What is Lead Generation? Guide & Best Practices (2024)

It’s no secret that people are inundated with countless messages and offers daily. Marketers have to find a way to capture attention and build genuine interest in their products and services using the right marketing platform. Chief marketing officers (CMOs) cite customer preferences and expectations as their number 1 influence on digital strategy according to the State of the Connected Customer report. The goal is lead generation: building interest over time that eventually leads to a sale.

Let’s break down exactly what lead generation is, how artificial intelligence (AI) plays a role, and what steps to take to make sure you’re finding and nurturing leads the right way.

• What is lead generation?
• What are the most effective lead generation strategies?
• How do lead qualification and nurturing work?
• What are some methods for nurturing leads?
• What are the current trends in lead generation?
• How do you measure the success of your lead gen strategy?
• What are the best practices for lead generation?

Lead generation is the process of building interest in a product or service and then turning that interest into a sale. Lead gen makes the sales cycle more efficient because it focuses on the strongest and most valuable prospects. The result is greater success in new customer acquisition and conversion rates.

There are three types of leads:

• A qualified lead is a prospect who has demonstrated a genuine interest in a product or service and is more likely to convert.
• An unqualified lead lacks the necessary interest level to become a customer.
• A warm lead falls between these two – they’ve expressed some interest, but it’s up to sales to follow up and determine if the lead can become qualified.

The lead generation process begins with creating awareness and interest. You can start by publishing blog posts that educate your audience and engaging users through social media. You capture potential leads through sign-ups in which a person voluntarily gives you contact info to stay in touch. This can be through an email newsletter or ”gated” content such as webinars, virtual events, live chats, whitepapers, or ebooks.

Once you have leads, you can use their contact info to engage with personalized communication and targeted promotions.

Now that you’ve got a better understanding of lead generation, how can you start to move people from prospect to buyer? Start with creating, sharing, and testing content that grabs your audience’s attention.

Make sure your content addresses pain points

It all starts with creating strong content. Focus on your target audience’s pain points and how your product or service can solve those.

For example, if a business offers project management software, it would be a good idea to create a series of videos about project planning tips or case studies showcasing some examples of successful timeline implementations. Customers like seeing proof that companies can actually do what they say, so make it a point to show your customers exactly that.

Set up a lead scoring system

You also need a lead scoring system. This is when you assign points based on specific actions, such as webinar attendance, whitepaper downloads, or engagement with high-value pages on your website.

If leads consistently engage with product features on your site, assign them a higher lead score than someone who only occasionally visits your homepage. By prioritizing efforts on leads with higher scores, sales teams can focus on prospects more likely to convert to save time and money.

Go where your audience is

Figuring out which social media channels your target audience uses matters. If you’re fishing for clients, you have to be in the right spot. You’re not going to use X if your business targets a visually-oriented demographic, right? Using platforms like Instagram or Pinterest to share visually appealing content, you’ll have better results.

Dial in a great call-to-action

Regardless of the channel, you’ll need a clear and compelling call-to-action and a user-friendly design. You’ll get better conversion rates for subscription-based services by featuring a persuasive sign-up form on the site’s landing page, accompanied by customer testimonials.

Perform A/B testing for best results

Use A/B testing and analytics to refine things like headlines, visuals, or calls-to-action based on real-time performance data. (Remember, A/B testing is a way to compare multiple versions of a single variable to determine which of the variants is more effective.) On email subject lines, analyze open rates to determine the most effective messaging, ultimately optimizing your email campaign for better engagement and lead conversion.

Talking about how to evaluate your leads involves some acronyms that can feel like a mouthful, but understanding why they’re important will help your marketing efforts.

The first thing to do is define your ideal customer profile (ICP). That just means assessing potential leads based on the information you have. Do you know their level of interest? What do you know about their budget or buying authority?

The BANT (Budget, Authority, Need, Timing) framework is valuable because it establishes key criteria for assessing lead readiness, guiding marketers to prioritize efforts on prospects with a higher likelihood of conversion.

Let’s say you have a software company and you’re using BANT to qualify leads. Here are some questions to ask yourself:

• Budget: Does the lead have the financial resources to invest in my software? I want to make sure I’m targeting prospects who can afford my product.
• Authority: Does the lead have decision-making authority? I want my sales team to engage with individuals who can make purchasing decisions.
• Need: Do the lead’s specific needs align closely with what my software offers?
• Timing: Does the lead have near-term timing to purchase my software?

These criteria are like a filter that help prioritize leads who are ready to take action.

Lead scoring is a lot like what it sounds. By assigning numerical values to leads based on their behavior and interactions, you can prioritize follow-up efforts. For example, a lead downloading a product demo will receive a higher score than one who only visited the homepage.

Lead grading complements scoring by evaluating the overall fit of a lead within your target market. A lead from a large enterprise in your target industry would receive a higher grade than a lead from a smaller, unrelated business. Use them both and you’ll get a nuanced understanding of lead quality.

Once you’ve established your scoring and grading, your next step is to strategize ways to nurture your leads. You can do this with:

Email drip campaigns:

An automated email sequence like a welcome note to new subscribers helps nurture them toward a first purchase. The goal here is to keep leads engaged over time by delivering a sequence of targeted and relevant messages. The automated approach allows for consistent communication, which gradually builds trust and familiarity.

Webinars and virtual events:

These allow you to get customer insights and interact directly. A software company, for example, might organize a webinar series showcasing advanced features with a Q&A at the end.

Personalized content:

Tailoring content to individual preferences enhances engagement. An example of this is an online fashion retailer sending product recommendations based on a lead’s browsing history.

Social media:

It’s crucial to understand which social media channel your prospect uses, but active participation on platforms like X, LinkedIn, or Facebook is always a good idea. Anytime you can engage in industry-related discussions, share relevant content, and respond in the comments, you build awareness and credibility with leads.

Interactive content:

Quizzes or assessments keep leads engaged while providing valuable data about their preferences. A fitness app could create a quiz that helps leads determine their ideal workout routine, simultaneously collecting first-party data to tailor future content and promotions.

It seems like AI is influencing every part of the marketing landscape — lead generation included. Here’s a look at some ways marketers are improving their lead gen skills.

AI tools

The job of marketers is to understand lead behaviors and preferences — and AI-driven lead generation tools have made it easier to do just that. Machine learning algorithms can even predict the content a lead is most likely to engage with based on their past interactions.

Use AI to analyze a customer’s purchase history and recommend complementary products. The analysis can give you a nuanced understanding of the customers’ specific interests and help identify broader trends within your big-picture customer base. And it helps improve targeting and personalized marketing strategies.

Automation and personalization

Marketing automation tools can also help automate processes and deliver personalized content at scale. When you created dynamic email campaigns, adapt content based on lead behaviors, prompting the tool how to tailor communications. Customers feel special when they are “seen” by businesses. With personalization, you can extend beyond the initial lead generation phase. Clients will be more satisfied, and you are more likely to get repeat business.

Video marketing

Video marketing is another way to offer a dynamic experience. People are naturally captivated by the visual and auditory appeal of videos, so you can draw more attention by promoting them across your social media, website, and email campaigns.

Make sure the content is compelling though – short product demonstrations, testimonials, or educational pieces can enhance the lead generation process. You’ll earn brand ambassadors when you make it memorable. Use a shareable format so leads respect your concise style and usability.

Having metrics as part of your toolkit for evaluating lead generation efforts is crucial for several reasons. Number one, they offer a clear understanding of what is working and what needs work. Number two, these metrics contribute to accountability.

When you quantify the cost-effectiveness of acquiring leads and assessing their quality, you can better allocate your marketing budget. Last, having measurable metrics encourages you to set realistic benchmarks for the kind of progress you hope to make over time.

Key metrics for evaluating lead generation efforts include:

• Conversion rate: Track the percentage of leads that take a desired action, such as filling out a form or making a purchase.
• Cost per lead (CPL): Calculate the cost incurred for acquiring a single lead, dividing the total spend by the number of leads generated. If a marketing campaign costs $1,000 and generates 200 leads, the CPL is $5.
• Lead quality: Assess the quality of leads based on their likelihood to convert into customers. For instance, if a business uses lead scoring and finds that leads with a score above 80 are more likely to convert, it indicates the effectiveness of the lead generation strategy.

Return on investment (ROI): Measure the overall effectiveness of lead generation efforts by comparing the revenue generated to the total investment.

Best practices in lead generation are not just about increasing leads. They’ll also help you earn the respect of your customers and keep connections positive and ongoing. When you adhere to a quality work ethic, you signal a commitment to transparency. This is crucial in a landscape marked by privacy concerns. You’ll gain more leads and earn their respect if you consider the following tips:

• Target the right audience. The better you understand your buyer personas, demographics, and behaviors, the better you can use data analytics to prioritize segments that align with your product or service.
• Reliable lead qualification and scoring requires clearly defined criteria. Regularly review and adjust your scoring system based on data analysis and feedback.
• Consistent brand messaging and delivering on promises builds trust and credibility. This might mean sharing customer testimonials and showcasing industry awards or certifications.
• Use a customer relationship management (CRM) tool that features lead scoring, activity tracking, and communication history to ensure a comprehensive view of each lead’s journey.
• Keep lead capture forms concise. Focus on key details and use strategic placement on landing pages.
• Use A/B testing to refine elements like form fields, layout, and CTA language. Track these metrics: conversion rates, CPL, lead quality, and ROI.
• Use AI and machine learning algorithms to analyze data, predict lead behavior, and automate personalized interactions. AI-powered chatbots (copilots) help with real-time engagement and use predictive analytics to identify high-value leads.
• A culture of iterating on strategies means regular assessments. Ask for feedback from your sales teams. Ask yourself: Is our workflow agile? How can we improve?

Lead generation is how you build trust with and bond with your audience. It takes some work to set up properly. But do it right and you’re more likely to earn more business – and create those lasting, meaningful relationships with customers.