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Define Lead Generation

Learning Objectives

After completing this unit, you’ll be able to:

  • Discuss the concept of lead generation.
  • List five lead classifications.
  • Explain how digital lead generation is different from traditional lead generation.
  • Share details about how to generate leads.

What’s Lead Generation, Anyway?

Leads are potential customers, and lead generation helps you reach those leads early in their customer journey. By doing so, you’re able to earn their trust, build a relationship, and be by their side until they’re ready to make a purchase.

According to the sixth State of Marketing report from Salesforce, 32% of marketers own lead generation, and 65% contribute to it. Marketing leads, sales effectiveness, and customer acquisition costs are the most important metrics for measuring lead generation success.

Classifying Leads

Understanding the five different classifications of leads can help your marketing and sales teams grow your business.


Any potential customer you know something about. This can be customers who visited your website and entered their email address, stopped by your booth at a trade show, or walked into your store and signed up for a mailing list.


A lead with whom you are having an active conversation. This person can be signed up for your email lists, following you on social media, or talking on the phone with you right now.


A lead who isn’t interested in buying right now but may be in future. Keep in contact with these leads by sending them additional information like newsletters, product announcements, or upcoming webinar schedules. The idea is that they’ll remember your company when it’s finally time to buy.


A lead who isn’t interested in what you have to offer; also known as a dead lead.


A lead who does want to do business (yay!); also known as a sales lead.

Now let’s look at how digital lead generation works, and how the right lead-generation strategies can help you reach new customers.

Digital Lead Generation

The traditional lead generation process requires sales teams to cold call lists of people and hope for the best (may the odds be ever in your favor). But thanks to digital technology, you can now automatically generate leads based on specific criteria.

According to the Salesforce State of Marketing report, the top three channels with the highest lead generation ROI are social media, customer communities, and paid search engine marketing. Better leads yield more consistent sales and business growth. And that’s better for business.

Companies today collect information about key prospects, allowing them to tailor marketing messaging and sales pitches to their needs. This usually happens through a combination of inbound and outbound marketing strategies in digital channels.

Because customers spend so much time online, developing a strong digital presence is a key part of lead and pipeline generation. This is best achieved through inbound marketing strategies like content marketing, website forms, and search engine optimization—all of which work together to drive prospective customers to your website.

Technology makes it easier for companies to understand and target prospects. With the right data, you can tailor your online presence to your buyers’ needs and set the stage for lead generation.

When they engage with your brand, customers are looking for something more than an old-fashioned sales pitch. They want to trust your brand and feel good about buying what you’re selling.

In B2C (business-to-consumer) and B2B (business-to-business) alike, it’s up to you to earn that trust and build a relationship with each customer. That’s where lead generation and customer journeys come in.

While customer journeys may vary by industry, managing journeys is always about turning prospects into long-term customers. And every customer journey starts with a lead.

Lead generation isn’t about rounding up all the leads you can and forwarding them to your sales team. Rather, it’s about using the right channels to find high-quality inbound and outbound leads you can build relationships with.

How to Generate Leads

Understanding the different types of leads and how new leads become qualified leads is just the beginning. Next, you need to generate real leads you can nurture into new customers for your business. 

Let’s put theory into practice with an overview of how lead generation works.

The Marketing Funnel

The marketing funnel is a way to describe how prospects evolve to become real customers. There are three parts to the marketing funnel.

  • Top of funnel (TOFU): full of new leads looking for solutions, but who may not be ready to buy
  • Middle of funnel (MOFU): populated by potential customers who are showing significant interest in your brand’s offerings
  • Bottom of funnel (BOFU): has the fewest leads in it, but these are the ones who are ready to do business

Lead generation is mainly about filling the TOFU with quality leads. Great marketing is key to great lead generation. After all, marketing generates interest in products and services.

The best marketing strategy is to meet your customers where they are—and in this digital age, your customers are likely on the internet. Building a great website for your company is the right place to start. From there, you can expand your lead generation strategies to include social media, blogs, and email campaigns that generate inbound leads and drive traffic back to your site. Making sure you set up campaign landing pages effectively to convert leads is also a must.

Generate Inbound Leads

Outbound marketing is about proactive outreach. It includes television commercials, print advertisements, internet banners, email lists, and good old-fashioned cold calling. By contrast, inbound marketing is about meeting customers along their own journeys with content and resources that will help them become interested in your business.

To generate inbound leads, your content should add value to readers’ lives and draw them to your brand. Inbound marketing tactics like blog posts, ebooks, and social media content have proven to be highly effective means of generating high-quality leads at a much lower cost than most outbound marketing tactics.

Keep in mind that consumer behavior changes constantly, and so do opportunities for inbound marketing. That’s why it’s important to periodically revisit your lead-generation strategies to ensure you’re responding to evolving consumer behavior and tech trends.

Social Media Lead Generation

The key to lead generation through social media is listening to your target audience. Through social listening, you can discover which topics generate the most interest with your audience, and what customers are saying about your brand. You can also strategically hone in on key “buy words” in peoples’ posts that may indicate interest in the solutions you provide through your products and services.

Once you’ve gathered insights through social listening, you can pinpoint your messaging and create content that speaks to your intended audience on social media. But be sure each call to action lets you track prospects to the next phase.

B2B Lead Generation

The lifeblood of most B2B companies is managing the customer journey—and every journey starts with lead generation. This means meeting B2B customers where they are, whether that’s on smartphones, social media, or desktop websites. Those customers also expect personalized shopping experiences. When you let your prospects know that buying from you will be seamless and simple, they’ll be more likely to become leads.

The best content strategy for B2B lead generation is to give your audience opportunities to take action and improve their own businesses. For example you can offer blog posts, ebooks, or webinars on how they can enhance their tactics and find greater success by using a product like yours. By using your data to find the right prospects and giving them helpful advice, you position your brand to consistently add value to the businesses of your ideal leads.

Now that we’ve covered lead generation basics, let’s take a look at the importance of inbound marketing in the next unit.


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