Lead generation is like turning passersby into customers, starting with attracting attention, engaging them, and converting interest into sales.

This guide explains what lead generation is, types of leads, the process, and tools to get started.

What is lead generation?

Types of leads in sales and marketing

Cold leads

Cold leads are prospects who have little to no prior interaction with your brand. They may not know who you are, what you sell, or why they should consider your solution. Typically, cold leads require more effort in terms of awareness-building and nurturing. Outreach methods such as cold calls, email campaigns, or advertising are often used to generate interest and move them further down the funnel.

Example: Someone who receives an unsolicited sales email but has never visited your website or engaged with your content.

Warm leads

Warm leads are prospects who have shown some level of interest in your product or service. They may have visited your website, signed up for a newsletter, downloaded a resource, or engaged with your brand on social media. While they’re not yet ready to buy, they are open to communication and more receptive to nurturing efforts.

Example: Someone who downloads your eBook and subscribes to your email list, signaling curiosity about your solutions.

Hot leads 

Hot leads are highly qualified prospects who are actively considering a purchase. They have a clear intent to buy and often just need the right offer, reassurance, or a final push from the sales team. These leads are top priority, as they are closest to conversion.

Example: A decision maker who requests a product demo or asks for a pricing quote.

Types of leads based on qualification

Information Qualified Leads (IQLs)

IQLs are at the very top of the sales funnel. They are people who are seeking information but aren’t yet ready to buy. Typically, they engage with your brand by downloading a free guide, subscribing to your blog, or attending a webinar. At this stage, they are mainly exploring solutions and gathering knowledge.

Example: A prospect who downloads an industry report in exchange for their email address.

Marketing Qualified Leads (MQLs)

MQLs are leads that have shown a deeper interest in your offerings compared to IQLs. They’ve interacted with your marketing efforts, such as engaging with multiple emails, visiting key website pages, or filling out forms. While not ready to purchase yet, they are more likely than IQLs to become customers with proper nurturing.

Example: A visitor who downloads your ebook after engaging with your blog posts and signing up for your newsletter.

Sales Qualified Leads (SQLs)

SQLs are leads that have been vetted by the marketing team and passed on to sales. These are prospects who have demonstrated a strong intent to buy and meet your ideal customer criteria. The sales team engages them directly to close the deal.

Example: A lead who requests a product demo or explicitly asks to speak with a sales rep.

Product Qualified Leads (PQLs)

PQLs are common in businesses with a free trial or freemium model. These are leads who have actually used your product and experienced its value. Their usage behavior indicates a high chance of conversion since they already understand how the product works.

Example: A user who signs up for a free trial and then upgrades to a paid plan after hitting usage limits.

Service Qualified Leads

Service qualified leads are prospects who directly express interest in becoming a paying customer through your service channels. Often, these are existing customers of one service or product who are ready to upgrade, cross-purchase, or request additional offerings.

Example: A customer telling a support rep, “I’m interested in upgrading to the premium package.”

Lead generation process

Identify target audience

Define your ideal customers based on demographics, behavior, and needs. A well-defined target audience ensures your marketing efforts are focused and effective.

Attract prospects

Use channels like social media, SEO, ads, or events to draw potential customers toward your brand. The goal is to spark initial interest and get them curious about your offerings.

Engage with value

Offer useful content such as blogs, guides, webinars, or free tools to build trust. This positions your business as a helpful resource rather than just a seller.

Capture information

Encourage prospects to share their details through sign-up forms, gated content, or subscriptions. This data becomes the foundation of your lead database.

Qualify and segment leads

Not all leads are equal, so you evaluate their readiness to buy and group them accordingly. This ensures your sales team spends time on the most promising prospects.

Nurture leads

Build relationships with leads by sending personalized emails, sharing targeted content, and offering timely follow-ups. The aim is to keep your brand top-of-mind until they’re ready to purchase.

Convert leads into customers

Once a lead shows strong intent, your sales team steps in to close the deal. This is where effective communication and addressing final objections matter most.

Analyse and optimise

Track performance metrics to see which strategies are working and where drop-offs occur. Continuous analysis helps refine your process for better results over time.

Tools for lead generation

Lead capture tools

They help collect visitor details through forms, pop-ups, and lead magnets.

Example: Paperform

Landing page builders

Landing pages are vital for campaigns like festive sales, product launches, or gated content downloads.

Example: Leadpages

Prospecting and database tools

They help sales teams find and connect with potential leads by providing access to large contact databases and advanced filters.

Example: Linkedin Sales Navigator

CRM software

CRMs centralize lead data, track interactions, and help teams manage the pipeline effectively. 

Example: Superleap, Salesforce

Chatbots and conversational marketing tools

AI-driven chatbots engage visitors in real-time, answer questions, and capture information instantly.

Example: Drift

Interactive content tools

Quizzes, assessments and calculators are engaging ways to gather data while providing value to prospects.

Example: Outgrow

Referral and incentive tools

These encourage customers to refer friends or take specific actions in exchange for rewards, boosting word-of-mouth lead generation.

Example: ReferralCandy

Analytics and tracking tools

They provide insights into user behavior, campaign performance, and ROI, helping optimize lead generation strategies.

Example: Google Analytics