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What is a Lead? How to Qualify and Generate Leads

Lead generation is something that all companies struggle with. In fact, 68% of all marketers admit to struggling. Why is this so important? Because without leads, you have no future business. If you are not generating leads, you are not growing, and if you’re not growing, you will not be able to keep up.

To generate leads, we have to understand what a lead is in marketing. I have no doubt that we all understand the idea of a lead, but it’s so much more than that. Leads are the lifeblood of a business. For that reason, we’ll be going into the specifics. Let’s get started.

What is a lead in marketing? 

In the context of sales, a lead is a contact that has the potential to be a customer. Most often, this is an individual that has provided contact information, and in doing so, created a potential sales opportunity. 

The definition of a lead can be slightly different depending on who you ask. For example, one company might consider a lead someone with high conversion potential, whereas another might consider a lead a simple contact.

Regardless of the definition, a lead is a contact you will pitch and market to in order to sell them something. Whether a service or physical product, a lead is a potential customer.

Pro tip: In certain stages, a lead can also be known as a prospect. Some companies consider prospects more qualified (e.g., further down the funnel) than leads; for others, it is the opposite. There isn’t a universally accepted terminology for leads or prospects, no matter what others tell you. It’s up to you and your team to establish the right standard that works in your sales and marketing operations and ensure everyone is on the same page regarding definitions.

How to generate a lead

Lead generation is pretty important, but it’s not easy. Even if you know your audience like the back of your hand, that doesn’t mean you can turn them into leads. Lead generation takes some time, but more importantly, it takes strategy. Here are some ways that you can generate leads in your business.

Direct engagement

In some cases, especially if we’re talking about high-value sales, direct engagement is a great choice for generating a lead. This requires a lot of research, and the fundamental steps of the conversion funnel are the same, but reaching out personally and talking to the lead might prove to be a smart move.

This tactic is often utilized heavily on social media channels like LinkedIn, but it could also be through email or phone. The point is to contact the lead directly without an automated message. The reason they are so effective for high-valued sales is because the experience is personalized and tailored to the lead and only the lead. 

A good example of this is someone like an account manager reaching out to a startup company, asking if they need help. For the account manager, this is a big sale, and the startup company feels like they are getting a personalized experience through direct engagement.

Make contact through LinkedIn

Speaking of LinkedIn, did you know that it has 2x the buying power of the average web audience? B2B marketing has proven to be highly effective on this platform, and it is the go-to for most people and businesses when it comes to discussing their professional life.  

Depending on your industry, you can easily find and make connections with industry leaders and influencers. Doing so sets you up with a network of potentially high-value leads. 

Using LinkedIn and other social media platforms, you can even pay (given you have the budget) for lead-generating ads. These are ads specially made to collect lead data like name, location, and email. If you don’t have the budget for that, you can still connect and engage with your target audience through their posts, creating posts of your own, and messaging them directly through the platform.

Search advertising

When it comes to generating quality leads, targeting your ideal audience through ads is a good way to go. Of course, this involves a budget, but it is highly effective if executed properly. 

Utilizing Google and Bing to advertise based on keywords that you know are relevant for your business is hands down one of the most effective ways to reach an audience and generate hot leads. The trick is to make sure that you know what kind of searches people who buy from you are making.

Search engine results page
Targetted search engine results

So let’s say that you own a bicycle company. It wouldn’t make much sense to place an ad for something like “20% off bike tires” on a keyword search like “Lawncare services.” Instead, you might want to try “How to fix a bike tire”, or “New mountain bike tires”. All of this is possible within the ads managers for search engines; you just have to have the budget.

Customer referrals

Getting referrals from customers is one of the oldest tricks in the book because it works! If you try your absolute best to make a customer happy (Which, by the way, you should), then most of them will have no problem referring you to a friend.

This is word-of-mouth marketing at its finest, and it is such a powerful tool. Unfortunately, it’s often forgotten about. When you help a customer place an order, make a purchase, or really, help them out in any way, don’t be shy! Ask for a referral and incentivize them. 

Tell them that every new customer who uses their name at checkout gets $10 (or something else valuable to them) to use in your store. That way, you generate new leads and guarantee a returning customer.

Guest blogging

Guest blogging is tricky and time-consuming, but that’s not to say it doesn’t work. In content marketing, backlinks are everything. It helps search engines determine that what you’re linking to is an authority on the subject, but it also gets the attention of those reading it.

For example, let’s say that you work for a business that makes digital catalogs and magazines, but you want to get into the restaurant menu business, too. Finding a blog that talks about how to design and style a menu and then pitching them an idea you can write about is an effective way to tap into a different audience.

Odds are that the people reading the other blog’s content haven’t heard of you. But, they’re looking for inspiration to help design their own menu. Once they find that article, click on it, and see your link and solution, then the chances of generating a new lead are fairly high.

Offer a free tool or lead magnet

Let’s be real with ourselves here and say that we all love the word free. Free samples in the grocery store, free detail when you get your car washed, and of course, free trials and tools.

Free digital tools are extremely helpful for both the user and the business. The user gets what they want through the tool, and they get a taste of what the product (in case you run a SaaS business) is capable of. Once they do that, they have a much higher chance of converting, because they’re already familiar with your tool. But, at the very least, they have signed up for the free version, given you their email, and exposed their intent. These people will be much easier to market to. 

For instance, we launched our very own free AI-subject line generator. You can generate 15 free subject lines a day. If you want more, you are prompted with a CTA to sign up for our full product:

Encharge Subject Line Generator lead captture popup
Lead generation CTA

On the other hand, you could offer free information. Something like an ebook loaded with information or a webinar with insight are things that your target audience will be interested in. Gated lead magnets like this is a very effective way to generate leads.

Inbound vs. outbound lead generation

The truth is that there are many ways you can gather a lead’s contact information. Let’s break it down into two categories based on your general: Inbound and outbound marketing.

Inbound marketing is a strategy whereby a company creates valuable content in order to attract a customer. We all know these tactics, as we’ve seen them everywhere. Blog articles, eBooks, webinars, demo videos, and more. All of these pieces of content were created to be a proverbial fishing rod. They cast the bait out there, waiting for you to find it, and convince you to bite; then they reel you in. Ultimately, it was you that found them based on a need that you had.

Outbound marketing is when a company pushes its message to you. This is visible through advertisements, direct marketing, trade shows, seminars, etc. The company meets you where you’re at and then shows you what they’ve got.

As you can see, these two are the polar opposite of each other. Inbound relies on the customer finding the company, while outbound relies on the company finding the customer. Every business uses both tactics, as they are both useful in their own setting.

Cold vs. hot leads

A cold lead is a lead that has not heard about you or your business; they might not even be aware of the problem that you are trying to solve. Alternatively, they might be a good fit for your business but already have a solution. Generally, cold leads have a low potential to convert. 

Meanwhile, a hot lead is one that is aware of your business and ready to make a purchase — i.e., they have high conversion potential. 

Warm leads are usually aware of the problem and your solution but might not be yet ready to take out their wallet for you.

If you invest most of your time and money into warm and hot leads, you will have a much higher ROI and conversion rate. 

Of course, it’s always possible to convert cold leads into warm and eventually hot leads; it’s just much more difficult.

Lead types based on readiness to buy
Lead types based on readiness to buy

How do you tell the difference in your lead temperature? 

A cold lead might be someone that was cold-called/emailed. These people weren’t necessarily looking for a solution at this particular time. The odds are that they aren’t interested at all. 

This is typically the case with outbound marketing. 

However, that’s not to say that outbound is a useless strategy. That’s how many businesses get started because the approach is quick, and if executed properly (targeting the right audience, with the right message, at the right time), you could yield rapid results. 

However, eventually, you would want to grow out of cold outreach and start investing in long-term inbound strategies that build your audience and authority in the space.

Inbound marketing produces hot leads because the customer is the one searching for the solution. They have an issue, are aware of the potential solutions, and begin their search. It’s up to you to make your solution look like the best fit for their needs.

  • Inbound marketing costs 62% less per lead than traditional outbound marketing. (HubSpot)
  • Email marketing has 2x higher ROI than cold calling, networking, or tradeshows. (Custom Content Council)
  • out of 4 inbound marketing channels cost less than any outbound channel. (HubSpot)

Source

A good way to visualize this is by going into a grocery store with a list. You know what you need, and you go and get it on aisle 5 (inbound marketing). However, on this particular trip, you have a sweet tooth, and you pass by a box of candy that you simply cannot pass up (the messaging was “pushed” to you — outbound marketing). You needed the ingredients to make a lasagna for dinner, but once you passed by the candy display, you wanted to get candy. 

How to qualify a lead

In order to better determine the conversion potential of a lead, you have to qualify them. But it’s not as simple as saying yes or no. True, they are either qualified, or they aren’t, but there are different levels of qualification. The truth is that you really can’t understand what a lead is in marketing without understanding these common qualification types:

5 types of lead qualification:

  1. Information Qualified Leads (IQL)
  2. Marketing Qualified Leads  (MQL)
  3. Product Qualified Lead (PQL) 
  4. Sales Accepted Lead (SAL)
  5. Sales Qualified Lead (SQL)
Different types of leads based on the funnel stage
Lead types based on the funnel stage

Information Qualified Lead (IQL)

A lead that submits their contact info for helpful information is considered an information-qualified lead (IQL). These are people at the very top of the funnel, researching to find the best solution for their needs. 

Oftentimes, these leads come from information-based searches on Google. They will most likely not be very familiar with your company and your solutions.

The typical flow here is the IQL submits their info, and they’re redirected to a thank you page where they can freely download whatever content you’re offering. Alternatively, you could send them an email with a thank you note and the link to download. The first solution requires an additional landing page. The other requires a simple email automation workflow

Because these leads are at the very beginning of their journey and still aren’t very sure of their options, they are considered cold leads (or warm at best). As such, IQL should be given low priority. They have very little conversion potential, and you shouldn’t use a bunch of your time and money to acquire them. It’s best to qualify and nurture these leads before giving them to sales. This is where marketing qualification comes into play.

Marketing Qualified Lead (MQL)

A marketing qualified lead (MQL) is the next step up on the lead qualification scale. Oftentimes, an MQL has been through their options and has determined that you and your solutions could be a good fit. This doesn’t mean that they’ve made up their mind, but it certainly means that you are a contender.

A marketing qualified lead is usually determined based on behavior or specific attributes that indicate a good fit. If they take certain actions, it shows that they are interested. For example, maybe they’ve signed up for your newsletter, and they’ve clicked through multiple times to view your pricing page.

Marketing automation flows and operations are set up to provide information and content to the lead in order to provoke a response and gauge readiness to buy from the lead. The lead becomes MQL when they click on a specific CTA, open your lead nurturing or onboarding emails, respond to your messages, or otherwise engage with your business. The marketing team qualifies the lead manually or uses marketing automation to qualify the lead when they satisfy the criteria to become an MQL. This operation usually involves an automated lead scoring process.

MQLs are ready to move to the next phase in the sales process. In this case, the best thing to do is to follow up with some offers and/or pass the lead to the sales team. That could mean a discount for a new user, a free consultation, or even a simple product demo. Whatever it is, the marketing team and sales team need to be aligned to determine the best course of action based on the lead’s position in the conversion funnel. 

Lead Qualification Process Funnel Diagram

Both teams need to be aligned because MQLs, if qualified correctly, are considered hot leads. They have massive potential to become a customer, and rather quickly at that. They have reached the point in their journey where they are ready to convert. They just need the right offer.

Product Qualified Lead (PQL)

The concept of product-qualified leads is relatively new and has emerged with the popularity of product-led growth. SaaS and other digital tech companies primarily use it.

A product qualified lead (PQL) is an individual who has experienced value from using a product (i..e., has reached an aha moment in your product) as a result of a free trial, freemium model, or other types of first-hand experience with the app. 

It’s essentially a much more relevant form of MQL for product companies. Instead of simply tracking and scoring leads based on email activity, engagement with marketing CTAs like pop-ups and ads, and others, you qualify leads based on their behavior in your product.

For instance, if you run a task-management app, you might consider a PQL, every trial user that has created at least 2 projects and 20 tasks within their trial period. 

In order to implement product-based lead qualification, you need a marketing automation tool that supports receiving events from your app and scoring leads based on app behavior. Luckily, Encharge can help with this with its powerful Event API and lead scoring features.

Sales Accepted Lead (SAL)

Companies rarely use this stage, but it could improve the qualification process significantly. It’s a step between the marketing qualified, and sales qualified leads. 


This step helps create better alignment between the sales and marketing departments. The goal is for the sales team to collect additional information about the lead and determine if they are a good opportunity to pursue further down the sales process.

This stage of the qualification process might involve a discovery call, performed before the actual sales call or product demo, to determine if the lead is a good fit. The aim of the discovery call is to understand:

  • If your product or service is the right fit for the lead.
  • Identify the decision-makers.
  • Establish the decision-making process and timeframe of the lead.
  • Is the lead currently using an alternative solution? Etc.

The discovery call will allow the team to focus on understanding the lead before selling to them instead of trying to squeeze both discovery and sales in a single call. It would also provide instant feedback to marketing and allow the salespeople to prepare better for a successful demo/sales call.

Sales Qualified Lead (SQL)

In the last stage, a lead will advance to being sales qualified. In most organizations, this means that the sales team has done one or more sales calls with the lead, qualified them, and had some indication of a preliminary go-ahead from the lead. Now the sales team is pursuing to close the deal.

A sales-qualified lead (SQL) is also considered a hot lead. The faster the sales team can follow up with an offer, the higher the closing rate will be. The idea behind such a lead is simple. They are ready to convert. Whether now or later, they have seen all of their options, recognized yours, and need the solution you offer.

Once a lead has reached this level of qualification, it’s all up to the sales team to make it happen, but that doesn’t mean that the marketing team is useless here. The sales team will need content to help close the deal, highlight your organization’s strengths, and explain how the new customer can take advantage of those strengths in their applications. This could be customer testimonials, product demos, free trials, discounts, and more.

How to nurture a lead

We’ve talked a lot about the different kinds of leads, but it all means nothing if you don’t understand how to properly nurture a lead. Lead nurturing is the process of guiding someone from a lead to a customer through the conversion funnel. 

Because it’s not necessarily as cut and dry as some might expect, we’re going to list a few ways that you can make the lead nurturing process a little more smooth in your organization. Let’s start from the top.

Launch email marketing campaigns

Email marketing campaigns are one of the most powerful tools that you have in your arsenal as a marketer. We’ve all seen them. Those emails that pop up at what seems like the most random time, offering you something. Truthfully, those emails aren’t all that random.

Sure, some of them might be cold outreach, but the vast majority of them are based on what the company sending them to you believes to be an opportunity. You’ve most likely taken an action that led that company to believe that you are either a marketing qualified lead or even a sales qualified lead.

Email marketing campaigns are carefully designed to hit you at the right time. They come at you with information, answers, and offers that are personally designed for you based on where you are within the funnel. This is called lead nurturing, and it is vital.

According to Marketo, 96% of people visiting your website aren’t ready to buy yet. That means that unless they continue coming to your website, they will be unaware of anything that you have going on. Some might even forget about you completely. The easiest and most consistent way to get back in touch with them is through an email marketing campaign.

Omnichannel nurturing

Although email is a powerful tool in marketing, it’s not the only channel for nurturing. In fact, a well-placed ad can convert just a well sometimes. Think about the last time you went browsing online, looked around, and didn’t find what you were looking for. How many Facebook Ads did you see about that product over the next 2 weeks? Countless! And it’s not by coincidence. 

Omnichannel marketing means meeting the lead where they’re at. It means setting up irresistible ads across all platforms, staying active on the business’s social media accounts, and taking advantage of any channel you possibly can to reach new and existing customers and leads. Plus, it comes with its own set of benefits:

  • Better user experience 
  • Cohesive brand strategy and identity
  • Increased revenue and ROI
  • More accurate attribution data

Targeted content

Targeted content is content created for a certain audience in a niche to drive a specific response from the group. In the simplest terms, you’re showing people content that’s made for them. This content then prompts them to take action. 

This is so important because literally, everyone is creating content nowadays. It is impossible to hit a broad audience and be profitable. Sure, big brands like Amazon or Apple can do that, but they have a large audience and an even larger wallet. 

Targeted search results on Google

Take a look at this example from Google. When you search “How to delete a Google account”, this is one of the first results. Around it, you have other curated content explaining the same thing. It is specifically designed for people looking for a solution on how to delete their account.

Of course, this is an easy key phrase for someone like Google Support to rank for, but you get my point. It was designed, written, and displayed for a particular group of people with very specific intent.

Create multiple touchpoints

A touchpoint in marketing is counted anytime a customer or lead comes into contact with your brand. This could be directly or indirectly. For example, they could come across a review on a third-party website of your company. 

Multiple touchpoints diagram in marketing

For a brand trying to stay on the minds of leads, multiple touchpoints are incredibly important. You don’t want the lead thinking about you only when they’re on your main website. Instead, you want to be woven into their entire customer journey through ads, reviews, videos, blog articles, and anything else you can think of. This is why brands take advantage of platforms like Medium and Unsplash and even try their best to be on every review platform. It’s all for the sake of nurturing.

Learn more: Aligning Your Content Marketing Efforts with the Customer Journey

Be timely with responses

Let’s say that a lead contacts customer support about a deal you have going on, and it takes a day or two to reply. In the world of business, 48 hours is a lifetime. In those 2 short days, the lead can and most likely will look for new solutions. That is time that you can’t get back, and responding to leads should be a massive priority.

A quick response time goes far beyond customer service, though. If you’re a brand that’s active on social media, your response times should be quick there, too. The best way to visualize this is by picturing when you, yourself are in a situation where you need some customer support. You want a fast response time, right?

The faster you can get to your lead, no matter what medium they’re reaching out to you through, the more likely they will be to convert. At the very least, a fast response time means a satisfied customer. And satisfied customers convert.

Utilize personalization

Personalization is no longer a suggestion in marketing. Sprinkling a little personal touch on your messaging really does help sell. In fact, according to Forbes, 71% of customers feel frustrated when their experience isn’t personalized. That’s a staggering number, and it shouldn’t be ignored.

What does personalization mean in marketing? Truthfully, it’s not as complex as it seems. Personalization refers to using the customer’s name when sending them emails. But more than that, it’s targeted discounts and not-so-generic advertising.

When a customer spends their time web surfing, adding a specific item to their cart, only to abandon it because it was too expensive for them, that is the perfect opportunity. These customers have thought hard about that item. Sending them a personalized discount code for said item is a quick way to increase conversions and ROI. Personalization sells!

Implement lead scoring

Lead scoring is a methodology by which you rank prospects on a scale that represents their sales-readiness. This is all based on predetermined factors or data points. Every time a prospect meets that criteria, they’re assigned points on the scale. The higher the score, the more likely they are to convert.

Lead scoring diagram

Many companies have used lead scoring for a long time to qualify leads. It effectively increases sales efficiency (and marketing efficiency, for that matter) and keeps everyone aligned within the company. Using a solid lead scoring scale, you can:

  • Create more effective marketing campaigns
  • Keep the marketing and sales teams aligned
  • Increase sales

Data points can be thought of as milestones or checkpoints. Each time a lead makes a predetermined action, such as signing up for a free trial, then points can be added. The scale gives you precious insight into the lead’s intent. So if they decide to sign up for a free trial of your digital tool, for example, you can determine that they are interested in a solution that you provide.

Align sales and marketing strategies

Speaking of keeping everyone aligned, the sales and marketing team should work hand-in-hand when it comes to lead generation. Both teams should share communication channels, strategies, goals, and objectives. Without this alignment, your leads will most likely get mixed signals, seeing one thing from the content, then hearing something completely different from a sales representative.

Historically speaking, sales and marketing used to operate in what’s called a silo. If you picture a big silo and understand its purpose, you can see why this is a problem. On a farm, a silo is designed to keep grain and other crops away from the elements on a farm. Once the silo serves its purpose, the crops are then relocated.

In marketing silos, the marketing team deals with the lead in their own way, never hearing from sales. Once they make their way through the funnel to the point of sales, they’re handed off to the sales team. Once that’s done, they most likely will never hear from the marketing team in any way ever again. Each team is secluded.

This idea no longer works in this day and age. Customers, leads, and prospects interact with brands long before and long after they make a purchase. Thanks to social media and the ease of access everyone has to the digital realm; brands just don’t disappear. Avoiding the marketing and sales silos helps keep the process transparent for everyone, making approaching a lead much easier for both teams at any given time.

Conclusions and takeaway

A lead in marketing is someone that has the potential to give your business a sale. As you can imagine, they’re pretty important to the success of your business. But a lead is not someone who just walks up to your front door, knocks, and asks to make a purchase. No, a lead takes time to generate, nurture, and convert.

Leads take time, effort, and oftentimes a good bit of money to acquire. Depending on your company, there are several things you can do to gather them. Leads are people, just like you and me, and they will take some convincing to buy from you. With competition the way it is, you absolutely have to make sure you are using all avenues, channels, and strategies that make sense for your business. 

And to close, make sure you have the right tools. Encharge can help you score, qualify and nurture your leads from start to finish. Some of the key features that we’ve implemented to make this process easier include:

If this sounds interesting, don’t hesitate to book a quick demo call with us. Happy to help you generate and convert more leads!

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