What is Lead Generation? Beginner’s Guide for 2025

Fortunately for everyone in sales and marketing, the days of picking up the phone and cold calling your way through the Yellow Pages are long gone.

Modern-day lead generation gives you many more sales opportunities from high-quality prospects. And if you make the most of them, your revenue will soar.

Welcome to Cognism’s beginner’s guide to lead generation! In this article, you’ll learn:

What lead generation is and why it’s important.
How it works in practice.
Tips for optimising your lead generation funnel.

And lots more! Scroll 👇 or use the menu to get started.

What is a lead?

Leads are potential customers who’ve shown interest in a company’s product or service.

This interest is often indicated by providing contact data, such as an email address, phone number, or other relevant details. When leads enter the sales funnel, it’s sales and marketing’s job to nurture them and convert them into paying customers.

There are four different types of leads; what differentiates them is their level of interest and engagement.

1. Marketing Qualified Lead (MQL)

This is a lead who has shown interest through marketing efforts, such as downloading a whitepaper, attending a webinar, or filling out a contact form.

MQLs are deemed more likely to become customers than general contacts.

2. Sales Qualified Lead (SQL)

This is a lead that sales has vetted and considers ready for direct sales engagement.

SQLs typically show a stronger intent to purchase and often fit the criteria of an ideal customer.

3. Product Qualified Lead (PQL)

This is a lead that has used a product as part of a free trial or a freemium version.

PQLs typically behave in a way that indicates a readiness to convert to a paying customer. These behaviours include frequent usage or engaging with premium features.

4. Service Qualified Lead

This is a lead that has indicated interest in a company’s service offerings, often through initial consultations or requests for more information.

What are the types of lead generation?

Lead generation encompasses numerous methods for attracting and converting potential customers.

Here are some common types of lead generation:

Inbound lead generation

This strategy uses valuable content and experiences to attract target customers to your business.

Unlike outbound methods, which actively reach out to prospects, inbound lead generation draws people in by providing helpful, relevant information that addresses their problems and questions.

Here are some inbound examples:

Content marketing: Creating and sharing valuable content (blogs, eBooks, whitepapers, videos) to attract potential leads.
SEO (Search Engine Optimisation): Optimising website content to rank higher in search engine results, thereby attracting organic traffic.
Social media marketing: Using social networks to engage with potential leads through posts, ads, and interactions.
Email marketing: Sending targeted emails to nurture leads and collecting email addresses through sign-ups.
Webinars and online events: Hosting informative sessions to engage with potential leads and collect their contact information.

Outbound lead generation

This strategy involves reaching out directly to potential customers, with the goal of generating interest in your product or service.

Unlike inbound methods, which attract leads by offering valuable content, outbound lead generation focuses on initiating contact with prospects who may not have previously expressed interest.

Here are some outbound examples:

Cold calling: Directly contacting potential leads via the phone to pitch products or services.
Direct mail: Sending physical mail, such as brochures or postcards, to potential leads.
Cold emailing: Sending unsolicited emails to potential leads.
Advertising: Launching paid ads on search engines, social media, or other platforms to reach potential leads.

B2B (Business-to-Business) lead generation

The process of identifying and attracting a business to buy products and services offered by another.

Unlike B2C (business-to-consumer) lead generation, which targets individual consumers, B2B lead generation focuses on companies, organisations, or professionals as the target audience.

Here are some B2B examples:

LinkedIn marketing: Leveraging B2B’s number one social platform, LinkedIn, for networking, ads, and direct outreach to other businesses.
Industry events and trade shows: Participating in events to connect with potential business clients.
Account-Based Marketing (ABM): Targeting specific companies with personalised marketing efforts.

Online lead generation

This approach leverages online tactics and tools to reach and engage with prospective customers.

Online lead generation offers the advantage of reaching a wide audience while providing measurable results and opportunities for continuous improvement.

Here are some online examples:

Landing pages: Creating dedicated pages that are optimised for capturing lead information.
Lead magnets: Offering free resources (eBooks, templates, checklists) in exchange for contact details.
Chatbots and live chat: Using automated or live chat services on websites to engage visitors and collect their information.

Offline lead generation

This approach relies on traditional marketing and networking tactics to reach and engage with a customer base.

Offline lead generation offers the advantage of building personal relationships and trust, as well as reaching audiences who may not be active online.

However, it usually requires more resources and time compared to online lead generation.

Here are some offline examples:

Networking events: Attending industry-specific events to meet potential leads.
Workshops and seminars: Hosting educational sessions to attract and engage potential leads.
Community involvement: Participating in local events and sponsorships to build brand awareness and generate leads.

Hybrid lead generation

This strategy combines online and offline lead generation to attract and capture potential customers.

By integrating online and offline channels, businesses can effectively engage with prospects across different touchpoints. This increases their chances of capturing high-quality leads.

Here are some hybrid examples:

Webinars with follow-up calls: Running online webinars followed by direct calls to attendees.
Online ads with offline events: Using online ads to promote offline events and collect leads.

Why is lead generation important?

Lead generation is vital for any business’s growth. By focusing on generating high-quality leads, you provide sales teams with a contact base of consumers that match your ideal customer profile. This, in turn, increases revenue from conversions.

And even if your leads aren’t ready to buy your product when they first learn about it, you can nurture them through the B2B marketing funnel until they eventually become sales-qualified leads.

What is the lead generation process?

We know it’s complex!

First off, lead generation costs money. You have to factor in the costs involved in creating content or campaigns to generate leads.

Secondly, it takes time to pay off. How much you spend and what return on investment you’ll see depends on the lead generation strategies and channels you choose.

To cut a long story short:

Lead gen works best when you create an omnichannel lead generation strategy that targets the right audience with the right messaging. It allows customers to engage with your company in ways that work for them.

The lead generation process involves several steps to attract, capture, and convert potential customers.

Here’s an overview of a typical lead generation process:

1. Identify your target audience

Start by conducting research to understand your target audience’s needs, preferences, and challenges.

Then develop detailed profiles of your ideal customers. Include elements like demographics, technographics, interests, pain points, and buying behaviours.

Tip! Find out how to find free leads for your business.

2. Attract online visitors

In this step, you must create and distribute content that addresses your audience’s needs and interests.

Try a mix of content marketing (blogs, videos, podcasts, eBooks), SEO, social media and pay-per-click.

3. Capture your leads

Follow these online strategies for capturing demand:

Create dedicated landing pages for specific campaigns. Include clear and compelling calls-to-action (CTAs).
Use forms on your landing pages, website, and blog to collect contact information from visitors.
Offer valuable resources (also called lead magnets) in exchange for contact details. Examples are eBooks, whitepapers, webinars and free trials.
Implement pop-ups and slide-ins on your website to capture lead generation data.

4. Qualify your leads

Lead qualification is a crucial step in the lead gen process. Here, you have to work out if the prospect is right for your company.

There are several ways of qualifying leads:

Ask qualifying questions

The best qualification questions to ask your leads are:

What challenges/pain points are you/your team experiencing?
How urgently do you need to solve these challenges?
What solutions/vendors are you/your team using?
Who is involved in the decision-making process and what steps do they follow?
What budget/financial constraints are you/your team currently working under?

Use qualifying frameworks

Here are some ways of qualifying sales leads:

BANT (Budget, Authority, Need, Timing):

Budget: Does the lead have the financial resources to purchase your product or service?
Authority: Does the lead have decision-making power? If not, are they an influencer in the purchasing process?
Need: Does the lead genuinely need your product or service? Can it effectively solve their problem?
Timing: Is the lead ready to make a purchase within a reasonable timeframe?

CHAMP (Challenges, Authority, Money, Prioritisation):

Challenges: What specific challenges/pain points does the lead face?
Authority: Does the lead have the authority to make purchasing decisions?
Money: Does the lead have the budget for your product or service?
Prioritisation: Is solving the identified challenges a priority for the lead?

MEDDIC (Metrics, Economic Buyer, Decision Criteria, Decision Process, Identify Pain, Champion):

Metrics: What potential impact will your solution have on the lead’s business?
Economic buyer: Who has the ultimate purchasing power?
Decision criteria: What criteria does the lead use to make purchasing decisions?
Decision process: What is the lead’s decision-making process? Who are the key stakeholders in that process?
Identify pain: What are the lead’s pain points and challenges?
Champion: Who in the lead’s organisation can be an advocate for your solution?

GPCTBA/C&I (Goals, Plans, Challenges, Timeline, Budget, Authority/Negative Consequences & Positive Implications):

Goals: What are the lead’s goals and objectives?
Plans: What are the lead’s current plans for achieving those goals?
Challenges: What obstacles exist that prevent the lead from achieving their goals?
Timeline: What is the lead’s timeline for addressing their challenges?
Budget: Does the lead have the financial capacity to invest in your solution?
Authority: Who are the decision-makers involved in the purchasing process?
Negative consequences: What are the negative consequences of not addressing the lead’s challenges?
Positive implications: What are the positive outcomes of solving the lead’s challenges?

Score your leads

This is a process where you assign scores to your leads based on their behaviour, engagement, and fit with your ideal customer profile.

There are several lead scoring methods:

Demographic scoring: Assign points based on demographic information, such as job title, industry and company size.
Behavioural scoring: Score leads based on their behaviour, such as website visits, email opens, content downloads, and event attendance.
Engagement scoring: Measure the lead’s level of engagement with your brand across various channels.
Fit scoring: Evaluate how well the lead fits your ideal customer profile (ICP).

5. Nurture your leads

This step is all about growing relationships with your leads. You must engage and educate them about your product, as well as continually assess their readiness to buy.

Follow these lead nurturing strategies:

Send personalised and relevant emails to engage and educate leads over time.
Set up automated email sequences to guide leads through the sales funnel (this is also known as drip email marketing).
Provide additional valuable content and resources to keep leads engaged and interested.
Continue to engage with leads on social media by sharing relevant content and responding to their interactions.

6. Handoff to sales

In this step in the process, marketing transfers qualified leads to the sales team, including all relevant information.

Then, sales representatives follow up with the leads, with the aim of moving them further down the sales funnel.

For this step to work, your sales and marketing teams must be aligned on the lead generation process, especially the qualification criteria.

7. Convert your leads

This is what you’ve been waiting for - the conversion stage!

To effectively convert leads, follow this sales process:

Use personalised outreach (calls, emails, meetings) to address leads’ specific needs and concerns.
Offer product demos or free trials that showcase your solution’s value and benefits.
Present proposals and negotiate terms to convert leads into paying customers.

8. Analyse and optimise

In this step, you must track lead generation KPIs such as conversion rates, lead quality, and ROI.

It’s a good idea to A/B test different elements of your lead generation process (CTAs, landing pages, email content). That way, you’ll identify what works best.

You should also collect feedback from leads and customers. This can help you improve your lead generation strategies and processes.

Use the data (and the insights you gain from it!) to refine and optimise your lead generation efforts.

9. Retention and upsell

Lead generation doesn’t end when leads become loyal customers!

To start with, you must provide an excellent onboarding experience. This ensures that new clients succeed with your product or service.

Make the buying journey smoother by engaging with your customers. Newsletters, product updates and personalised offers are all worth a try.

Finally, don’t neglect upselling and cross-selling! Always be on the lookout to upsell and cross-sell products or services to your existing customers.

10. Invest in lead generation tools

Sales intelligence tools (like Cognism!) allow you to get relevant, accurate customer information in bulk. They pull in data about leads from various sources, educating you about them before you contact them.

Kinaxis, the leading supply chain management software firm, used Cognism to obtain 5.7% of its MQLs - a rate that far outstripped other data vendors.

Barbara Collins, Marketing Database Manager at Kinaxis, said:

“Cognism’s percentage of MQLs is higher than our other vendors A and B:

Cognism MQLs - 5.70%
Vendor A MQLs - 3.43%
Vendor B MQLs - 0.58%

“Overall, we yield fewer contacts in Cognism but they’re of better quality. I’m very pleased with the overall strength of the contact data accuracy.”

Read the full case study

What are the best tips for effective lead generation?

Refining and optimising a data-driven lead generation campaign involves using data insights to improve your strategies and outcomes.

Here are some top tips to ensure your campaign is as effective as possible:

1. Set clear goals and metrics

Establish specific, measurable, achievable, relevant, and time-bound (SMART) goals.
Choose key performance indicators (KPIs) such as conversion rates, cost per lead, lead quality, and return on investment (ROI).

2. Leverage analytics tools

Employ tools like Google Analytics, HubSpot, or Marketo to track and analyse your campaign’s performance.
Combine B2B data from various sources (CRM, email marketing, social media) to get a holistic view.

3. Segment your audience

Divide your audience based on characteristics such as age, gender, location, and job title.
Segment based on behaviour, such as past purchases, website interactions, and engagement levels.

4. Optimise your content

Ensure your content addresses your target audience’s needs and pain points.
Experiment with different formats (blogs, videos, infographics) to determine which resonates most with your audience.

5. Enhance your website and landing pages

Improve site navigation, loading speed, and mobile responsiveness.
Place clear and compelling calls-to-action strategically throughout your website and landing pages.
Simplify forms to reduce friction and increase submission rates.

6. Utilise marketing automation

Create automated email sequences to nurture leads based on their behaviour and engagement.
Implement lead scoring to prioritise sales leads and focus on those most likely to convert.

7. Personalise your campaigns

Use dynamic content to personalise emails, landing pages, and website experiences.
Tailor your messaging to different segments or individual leads; this increases relevance and engagement.

8. Monitor and adjust paid campaigns

Regularly review and adjust your bidding strategies in PPC campaigns.
Continuously monitor ad performance; optimise for better click-through rates (CTR) and conversion rates.
Implement retargeting campaigns to re-engage visitors who have shown interest but haven’t converted.

9. Analyse and interpret data

Conduct regular reviews of campaign performance data to identify trends and insights.
Use tools like heatmaps to see where users are clicking and interacting most on your site.

10. Regularly update and refresh

Keep your content fresh and up-to-date to maintain relevance and SEO rankings.
Keep up with industry trends and changes in consumer behaviour; adjust your strategies accordingly.

11. Test new channels and strategies

Experiment with new marketing channels and platforms to reach a broader audience.
Try new lead generation tactics like interactive content, chatbots, and AI-driven personalisation.

12. Align sales and marketing teams

Establish a feedback loop between sales and marketing to ensure continuous improvement and alignment.
Ensure both teams are working towards the same sales goals and metrics, with clear communication and collaboration.

Looking for more lead gen tips? Check out these resources:

What are the most common lead generation challenges?

You know by now how crucial lead generation is for B2B companies. But it can also be fraught with pitfalls.

Here are some common lead generation mistakes to avoid:

1. Not defining your target audience

Failing to create detailed buyer personas can lead you to target the wrong audience.

Or you’ll cast your net too widely, trying to reach everyone rather than focusing on a specific niche or segment.

2. Poor quality content

Don’t be generic with content - you must address pains and needs or offer valuable insights.

3. Ignoring SEO best practices

Avoid keyword stuffing - that’s the practice of overloading content with keywords. This can harm your search engine rankings.

Don’t neglect on-page SEO; failure to optimise meta tags, headings and URLs can also harm rankings and lead to losses in organic traffic.

Finally, review your website structure. Having a website that’s difficult to navigate and not user-friendly will turn leads away.

4. Ineffective call-to-actions (CTAs)

With your CTAs, you want to encourage users to take action. Vague or uninspiring messaging will do the exact opposite!

Where you place your CTAs is equally important. Avoid placing CTAs in locations where they’re easily overlooked.

You can also have too many CTAs on a page! If that happens, you overwhelm visitors and create decision fatigue.

5. Neglecting mobile users

We know at Cognism that mobile audiences are growing, even in B2B!

Therefore, make sure your website is optimised for mobile devices. If it isn’t, mobile users will suffer slow load times, increasing your bounce rate.

6. Overlooking social media

The most popular accounts on social media maintain regular schedules.

Inconsistent posting, ignoring engagement and not utilising ads means that you’ll miss out on the benefits of social media platforms.

7. Poor follow-up

Don’t delay responding to prospects. Taking too long to follow up will cause them to lose interest.

You also mustn’t be generic. Don’t send impersonal or automated responses without customising them first.

Remember, in lead generation and sales, people buy from people!

8. Not using analytics

Ignoring data. Not A/B testing. Not adjusting or refining your strategy.

These are all big lead generation mistakes. Always, always track and analyse your sales and marketing metrics.

9. Over-reliance on a single channel

It can happen so often in sales lead generation.

You depend too heavily on one source, risking your lead flow if it underperforms.

The alternative is to diversify! Explore multiple channels like SEO, PPC, social media, and email marketing.

10. Ignoring customer feedback

For lead generation to be at its most effective, you must have a feedback loop going.

Failing to gather and act on feedback from leads and customers will hobble your content and strategies from the start.

11. Misaligned sales and marketing teams

This is often seen in a lack of coordination and communication between sales and marketing.

The two teams might also have different objectives and strategies. This leads to silos and inefficiency.

Counteract misalignment by ensuring your sales and marketing departments collaborate and work together.

12. Underestimating the power of reviews and referrals

Your customers can be your best advocates, referring your business to new leads.

If you haven’t set up a referral program, start by collecting and promoting positive reviews and testimonials.

13. Ineffective landing pages

Most of the time in SaaS lead generation, simplicity is best.

Having a cluttered design or a confusing layout on your landing pages will flummox your prospects.

Here’s an example:

Using forms that are too long or ask for too much information leads to high abandonment rates.

14. Low-quality leads

The biggest lead generation problem is when sales has low-quality leads that they find hard to convert.

This happens due to two things:

Quantity over quality: The company focuses on generating a high volume of leads rather than high-quality leads.
Unqualified leads: The company doesn’t properly qualify leads, resulting in wasted time and resources.

In that case, go back to your sales leads qualification criteria and see if it needs to be narrowed down.

Also, investigate what channel poor leads come from and what their characteristics are. Then, you’ll be able to adjust your strategy.

What is the best lead generation tool?

With Cognism, low-quality leads aren’t an issue. With us, you’ll find the right companies and decision-makers, almost instantly.

Use our solution to:

Build lists of your ideal customers and target companies.
Source the mobile phone numbers and B2B emails of the people you want to do business with.
Enrich your existing contact data with global, human-verified sales intelligence.

Get a snapshot of what Cognism’s tech can do for your business - click 👇 to speak with our lead generation experts.