What is Lead Generation in Digital Marketing?

Every business needs leads. Whether you are a brick-and-mortar store, an author selling books,  or a service-based business looking to book more appointments, leads are the fuel that keeps your revenue engine running.

In the digital space, lead generation refers to the process of attracting potential customers and getting their contact information, usually in exchange for something of value, like a free guide, discount code, or consultation. It's one of the most important parts of growing a business online, but it’s often misunderstood.

Some businesses confuse lead generation with sales, fail to qualify their leads, or rely entirely on ads without having a strategy to turn interest into action. That’s where things tend to fall flat.

In this blog, we’ll walk through what lead generation actually means, why it matters, how it works in digital marketing, and best practices for doing it well, whether you're just starting out or ready to refine your current approach.

Defining Lead Generation in Digital Marketing

Still not sure what we mean by lead generation? No worries. It can be a tough concept to grasp, especially when trying to apply it to digital marketing. Simply said, it’s all about creating interest in the products and services that you sell. So, a lead, then, is someone (a person or a business) who expresses that interest. Once that person expresses interest, the goal is to help lead them through the sales funnel to the point of purchase.

The typical sales funnel works something like this:

• Awareness: A potential lead finds you through a blog post, ad, or social media.
• Interest: They click through to learn more about what you offer.
• Evaluation: They compare your services or products to others.
• Decision: They’re ready to buy—or take the next step.
• Sale: They make a purchase or sign up.
• Renewal/Repurchase: They return again or refer others (hello, loyalty!).

In inbound marketing, lead generation plays a huge role in guiding people through this process by offering helpful, engaging content at every stage.

Leads are often captured through:

• Landing pages with a clear offer
• Forms for email signups or consultations
• Gated content like free downloads, webinars, or discount codes

The goal is to earn trust and build relationships that turn interest into action.

Why Lead Generation is Critical for Business

If you aren’t actively working on generating leads for your business, you could find yourself in a downward spiral, and fast. If people aren’t interested in what you have to sell, or worse, they don’t even know you exist, then you won’t get sales. 

But you’re not alone in this challenge. In fact, 50% of marketers say lead generation is a top priority in their campaigns. And how are they doing it? 76% of marketers use content to generate leads, including blog posts (like the one you’re reading right now), ebooks, landing pages, videos, webinars, and more. Content works because it meets potential customers where they are and gives them something valuable in return.

Here’s why a good lead generation strategy is so worth your time:

• Better ROI compared to untargeted advertising
• Provides sales teams with qualified leads they can actually close
• Builds long-term brand awareness and trust with your audience
• Reduces wasted ad spend by targeting the right people from the start

Think of lead generation as all the things you do to build a sustainable path to growth.

How Lead Generation Works in Digital Marketing

So, just how does this lead generation thing work? We’re glad you asked. Remember that sales funnel we mentioned earlier? Here’s where it really comes into play. The thing to understand is that different types of content and different actions by your organization are what help consumers, aka your potential buyers, move down that sales funnel. What we’re trying to say is, you can’t just post a cool video to social media and write an informative blog now and again for your website. 

Lead generation is all about a cohesive series of actions that keep interest growing and help get those customers to buy. Let’s refer back to that sales funnel we shared earlier and break things down to help this make a bit more sense.

Awareness: Catching Their Attention

This is the “hey, who are you?” phase. You’re not selling. Yet. You’re just showing up in the right places so people know your brand exists.

• Common tactics include SEO, social media, paid ads, guest posts, and YouTube videos
• The ultimate goal is to get on your audience’s radar

Interest: Keeping Them Curious

Now that they know who you are, you want to educate, inspire, or entertain.

• Common tactics include blog content, webinars, free resources, short-form videos, and lead magnets
• Your goal now is to build trust and get them to raise their hand (like subscribing or downloading)

Decision: Helping Them Choose You

This is where you nurture leads with more personalized and helpful content that moves them toward action.

• Common tactics include email sequences, free trials, product demos,and case studies
• This is where you want to remove doubt and make it easy to say “yes”

Key Strategies for Lead Generation

This all might seem a bit overwhelming, but it doesn’t have to be. And you just so happen to be reading a blog from some folks who can help you make all of this come to life. But we digress, and we’ll revisit that later.

Here are some things that you can do to help generate leads and get more purchases.

• Content Marketing: Share helpful blogs, whitepapers, eBooks, and videos that educate and build trust.
• Email Marketing: Set up newsletters or drip campaigns that keep your audience engaged over time.
• SEO & SEM: Use organic strategies and paid ads to bring targeted traffic to your website.
• Social Media: Run paid campaigns or team up with influencers to expand your reach.
• Landing Pages & CTAs: Use pages built specifically to convert—clear message, simple design, strong call-to-action.
• Lead Magnets: Offer something valuable in exchange for contact info. Think of tactics like checklists, free trials, or interactive tools.

Metrics for Measuring Lead Generation Success

We think we know what you’re going to ask next: How do you make sure that all of these activities are paying off? It all boils down to measuring the right metrics. And we’re not just talking about checking in on these periodically. The best lead generation efforts are measured frequently to determine what tweaks, if any, need to be made.

Here are the top lead generation metrics that you need to measure for success.

• Conversion Rate: This tells you what percentage of people took a desired action (like signing up or purchasing) after engaging with your content or landing page.
• Cost Per Lead (CPL): How much you’re spending, on average, to generate each lead. The lower this number (with quality leads), the better.
• Lead-to-Customer Rate: Of the leads you collect, how many actually become paying customers? This helps you measure lead quality, not just quantity.
• ROI from Campaigns: Are your marketing dollars generating a return? This metric helps you decide where to invest more (or less) going forward.

What You Should (and Shouldn’t) Be Looking For in a Lead Gen Strategy

A solid lead generation strategy doesn’t happen by accident. If you’re putting time, energy, and money into generating leads, you want to know your efforts are building toward long-term growth. Not just a temporary spike. So what makes a strategy worth sticking with?

Here’s what to look for:

• Consistent content strategy that provides value and builds trust over time
• Sales and marketing alignment to keep messaging and goals on the same page
• Transparent tracking and analytics so you know what’s working and what needs adjusting
• A focus on lead quality, not just hitting vanity numbers

But it’s just as important to know what to avoid. Remember, not all lead gen tactics are built the same. Here are just some of those red flags you want to keep your eyes open for. 

• Buying leads or email lists that haven’t asked to hear from you (note, this can get you in some big trouble with the FTC and the CAN-SPAM Act)
• Relying too heavily on cold outreach without warming up your audience
• No clear nurturing process, leaving leads hanging with no next step

The thing to remember? Keep your strategy thoughtful, and results will follow.

LAMA Marketing is Your Lead Generation Partner

Yes, we had to pat ourselves on the back earlier by mentioning that we can help you with your lead generation strategy. And it’s true. At LAMA, we pride ourselves on the ability to help our clients grow their businesses through tried-and-true lead generation strategies and tactics. But even better? Our plans are customized to your business and what it will take to get you the results you desire. 

Are you ready to learn more? Contact us today to get started.