An effective lead generation strategy helps set your sales team up for success. Build a sales pipeline of the right prospects with this deep dive into what lead generation is, why you need it, and how it works.
What is lead generation?
Lead generation is the process of identifying potential customers for your business or service and guiding them into your sales pipeline. The goal of lead generation is to pre-qualify interested buyers, filling your sales pipeline to help close deals more quickly.
Generating leads can occur across a variety channels, including both online and in person. The more you expand your reach, the more potential customers you can identify, increasing the number of leads in your sales pipeline. Lead generation saves a tremendous amount of time for the sales team, allowing them to focus on the most high-value contacts.
Although every business has their own process, lead generation often follows these stages:
Why do you need lead generation?
Lead generation paves the way towards gaining new customers, and offers the following benefits:
- Identify the right prospects. Your lead generation efforts help you reach your audience, engaging the prospects most likely to become customers.
- Build relationships with potential customers. Nurturing leads helps pave the way towards building trust—and ideally, towards leads feeling ready to take the next step.
- Speed the sales process. Instead of starting from the beginning every time you need to find customers, lead generation feeds your sales team a list of interested individuals.
- Keep your sales pipeline full. Lead generation helps continually replenish your pipeline with pre-qualified leads, helping you more accurately forecast sales.
Lead generation vs. demand generation
You may be curious about how lead generation relates to demand generation. Although there are similarities, they are different.
Focuses on identifying and qualifying potential customers and adding them to your sales pipeline.
Lead generation aims to capture the contact information of potential customers.
Examples of lead generation:
- Content upgrades
- Lead-capture web pages
Focuses on building awareness and creating demand for your product or service.
Demand generation aims to convey the value of what your business offers, without requiring the audience to provide any information.
Examples of demand generation:
- Blog posts
- Social media posts
Categories of lead generation
The goal of lead generation is to identify and pre-qualify potential customers for your sales pipeline. However, not all individuals are ready to purchase immediately. As a result, your lead generation and marketing strategies should fit the needs of the potential customer, regardless of where they fall in the sales process. These categories are often used to help define the different stages a potential customer follows throughout the lead generation process.
- Top-of-the-funnel (ToFu) marketing – Focuses on identifying net-new prospects, or those who have recently come into contact with your company and have expressed interest. At this early stage in the process, marketers may not easily be able to tell which leads will most likely result in a sale.
- Middle-of-the-funnel (MoFu) marketing – Focuses on lead nurture, developing an introduction or expressed interest into a relationship. Ideally, this relationship will turn into the trust needed to take the next step and make a purchase.
- Bottom-of-the-funnel (BoFu) marketing – Focuses on helping interested leads move towards taking the next step and making a purchase. BoFu strategies include a clear offer and call-to-action, aiming to turn leads into customers.
Here are some additional terms commonly associated with lead generation.
- Marketing qualified leads (MQLs) – Often new to your website or company, these leads have expressed interest or responded positively to your marketing—but a distinguishing factor is that they are not yet ready to receive a call from your sales team.
- Sales qualified leads (SQLs) – Showing a stronger interest to your marketing efforts, these leads demonstrate an increased likelihood of becoming a customer, and the sales team should proactively engage these leads.
- Product qualified leads (PQLs) – Most commonly used with product trials, these leads have engaged with your free or trial offering and have demonstrated their interest in making a purchase.
- Service qualified leads – Often specific to customer service, these leads have interacted with your customer service team and have expressed or demonstrated interest in upgrading to the next level of service.
Lead generation approaches
There are a variety of ways to connect with potential customers and begin generating leads. Inbound marketing and outbound marketing offer a variety of approaches—so it’s helpful to understand these terms and how different lead generation approaches fit within them.
Inbound marketing focuses on attracting customers prior to the point at which they require your product or service. The goal of inbound marketing is to help the customer learn more about the value your company provides.
Examples of inbound marketing include:
Content marketing. Creating blog posts, info-graphics, videos, and eBooks, content marketing aims to provide useful and valuable information that helps your audience. Doing so conveys the value your company provides and helps build trust with your audience.
Social media. On Facebook, Twitter, LinkedIn, or any other social media platform where your audience stays active, regular social media posts are a great way to keep your audience engaged.
Outbound marketing proactively reaches out to the customer to create awareness. Highly targeted and using a clear call-to-action, outbound marketing is often associated with advertising.
Examples of outbound marketing include:
Advertising. On the web, in print, on TV, or on the radio, advertising is a classic approach to help promote awareness and drive responses to the call-to-action.
Telemarketing. Although no longer as common as it was in the past, telemarketing goes to a list of individuals and aims to engage and inspire them to take the next step.
Examples of lead generation that are both inbound and outbound marketing:
Email marketing. Current email marketing providers require opt-ins, which means subscribers have given permission to receive messages. However, email marketing pushes communications out to recipients, which can be categorized as outbound marketing. Email marketing is a great way to send targeted messages to help drive responses on the call-to-action.
Events. Most know that face-to-face events are a tried-and-true formula to help your company get more visibility and drive awareness among event attendees. But digital, or virtual, events can help you reach more people and generate leads more cost effectively—while still building the trusted relationships that fuel your sales pipeline.
How to generate leads
As you begin building your lead generation strategy, consider these steps—and how to customize them for your business, budget, and goals.
Step 1: Build a lead-capture form.
As you roll out your lead generation strategy, you will need to have the infrastructure in place to capture contact information for your new leads. A lead-capture form can be embedded on a webpage, letting you link to it from any communication you have with your audience. You can also create a series of lead-capture forms, helping you target and segment lead lists however fits your company best.
Step 2: Create high-value offerings that will engage your audience.
What type of information does your ideal customer often look for? Offering useful and informative resources helps build trust with potential new leads. Here are some ideas that could help you generate leads:
- Product trials
Step 3: Run a lead generation campaign.
Now that you have a lead-capture form and high-value resources you can use to engage your audience, it’s time to run a lead-generation campaign. Build out a lead generation strategy and select the media or sources you will use to help reach your audience.
- Outline your objective.
- Select the media outlets you will use.
- Clarify your call-to-action.
- Build a plan for how your sales team will follow up with the new leads.
Accelerate lead generation with lead generation software
Lead generation software and marketing automation help streamline the many tasks associated with marketing your business. Automation helps keep everyone organized with a single place to find contacts, see sales progress, run and manage campaigns, and build trusted relationships with potential and current customers.
- Expand your reach. Connect with prospects through email, on the web, or through online events. Easily scale your lead generation efforts with add-ons like LinkedIn integration, SMS integration, and other custom channel integrations.
- Find the right leads. Lead generation software helps you target more effectively, maximizing results by focusing your efforts and resources in the right places.
- Create a personal touch. Begin building trust with new leads by creating custom, personalized experiences and customer journeys based upon behavior, engagement, or interest.
- Manage leads through the lifecycle. Get real-time visibility across campaigns, and track and score sales readiness across all leads in your funnel.
- Gain valuable insight. Lead generation software brings customer intelligence and AI-driven insights, helping predict which leads have the highest likelihood for conversion.
- Streamline across campaigns. Share campaign content across multiple audiences or segments, helping you stay efficient while building leads for all divisions of your business.
Discover how lead generation can help your business
See if lead generation software is right for your business—Dynamics 365 Marketing helps you find and nurture leads, score lead readiness, create marketing content, and personalise the customer journey.