Lead Generation: The Complete Guide

Types of leads

1. Marketing qualified lead (MQL)

A marketing qualified lead (MQL) has a certain level of engagement with your business as a result of marketing activity. MQLs are a result of lead generation techniques employed by the marketing team and are handed over to the sales team for nurturing. An MQL typically performs an activity, like downloading your ebook or attending your marketing event, which is a clear indication of their interest in your business. MQLs are ready to be nurtured, but they’re not ready to buy just yet.

2. Sales qualified lead (SQL)

When an MQL displays sales-ready behavior, like requesting a demo or signing up for a free trial, they become a sales-qualified lead. These leads are usually handed over by the sales team to an Account Executive (AE). Sales qualified leads (SQLs) are close to making a purchasing decision, so the quicker the AE acts, the higher their chances of conversion. A good way to identify SQL is by applying the BANT framework—do they have the Budget, Authority, Need, and Timeframe to buy from you?

3. Product qualified lead (PQL)

A product qualified lead (PQL) has already experienced your product, usually through a free trial or a free product version, and is ready to purchase or subscribe to your product’s paid version. A PQL may enquire about features on your paid product, max out of their free product plan, request sales assistance to understand premium pricing tiers or convert without any assistance. PQLs engage with the product, while MQLs engage with your marketing. Generally, PQLs have higher conversion intent. So sales teams consider them high-quality leads that can convert with some lead nurturing effort.

4. Service qualified lead (SQL)

A service qualified lead is a paying customer who has told customer service they’re interested in either upgrading their product subscription or purchasing another product/service. Customer service agents connect a paying customer to a sales representative after they sense an upselling or cross-selling opportunity. Converting service qualified leads is generally low-hanging fruit and helps companies retain customers for longer.

Benefits of lead generation

Acquire new customers 

It's great to have repeat customers who are loyal to your brand. But, you also want to spark interest among new prospects to make Freshsales. Lead generation expands the pool of potential customers in your sales funnel, increasing the chances of a sale. Lead management ensures prospects are nurtured and converted into loyal customers.

Grow your business 

Lead generation tactics are crucial for any CRM for leads strategy, enabling you to attract and nurture potential customers with compelling content tailored to their needs and interests. This approach not only engages prospects but also primes them to make informed purchasing decisions, ultimately driving business growth.

Build credibility and value

Lead generation strategies show and tell the value you can provide to a potential buyer. It helps you get into the minds of prospects with useful content. Since you provide something of value to them, they develop trust and affinity towards your brand and are more likely to purchase from you.

Lead generation stages: classifying your leads

A lead moves through various lead generation stages before finally purchasing from a business. Let’s see this through an example. You experience a deluge of ads on social media, search engines, games and websites. Not every ad piques your interest. 

But let’s say you’ve been thinking about buying a pair of sneakers. So, when you see a sneaker ad with a discount code on it, you’ll probably click it. However, you may scroll past a smartphone ad as you’re not looking to buy one.

This shows your different levels of interest in various products and services. You are mildly curious about some and ready to buy others. Sometimes, you may exchange your contact information for access to some content. For example, the sneaker brand gave you a way to subscribe to their email list to get notified about future discounts. By doing so, you’ll become a lead for this particular business that uses email marketing as a lead generation strategy. The sneaker company may now entice subscribers with short-term deals or limited-time coupons.

It’s important to be cognizant of lead stages so that your marketing appeals to prospects at each stage. Inbound and outbound lead generation classifies leads into three stages based on where they are in the sales funnel.

ToFu (top of the funnel) leads aren’t aware of their problem or the solution (you), MoFu (middle of the funnel) leads are aware of their problem and the existing solutions, and BoFu (bottom of the funnel) leads are completely aware of their problem, the possible solutions and are ready to make a decision.

Top of the funnel (TOFU)

Leads at the top of the funnel are aware of their problem. For instance, a small e-commerce business might know they need to establish a digital presence and that it’s going to be hard to do on their own. They know nothing about XYZ agency’s digital marketing services or products at this stage. So, XYZ may choose to create a starter guide for e-commerce businesses to start a Facebook page. This will pique the interest of ToFu leads. Blog posts, ebooks, and guides are a few content types that work well at this lead generation stage.

Middle of the funnel (MOFU)

Leads at the middle of the funnel are aware of the various solutions in the market that could help address their pain. Leads at this stage for XYZ agency are aware that they need help with digital marketing and that various agencies exist specifically to help businesses like them. They may have questions about working with one or not know what to look for in the right digital marketing agency. They may even be comparing XYZ with its competitors. Lead generation content at this stage looks like case studies, testimonials, and videos that continue to educate your audience and make a strong case for your brand.

Bottom of the funnel (BOFU)

Leads at the bottom of the funnel are ready to make a purchase decision. They’re past the education stage. They know exactly how you can help them. You need to clear out any leftover cobwebs of doubts and questions. XYZ agency’s leads at this stage might need a free 30-day trial Facebook ads strategy or a special discount to convert them into paying customers. Only a few leads arrive at this stage through the funnel, so make sure your lead generation tactics offer maximum value here and further the buying intent. Lead generation strategies at this stage include a limited period free product trial, freemium, and product demo.

Evergreen ways to generate sales leads

1. Content marketing

Content can span all three lead generation stages in inbound lead generation depending on its intent, placement and direction. When it’s an informational blog post, it will bring in ToFu prospects who are pain/problem aware. When it’s a case study, it will attract MoFu prospects considering various solutions. A white paper will attract BoFu prospects who are ready to buy.

Creating content according to the buyer’s journey through the sales funnel ensures you meet them where they are. Otherwise, your content may create a disconnect with your leads.

Example: Mofu lead generation with a case study

Let’s consider a middle-of-the-funnel lead for the XYZ e-commerce digital marketing agency we’ve been considering throughout this guide. This lead is aware of the problem- they know they need digital marketing services to bring in more leads (this just got meta!) and stay visible online. They are aware of the possible solution- hiring a digital marketing agency.

This lead now needs to be convinced that XYZ is the right agency to partner with. A case study can achieve this. XYZ produces a case study that details how it helped an e-commerce client achieve significant revenue growth through blogging strategies executed over a year.

The case study shows the process of working with XYZ and the results it can produce. It moves the lead further along the pipeline.

2. Social media

Social media marketing is a ToFu content marketing strategy, but important enough to deserve a spot of its own. Every social media channel can be a lead generation channel, depending on the nature of your business. Generally, B2B marketers find more value in LinkedIn and Twitter, while B2C businesses leverage Facebook, Instagram and Pinterest. 

Social media content can be both long-form and short-form based on the intent and direction of the content. If you intend to share a blog post to your socials, the post content can be short. However, if you’re laying out an idea or detailing a process, you might want to create a carousel with in-depth content.

Example: ToFu lead generation with LinkedIn marketing

Let’s say XYZ agency wants to create a powerful social media presence. It can do so not only by sharing its blog posts or lead magnets on social media but also creating social media-specific content to engage followers and prospects.

One specific LinkedIn marketing strategy can be to put up polls to listen to your prospects. XYZ may choose to post a poll asking their followers which digital marketing strategy they most struggle with. They can include a link to their in-depth guide about solving digital marketing hassles with easy tactics.

As a result of this poll, XYZ agency engages their prospects, listens to their struggles and gets leads when they sign up for their guide.

3. Email

Email marketing is often how leads progress from the ToFu to the MoFu stage. Once you receive your lead’s email address, you can send them personalized content and discount codes to move them further along. Email marketing is also a part of content marketing, but a powerful strategy to stand alone.

Emails can help you establish a one-on-one relationship with your prospects, follow-up with them consistently and nurture them with information while nudging them toward the next stage.

Example: Mofu lead generation with email marketing

Let’s say a lead signed up for XYZ’s guide about solving digital marketing struggles with easy tactics. Knowing what XYZ knows about this lead (they’re struggling with digital marketing), XYZ can use email marketing to survey this lead about their top challenge with digital marketing. With a simple click, the lead can divulge more information about their pain. Let’s say they respond with social media marketing being their top challenge.

XYZ can now invite them to a webinar on social media marketing challenges and tactics. They can talk about their services at the end of the webinar to generate interest. This way, the lead will gain more awareness of a possible solution (XYZ’s services) and move along in their buyer’s journey.

4. Webinars

A webinar can lie in any of the three B2C/B2B lead generation stages depending on its content, purpose and intent. If it’s ToFu, prospects may need to register with their personal information, yielding leads for the business. Marketing campaigns with timely webinars on relevant topics delivered by valued thought leaders can build a brand around your business.

Example: BoFu lead generation with a webinar

Let’s say XYZ has a lead who has downloaded a case study, has considered other solutions for their digital marketing needs and is now ready to purchase. At this stage, they want to be convinced that XYZ is the right agency for them. XYZ can invite them to a LIVE webinar about an SEO tutorial to rank a page better.

At this stage, the webinar should be a two-way conversation with the expert willing to answer any questions at the end of demonstrating their SEO strategies. This experience may be the one that convinces the lead to sign up with XYZ, given how willing and resourceful they are.

5. PPC (pay-per-click) ads

PPC or pay-per-click is an online advertising model where you only pay when a person clicks on the ad. PPC ads generate ToFu leads for your business and appear on search engine result pages (SERPs) and social media platforms. 

Clicking on a PPC ad takes the visitor to a landing page, which collects the lead’s information. PPC ads work because they contain keywords relevant to your audience. Retargeting high-quality leads with more attractive ads can also be a great way to land new customers.

Example: Tofu lead generation with Facebook ads

XYZ wants to capture fresh leads on Facebook and uses a lead magnet to attract its ideal audience. They create a lead magnet about e-commerce digital marketing mistakes small businesses should avoid.

XYZ will refine its criteria to reach the desired audience, choose where and how the ad will appear, bid on specific keywords relevant to the market, define a budget for the campaign and analyze the ad’s performance for the future.

6. Display ads

Also called banner ads, display ads are like print ads for digital. They appear on third-party websites and help attract ToFu prospects through crisp copy, an attractive video or image, and a persuasive CTA (call-to-action).

Display ads also need your brand logo, a value proposition and a responsive structure, as prospects may view them on different devices. They intrigue your audience, engage them and make them click.

Example: Tofu lead generation with a display ad

XYZ agency may choose to widen its reach for an upcoming webinar about e-commerce digital marketing starter tactics through a display ad. They create a responsive, attractive and engaging ad that speaks to a specific audience (e-commerce small businesses) and gets them to become a lead by signing up for the webinar.

Essential lead generation metrics

If you don’t measure something, you can’t know if it’s working or not. Consequently, you can’t improve it. Lead generation cannot be based on hunches or guesswork. When you’re generating leads, you want to quantify your results.

These lead generation metrics or key performance indicators (KPIs) are applicable to both B2B and B2C (business-to-consumer) businesses. Here’s a list of all metrics you should track and strive to improve for effective lead generation -

1. Website visits

Website visits are the number of visits to your website from unique URLs, not including your own employees. More website visits mean more people are landing on your site. Google (and other search engines) acknowledge high website traffic as an indication of your website’s authority. 

As a result, you start ranking higher for the keywords you’re targeting. One way of getting more visitors to your website is by promoting it on Facebook, Instagram, and LinkedIn. A healthy blog regularly updated with informational and engaging content across buyer stages helps improve your website’s traffic and search performance.

2. Source of visit / lead source

In Google Analytics, the lead source is classified based on the following default channels:

• Direct: lead types your URL into the address bar or clicks on a bookmark of your site

• Organic: lead finds you from organic search results

• Social: lead arrives on your website from social networks

• Email: lead follows a link to your website from an email

• Affiliates: lead comes from an affiliate marketer’s website

• Referral: lead is “referred”, i.e. they land on your website from clicking a link on another website

• Paid search: lead finds you from PPC (pay-per-click) ads in search results

• Other: lead comes from online advertising apart from search and display, like cost-per-view video ads

• Display: lead finds you from display ads

3. CTR (Click-through rate)

CTR is a key performance indicator defined as the number of clicks on your call-to-action button instead of the total number of visitors that arrived on that landing page or ad. If 100 people visit your landing page or view your ad and 65 of them click on the CTA, your click-through rate is 65%. 

CTR depends on several factors, chief among which are the value proposition on your page/ad, your CTA’s placement, and the relevance of your content vis-à-vis your target audience. 

4. ROI (Return on investment)

ROI is probably the most important metric in lead generation. Its calculation is fairly simple: the profit or loss you make from investing in a lead. Let’s say you spent $15 capturing each lead, and a lead is worth $20 to you. Your profit from a lead ($5) against your initial investment ($15) gives you an ROI of 33%.

The more expensive your product or service, the more you can invest in lead generation activities, as your ROI will be worth the effort.

5. CLTV (Customer lifetime value)

CLTV determines revenue by denoting the amount of revenue a customer generates through their relationship with your business. A high CLTV shows brand loyalty and healthy upselling and cross-selling by marketing and sales teams.

Upselling and cross-selling products to customers who have already purchased from you is easier and less expensive than converting new leads. So, a high CLTV is a sign of a healthy lead generation pipeline.

6. CPA (Cost per Acquisition)

Paid or inorganic lead generation avenues consider CPA a key metric in defining success. It’s calculated as advertising spend divided by acquisitions generated. So, it’s framed as it costs $X for you to acquire a lead. For instance, if you spent $100 on a lead generation campaign and obtained 20 leads, your CPA would be $5.

A lower CPA indicates a better lead generation engine as you spend fewer resources on acquiring leads, which can potentially increase your profit.

7. CR (Conversion rate)

CR specifies how many qualified leads you have converted into paying customers. A high CR is a sign of successful lead generation. Conversion rate is calculated as the number of sales for a particular period of time divided by the number of leads generated over the same period.

For instance, if you landed 100 leads in a month and converted 2 of them into paying customers, your CR will be 2% or 0.02.

Lead generation activities are both the fuel and the engine of a successful business today. You can employ a combination of the strategies we’ve discussed here to create a healthy pipeline of leads for your business and ensure your continued success.

Sales Lead strategies employ both creativity and science in that creating inspirational designs and messaging for prospects is as important as employing data-driven sales generation tactics.

Now you know how to generate leads for your business. What we’ve covered in this blog post is only a starting point. You’ll need to take every strategy, experiment with it and refine it for your audience and business. You may also find several attractive lead generation tools to help you along the way.

Testing, tracking, refining and repeating is how lead generation works. But you don’t have to go at it alone. Consider using Freshsales, a sales automation tool to assist your lead generation efforts. Freshsales gives you 360 degree information on your leads and helps you manage them effectively through their lifecycle.