B2B Lead Generation Explained: Strategy, Funnel Impact, and Best Practices
Library > Lead Generation
Written by Alexandra Flygare, Content Marketing Manager
Last Updated: October 2025
61% of marketers say generating traffic and leads is their top challenge.
Yet in B2B marketing, lead generation is the beating heart of your business that can make or break your growth trajectory. But what exactly is lead generation, and why is it so essential?
Let's dive into this crucial marketing component, exploring its nuances, benefits, and shortcomings.
TL;DR
Lead generation is the marketing process of identifying and cultivating interest in a company's products or services to develop a pipeline of potential customers, known as leads.
It typically works by attracting a visitor through a marketing channel, guiding them to a landing page via a call-to-action (CTA) , and capturing their contact information through a form in exchange for a valuable offer.
The primary goal is to convert strangers into interested prospects and build a sales pipeline that can be nurtured to eventually close deals and generate revenue.
What’s a Lead?
Before getting into the intricacies of lead generation, let’s go over what a lead is. At its core, a "lead" is a potential customer who has shown interest in a company's product or service.
Types of Leads in B2B Marketing
Marketing Qualified Leads (MQLs): These are individuals who have engaged with your marketing efforts but are not yet ready to make a purchase. They might have downloaded a whitepaper, filled out a form, or engaged with your social media posts.
Sales Qualified Leads (SQLs): These leads have shown a higher level of interest and are considered more likely to become customers. They might have requested a demo, shown interest in pricing, or engaged directly with your sales team.
Product Qualified Leads (PQLs): These leads have used your product in some capacity, such as through a free trial or freemium model, and have shown signs of becoming paying customers.
Sales Accepted Leads (SALs): This is a lead that has been okayed by both the marketing and sales teams for further engagement.
Different marketing channels are more effective at generating different types of leads. For example, data from our LinkedIn Ads Benchmarks Report shows that LinkedIn ads influence 29% of all Marketing Qualified Leads (MQLs) and 36% of all Sales Qualified Leads (SQLs), making it a powerful channel for generating high-intent prospects.
What is Lead Generation and Why It Matters?
The Goal of Lead Generation
Lead generation (lead gen) is the process of attracting and converting strangers into someone who has indicated an interest in your company's product or service. In simpler terms, it's the way you gather potential customers' contact information so you can nurture them into becoming full-fledged clients. This process values quality over quantity—identifying those who are genuinely interested and likely to become paying customers.
Why Is Lead Generation Important for B2B Marketing?
Lead gen is the lifeblood of B2B marketing for several reasons.
Driving Revenue Growth
First and foremost, it drives revenue growth. The more leads a business can generate, the higher the potential for sales and revenue growth. Leads are the first step in the sales funnel, and without them, the funnel dries up.
Increasing Marketing Efficiency and Precision
Another vital aspect is the ability to focus marketing efforts more precisely – so companies can focus their efforts on prospects that have shown interest. By increasing the efficiency of marketing campaigns, resources are concentrated on those most likely to convert into paying customers. This also enables businesses to segment their audience based on various factors (like industry or company size) allowing for more personalized campaigns.
To understand the relative effectiveness of lead gen compared to other marketing strategies, businesses can use marketing mix modeling (MMM). MMM helps determine how different channels contribute to conversions, providing a data-driven basis for budget allocation.
Gathering Market Insights and Data
Lead gen also provides valuable data about market demand, customer preferences, and emerging trends. Analyzing this data can inform product development, marketing strategies, and overall business planning.
Using digital marketing analytics tools enables businesses to track, measure, and optimize their lead gen performance. Metrics like click-through rates, conversion rates, and customer acquisition costs can offer critical insights for refining marketing efforts.
Measuring and Attributing Marketing Impact
Understanding how different touchpoints contribute to a lead's journey is essential. This is where marketing attribution comes in—it helps marketers measure the impact of various channels and campaigns on lead conversion
Building Trust and Long-Term Relationships
Additionally, lead gen is the starting point for building relationships, providing the initial touchpoint that can be nurtured over time, helping to establish trust and credibility with potential clients.
How Does Lead Generation Work?
The Lead Generation Process Step-by-Step
Lead gen typically follows a structured process that begins with attracting potential leads. This can be achieved through various channels such as content marketing, social media, search engine optimization, paid advertisements, webinars, and trade shows. The aim is to draw the attention of potential clients and spark their interest in your offerings.
Capturing and Qualifying Leads
Once interest is generated, the next step is to capture relevant information. This often involves using forms on landing pages, gated content, or sign-up offers where potential leads provide their contact information in exchange for something valuable, like an ebook, a whitepaper, or access to a demo.
After capturing leads, it's crucial to qualify them. Not all leads hold the same value, and lead qualification involves assessing their potential based on criteria like company size, industry, and decision-making authority. This step helps businesses prioritize their efforts and allocate resources efficiently.
Nurturing and Converting Leads
Following qualification, leads are nurtured through targeted communication. This nurturing phase can include personalized emails, follow-up calls, or tailored content that specifically addresses the identified needs and pain points of the leads.
The final goal is to convert these nurtured leads into customers, typically through the efforts of the sales team, who guide them further down the sales funnel to close deals.
When Should You Use Lead Generation
When Entering a New Market
Lead gen should be an ongoing effort in any B2B marketing strategy, though there are certain times when it is particularly useful. For instance, when entering a new market you’re going to need to generate leads to establish a presence.
When Launching a New Product
Similarly, when launching a new product you can use lead gen to create awareness and stir interest among potential customers.
When Pipelines Need Replenishing
For pre-established businesses, when existing pipelines are becoming dry or there is a need for additional revenue streams, focusing on lead gen can expand the sales pipeline effectively.
Dreamdata’s Customer Journeys feature can help you identify high-intent accounts.
The Shortcomings of Lead Generation
Balancing Lead Quality and Quantity
One common issue associated with lead gen is the balance between quality and quantity. There's often a trade-off between the number of leads generated and their quality, as high volume doesn't always equate to high conversion rates.
Resource and Cost Challenges
Moreover, good lead gen can be resource-intensive, requiring significant time and effort. From creating content to managing campaigns, the process can be costly. To reduce these costs, you could look into marketing automation tools, which can streamline the process and reducing manual effort. Tools like email drip campaigns, CRM integrations, and AI-based lead scoring can ensure more efficient lead nurturing and engagement.
Evolving Buyer Expectations
Also, the evolving expectations of B2B buyers, who increasingly seek personalized experiences, make it harder for businesses to stand out and capture attention.
Attribution and Measurement Difficulties
Another challenge is solving the marketing attribution puzzle.
Accurately mapping out which channels, touchpoints, or campaigns lead to conversion is often complicated. Misattribution can lead to inefficient resource allocation. However, solving this with a proper attribution model reveals which channels are truly profitable.
Our LinkedIn Ads Benchmarks Report shows that while some lead generation channels operate at a loss (ROAS below 100%), B2B-specific platforms like LinkedIn can deliver a positive 113% Return on Ad Spend (ROAS).
Finally, With increasing regulations around data privacy, businesses must be cautious about how they collect and use customer information.
Conclusion
Lead gen isn’t just about filling the sales funnel with names and email addresses; it's about identifying genuine business opportunities and cultivating them into long-term relationships. The rewards of a well-executed lead gen strategy are well worth the effort.
FAQs
What are the most effective B2B lead generation channels?
The most effective B2B lead gen channels often include LinkedIn Ads, SEO-driven content, webinars, and referral programs. The right mix depends on your audience, sales cycle, and product complexity. High-performing channels are those that build trust and capture intent early in the buyer’s journey.
How does lead generation fit into a broader revenue marketing strategy?
Lead gen supports the top of the funnel in a revenue marketing strategy. Its role is to create awareness and capture interest, which can then be nurtured through segmentation, attribution insights, and personalized engagement to drive conversions across the funnel.
What’s the difference between inbound and outbound lead generation?
Inbound lead gen attracts prospects through educational content and SEO. Outbound lead gen uses direct outreach such as emails, calls, or paid advertising. Most B2B companies use both to reach different segments and accelerate growth.
How can I ensure lead quality without sacrificing volume?
To balance quality and volume, define your Ideal Customer Profile (ICP), apply lead scoring, and align sales and marketing goals. Using tools that track engagement signals and intent data can help you prioritize leads that are more likely to convert.
How long should I nurture a lead before passing it to sales?
The right timing depends on your sales cycle and the lead’s behavior. Common triggers include demo requests, repeated high-intent activity on your site, or form submissions. Monitoring these signals helps determine when a lead is ready for handoff to sales.
Author
Alexandra Flygare is a content marketing manager at Dreamdata. Before transitioning to B2B marketing, Alexandra worked as a music journalist, developing her expertise in storytelling and cultural analysis. Her background spans both creative and technical writing, allowing her to bridge the gap between complex technology concepts and accessible content.