What is Lead Generation?

Lead Generation is the process of capturing the attention of potential customers and then engaging with those who display an interest. When prospective customers demonstrate an interest in your company before you contact them, it prevents the issues that can come with methods like cold-calling.

But, why is that?

What is a Lead?

A lead is any potential purchaser that displays an interest in a company. People can display their interest in various ways, from engaging with written content on a company’s site, to calling up a company and asking questions regarding their service.

This means that in some way, shape, or form, the customer has opened the conversation; they are not receiving unprompted attention from a company they’ve never heard of. This allows marketers to continue the conversation until a sale is made.

How Does Lead Generation Work?

Here is a step by step:

  1. A potential lead discovers a service and product. They visit a site, app, or company to learn more
  2. This lead engages with the platform and finds something that encourages them to act on their initial interest
  3. The individual is taken to a page through a call to action request made by the company
  4. From here, they fill in their details on a form in exchange for an offer, newsletter, or more information about the company
  5. Once the information has been received, the potential buyer becomes a lead
  6. Depending on the quality of the lead, the company begins to convert this lead into a user

This process can work for an array of industries, including sustainable energy, hearing aids and Epos.

What Makes a Good Lead?

Qualified Leads

Not all leads are the same.

There is a difference between someone who has clicked on a link once and someone who has asked about how they can purchase your service. Lead scoring is the process of determining whether a lead is worth pursuing and how to approach them. Companies decide if a lead meets their criteria through lead scoring models, and if they pass, they are deemed a ‘qualified lead’.

There are different types of qualified leads depending on the level of interest the individual has demonstrated:

An MQL, or Marketing Qualified Lead, is a potential customer who has only displayed initial interest in the service or product through passive engagement. This can include clicking on a link or reading an article. These individuals are often not ready for calls or personal engagement yet, so they need to be marketed to through campaigns and strategies.

Those who have expressed interest in purchasing the product or service are SQLs, or Sales Qualified Leads. This is often when engagement can begin, as the customer has started to inquire into the service or product.

Product Qualified Leads, PQLs, are those who have tried your product or service and demonstrate an interest in becoming a paying customer. This stage is normally reserved for services that provide either free or discounted versions of their products, with premium or additional services that require payment.

Service Qualified Leads, or SQLs, is the stage marketers are aiming for. This is when leads tell the company that they want to become a customer. For example, if a lead emails a company asking to purchase the service. From there, it’s just a matter of turning this lead into a user.

Sales Funnels

Companies will often invent their own ways of measuring leads, but the criteria is almost never linear; every lead has a different interest level. By building trust and authority, you can develop leads into qualified ones. This is done through sales funnels.

Successful marketing funnels can nurture a passive customer relationship into a sales-qualified lead.

What is NOT a Good Lead?

A bad sales lead, also known as ‘Tyre Kickers’ to mimic reluctant car buyers, is a prospect that has a very low chance of buying or purchasing from a company. If the lead displays no interest in what is being sold, then trying to pursue them can be a waste of time, money and resources. They are also more likely to be highly critical of a service, especially if they’re being begrudgingly chased.

A bad lead can also be when a company supplies you with just data on a potential customer. While this may seem helpful at first glance, the customer is still not able to show active interest. Good lead generation would be a customer calling you.

This data can also leave out facts about the lead that can help a company measure if their qualifying level: are they decisive? Do they engage well with conversation? Do they understand the services being offered? Do they believe they need it?

When a brand has set goals it can become increasingly tempting to use scraped or limited data to try and obtain those numbers. This form of prospecting will lead to the same result, as this lead is not actively interested and, therefore, is not an appropriately qualified lead.

When you use qualitative data from a curious individual, you are far more likely to meet sales targets.

Inbound Marketing Vs Outbound Marketing

The inbound methodology, or inbound marketing, is the act of building a relationship with a company’s potential customer-base that is actively looking for a solution to a problem or to optimize.

Outbound marketing is when the company reaches out first, trying to offer a solution to those who aren’t actively searching for one. This can involve cold-calling, door-to-door sales, and cold emails.

An issue that can be found in outbound marketing is that with the invention of the internet, a solution to your problem is a google search away. If the individual wants to find a solution to their problem, they can do so.

If they aren’t actively searching for a solution, they might not want one, and if they do, converting them from a marketing-qualified lead to a sales-qualified lead is often harder. Those actively searching for a solution display an organic interest that can be utilized by marketers.

Leads are also far more likely to become loyal, recurring purchasers, which is essential for businesses with on-going services.

Outbound marketing can still be useful for some businesses, if used in conjunction with inbound methods like lead generation.


Lead generation is only successful when the quality of the leads is taken into serious consideration. Once you have qualified leads that are being produced in high volume, then you have a profitable lead management system in place.

While no system can be without fault, by researching how to get quality leads for your company’s specific needs, you are far more likely to have less potential customers slip away.