A Lead Magnet is an asset that a business exchanges with prospects for contact information such as their email, phone number, name, etc.
This can be something like an ebook, a webinar, a free trial, etc.
The best practice when creating a lead magnet is to understand your ideal customer and then provide something of value, whether that's information (which tends to be the easiest to create without creating an expense) or physical goods such as a physical book or flyers.
Now the reason we recommend every business to have at least one lead magnet is that relationships don't start with a marriage. In business, our view is that when a client purchases your main offer then that is quite a bit of commitment. In general, it's better to start out on a gradient of the prospect getting to know you rather than going all out from the get-go.
Our view is that the business of the future will be the ones to provide the most value for their clients. In the past, companies were more easily able to get away with sub-par products. Today, with the rise of the internet and more and more feedback being open and available due to social media, companies have to rise to the top and provide more value than ever before.
One way that businesses can do this is to start the relationship with prospects with information that is both valuable and relevant for their future customers.