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 of 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:

Discovery

Identifying potentially interested individuals and laying the foundation for lead nurture.

Lead nurture

Beginning to build a trusted connection, helping the lead feel comfortable with your company and what you offer.

Lead qualification

Determining whether or not this lead is ready to move forward, often the point at which the lead is handed to the sales team.

Why do you need lead generation?

Lead generation paves the way toward 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 toward building trust—and ideally, toward 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.

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 take the next step and make 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.