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Sales Intelligence

Lead Generation: The Complete Guide (2020 Update)

by Sigal Berezin , Sales Intel. Content Manager at Similarweb 9 Min.
February 10, 2020 | Updated July 13, 2022

It doesn’t matter how great your product or service is if you don’t have customers to pay for it, that’s why generating leads is the most important part of any sales funnel. In this guide, we’ll learn everything there is to know about lead generation, so let’s start at the top.

Lead generation — the act of attracting prospects and converting them into paying customers — is one of the most essential processes in running a business. Sign up here to receive a list of the fastest-growing eCommerce companies to your inbox every month.

Without an effective approach to lead generation, it will be nearly impossible for your sales reps to reach and engage with potential customers. Instead of focusing on nurturing relevant prospects, SDRs and BDRs will waste valuable time blindly reaching out to people who have no intention of becoming customers.

Today, traditional tactics like email blasts or publishing a gated report are not enough to cut through the noise and produce relevant leads. That’s why it is essential to implement a strategic approach to lead generation that helps you narrow down the pool of could-be leads into high-intent and highly qualified prospects.

What is a lead?

Before we begin covering the ins and outs of lead generation, let’s clarify what we’re talking about when we say “lead.”

A lead is an individual who has either indicated they’re interested in your product or services or would be a suitable customer. If you are a B2B company, your leads are usually company leaders or other employees with decision-making authority. If you work for a B2C company, your leads are individual consumers.

Leads can be categorized in two ways:

  1. Inbound lead: Anyone who shows an interest in your product or services by proactively leaving their contact information.
  2. Outbound lead: Anyone your sales team deems would be a relevant buyer but hasn’t actually offered to make contact.

When a person becomes a lead, they require nurturing over time to learn more about your value proposition and use cases. Proper nurturing helps guide leads through your sales funnel until they are “well-baked,” or ready to become a paying customer.

What is lead generation?

Lead generation is the process of finding and attracting potential customers. The main goal of lead generation is to pique their interest and get them to provide their contact information.

Marketing and sales teams often run numerous campaigns and initiatives with the hopes of attracting the right leads, nurturing them with useful information, and eventually, getting them to buy your product or service.

Despite the crucial role lead generation plays in growing your business and sustaining success, it continues to challenge the majority of companies. More than half (58%) of decision-makers in the UK cited lead generation as a key business challenge. That’s why gaining a clear understanding of lead generation and developing effective, scalable strategies are essential for both novice and veteran salespeople.

Why is lead generation important?

At the most fundamental level, the answer to this question is that leads ultimately turn into customers, who produce revenue for the company. This revenue covers all of the company’s operational costs, including employee salaries. It also enables the company to refine its products or services over time.

But, if we go deeper, we can name several other important benefits of lead generation:

  1. Brand awareness: Publishing collateral such as ads, social media posts, and blog posts are common ways to generate leads, but this content has another effect — it builds your brand. Everything from the images you use to the tone of your copy to the topics you discuss influences how people will perceive your company.
  2. Targeted nurturing: Lead generating initiatives also help nurture leads, which makes it easier to qualify them. For example, a person who becomes a lead because they downloaded your eBook, finds it relevant, and actually reads it can be considered a well-baked lead. After reading this content, they’re more familiar with what your company sells and has probably already considered how it could bring them value.
  3. Competitive analysis: Performing some sort of competitive analysis commonly goes hand-in-hand with lead generation activities. What types of outbound approaches or ads are your competitors using, and who are they targeting? What kind of language do they use? What customers have they won? All of this information can help you develop more strategic and effective lead generation tactics.
  4. Product improvement tips: When speaking to leads, sales reps can gain valuable information that can be used to improve your product or service. If reps notice that leads commonly ask about certain features or complain about the same pain points, they can pass this information on to your product team, who can incorporate it to create a more competitive offering.

All leads are not created equal

It’s important to note that not all leads are worth pursuing, even if they demonstrated an organic interest in becoming a customer.

For example, the CEO of a small technology startup with seven employees might leave her contact information on your lead form, but if your company sells a SaaS product with a minimum $150,000 annual licensing contract for 500 users, her company won’t be relevant. Instead, you will want to focus on leads from large enterprises.

That’s why, in addition to collecting leads, it’s important to have a system in place for qualifying them. While each company tweaks these definitions here and there, lead qualification is most commonly broken down as follows:

Marketing qualified lead (MQL)

Just as the name suggests, the marketing team is responsible for determining which leads can become MQLs. This is mainly relevant in inbound marketing, since marketing campaigns, content, and social media posts often generate organic interest in a company.

Marketing teams usually use more than one approach to qualify leads. Many use lead enrichment and lead scoring tools to automatically rate leads based on certain criteria, such as the name of the company, the number of employees, and the individual’s role. They may also consider the lead’s journey to gauge intent (a lead that had previously engaged with several of your ads and then went directly to your website and clicked your “Request a Demo” button is probably very interested in your company’s product or service and might have already researched its value proposition and competitors).

Sales accepted lead (SAL)

After a lead becomes an MQL, the marketing team hands it over to the sales team, which runs a deeper evaluation to determine the prospect’s potential. This is the beginning of the sales pipeline process.

At this point, the sales team looks for any more information that will help it determine whether the lead requires further nurturing from the marketing team or if it can be groomed by sales. Sometimes, sales reps will determine the lead isn’t relevant, and it doesn’t move any further.

Sales qualified lead (SQL)

A lead becomes an SQL after the sales team determines the lead is ready to buy your solution. That means:

  • A rep has already determined that the lead is the right point-of-contact to develop the deal.
  • The lead has decision-making authority or can bring a decision-maker into the conversation.
  • The lead has an adequate budget to actually buy your product or service.

What are the lead generation channels?

There are two ways to generate leads: through marketing and through sales. We touched on this above, but now we’ll take a closer look at each of these lead generation channels.

Marketing leads

Also called “inbound leads,” marketing leads are potential customers who offer their contact information while engaging with your content. Common examples of marketing leads include people who:

  • Click on your ads, get directed to a landing page, and fill out a contact form.
  • Subscribe to your blog or newsletter.
  • Download a gated piece of content, such as an eBook or whitepaper.
  • Participate in a survey that your marketing team created.
  • Go to your website and leave their information in a contact form.

Lead generation strategies for marketing leads

The key to an effective marketing lead strategy is to be deliberate about the content you publish. Each blog post, ad campaign, landing page, eBook, or webinar should serve a specific purpose. When deciding which content will help you generate the most high-quality leads, consider the following questions:

  • Who do we want to target?
  • What issues or challenges do they face?
  • What do they care about?
  • What value can we offer them?
  • What “language” do they speak (i.e. what kind of vocabulary, jargon, and tone are they used to reading)?
  • What kind of visuals will be the most compelling?
  • How can we differentiate our content from our competitors’?
  • What is our key messaging?
  • What is our call to action?

Solidifying answers to these questions will empower you to create tailored, on-point lead generation campaigns that speak directly to your audience, capture their attention, and offer real value.

Sales leads

Sales leads, or outbound leads, are the people your sales reps identify as relevant potential users of your product or service.

Imagine you work for a human resources management (HRM) software company that sells its solution to large enterprises. Your sales team would determine a list of relevant Chief Human Resources Officers as outbound leads and reach out directly to them to pitch your product, even if the CHRO didn’t previously show an interest in it.

Lead generation strategy for sales leads

Sales teams use a variety of tools and approaches to build cohorts of outbound leads. For example, many sales reps attend industry events where they network with possible leads and collect their contact information so they can pitch them later. LinkedIn is a popular tool because it allows users to search for individuals based on key parameters, such as company, position title, number of employees, etc.

Similarweb offers a tool that is specifically designed to simplify the process of identifying relevant B2B outbound leads and analyzing their company. The Similarweb Lead Generator allows users to produce curated lists of relevant companies based on a wide range of dynamic website metrics, such as how much web traffic a website gets, level of engagement with the website, the technology used to build the website, geographical origin of traffic, and many others.

Tools such as Similarweb make your sales reps’ lives easier by making the process of finding the most relevant leads fast, effortless, and more targeted. When sales reps have access to the right information, they can spend their time and energy contacting leads from an informed point of view, instead of wasting time searching for them one by one.

Dive deeper: How to create a lead generation process for sales leads

Let’s take a closer look at the process of identifying sales leads.

  1. Create customer personas: Customer personas are fictional customers that use your product or service to fulfill different use cases. When creating them, consider the various ways your company provides value, and to whom. Then, write detailed descriptions about each of these personas, including their role in the organization, responsibilities, challenges, interests, styles of working, and any other information you think is relevant. Before approaching a new lead, think about which persona they are most similar to, and tailor your communication with this in mind.
  2. Use your best customers as a point of reference: If your company already works with customers, think about what led to the success of those deals. Was it the industry they work with that makes for the perfect use case for your tool? Or is it because they sell to an industry that can really benefit from your expertise? Or maybe even it’s the size of the company that makes them relevant partners? Find what are the similarities between your best customers and your prospects and use that when prospecting.
  3. Scale your efforts with data: Manually searching for relevant leads wastes time that could be used to do more complex, high-value work. Instead, tools that use data to create segmented lists automatically empower sales reps to scale their efforts with far less work.
  4. Outreach: When it’s finally time to reach out to leads, your communication should be clear, concise, and tailored to the individual you’re emailing.

How to generate leads in sales

Here are four ways to generate meaningful connections with your sales leads.

  1. Personalize your outreach: When reaching out to leads, remember that the typical employee receives more than 120 emails per day. In addition to standing out in an overflowing inbox, your outreach should be personalized, not generic. It should clearly describe your value proposition and offer an example of what your services would provide.
  2. Do your research: Before emailing your lead, do your homework on their company, industry, current challenges, and competition. The more easily you can pick up their perspective, the easier it will be to frame your pitch, as well as anticipate what questions they will ask.
  3. Use data to enrich your value proposition: Remember that leads usually need to justify investments in new products or services to their higher-ups. By offering compelling data that illuminates your value proposition, it is easier to persuade both the lead and their CFO that your product will produce a high ROI.
  4. Use sales signals: The process of moving a lead through the sales funnel can take weeks or even months. With so many calls, emails, demos, and other points of communication along the way, it’s helpful to find ways to predict your prospect’s next action. By learning to identify sales signals, you can get a clearer idea about what stage your lead is in, and where they might need a little prodding.

Understanding the lead generation funnel for sales leads

There are three primary phases in the lead generation funnel for outbound leads.

Stages of the sales funnel

  1. Awareness & Discovery: In this first phase, prospects have just begun learning about a product or solution category. Usually, this is catalyzed by a certain pain point the lead wants to remedy, or a goal they want to achieve. When you reach out to a prospect in this phase, it’s important to make a positive impression as you introduce your product.
  2. Interest & Engagement: The second phase involves a narrower focus on your specific product, as well as your competitors’. Now, leads are trying to decide which option is best-equipped to fulfill their needs. They are seeking personalized content that clearly describes your value and how your product will provide the solution to their challenges.
  3. Decision, Purchase, & Adoption: In the last phase, prospects have become well-informed on the market and their available options. Winning them means you’ll need to prove why your product or service is better than your competitors’, and also negotiate the cost.

Lead generation: The foundation for sales success

The importance of effective lead generation cannot be overstated. Successful lead generation makes the rest of your sales processes smoother and more productive and contributes to better business outcomes. There are many lead generation definitions and connected parts to understand, but once you gain a solid grip on them, your potential is already higher.

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Learn more about How to Generate B2B Leads: 11 Tactics That Get Results

Lead Generation FAQ

What does lead generation mean?

Lead generation is the process of generating consumer interest for a product or service with the goal of turning that interest into a sale.

What is an example of lead generation?

Some ways to generate leads are through job applications, blog posts, coupons, live events, and online content.

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