Lead generation: finding new customers
A lead is someone who might buy from you. Lead generation is simply having a reliable way to find more of them - and following up well enough to turn them into customers. This guide compares inbound, outbound and referral methods, shows how to build a simple pipeline, and covers the rules on emails, calls and buying lists.
In short
- Use a mix of inbound (people find you), outbound (you contact them) and referral methods, weighted to what works for your customers.
- Define your ideal customer first, so you chase the right leads, not just more leads.
- Respond fast - a quick, helpful reply wins more work than any clever campaign.
- Track every lead from first contact to sale, so you know which sources are worth the money.
- Marketing emails and texts need consent. Telemarketing calls to numbers on the Do Not Call Register need consent too, and buying a list doesn't give you consent.
Start with your ideal customer
More leads aren’t better if they’re the wrong ones. Write a short description of your best customers:
- Who are they (type of person or business, location, size)?
- What problem do they have that you solve well?
- What triggers them to look for help (a move, a breakdown, a new regulation, growth)?
- Where do they look for help?
- What makes them choose one supplier over another?
Use it to decide where to look and what to say. See Market research on a budget.
Three ways to generate leads
| Approach | How it works | Examples | Best for |
|---|---|---|---|
| Inbound | Customers find you when they’re looking | Search, maps listings, website content, social media, reviews, directories | Most local and service businesses; builds over time |
| Outbound | You contact potential customers first | Targeted emails to businesses, phone calls, letterbox drops, ads, events | Business-to-business; new businesses needing quick results |
| Referral | Existing customers and partners send people to you | Happy customers, referral partners, networking | Trust-based services; usually the highest-quality leads |
Most small businesses need all three, in different amounts.
Inbound: be easy to find
- Google Business Profile and map listings, complete and current, with photos and reviews.
- A clear website that says what you do, where, for whom, and how to get in touch, with your phone number on every page. See Building a small business website.
- Content that answers questions customers search for. See Content marketing and blogging and SEO and GEO.
- Paid search ads for people ready to buy now. See Paid search and Google Ads.
- Social media where your customers spend time. See Social media marketing.
- Lead magnets: a useful checklist, guide or quote calculator in exchange for an email address (with consent to follow up).
Outbound: reach out, respectfully
Outbound works best when it’s targeted and genuinely relevant.
- Research first: a short list of well-matched prospects beats a long list of strangers.
- Personalise: mention something specific about their business and why you’re contacting them.
- Lead with value: an idea, an observation or a useful resource, not a hard sell.
- Follow up a few times, politely, then stop.
- Other outbound methods: letterbox drops in target areas (see Business cards, flyers and brochures), trade shows (see Events marketing) and targeted ads.
The rules on emails, texts and calls
- Marketing emails and texts generally need the recipient’s consent, must identify you and must include a working unsubscribe, under the Spam Act. You must be able to prove consent. Buying or renting a list doesn’t give you consent, and you remain responsible even if someone else sends messages for you. See ACMA’s guidance and Email marketing that people read.
- Telemarketing calls: it’s illegal to make a telemarketing call to a number on the Do Not Call Register unless you have consent or an exemption applies. Business numbers can’t be added to the register, but personal and home numbers can, so check (“wash”) your call list against the register before calling consumers. Rules on calling hours and identifying yourself also apply. See Telesales, cold calling and call centres.
- Privacy: tell people how you’ll use their details, collect only what you need and keep it secure. Some businesses are covered by the Privacy Act regardless of turnover, including those that trade in personal information.
Referrals: your best leads
- Ask every happy customer, at the moment they’re happiest (the job’s done, the result is great).
- Make it easy: a short message they can forward, or a link to your booking page.
- Thank every referrer, and tell them how it went.
- Build referral partnerships with businesses that serve the same customers but don’t compete.
- Reward referrals if it suits your business, but be careful: offers that depend on the business making a sale to the people referred can breach consumer law. See Networking and referrals.
Respond fast and follow up
Many leads are lost simply because no one replied quickly.
- Reply within hours, not days. Set up alerts for web forms and missed calls.
- Ask questions to understand what they need, by when and their budget.
- Send what you promised, when you promised: a quote, information, a booking time.
- Follow up if you don’t hear back: a call or email after a few days, and again a week or two later.
- Record the outcome, won or lost, and why.
See Sales techniques that work.
Build a simple pipeline
Track every lead through stages, in a spreadsheet or CRM:
New lead → Contacted → Quote or proposal sent → Won / Lost
For each lead record: name, contact details, where they came from, what they need, the value, the next action and its date. Review the list weekly so nothing slips. See Choosing a CRM system.
Measure which sources work
For each lead source, work out:
- number of leads
- how many became customers (conversion rate)
- cost per lead and per customer
- the value of those customers.
Then put more into the sources that bring good customers at a sensible cost. See Measuring marketing.
Avoid lead-generation traps
- Buying “leads” in bulk from unknown sources: often poor quality, sometimes collected without consent.
- Pay-per-lead platforms that sell the same lead to several businesses: check the terms and your results carefully.
- Exaggerated claims in ads or outreach. Claims about your services must be accurate.
- Chasing volume instead of the right customers.
Common questions
What is lead generation?
Having a reliable way to find people who might buy from you, and following up well enough to turn them into customers. Most small businesses use a mix of inbound, outbound and referral methods.
Can I cold call people on the Do Not Call Register?
It’s illegal to make a telemarketing call to a number on the Do Not Call Register unless you have consent or an exemption applies. Business numbers can’t be registered, but home and personal numbers can, so check your list first.
Is it worth buying lead lists?
Be careful. Bulk-bought leads are often poor quality and sometimes collected without consent, and buying a list doesn’t give you consent to send marketing emails or texts under the Spam Act.
How fast should I respond to a new enquiry?
Within hours, not days. Many leads are lost simply because no one replied quickly, so set up alerts for web forms and missed calls and send what you promised when you promised.