Lead Generation: Definition and How To Do It in 4 Steps

Updated October 17, 2022

Your ability to generate leads on behalf of your business is a key performance indicator for your success. The measurement of your lead generation process can help marketing and sales departments determine if you're making progress in reaching your target audience. It's important to be creative with and learn more about lead generation processes to establish a long-term relationship with your target audience.

In this article, we discuss what a lead is and what lead generation entails, explain the different methods for lead generation and provide a list of four steps detailing how to generate leads for your business.

What is a lead?

A lead is an individual who or a business that feels an attraction to the product and service you're trying to sell them. An example of a lead can be if someone takes a company survey about a service needed in their home. The answers they provide give you a better idea about how to frame the next email you send to better service their needs.

Related: What Is a Lead in Business?

Types of leads

Here are the different types of leads a company can attract:

Marketing-qualified lead

A marketing-qualified lead is an individual who's interested in your product based on the way you've marketed to them. Usually, they have an increased chance to purchase from you compared to other types of leads considering the engagement level marketing campaigns have with the user. A lead may have filled out a contact form on your website, used a product demo or have visited your website multiple times. However, they might want to hear your sales pitch, which can progress them into the buying stage.

Sales-qualified lead

Sales-qualified leads aim to make it clear to you they're interested in buying your product or service. You need to research the company and follow your organization's guidelines to find out who's qualified to be a customer. This is a combined effort from sales and marketing teams, and you can gauge their interest to buy by checking if they opened emails sent to them or attended industry webinars you've hosted.

Product-qualified lead

A product-qualified lead is a potential paying customer who used your product in the past. They could have used it if they received it as a gift or sampled it at a brick-and-mortar store in a mall or shopping complex. For a digital product, the lead might have downloaded a free trial to evaluate their experience with it. Your sales representative can call the lead once they finished the trial to find out if they plan to buy your product and what reasons lead to their decision.

Service-qualified lead

A service-qualified lead notifies your company that they're ready to buy your product. They may want to purchase an annual subscription or make a one-time purchase to see if they plan to buy more of your product. A sales representative can give this lead an exclusive offer that may give them a chance to buy more products for less than face value.

What is lead generation?

Lead generation is a method of sales and marketing that starts after a company sends a communication soliciting action from a user and can be a substitution for cold calling a prospect. It's a part of a company's effort to transition a customer from a visitor of a website to an avid buyer and user of the product. In a business-to-business (B2B) environment, it's ideal for a business to have customers give testimonials about how much they like a product and the customer service they received throughout the process.

How to generate leads

Review this step-by-step guide on how to generate leads for your business:

1. Conduct research on your target audience

Market research is a key tool that can help you target new leads with your lead generation process. It's important to emphasize the area in which they live in addition to their age, annual income and previous buying habits to have efficient leads. This can improve the performance of your marketing campaign.

2. Choose the appropriate promotional channels

The promotional channels you select should offer as much exposure for your product as possible. Normally, this part also falls under your marketing plan, and you can brainstorm with your coworkers and managers before you proceed.

Here are some channels that can augment your lead generation process:

Content: Content can come in a variety of forms such as writing, graphics and video, but its main purpose is to provide valuable information to your target audience that they can use to improve their use of your products in their everyday life. Ideally, you include a call to action within your content so they can interact with your website, which can get them closer to buying your product.
Emails: Email helps you contact customers with previous exposure to your company so you can communicate with contacts subscribed to your emails, create content that attracts further interest and request them to visit your landing page. Produce a strategic plan to contact previous customers, along with new customers, to have a diverse set of leads.
Blogs: Blogs can promote your offerings to customers while enticing them to proceed with your call to action. For example, you can write a blog about the importance social media has on a brand and solicit businesses to complete a contact form, allowing you to contact them if they're interested in purchasing marketing services from you.
Social media: Social media is an interactive platform for users to see your product and the human element of your brand. Produce story-based social media content that communicates directly with your audience and makes it easier for them to understand your call to action and how it influences them.
Free trials or samples: Product trials and samples can address the doubts customers may have in wanting to buy your product and give them additional sales opportunities offering new products and add-ons to current products they purchased. For example, video games have additional downloadable content, whereas you may see infomercials that can give you a discount on practical household products of your interest.

3. Establish a plan to collect data

Collecting data from your leads is important because you can insert them into lead generation software and document the likelihood they have of responding to marketing and sales pitches you make with your content. You can gather data from leads if they complete a contact form, where you can generate an incentive for interacting with your brand.

4. Use your promotional channels

Social media is indispensable in engaging with leads. A professional sports team interacting with fans during a game is an example of an interaction that makes them feel a part of the organization's efforts. A full-time social media staff member can comment on content posted on social media platforms and respond to direct messages that address concerns that arise. Marketing relates to your public relations efforts, so be conscious of distributing press materials regarding new developments offering clues on what your target audience should look forward to in the future.