First of all, you're not using the proper terminology. A lead is a potential customer whom you know how to reach. Your visitors are already your leads (and very good ones - you're in direct contact and they're obviously interested in your offer). What you're really asking, I'm guessing, is how to convert visitors into (paying) customers, i.e. how to increase conversion rate.
That's a very large and complicated matter, which depends on the product and the target audience, and there is no universal answer.
That being said, if your conversion rate is too low, then one (or more) of the following is probably true:
1. Your product just isn't good enough - it doesn't provide the value that the ad promised. Try to understand how to change your product to make it better, valuable, interesting.
2. Your ads are not properly targeted. You will need to understand who your likely customers are, and target the marketing effort accordingly. AdWords is not a good channel to start from - to understand your audience properly you will need a more personal marketing approach, actually talk to customers, interview them, watch them use your product, try to understand what they want. Then, and only then will you know how to target an ad by appealing to the right customer segment.
3. Your revenue model isn't efficient enough. Perhaps the conversion rate is not the problem. Even if a conversion rate is only 1%, it's still good enough, if each customer pays you enough for 300 AdWord clicks (using the standard 3x multiple). If they don't, then maybe you could change the revenue model to get them to pay more (it's often easier than you might think).