Lead Generation | How It Works, Strategies & Tips
Lead generation is the marketing and sales process of attracting potential customers’ interest in a product or service and capturing their contact information for follow-up marketing and sales activities. This guide explains what lead generation is and how it works in greater depth. You’ll also learn about the related concepts of leads, lead magnets, lead qualification, and lead nurturing.
If you’re creating content for your own lead generation pipeline, Quillbot’s Design Templates help streamline the process.
Key takeaways
- Lead generation attracts potential customers and captures their contact information so marketing and sales teams can turn their interest into sales opportunities.
- Lead magnets like ebooks, free trials, templates, and webinars give prospects a reason to share their details, while lead qualification helps businesses prioritize the most promising leads.
- Inbound and outbound strategies help businesses attract or directly reach potential customers, while lead nurturing builds trust and guides them toward a purchase.
- Measure and optimize your results by tracking metrics like conversion rate, cost per lead, and lead quality, and use the right tools and best practices to improve your pipeline.
Table of contents
What is lead generation?
Lead generation refers to attracting potential customers, often through content or free trials, and “capturing” their personal information. This allows a marketing or sales team to follow up with targeted communications as they attempt to convert them into paying customers.
A lead is the person or organization who shares this personal information, which almost always includes their name and email. Some lead generation pipelines may also request a potential customer’s phone number, company name, company size, job title, age, gender, or location.
Businesses use lead generation to make their marketing and sales cycles more efficient. It helps them reach people who are likely to be interested in what they offer, identify and prioritize promising prospects, build relationships with people who aren’t quite yet ready to make a purchase, and guide sales teams in pursuing the right opportunities.
What is a lead magnet?
Since lead generation hinges on people submitting their contact information, it’s important to understand why and how they do that. A lead magnet is some type of useful content, trial, or demo that is “gated,” meaning people can only access it by submitting their information.
Some common types of lead magnets are:
- Ebooks and guides: Detailed PDFs that delve into a niche or strategy
- Free trials: An opportunity to try a tool or software for free before committing
- Freemiums: A basic version of software with limited features or access
- Product demos: Prerecorded videos that show how a product works
- Checklists: Actionable lists that help people complete a certain task
- Cheat sheets: Summaries of information relevant to a topic or task
- Templates: Premade documents that help people streamline their work
- Interactive content: Quizzes, calculators, games, and other content that people need to register to use
- Promotions: Discounts or offers only made available to potential customers when they submit their information (like a 10% discount on your first order if you sign up for a newsletter)
- Swipe files: Collections of curated content that people can use as inspiration in their work (often used in creative fields like copywriting, branding design, and user experience design)
- Webinars and courses: Video-based classes or workshops that help people understand and solve a problem
For example, a potential customer may provide their name and email address to “unlock” and download an ebook. Another person might fill in a short form to sign up for a free trial of a software. And another may provide contact information to access a webinar.
Lead generation vs related terms
If you’re not very clear yet on what lead generation is, it’s easy to get it mixed up with other, similar marketing and sales terms. The table below outlines some of the terms that people may get confused with lead generation.
| Term | Definition | Typical owner |
|---|---|---|
| Advertising | Paying to promote a product, service, or brand to a target audience in the form of a banner ad, video advertisement, etc. | Marketing or Paid media |
| Demand generation | Building brand awareness, educating a target audience, and driving long-term interest in a company’s products or services | Marketing |
| Lead generation | Attracting potential customers via marketing content and capturing their information so they can be followed up with and converted to paying customers | Marketing |
| Sales prospecting | Identifying and cold contacting potential customers who may be a good fit for a product or service without waiting for them to engage with marketing content | Sales |
| Customer acquisition | The broader process of attracting and converting new customers through marketing, sales, and other activities | Marketing and Sales |
How does lead generation work?
Lead generation attracts potential customers, gives them a reason to engage with a business, and captures enough information to continue the relationship. The process is a bit different for each company, but it typically includes these five stages.
Attracting
First of all, a company has to draw the attention of people who may be interested in its products or services. Some lead generation strategies and channels for attracting potential customers are:
- Search engine optimization (SEO): Targeting high-intent keywords related to companies’ products or services to bring people to their websites
- Content marketing: Blog posts, guides, case studies, and videos that educate prospects and build trust and authority
- Social media marketing: Organic posts, videos, and community engagement on platforms such as LinkedIn, Instagram, and TikTok
- Events and webinars: Online presentations, workshops, trade shows, and industry events that introduce potential customers to a company
- Referrals: Word-of-mouth recommendations from existing customers
- Paid search (PPC): Targets ads on Google or niche platforms that display during relevant searches
- Cold outreach: Personalized emails and calls that directly target people who may be looking for a company’s product or service
Lead capturing
Once potential customers reach a company’s website or content, it needs to turn them from anonymous visitors to identified prospects. This is where the lead magnet comes in. The customer provides their contact details in order to access the “locked” content, trial, or demo.
Lead qualification
Lead qualification is the process of figuring out if a lead is a good fit for a business to help you decide whether it’s worth investing resources in targeting them with follow-up activities. Not all leads are equally likely to become customers, so companies filter leads based on different criteria to compare them to their ideal customer profile. Simply put, the closer a lead is to the ideal customer, the more qualified they become.
How exactly companies do lead qualification usually depends on if they are business-to-business (B2B) or business-to-consumer (B2C):
- B2B: Potential customers typically have to fill out forms that ask for firmographic data (like company name and location), which is then fed into a customer relationship management tool (CRM). The CRM will usually then award the lead points based on scoring criteria set up by the company. Leads with higher scores are considered more qualified.
- B2C: Qualification is usually much simpler and based on behavior, although this can vary based on the purchase value. For consumers looking to buy everyday goods, like $50 sneakers, there probably wouldn’t be a lead qualification process. But for high-ticket purchases, like a $3,000 kitchen renovation, a lead would be considered qualified when they perform an action that signals intent, like requesting a consultation or providing location and budget info to download a guide.
Two common lead qualification frameworks are BANT and CHAMP, as outlined in the table below. These frameworks are typically used in sales in B2B environments, but can be adapted to high-value or consultation-based purchases in B2C ones. They may be applied to a CRM’s scoring system or carried out by a sales team, who follows up with leads to continue the conversation.
| BANT criteria | CHAMP criteria |
|---|---|
| Budget: Can the lead afford the company’s product or service? | Challenges: What problems, inefficiencies, and pain points does the lead face? |
| Authority: Does the lead make the purchasing decision, or must they escalate the decision to others? | Authority: Does the lead make the purchasing decision, or must they escalate the decision to others? |
| Need: Can the company solve the lead’s problem? | Money: What’s the allocated budget for a solution to this problem? |
| Timeline: When will the lead (or their team or company) make a purchase? | Prioritization: How urgent or important is solving this specific problem compared to the company’s other objectives and initiatives? |
In the end, a lead may end up being a:
- Marketing-qualified lead (MQL): This is someone that marketing considers interested or suitable enough to warrant further attention. An MQL isn’t necessarily ready to buy or even to speak to sales; they may simply still be researching their options.
- Sales-qualified lead (SQL): This is a lead that sales has reviewed and determined is worth pursuing as a potential sales opportunity. A salesperson would likely follow up and potentially apply one of the qualification frameworks to further assess the quality of the lead.
- Product-qualified lead (PQL): This person has demonstrated interest through the actual use of a product instead of just engagement with marketing. The typical example is a lead who has used a free trial or the freemium version of a SaaS product.
These lead categories are not universal or exhaustive. Each business approaches lead qualification a bit differently, and they may have their own categories based on the criteria and behavior that matters to them.
The homeowner who downloaded the kitchen renovation cost guide had to fill out a short form to do so. They answered that they have a detached house 25 km from the city, want to renovate their entire kitchen, plan to start within three months, and estimate a budget of $50,000.
Based on their answers, the homeowner matches the company’s ideal customer profile. The homeowner is therefore classified as a qualified lead and the sales team prioritizes them for a consultation.
Lead nurturing
Lead nurturing helps companies build trust and stay in touch with leads who are interested in a product or service but not ready to buy. The goal is to gently move them towards a purchase with content that helps them make an informed and confident decision.
Some common ways to nurture leads are:
- Email marketing campaigns: Automated email sequences that provide relevant messages to a lead based on their behavior
- Value-driven content: Free guides, research, data, case studies, and other content that build trust and authority
- Personalized recommendations: Products or service recommendations specifically tailored to the lead’s demonstrated interests and preferences
- Interactive content: Quizzes, assessments, or games that offer personalized feedback and collect data on lead preferences
- Reengagement campaigns: Updates, insights, and other check-ins that are low pressure and seek to reignite the conversation with dormant leads
- Direct outreach: Follow-ups from a sales team after a lead completes some action (e.g., consuming content or attending an event) to ask open-ended questions about their current challenges and needs
Lead nurturing is often positioned within the larger marketing funnel to make sure that leads receive the right content based on where they are in the customer journey. Lead nurturing typically falls in the consideration stage of the funnel.
- A guide to kitchen layouts and advice on choosing durable materials
- A follow-up that explains average renovation costs and how the budget can vary depending on cabinets, finishes, and appliances
- Photos and case studies from previous projects with similar budgets
Each email includes a CTA to book a consultation, but the focus is on helping the homeowner confidently make an informed decision rather than pressuring them to buy. When the homeowner eventually clicks through to the consultation page, the company can use that renewed interest as a signal to follow up.
Converting
The final stage focuses on converting qualified leads into customers. Depending on the business model, conversion might mean making a purchase, signing a contract, signing up for a paid subscription, or booking a service.
Businesses can use the data from conversions to identify which channels, offers, and campaigns generated the most valuable leads, which helps them fine-tune their lead generation strategy over time.
The homeowner accepts the proposal and signs a contract. They have now converted and become a customer. The company then tracks and analyzes the lead’s journey to understand which marketing activities helped turn their initial interest into a sale.
Types of lead generation
Businesses generate leads differently depending on their audiences, products, budget, and sales cycle. Two important distinctions are inbound vs outbound lead generation, which focus on how businesses attract customers, and B2B vs B2C lead generation, which looks at who they are trying to attract.
Inbound vs outbound lead generation
Essentially, inbound lead generation means the lead finds the company, usually through content marketing and organic search. Outbound lead generation, on the other hand, means the company finds the lead, typically through cold outreach. Another way to think of this is that with inbound, the company attracts the lead, while with outbound, the company directly reaches out to the lead.
| Inbound lead generation | Outbound lead generation | |
|---|---|---|
| How it works | Potential customers discover a business and express interest | A business contacts potential customers to gauge interest |
| Common tactics | SEO, blog posts, downloadable guides, webinars and workshops, organic social media, referral programs | Cold emails, cold calls, LinkedIn outreach, direct messages, targeted advertising, and outreach at trade shows, conferences, other events |
| Best for | Businesses that can can attract an audience by leveraging content marketing, expertise, and discoverable products and services | Businesses that need to reach specific prospects, break into new markets, or generate interest proactively and businesses that don’t have as much leverage with content marketing |
| Main advantage | Can attract leads who are already looking for information or a solution | Gives businesses more control over whom they approach, when, and how |
| Main challenge | Building visibility and attracting the right traffic can take time | Reaching the wrong people or sending generic messages can waste resources and damage trust among leads |
- Company A uses inbound lead generation. It publishes blog posts about how solar installations reduce energy costs and case studies about how much previous customers have saved. It also creates a guide to government incentives for solar panel installations. A factory owner searches on Google for “solar panel installation benefits,” finds Company A’s website, and downloads the guide in exchange for their business email address. It generates a lead by attracting someone who is already researching ways to reduce energy expenses.
- Company B uses outbound lead generation. The sales team identifies manufacturing companies with large plants and contacts their operations managers directly via emails and calls. They provide personalized emails explaining how solar panels could reduce electricity bills and how much the companies could save. An interested operations manager replies and arranges a consultation, becoming a lead.
To sum up, Company A attracts prospects who discover its content, while Company B proactively contacts prospects it believes could benefit from what it offers.
Inbound and outbound lead generation can complement each other so that a business attracts people who are already researching a solution to a challenge and also reaches out to suitable prospects who aren’t yet aware the business’s solution exists. This combined approach is sometimes referred to as allbound lead generation.
- Inbound: The marketing team publishes articles about reducing energy costs and offers a free “solar savings” calculator on its website. A factory owner finds an article through a Google search, discovers the calculator, and inputs their business email in order to run a calculation. They become a lead thanks to Company C’s content marketing.
- Outbound: Simultaneously, the sales team identifies manufacturing businesses that match their ideal customer profile and reaches out directly to operations managers. Before doing so, they check if the managers have engaged with Company C’s marketing materials so they can best personalize their message. One manager responds to a personalized email requesting more information about potential savings and becomes a lead thanks to Company C’s outreach.
What’s crucial in allbound lead generation is that marketing and sales share data and communicate regularly. This way, each team can adapt their strategies to complement the other. For example, when the operations manager contacted by sales visits Company C’s website and downloads a case study, sales can use that engagement data to tailor their follow-up. If these teams do not work together, they run the risk of confusing or overwhelming leads and damaging the company’s reputation.
B2B vs B2C lead generation
B2B lead generation targets other businesses, whereas B2C lead generation targets individual customers. This difference in target audience affects how companies capture, nurture, and convert leads.
| B2B lead generation | B2C lead generation | |
|---|---|---|
| Target audience | Businesses and the people involved in their purchasing decisions | Individual consumers or households |
| Typical information requested from lead | Name, contact details, job title, company, company size, industry, business needs, purchasing authority | Name, contact details, location, interests, preferences |
| Common tactics | Educational content, industry reports, professional networking, targeted emails, webinars, trade shows, product demos, free trials | Educational content, social media campaigns, search ads, discounts, quizzes, newsletter signups, free trials or samples |
| Buying process | Usually involves various stakeholders, larger budgets, and longer timelines | Often involves few decision-makers and shorter timelines (although high-ticket consumer purchases can take longer) |
| Usual next steps | A discovery call, product demo, proposal, quote, or sales meeting | A purchase, booking, quote, or consultation |
- Company 1 is B2B: It provides catering for corporate events, business meetings, and conferences. It targets office managers, HR teams, and event planners. It generates leads by publishing content relevant to planning business events and reaching out to local businesses. Interested prospects can request a quote by providing details about their event, including the number of guests, date, and budget, and the company follows up to discuss requirements and prepare a proposal.
- Company 2 is B2C: It caters for private parties, weddings, and family celebrations. It shares photos and videos of its menus, food, and events on social media and offers resources like a free party-planning checklist in exchange for contact details. Interested customers can request a quote by submitting information about their event, guest count, preferred menu, and date. The company then follows up with suitable menu options and pricing.
Both companies sell similar services and use marketing to attract potential customers and encourage them to make contact. But the B2B company targets other companies and works with professionals, while the B2C company targets individuals planning personal events.
How to measure lead generation success
It’s important to know how to measure lead generation so you can analyze which marketing and sales activities are actually attracting people, capturing their interest, and guiding them toward conversion. The metrics you track depend on your business model, sales cycle, and goals, but some common metrics are outlined in the table below.
| Metric | What it measures | How to calculate it |
|---|---|---|
| Number of leads | The total number of leads generated during a specific period | Count the leads captured through your lead generation activities |
| Lead conversion rate | The percentage of visitors or prospects who become leads by completing a desired action (such as submitting a form or signing up for a trial) | Divide the number of conversions by the total visitors and then multiply that figure by 100 |
| Cost per lead (CPL) | The average cost of generating one lead | Divide total lead generation costs by the number of leads generated |
| Lead-to-customer conversion rate | The percentage of leads who eventually become paying customers | Divide the number of leads who convert to customers by the total number of leads and then multiply that figure by 100 |
| Customer acquisition cost (CAC) | The average cost of acquiring a new customer across your sales and marketing activities | Divide total marketing and sales costs by the number of new customers acquired |
| Lead quality | How closely leads match your ideal customer profile and how likely they are to buy | Assess factors such as customer fit, engagement, buying intent, and qualification criteria |
These metrics help you evaluate different stages of your lead generation pipeline and see where you can improve. For example, looking at lead conversion rate shows you how well you are capturing leads, and a poor conversion rate could mean you need to optimize your form or landing page. Meanwhile, your lead-to-customer conversion rate can show you how well your lead nurturing is working.
Lead generation best practices
These best practices aren’t just about getting more leads. They’re about generating the right leads, nurturing them well, and building trust and authority among your target customers.
- Know your audience: This is one of the marketing fundamentals that you should apply to every marketing initiative you run. Conduct market research, analyze data, and use surveys to get to know your audience. The better you understand your ideal customer, their demographics, and their behaviors, the better you can segment and target them in your lead generation pipeline.
- Set up lead qualification criteria: Don’t treat every lead as an equally promising sales opportunity. Set up a qualification framework with clearly defined, relevant criteria. Review this regularly to adapt it according to data analysis and feedback.
- Offer something valuable: Your lead magnet needs to be something people actually want, so make its value clear. Avoid generic popups or offers, and instead tie lead magnet promotion to related content so it arrives to visitors primed to want it. Also, make sure that once a lead fills in their information, they promptly receive the promised content or access. If not, you could damage trust, and that is hard to recover.
- Write clear calls to action: Calls to action (CTAs) tell someone exactly what to do next. Make sure your CTA accurately describes the action that the user will perform so that they don’t end up feeling confused or misled. For example, a button that says “Download free guide” should in fact download a guide.
- Optimize forms and landing pages: Your lead capturing forms should be concise and only ask for the required information. For example, don’t ask for company size and location if that information isn’t relevant to your lead qualification. Place them strategically on landing pages and make sure there is as little friction as possible for visitors to fill them out. As for landing pages, optimize them to give visitors the best user experience possible. Make sure your pages load quickly, add trust signals (like customer testimonials, security badges, and a transparent privacy policy), and keep your web design professional and user friendly. Use A/B testing to experiment with page copy and CTAs and find out which messages work best.
- Apply consistent visual identity and brand messaging: Consistency builds trust and credibility. Align your brand’s visuals and messages across different channels and resources, like your website, social media, and paid ads. This will help visitors recognize your brand and feel more secure when handing over their contact information.
- Experiment with AI tools: AI can help you collect information, qualify leads, and analyze how leads convert to customers. For example, automated chatbots can help you collect customer data while engaging with them in real time, and AI agents can automatically qualify leads as they enter your lead generation pipeline. Generative AI, like Quillbot’s AI Chat, can also help you brainstorm lead generation ideas or analyze datasets from different perspectives, giving you insights into how to improve your lead generation pipeline. Just remember not to paste any sensitive customer data into generative AI tools.
- Respect consent and privacy: Collect personal information transparently and follow applicable data protection and marketing rules. Always review to see which data privacy regulations apply to you. For example, people may think of the General Data Protection Regulation (GDPR) as a European directive, but it may apply to organizations outside the EU that offer goods or services to people in the EU or monitor their behavior there.
- Align sales and marketing: It’s critical that sales and marketing are aligned on how your organization attracts, captures, qualifies, nurtures, and converts leads. Establish shared definitions of qualified and unqualified leads, make sure both teams follow the same qualification criteria, and define which team owns which stages of the process. Marketing and sales should also both be able to access the same customer data so that everyone is on the same page.
Lead generation tools
The right tools for lead generation depend on your target audience, lead volume, sales process, and budget, and success with these tools depends on how your company integrates and configures them. This table outlines core types of lead generation tools with some examples of each so you can familiarize yourself with what’s out there.
| Tool type | How they support lead generation | Examples |
|---|---|---|
| Email finders | Find prospect emails, often by scanning domains or LinkedIn | Hunter.io, FindThatLead, Wiza |
| Form builders | Build forms to capture contact details | Typeform, Tally, Jotform |
| Landing page builders | Create landing pages where you can promote lead magnets and host forms | Unbounce, Leadpages, Carrd |
| CRM software | Store contact details, qualify leads, track interactions, and manage leads through the sales pipeline | Salesforce, Pipedrive, Attio |
| Email marketing software | Send targeted campaigns, nurture leads, and automate follow-ups based on prospect behavior | Mailchimp, Sendgrid, Brevo |
| Analytics tools | Analyze website traffic and visitor behavior to identify opportunities to improve the lead generation pipeline | Google Analytics, Amplitude, Leadfeeder |
| All-in-one platforms | Combine multiple lead generation functions, such as prospecting, contact management, email outreach, and automation, in one platform | Hubspot, Apollo.io, Zoho |
These are just a few examples. There are many tools out there, so if you are considering using one of these types of tools, spend some time researching the best option for your business.
Frequently asked questions about lead generation
- What is B2B lead generation?
-
B2B lead generation is the strategic process of attracting, capturing, and nurturing contacts from other businesses who may buy your products or services.
“B2B” means “business-to-business” and refers to companies that primarily sell to other companies instead of individual consumers or households.
B2B lead generation often uses a mix of inbound tactics (like content marketing and referrals) and outbound tactics (like cold calling and emailing). Marketing and sales teams typically use customer relationship management (CRM) software to collect data and qualify leads according to how well they match the company’s ideal customer profile.
To create content for your own B2B lead generation, check out Quillbot’s Design Templates for social media and marketing.
- How do I increase lead generation?
-
How to increase lead generation depends on your business model, industry, and product/service, but these are some common strategies:
- Create lead magnets that are valuable to your target customer, like free trials, product demos, or downloadable content such as guides and checklists.
- Mix inbound and outbound strategies. Inbound lead generation draws potential customers to you through content, social media, and ads. Outbound lead generation contacts them directly through cold calls or emails.
- Optimize your forms and landing pages. If it’s too difficult for a potential lead to fill out a form on your website to access content or a trial, they will likely abandon it, meaning you lose a lead.
- Set up a referral program. Word-of-mouth recommendations are still valuable, so ask current customers to send new ones your way.
To brainstorm more ideas for increasing lead generation, tell Quillbot’s AI Chat a bit about your business and ideal customer.
- How do I use AI for lead generation?
-
How to use AI for lead generation varies a bit based on your business model and industry, but these are some ideas:
- Try AI lead sourcing to find contacts that fit your ideal customer profile.
- Use AI agents and chatbots to collect customer data in real time, even when your human team is off the clock.
- Have an AI-powered CRM automatically qualify leads as soon as you capture their information.
- Brainstorm lead generation tactics or get perspective on data with generative AI like Quillbot’s AI Chat.
- Scale content creation with Quillbot by modifying existing content for different channels or creating new content that fits your goals and ideas.
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