What is Lead Generation? Why is Lead Generation Important?

11 mins

Did you know that in 2021, U.S.-based marketers alone spent $4.6 billion dollars on advertising campaigns for lead generation? And that this figure is up from $3.1 billion in 2018?

Before writing this article, we didn’t. 

Lead generation is the revenue-building process that keeps most (if not all) businesses afloat. 

And, because it’s very important, we’ve decided to dedicate an entire article to why lead generation matters. 

This article will address the following questions: 

  • What are the different types of leads and lead generation methods? 
  • What methods distinguish high-quality leads that are ready to purchase from other leads?
  • What strategies can businesses employ to entice prospects to engage with their product or offer? 

We’ll also share some expert processes and strategies so that you can implement them in your next campaign.

Here’s how this article will look:

And here’s a summary of our findings:

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TL;DR

  • Lead generation is the process of finding people who might be interested in your products and services. 
  • There are many types of leads, including:
    • Marketing Qualified Leads (MQLs)
    • Sales Qualified Leads (SQLs)
    • Product Qualified Leads (PQLs)
    • Service qualified leads 
  • Lead generation itself comes in two forms: inbound and outbound. The tactics, channels, and strategies involved in each are different.
  • Lead generation can help you:
    • Get prospects for sales reps
    • Increase profits
    • Help sales reps work smarter
    • Get new customers
    • Collect data from prospects
    • Build the foundation for brand loyalty
    • Increase your brand’s digital footprint 
  • Lead generation occurs at the very top of your sales funnel (but after demand generation). 
  • Lead generation is the responsibility of the marketing and sales departments. 
  • Expandi can help you take your lead generation efforts to the next level. Expandi allows you to conduct LinkedIn outreach at scale. Try Expandi’s 7-day free trial today.

What is lead generation?

Before we dive into lead generation strategies you can use to grow your B2B business, let’s ensure we’re on the same page regarding terminology.

“Lead generation” (often shortened to “lead gen”) is the process of finding people interested in your business. 

“Lead nurturing” is the process of filling your sales funnel with these people. 

Anything that gets someone to give you permission to contact them or market to them is a “lead generation tactic”.

For example, let’s say you’re the in-house digital marketer for a company that builds backyard decks. You can generate leads by creating a free PDF guide about deck maintenance. Because the people who want to read the guide must submit their contact information, this content serves as a lead generation tactic (specifically, this content is a “lead magnet”).

If you’d like to learn more about the lead generation process, read Lead Generation — How To Get High-quality Leads With Expandi.

Now, let’s discuss leads in more detail…

“Leads” definition and types of leads

A “lead” is simply someone who’s demonstrated interest in your business in some way.

For example, think of someone who’s given you their contact information — perhaps to attend a webinar, download a free guide, sign up for your newsletter, etc. Because this person has engaged with your business website and permitted you to contact them, they’re now inside your sales funnel. They are a lead. 

Here are the major types of leads:

  • Marketing Qualified Leads (MQLs)

“Marketing Qualified Lead” (MQL) is a term used to describe a customer who has shown interest in your product or service and is ready to communicate (but has yet to show the intent to buy). 

MQLs are an integral part of any lead generation strategy because they are more likely than other non-leads to convert into sales.

A prospect must have expressed interest and given you their contact information to qualify as an MQL.

  • Sales Qualified Leads (SQLs)

“Sales Qualified Lead” (SQL) is a term used to describe a potential buyer who has expressed an immediate interest in buying your product or service and has provided contact information like their:

    • Name
    • Email address
    • Phone number
    • Business address and work details

SQLs are also known as “warm” prospects because they have the intent to buy and are thus more likely to convert into a potential customer. 

Attracting this type of lead typically involves outbound marketing and inbound marketing. They will likely need some sales nurturing to qualify as an SQL.

  • Product Qualified Leads (PQLs)

“Product Qualified Lead” (PQL) is a term used to describe a customer who has interacted with your company’s products or services but has not made a purchase. They may be interested in purchasing later or have started a free trial.

The PQL qualification process begins when a salesperson speaks with this lead and learns about their needs. It’s important to remember that the more information a salesperson has about a PQL, the better they will be able to service the lead.

  • Service qualified leads 

“Service qualified lead” (or “serviced lead”) is a term used to describe a prospect who has been screened and qualified by a company. 

SQLs are usually more experienced and familiar with your products and services than other prospects. They may also have contacted a sales rep or been flagged by your sales team as ready for a direct sales follow-up.

A graphic showing the different types of sales leads

Types of lead generation

Now that we’ve clarified the difference between each type of lead, let’s discuss the two types of lead generation processes, known as “inbound” and “outbound”. 

The critical difference between them is that inbound leads find you through their own research. They initiate communication.

You find outbound leads and reach out to them with information about your products and services. 

A screenshot of a graphic showing different types of leads

Now, let’s go into more detail. 

  • Inbound lead generation

The inbound lead generation process involves attracting people looking for a product or service like yours using marketing tactics like content marketing, website marketing, social media marketing, and Paid-Per-Click (PPC) ads.

Inbound lead generation focuses on attracting prospects, creating awareness, and driving interest or demand for your product through marketing.

Read our article Inbound Marketing Funnel: What It Is and How To Build It For Your Business to learn more about inbound strategies.

  • Outbound lead generation

The outbound lead generation process involves finding potential customers who are unfamiliar with your brand and reaching out to them. It’s very useful for expanding your customer pool and building lasting relationships. 

Using effective outbound lead gen strategies can significantly shorten the sales cycle. But before you can execute a strategic lead gen campaign, your sales team must first and foremost identify your Ideal Customer Profile (ICP) and buyer personas.

Several common strategies used for outbound lead gen include cold calling, cold emailing, and LinkedIn outreach. We’ve found that taking an omnichannel approach to outbound lead generation boosts your chances of generating more leads.  

Benefits of lead generation

  • Get prospects for sales reps

Prospecting is the initial lead generation process that helps you identify and connect with consumers. It’s vital to offer prospects to sales reps because 77.3% of salespeople say their company provides at least 25% of their leads.

  • Increase sales, revenue, and profit

By targeting the right prospects with the right message, you can generate more leads and convert them into customers — boosting your profits. 

We know that many initial prospects aren’t a good fit, so generating lots of leads is crucial. 

SalesInsightsLab asked salespeople how many of their initial prospects were a good fit for their brand. Here are the results (“number” in this table means the number of salespeople who selected this category):

A table showing how many leads are a good fit

  • Decrease sales reps’ workloads

Sales reps are often tasked with a lot of work, from prospecting to closing deals. As a result, the average B2B marketing workload can be overwhelming and time-consuming.

Businesses should invest in lead generation to decrease the workload of sales reps. Businesses can also help by identifying potential customers and obtaining their contact information so sales reps can spend more time following up with leads. 

Sales reps can also focus on tasks such as marketing or leveraging automation tools such as Expandi to deliver leads on autopilot.

  • Get new customers 

Lead generation can help businesses get new customers by targeting members of their ICP. 

Incorporating marketing strategies such as email, social media, or paid advertising can help businesses attract MQLs. We know that 91% of consumers will visit a brand’s website after following and engaging with relevant content on social media — so inbound marketing does work. 

Focusing on acquiring a constant stream of new and high-quality customers can improve your Return on Investment (ROI). 

  • Target members of your ICP

Targeting members of your ICP is an effective way to generate leads for your business. Knowing who your ICP is and their needs can help you create a targeted approach to lead generation.

When targeting members of your ICP, 37% of marketing professionals say personalized nurturing makes your content stand out. In addition, 80% of B2B buyers want real-time interactions when communicating with companies — so invest in these interactions.

Understanding leads’ pain points and how your product or service can help solve them is essential. But, then, you must be able to offer a solution that meets their needs and is tailored to their specific situation.

  • Collect information from prospects

Lead generation is a great way to collect information from prospects and build the foundation for brand loyalty. By collecting data about your prospects, you can better understand their needs and tailor your content to meet those needs. 

In addition, gathering information allows you to adopt a more personalized approach when attracting prospects.

  • Build the foundation for brand loyalty

Creating customer trust is vital for any business to succeed. It’s the foundation of a successful customer relationship, and it’s something that needs to be nurtured over time.

According to Koros, only 46% of customers trust brands. In comparison, 56% said that they’d become long-time brand customers if only they felt more “connected” and could build better relationships with their sales representatives.

To build brand loyalty, businesses should leverage customer reviews and testimonials to build trust before the purchase. Reviews can prove that your product or service is worth investing in. 

After the purchase, brands should provide resources and support for customers that run into strife. Sales reps should also follow up personally. 

  • Increase your brand’s footprint in your niche

In the present business climate, companies must make an impression and become more visible. Therefore, social media marketing is essential for any lead generation campaign, especially in the B2B space. LinkedIn, for example, is responsible for 70% of B2B leads.

Content marketing and publishing great content consistently can also facilitate sales. Leveraging social media platforms and other digital avenues allows businesses to connect with their target consumers and build demand for their products.

Things you need to know about successful lead generation strategies

  • Concentrating on lead quality can bring more conversions — It’s essential to prioritize quality leads over lots of leads.
  • Developing a system for lead qualification will help you qualify leads faster — Sort leads by their interest level, delegate points to leads depending on criteria you set, and award points for website visits, downloads, or email open rates.
  • Growing a loyal customer base that will improve your returns in the long term — You’ll also be able to target new and existing customers.
  • Lead segmentation will help you target leads based on their interests and preferences This will help you create more personalized messages tailored to the individual.
  • Social media can attract quality leads — In particular, LinkedIn can help you boost sales. According to Rick Whittington, 44% of B2B marketers utilize Linkedin to generate sales.
  • Interactive, actionable website widgets like a quiz can help you score more inbound leads — Then, based on people’s responses to the quiz, you can send personalized assets and materials to them.
  • Getting data from high-quality leads is critical to converting them — Urge prospects to fill out forms to get free content and capture their contact information so that you can utilize the data later.
  • LinkedIn is an excellent resource for obtaining quality leads (especially for B2B businesses) — A tool like Expandi can also help you scrape information from leads’ profiles. 

Where lead generation fits into your sales and marketing strategy

Lead generation occurs at the very, very top of your sales funnel (after demand generation). 

To initiate an effective lead generation process, you’ll first have to consider your ICP so that you know which audience to target and who you want to work with. 

Then, you need to find leads. If you’re using an inbound approach, that means attracting leads through inbound marketing (like PPC ads, for example). If you’re using an outbound approach, that means finding leads in the wild (like on LinkedIn) and collecting their contact information. 

Lead generation turns into lead nurturing once your sales reps make contact with a lead and begin to talk shop. Lead nurturing turns into lead conversion when a lead makes an initial purchase. 

If you’d like to learn more about mapping your users’ journeys, read our article Lead Generation Funnel — Map Out Your User Journey

Who should conduct lead generation?

The sales team is responsible for conducting lead generation, and as a lead generator, finding prospective clients, contacting them, and nurturing leads through the sales funnel should be your top priority. 

Finding qualified leads can, however, take time and effort. 

That’s why many businesses are leveraging Customer Relationship Management (CRM) software and automation tools like Expandi. Automation tools can help you identify new leads, contact prospects, and build personalized and automated sales sequences.

A graphic showing smart sequences in Expandi

If you want to learn which sales prospecting tools you should use in your sales funnel, read our article We’ve Used The Top 15 Sales Prospecting Tools — Find The Right One For You

Lead generation use cases 

Lead generation is something that B2B, B2C, and B2G companies do. 

However, it tends to look a little different between B2B and B2C companies. 

B2B companies, for example, tend to leverage tactics like LinkedIn outreach and email outreach more. 

B2C companies, in turn, leverage more influencer marketing, video ads, and advertising mediums like radio, TV, and billboards. 

The types of messages B2B and B2C companies use are also different. B2B messaging is more formal and less emotionally charged than B2C messaging. B2C ads are more likely to pull at your heartstrings and use slang terms. 

Lead generation best practices

  • Leverage LinkedIn outreach to enhance the lead generation process.
  • Utilize automation tools or lead generation software to manage the process of generating leads. According to HubSpot, 76% of companies used automation in 2021.
  • Combine LinkedIn outreach with cold email outreach for the best results.
  • Use Key Performance Indicators (KPIs) to measure your lead generation efforts. Doing so can save you time and money.
  • Communicate and build rapport — developing a relationship will help you secure the sale.

Where Expandi fits into your lead generation strategy

By now, you likely know that 70% of leads generated on social media networks came from Linkedin.

That’s where Expandi enters the picture. 

Expandi is a cloud-based automation tool that can seamlessly integrate into your next lead generation campaign. Expandi has helped countless B2B companies achieve better results from lead generation. 

It helps you combine LinkedIn outreach with email outreach to find prospects and then engage and nurture them as they travel through your sales pipeline.

Over 12,500 people use Expandi, including marketers, startups, and agencies. 

A screenshot showing Expandi's users

Why choose Expandi?

Final thoughts: What is lead generation?

Lead generation is a powerful tool for businesses, and when done correctly, it can help you acquire new customers efficiently and effectively.

However, for marketing and sales teams, the lead generation process can be tricky, as the vast majority of leads don’t convert into customers. 

In this article, we’ve covered the critical things you need to know about lead gen, as well as the insights you need to generate more leads and convert them into loyal customers. 

If you’re interested in expanding your lead generation efforts, let us help!

Utilizing lead generation tools like Expandi can help you find high-quality leads and automate the process, making it more efficient and effective.

With Expandi, you can launch your lead generation campaign in just 15 minutes and see results in 24 hours. 

Try Expandi’s 7-day free trial today.

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