What is lead generation? Meaning, types and how it works
Lead generation (lead gen) means finding people or businesses who may want a product or service and getting their contact details, with permission, so a seller can follow up. The meaning is the same in every market: a lead is someone who has shown interest; lead generation is the work of producing those leads.
Key points
- A lead is a person or business that has shown interest and shared contact details with permission to be contacted.
- Lead generation can be done in-house, bought from lead sellers, or run through publishers who are paid per lead.
- Consumer lead generation, such as MVA and home improvement leads, usually moves through a form, consent, validation and real-time distribution to buyers.
- Sales teams sort leads by temperature (cold, warm, hot) and by qualification stage.
Lead generation meaning
In marketing and sales, a lead is a person or a business that has shown interest in what you sell and has given you a way to contact them. Lead generation is the set of activities that produces leads: ads, content, search, events, referrals, forms and calls. The lead gen definition does not depend on the channel. A form fill from a search ad and a business card from a trade show are both leads.
What separates a lead from a visitor is permission and intent. A visitor reads a page; a lead asks to be contacted, or agrees to be contacted, about something specific. In consumer markets that permission is recorded as consent, which decides whether and how the lead can be called or texted. See TCPA consent.
The main types of lead generation
| Type | Who it serves | How leads are produced |
|---|---|---|
| B2C lead generation | Businesses that sell to consumers: law firms, contractors, insurers | Ads, search, comparison sites and forms where consumers ask to be contacted |
| B2B lead generation | Businesses that sell to other businesses | Content, events, outbound prospecting, demos and trials |
| Inbound lead generation | Any business | People find you through search, content or social and contact you |
| Outbound lead generation | Mostly B2B | You contact prospects first by email, phone or social |
| Performance (pay-per-lead) lead generation | Buyers who want to pay per result | Lead sellers and publishers produce leads and are paid per lead or per sold lead |
This guide and the rest of the lead generation industry guide focus on performance lead generation for consumer services, the part of the market Summit Leads works in. See what is performance marketing for how the pricing models work.
What are the 7 types of leads in sales?
There is no single official list, but sales teams commonly sort leads into seven categories: three by temperature and four by how far the lead has been qualified.
| Lead type | What it means |
|---|---|
| Cold lead | Matches your target customer but has shown little or no interest yet |
| Warm lead | Has shown some interest, such as reading content or asking a question |
| Hot lead | Has asked to be contacted and is ready to talk now |
| Information-qualified lead | Has given contact details in exchange for information |
| Marketing-qualified lead (MQL) | Fits the profile and has engaged enough for marketing to pass on |
| Sales-qualified lead (SQL) | Sales has confirmed need, timing and fit |
| Product- or service-qualified lead | Has used a trial or asked about a specific service |
In consumer lead generation, buyers use other labels too: exclusive and shared, real-time and aged. Those are compared in types of leads.
How consumer lead generation works
In consumer verticals such as motor vehicle accident (MVA) claims and home improvement projects, lead generation is usually a chain of separate businesses. A typical path for one lead:
- Traffic: a person sees an ad or a search result and clicks.
- Form: they answer a few questions about their situation and enter contact details.
- Consent: consent language on the form records permission to be called or texted.
- Validation: phone, email and consent records are checked. See lead validation.
- Distribution: the lead is offered to buyers in real time by ping/post and sold to the highest bid that matches. See ping post explained.
- Follow-up: the buyer, or the buyer’s client, calls the person. See speed to lead.
- Returns: leads that turn out to be invalid can be returned under agreed terms.
The roles in that chain are covered in how lead networks work. Terms you will meet along the way are defined in the lead generation glossary.
Summit Leads buys and sells MVA and home improvement leads by real-time ping/post.
Who does lead generation?
- Businesses for themselves: a law firm or contractor running its own ads and website.
- Lead generators and publishers: businesses whose product is the lead, sold to others. See start a lead generation business.
- Brokers and networks: businesses that buy leads from many sellers and sell them to many buyers. See what is a lead broker.
- Agencies: marketing firms that run lead generation for a client.
Common mistakes
- Counting leads instead of customers. A lead is only worth what it turns into. Measure lead conversion rate and cost per customer.
- Collecting leads without recorded consent. Leads without a consent record cannot safely be called or texted.
- Slow follow-up. A lead that waits loses interest. Plan follow-up before you buy or generate volume.
- Mixing lead types in one report. Exclusive, shared, real-time and aged leads behave differently; report them separately.
Frequently asked questions
What is lead generation in simple terms?
Getting the contact details of people who may want what you sell, with their permission, so you can follow up.
What are the 7 types of leads in sales?
A common grouping is cold, warm and hot leads by temperature, and information-qualified, marketing-qualified, sales-qualified and product- or service-qualified leads by qualification stage. There is no single official list.
What is the difference between lead generation and demand generation?
Demand generation builds interest in a market or a brand. Lead generation turns interest into contact details a seller can follow up on.
Which verticals does Summit Leads work in?
MVA / personal injury and home improvement only. See for buyers and for publishers.
Related guides
- Lead generation statistics: Sourced figures on ad spend, consent and enforcement.
- The lead generation industry: How the whole industry fits together.
- What is performance marketing: Pricing models and where lead gen fits.
- Types of leads: Exclusive, shared, real-time and aged leads.
- How lead networks work: Publishers, brokers and buyers.
- Lead generation glossary: Plain definitions of industry terms.
Run the traffic. We handle the rest.
Every publisher is reviewed before going live. Email us your verticals, traffic sources, states and expected volume.
Or write to team@summitleads.ai. We reply by email.
What happens next
- Step 1: You email us.
- Step 2: We reply by email.
- Step 3: Every publisher is reviewed, and return and payment terms are agreed during onboarding, before you go live.
Generating leads on your own forms? Sell your leads.