What is Lead Generation? Tools & Channels for Lead Generation

Attracting potential customers or leads is one of the key tasks for any business. A lead can be a user who: registered on the site, signed up for a newsletter, started a trial period, or performed other targeted actions. In this article, we will talk about what lead generation is in simple terms, what leads are, and how to collect them and use them to increase the profits of your company.

What is lead generation?

Lead generation is the collection of a database of potential customers and their contacts. The purpose of this process is to turn website or social media visitors into potential customers and get their data for further work. Without lead generation, a person who is not ready to buy right away will leave your online platforms and you will no longer be able to interact with him.  

It is important to understand that not all leads are equally valuable to the business. There is a certain classification that marketers use to indicate the degree of readiness of the client to purchase.

Cold leads are those users who have newly learned about your product/business and left a request out of curiosity.

Warm leads are users/people who show interest in your product offer. For example, they ask you questions in the chat, request feedback, and specify the terms of delivery and payment.

Hot leads are your customers who are already ready to purchase/buy. Most likely, these are your loyal users/visitors or those who are in dire need of your product/service.

Lead categorization is important to show users the most relevant offers. In marketing, this approach is called segmentation. For example, cold leads are offered significant discounts on their first purchase, warm leads are offered bonuses and promotions, and hot leads may just need to show a new collection. Marketers study the reaction of different segments to promotional offers and choose those that worked best. 

Lead generation channels

You can attract leads on various online and offline platforms. Ideally, it will be traffic to your website, social network, or messenger, and not a ready-made database. Users who come by themselves after seeing your promotional offer will be of better quality and more likely to make a purchase. Consider where you can find potential customers.

Search engines

Google and other search engines are good because users are already looking for your product or service. You just have to create a profitable offer and show it to potential customers. This can be done in several ways: through SEO optimization and contextual advertising.

The essence of SEO optimization is that your site contains keywords that users enter into the search box. As a result, well-optimized resources get into the search without ads. Sounds pretty simple, but in practice, it’s more complicated. Users rarely view more than one or two pages in the SERP, so it is important to beat the competition. Because of this, SEO-optimizers are attracted to select keywords. They find popular words that competitors use less frequently. As a result, the site will gradually move up in the search results.

Contextual advertising helps sites to be above the issue in the search engine. This is a convenient way of promotion for businesses that need customers here and now. Advertising works similarly to SEO, but faster and more accurately: you select the keywords for which the ad will be displayed, form an offer and show it to certain users. If everything is done correctly, then hot leads come to the site, ready to buy.

Social networks 

Working with social networks or social media marketing is an effective way to build brand loyalty and attract new customers. You can use social networks only as a source of traffic – launch targeted advertising to go to a website or messenger. Or additionally, lead communities and communicate with subscribers in comments and private messages – this way you will get a more involved and interested audience.

To determine which social network is best for your business, use a life hack. Go to the advertising account of the site, enter the parameters of your audience: geolocation, gender, age, marital status, place of work, interests and see how many users the social network gives out. If the quantity suits you, you can start work.

The main thing is to decide before launching the communities why the business needs them and what result you expect. Posts without promotion will have no effect, users do not often search social networks for search queries. Therefore, lay a budget for targeted advertising or work with bloggers. If you want to try working with influencers, be sure to give them a promo code or referral link to track the effectiveness of such a channel.

Referral programs

Your customers are the best marketers because sincere recommendations are more persuasive than advertising. Invite your users to recommend your product or service to friends, and give bonuses in return. Usually, for this, you need to generate a personal promotional code on the site or a referral link. For example, this is how the most website works – customers can create a promotional code with a discount and share it. So new users get a nice bonus, and site customers get points for future purchases.

The advantage of referral programs is that any client can participate. A person does not have to be a popular blogger to earn bonuses, it is enough to recommend the product to relatives or colleagues. And it costs nothing for a business – you just need to set up a referral system on the site and explain to customers how to use it. That way everyone wins.

Guest posts

Guest posting is a form of collaboration in which companies exchange audiences through email newsletters, blog posts, and social media. Ideally, these should be businesses with similar customers who will be interested in a new product or service. For example, a pastry shop and florist, or a barbershop and a beard wax brand. 

The advantage of such a lead generation channel is that the audience already has loyalty to the company with which you are negotiating cooperation. This is not just an ad on the Internet that users see for the first time. In addition, you do not have to spend a budget on advertising. Even if the collaboration fails, you will gain recognition and not lose money.

Lead generation tools

Once you have attracted leads, it is not certain that they will immediately buy. Especially if they are cold or warm users. Therefore, marketers use tools for warming up – this is to work with users who have left contacts, but have not yet become customers. You can choose one tool or a combination of them, depending on the tasks and business opportunities.

Email distribution

Email is one of the most common channels for communicating with customers. E-mail is easier to get than a phone – just offer free information or a discount for registration. At the same time, via email, you can unobtrusively remind about the company, offer goods and services at a discount, talk about new arrivals and collect feedback. So you will always be in contact with the user and it will not cause negative, like frequent SMS or push notifications. And the client can always unsubscribe from the mailing list, which makes communication more comfortable.

Podcasts and Youtube shows

Sometimes it is beneficial to present information about a product or service in an entertaining format. For example, if your company has a charismatic representative. You can start your own podcast or show on Youtube, or speak on other projects as an expert. It works like with webinars – you provide free benefits and can natively interest customers in your product or service. After listening to the episode, the client will be able to follow the link in the description of the show or podcast and make a purchase.


Webinars are suitable for selling complex services and education. The bottom line is that users are invited to a free lecture where they benefit and learn more about the offer. After a person has listened to the speaker and learned more about the product, it is much easier to decide on a purchase. You can also give a discount at a webinar or promise a bonus if a person buys on the same day – this is an additional incentive for heated customers. You can invite to a webinar through advertising or in a letter.

Online chats

Customers are more likely to make a purchase if they receive prompt responses to their questions. To do this, companies use online chats on the site and communication in instant messengers. The bottom line is that the client sees the ad and goes to the platform where you can ask clarifying questions and immediately place an order. The main thing is that your manager should always be in touch, and respond promptly and to the point to clients. Also, your employee can collect contacts for feedback if a product or size is not currently available.

Blogs and media

Content marketing is not a quick but effective lead generation tool for complex products and services. In articles and media, you can describe the benefits in detail, tell cases and visualize information in the format of tables, charts, and diagrams. If you have a small business, try creating a blog on sites that already have traffic or publish an article in the media. A large business can afford a blog, moreover, it is an additional resource for indexing in search engines by keywords.

Offline events

You can attract customers not only on the Internet, but also offline. For this, thematic exhibitions and industry events are suitable. You can represent your company directly or become a sponsor – then the organizers will tell you about you. Another feature of lead generation at events is networking, which is especially true for the B2B audience. Communicate with potential customers in an informal setting, such as in a cafeteria or smoking room, and attract cooperation.

How to evaluate the quality of leads

A large number of leads is not always an indicator of high-quality lead generation. It happens that clickbait advertising collects uninterested or insolvent advertising. As a result, the business receives a lot of contacts, and spends resources on their processing, but there is no financial result. In order not to get into such a situation, decide on the metrics by which you will evaluate the results of advertising campaigns.

PPC (Pay Per Click) is a model of payment for a click on an ad and a transition to a website. The advertiser will try to get the business to get more clicks at a lower cost. At the same time, these should be actions from interested users who will continue their journey through the site. Therefore, it is very important not to deceive the client’s expectations with a catchy offer, otherwise, he will leave the site, and the business will lose money and a potential client.  

PPA (Pay Per Action) is a payment model for targeted actions, for example, for placing an order (Pay Per Order), installing an application (Pay Per Install), subscribing to a newsletter, or registering in a service (Pay Per Lead), downloading a file (Pay Per download). This is suitable for working with a warm and hot base of customers who have already heard something about the company. If you run such advertising on a cold audience, then the leads will be very expensive and it’s not a fact that they will continue to contact the business.

Other metrics you may need

Conversion Rate (CR) is a measure of how many visitors to your website take a targeted action.

The cost of acquisition (Cost Per Acquisition, CPA) is the amount of acquisition of each new user through advertising.

Average Check (Average Order Value, AOV) – this metric shows the effectiveness of sales. The higher this figure, the better marketing works in the company. 

If you have not worked with lead generation yet, we recommend starting with the basic sales funnel – this is the path that a user goes through from the first contact with an ad to the moment of purchase. To get started, try the AIDA funnel, it consists of the following steps:

Attention – The user is introduced to the business through ads, guest posts, or an event. 

Interest – a person becomes interested in an offer if it seems relevant to him.

Desire – A potential customer wants to buy a product or service and is interested in how to do it.

Action – a person performs a targeted action and becomes a client of the business.

Having passed all four stages, the user is transformed into a buyer. And the faster he goes through all the stages of the funnel, the sooner the business makes a profit and can work on returning the client.

Priyanka Sharma
Priyanka Sharma
Myself Priyanka, I Love Writing, SEO, and Graphic Design. I'm regularly contributing my knowledge/news on the leading websites.

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