Lead Generation: What Is It and How to Generate Qualified Leads?

Lead Generation is directly tied to creating business opportunities and expanding the commercial reach of your company.

In this article, you will learn what leads are, the different classifications for these contacts, the importance of lead generation, and how to manage this strategy to boost your sales.

Keep reading to clarify all your questions on the topic!

What Is Lead Generation?

Lead generation means attracting potential customers and turning them into business opportunities for a company.

Through lead generation, a brand builds relationships with consumers, gains trust and market relevance, and guides these contacts through the sales funnel until they convert into customers.

Where Does Lead Generation Fit Into Your Strategy?

Lead generation aligns with the overall strategy of the sales funnel.

This step is crucial for creating business opportunities and engaging consumers with diverse needs at varying stages of purchase maturity.

If we consider that there’s a long journey between a consumer’s first interaction with a brand and making a purchase, it becomes clear why lead generation is an effective way to provide content and offers tailored to what the consumer is looking for at each stage of their journey.

Why Is Lead Generation Important?

The way we consume and sell evolves constantly, influenced by societal developments.

Businesses need to adapt continuously and find new, more suitable ways to connect with their audience.

Today, consumers hold much more power, both in accessing information and influencing others—and they are well aware of it.

Every day, we are bombarded with thousands of advertisements. Often, consumers find this approach intrusive and ignore anything irrelevant to them.

Thus, brands must compete not only for purchase decisions but also for consumer attention.

Lead generation allows companies to gather personal information from potential customers in a way that builds trust and relationships, as consumers willingly share their data with the brand.

What Is a Lead?

A “lead” refers to a consumer who shows interest in something your brand offers.

This consumer actively seeks content, products, or services and, in exchange, provides personal information.

Whenever a consumer fills out a form, a contact box, or reaches out through support channels, sharing personal data like their name, email, and phone number, they transition from being a visitor to becoming a lead.

These contacts form your lead database, a resource your company can leverage in marketing and sales strategies.

Lead Classifications

When someone provides contact information to your company, they demonstrate interest in what you’re offering.

However, this doesn’t necessarily mean the consumer is ready to make a purchase.

It’s crucial to understand lead classifications, which correspond to the consumer’s purchase readiness.

Understanding this qualification helps your brand communicate effectively with each contact, offering what they need based on their stage in the buying process.

Think of these classifications as a pathway the consumer follows, progressing toward making a purchase decision with your company.

Prospect

Prospects are contacts who, at first glance, seem to match your ideal customer profile but haven’t yet shown interest in your product or service or completed a conversion.

At this stage, it’s still uncertain whether they align with your desired customer profile.

Lead

A lead is a consumer who has provided their information to your company by engaging with some type of content or offer.

Initially, you know very little about them.

Filtering and qualifying these leads will determine whether they are cold leads (outside your profile, unengaged, uninterested, or not ready to buy) or qualified leads.

Qualified Lead (QL)

A qualified lead is a contact interested in your brand’s communication.

While they might not be ready to buy, they’ve shown interest and fit within your target audience.

Marketing Qualified Lead (MQL)

As a lead moves through the funnel and provides more information, they may be categorized based on specific criteria.

For example, a visitor might download an eBook titled “Everything You Need to Know About” and provide their name, email, industry, and company size.

Depending on your marketing strategy, this information could be enough to label them an MQL.

Still, further details are often needed, which can be obtained through subsequent online conversions or discussions with an SDR (Sales Development Representative) or salesperson.

Understanding their position in the buyer’s journey is critical.

Are they aware of their problem?

Are they comparing brands and proposals?

This insight determines whether they need further nurturing or are ready to transition to the sales team.

Sales Accepted Lead (SAL)

When leads fit the ideal profile and are mature in their buying decision, a “handoff” occurs, transitioning a lead from marketing to sales.

This marks the beginning of the commercial relationship, with the pre-sales team verifying the information provided by the leads and gathering additional data to guide the next phase.

Generally, the sales team performs a “pre-qualification” process to determine if the lead truly meets the necessary criteria to become a Sales Accepted Lead (SAL).

Sales Qualified Lead (SQL)

A Sales Qualified Lead (SQL) is a contact who has reached the bottom of the funnel: they fit the profile, have the budget available, and are ready to close the deal NOW.

This is the most advanced stage in the buyer’s journey.

All that’s missing now is an irresistible commercial proposal.

This is where the sales team steps in with full force to convert the lead into a customer.

Product Qualified Lead (PQL)

Certain specific segments, such as Software (SaaS) companies, have slightly different ways of qualifying their contacts.

Product Qualified Leads (PQLs) are those who use free trials and demos of digital products, simultaneously showing that they have the right profile and interest in what is being offered.

In other words, these contacts have already experienced the value of your brand and have a different propensity to choose it.

The sales approach for this type of lead is entirely different, as we are dealing with a higher conversion potential, and the arguments chosen by the sales team also differ.

It’s also common for many companies to adopt a model where the user completes the entire purchasing journey independently, without the involvement of a salesperson.

Learn more about this model: What We Learned from a Product-Led Growth (PLG) Strategy

Service Qualified Lead (SQL)

Finally, a Service Qualified Lead (SQL) is a contact that comes through a slightly different channel: customer service or customer success.

This could be a free-tier customer looking to subscribe to a plan or an existing customer wanting to upgrade by acquiring new services or features within their current contract.

In these cases, each company determines the best way to proceed with the sales process: whether the consultant finalizes the sale independently, involves a salesperson, or forwards the contact to the sales team.

How to Generate Leads?

Now that you understand what leads are and the stages a contact goes through to become a lead ready to turn into a client, the next question is: how do you generate leads?

Lead generation happens in three steps:

Attract: Bringing visitors to your website or conversion pages.
Engage: Connecting and engaging with your audience so they are willing to provide personal information and move toward conversion. This means offering something valuable to the visitor.
Capture: Collecting contact information to transform visitors into leads.

Let’s delve into each of these steps.

1. Attract

The first step in lead generation is attracting visitors to your pages and conversion materials.

Additionally, you must design these materials and channels based on your target audience’s profile.

Your marketing strategy should clearly define objectives and explore channels that drive traffic to your pages while leveraging lead generation opportunities.

Do not rely solely on one traffic-driving method for your pages and lead generation materials.

Build an integrated strategy and utilize all possible ways to increase traffic to your channels.

Here are some key methods to achieve this:

Key Lead Generation Channels

Paid Advertising. Use paid media on websites, search engines like Google, and social media ads. Direct these links to your website, pages, or lead generation materials. Tailor the ads and platforms to suit your target audience.
Content Marketing and SEO. By producing blog articles, web pages, and other content optimized for organic search (searches conducted on tools like Google), you greatly increase the chances of attracting visitors to your pages. Besides increasing site traffic, a content strategy is an excellent way to showcase the benefits you offer to visitors.
Email Marketing. Leverage your existing contact database to promote your materials and offers, qualify leads, and drive traffic to your website.
Social Media. In addition to running social media ads, post content that directs users to your key pages, engaging those who already follow you and are familiar with your brand.
Podcasts and Videos. Podcasting and video platforms have grown immensely in recent years, with growth expected to continue. Creating content in audio or video formats is an effective way to direct audiences consuming this type of media to your website or conversion pages.
Virtual and In-Person Events. Engaging with your audience through events is another way to draw visitors. Whether online or in-person, events can attract a specific audience relevant to your sector.

2. Engage

Engaging visitors is where high-quality content and compelling conversion offers make all the difference.

Primary Incentives to Generate Leads

The top types of content that encourage leads to share their contact information include webinars, surveys, and white papers.

81% of users are willing to provide their email address in exchange for valuable content – but only 12% would share more sensitive information, such as their budget or annual revenue.

Consultations and Diagnostics. Offering free consultations is a great way to engage visitors. It not only provides them with unique insights but also allows you to gather detailed information for building a closer relationship.
Demos and Catalogs. For leads more mature in their buying journey, offering access to product demos and catalogs can effectively highlight your solutions.
E-books. E-books are a classic lead-generation tool. They educate leads about their problems and help them understand the type of solution they need. These should focus on consumer interests rather than promoting your product or service directly.
Webinars. Webinars offer a dynamic and personalized content format, often produced at a low cost. They allow you to showcase expertise through interactive or recorded presentations.
Templates. Templates are ready-made files that can be customized by leads. Offering tools like these demonstrates value and encourages engagement with your materials.
Tools. Providing tools such as spreadsheets, calculators, or product trial options helps potential clients solve specific problems, establishing your brand as a helpful resource.
White Papers. Similar to e-books, white papers focus on specific topics but are less in-depth. They allow you to break down broader content into several specialized pieces, engaging visitors across different stages of interest.
Quizzes. Quizzes provide an engaging and interactive way to collect data while entertaining users. They pique curiosity and can capture valuable information often overlooked in static forms.
Research and Case Studies. If you have exclusive data or studies that can improve client outcomes, sharing these is a compelling way to attract and engage leads.

3. Capture

The final step in lead generation, after attracting visitors and gaining their interest, is data capture.

This can be done through various tools and methods.

In this stage, identifying which data points are most relevant is critical to your strategy’s success.

For example, why ask for a lead’s profession if this information doesn’t help your sales team close deals?

Additionally, all collected data must be securely stored and obtained with the lead’s consent.

Key Lead Capture Tools

Today, the most common way to collect lead information is through tools like landing pages, forms, chatbots, pop-ups, WhatsApp buttons, and social media.

This ensures leads willingly provide their information to your company.

Here’s an overview of these data-capture tools:

Landing Pages. Also known as capture pages, these offer valuable materials like e-books, infographics, offers, webinars, or courses in exchange for lead information. Landing pages must communicate clearly and concisely, helping visitors understand what they’ll receive after filling out their details.
Forms. Forms are essential for collecting data. They can be embedded in landing pages, websites, blogs, or even pop-ups appearing during navigation or when visitors attempt to leave your site.
Banners. Banners, often containing CTAs (call-to-action buttons or messages), guide visitors toward conversion-focused pages or actions. They can appear across various site materials or pages.
Chatbots This is the biggest innovation in lead generation in recent years! With Conversational Marketing, you can offer personalized experiences that engage visitors on your corporate website, landing pages, and blogs. Through a virtual assistant or chatbot, you bring your visitor into an interactive conversation, capturing contact details and automatically qualifying leads by asking qualification questions. This approach increases your site’s conversion rates and replaces outdated forms. Learn more by visiting Leadster, a pioneer in Conversational Marketing.

WhatsApp Button. You can add a button to your website, landing pages, and chatbots that directs users to WhatsApp. With this feature, before starting a conversation, the lead provides some personal details.
Pop-ups. Pop-ups are another way to capture leads. These are windows or banners that appear on your pages to grab the visitor’s attention. Since they are a more intrusive resource, it’s important to use them carefully.
Lead Ads. This is a Facebook Ads feature that allows you to create forms directly on the platform. This way, users can complete their registration and become leads without leaving the social network they’re browsing.

Tips and Strategies for Lead Generation from Industry Experts

To overcome common challenges, we’ve gathered expert tips to help you improve your conversion rates and generate more qualified leads:

Avoid the “Leaky Bucket” Effect

Many marketers spend time, energy, and resources on “leaky buckets.”

This is like pouring water into a bucket with holes instead of fixing the problem and expecting it to remain full.

To avoid this, which only inflates acquisition metrics and yields subpar results, you first need to analyze your entire sales funnel to identify the bottleneck.

Start your work there.

Invest in Conversion Rate Optimization (CRO)

CRO, or Conversion Rate Optimization, is the strategy focused on improving conversion rates.

If you want to enhance your brand’s metrics, pay close attention to CRO, which involves using your existing infrastructure and making adjustments to improve conversion rates, boost results, and ultimately increase sales.

By applying CRO, you can test and improve nearly every stage of the buyer’s journey.

This includes creating hypotheses and optimizing processes and materials such as ads, conversion points on your site, account creation/login/onboarding processes, communication flows (email/phone/WhatsApp), site speed, design and usability (UX/UI), content accessibility, and more.

Adopt a Conversational Marketing Strategy

Conversational Marketing is one of the most modern approaches to lead generation and optimization.

Interactive marketing tools offer personalized experiences through messaging boxes and interactive conversations, driving engagement and conversions with visitors to your website, blogs, and landing pages.

Highlight Your Value Proposition

A value proposition is a promise of what will be delivered.

It’s the main reason a consumer should choose to buy from you.

Your value proposition needs to be evident in all your materials. A strong value proposition is a clear statement offering relevance, benefits, and differentiation.

This strengthens your brand’s market positioning and generates engagement with your target audiences.

Invest in Great Copywriting and CTAs

Copywriting is a writing technique focused on persuasion and conversion.

CTA (Call to Action) is the call that prompts the user to take an action — in this case, converting into a lead.

By applying persuasive articles and effective CTAs, your target audience is encouraged to decide to convert.

These materials should be part of a communication strategy tailored to your persona and their stage in the buyer’s journey.

Remove Friction Between the User and the Desired Action

To avoid friction points between users and their lead conversion, focus on improving the visitor experience.

This includes investing in content quality, making visuals appealing, creating responsive pages for different devices, and reducing page load times.

Issues can range from site speed to lack of mobile optimization or inappropriate language.

Conduct user surveys to understand what hinders conversion and address those points on your site.

Optimize Your Website’s Speed

A page with errors or slow load times discourages visitors, prompting them to quickly seek alternative content or pages without such issues.

One key improvement is ensuring your pages load quickly.

Don’t Buy Leads!

By now, you should know this is a bad practice and violates data protection laws.

To emphasize: never purchase lead lists for your company’s marketing and sales efforts.

Best Lead Generation Software

Technology plays a significant role in helping businesses acquire new contacts.

Here are the top tools for generating qualified leads:

Leadster

Leadster offers lead capture resources such as chatbots and WhatsApp Buttons.

These Conversational Marketing tools have higher conversion rates than static forms.

How to Generate Leads with Leadster

As mentioned in this article, Conversational Marketing is one of the most dynamic and modern ways to generate qualified leads.

Leadster provides exactly this type of tool.

With a personalized approach, you can transform static forms into conversations, making the conversion process much more interactive.

Learn more about our tool with a free demo.

Click here to get started.

🔎 Learn more: Leadster: How the Platform Triples Lead Generation

Key Metrics for Lead Generation

Conversion Rate

The conversion rate measures the ratio between the number of visitors and the number of leads.

It’s the primary metric for analyzing lead generation, though not the only one.

To calculate your conversion rate, track the performance of your marketing materials and efforts. The formula is simple:

Read more: Increase Sales and Lead Conversion Rates: 9 Practical Tips

Cost per Lead (CPL)

How much does it cost your company to acquire a lead?

CPL measures this, calculated by dividing the total investment in lead acquisition campaigns by the number of leads generated in the same period.

Customer Acquisition Cost (CAC)

CAC determines the financial health of your company and the effectiveness of marketing and sales investments.

It’s calculated by dividing the total marketing and sales expenses by the number of customers acquired in a given period.

Cost per Acquisition (CPA)

CPA measures the average cost per sale or transaction.

Unlike CAC, it considers every individual sale as an acquisition, regardless of whether it’s from a returning customer.

Return on Investment (ROI)

ROI calculates how much money your company earns or loses from its investments.

What to Do After Generating Leads? Next Steps

Generating leads is the first step in building relationships with potential customers.

So, what comes next after capturing their initial details?

How to Identify Leads

Unfortunately, not every lead conversion represents someone with a genuine interest in making a purchase or closing a deal.

In fact, many of these leads will not become customers, and many of them won’t even maintain a connection with your brand.

Often, a lead will not progress through the sales funnel.

Other times, the lead is simply not ready to make a purchase and must go through the process we call nurturing and qualification in Marketing.

You will only understand the profile of each user who converts through your materials if you perform this filtering and lead qualification.

We cover this topic in detail in the article: Lead Qualification: Expert Tips to Receive Warmer Leads.

How to Manage Leads

After generating leads, the real work begins.

Maintaining relationships with these contacts helps qualify them based on their stage in the buying journey.

Lead qualification efforts also help sales teams focus on decision-ready leads open to more aggressive approaches and negotiations.

Beyond lead generation, contact management is essential for a comprehensive marketing and sales strategy.

How to Nurture Leads

Once captured, leads enter the nurturing cycle.

This stage helps us better understand the lead’s profile, engage them with relevant content and informative materials, and create a closer relationship with the brand.

Here, we also begin to educate the lead more effectively about the problems they may have and the solutions to those problems, always adapting the language according to the lead’s buying stage.

How to Distribute Leads

Lead distribution is an essential part of lead management for companies using this strategy.

It involves directing contacts among sales team members, leveraging the sales funnel to increase conversion rates and reduce consumer waiting times.

A good distribution process can identify which contacts are most likely to close a deal, acting quickly at the right moment to prevent sales opportunities from cooling down.

It also takes into account the lead’s profile and the sales representatives’ profile, connecting them strategically.

Sales Negotiation Techniques

Negotiation techniques are methods, resources, and behavioral patterns used for persuasion to achieve the desired goal—in this case, conversion.

There are various negotiation techniques, and we cover all of them here: 14 Key Negotiation Techniques for Sales

Sales Closing Techniques

Sales closing is a complex phase that involves many steps: from sending the commercial proposal to negotiations, answering questions, follow-ups, and formal closing with the signing of the contract.

And, because it’s such a complex process, many factors and variables must be taken into account.

Handling sales objections and preparing arguments is part of a salesperson’s routine.

We also have a detailed article on the topic, and you can deepen your knowledge with the post 20 Sales Closing Techniques to Close Deals Like a Pro.

How to Analyze Metrics

Throughout the lead management process, it’s important to monitor and track metrics.

These metrics show us whether we are following the best strategies, which conversion opportunities perform best, the topics and channels most engaging to leads, base and qualification growth, as well as return on investment.

Some key metrics to track include: the number of leads generated, conversion rates, the number of qualified leads generated, the percentage of leads at each stage, conversion percentage per channel, number of sales, customer acquisition cost, and ROI (Return on Investment).

Conclusion

Now you know a lot about lead generation and are ready to start or refine actions to capture these valuable contacts for your business.

Don’t forget to check out other articles on our blog to deepen your knowledge on the topic and leave your questions in the comments!