Lead generation

How lead generation works

Lead generation fills the front of the sales pipeline with people who might buy. It ends when a contact is identified and handed to qualification, where marketing and sales decide who deserves follow-up.

HubSpot defines lead generation as the process of attracting prospects and capturing their contact information so sales and marketing teams can build relationships and convert them into customers 1. Salesforce frames it as building interest in a product or service and then turning that interest into a sale 2. Both definitions cover the same span, from first contact to a lead that someone can act on.

There are two main routes.

• Inbound lead generation earns attention through content, search and useful experiences that bring prospects to the company 1. A lead appears when someone fills a form, starts a trial or registers for an event.
• Outbound lead generation reaches selected prospects directly through email sequences, paid ads or other outreach 1. The team builds the list first and then contacts the people on it.

HubSpot notes that neither route is superior and that high-performing teams typically use both 1. Inbound tends to scale steadily, and outbound lets a team pursue specific high-value targets.

After capture comes qualification. Salesforce recommends starting with an ideal customer profile 2. A scoring system then assigns points for actions such as webinar attendance or visits to high-value pages 2. Lead scoring measures interest, and lead grading measures how well the lead fits the target market 2. A buyer persona helps decide which roles count as good leads in the first place.

Leads then move through stages such as marketing qualified and sales qualified, with marketing qualifying first and sales accepting or rejecting 1.

What decides lead quality

Lead counts are easy to raise. Lead quality is what sales notices, and four variables decide it.

Fit comes first. A lead from a company outside the target market rarely becomes a customer, however engaged the person seems. Salesforce describes lead grading as the check on fit, where a lead from a large company in the target industry earns a higher grade than one from a small unrelated business 2. Fit criteria usually come from firmographics such as industry, size and location.

Intent comes second. A person who requested a demo has shown more interest than one who downloaded a checklist. Scoring models weigh these actions differently, and Salesforce suggests using scoring and grading together 2.

Data quality comes third. A lead with a mistyped address or an old job title wastes the follow-up. For inbound leads, data enrichment can fill in company details the form did not ask for. For outbound lists, each address should be found and verified before anyone writes to it.

Handoff comes fourth. Many leads are lost between teams. A clear rule for when a lead moves to sales, and a deadline for sales to respond, matters as much as the source. HubSpot's model has marketing qualify leads and sales accept or reject them, which gives both teams a shared checkpoint 1.

Cost per lead is a useful number only next to these four. A cheap lead that never fits costs more in rep time than an expensive one that converts.

Example of an outbound lead generation run

A growth team builds an outbound lead list for IT directors at mid-sized software companies. RichAPI's people search recipe runs in three legs, with a filter in the team's own code between the search and the email lookups 3.

Outbound lead list
  search_reference_data     resolve valid filter labels first
  people_search             ICP filters, paged with limit and page
  filter in your own code   drop rows that miss the ICP
  email_finder              on the rows you kept
  email_verifier            on the addresses found
  load to CRM               tag source and date on each lead

The recipe states its counts. Pulling 2,000 profiles at 0.1 credits per result bills 200 credits, including rows the filter later discards 3. Filtering keeps 1,200 that match the profile 3. The email_finder step at 5 credits per call and a 60% hit rate finds 720 addresses for 3,600 credits, with the 480 misses free 3. Running email_verifier at 2 credits per call on those 720 adds 1,440 credits, for a total of 5,240 3.

The numbers show where the money goes. The search is the cheap leg, and the email lookups are the expensive one, so the filter between them decides most of the cost 3. Tightening the profile before the lookups saves far more than trimming the search 3. Because email_finder is a waterfall enrichment endpoint, the team pays for found addresses and not for misses 3.

Each lead lands in the CRM with its source and the date it was found. Sales can then see which list a lead came from, and marketing can compare reply rates by source over time.

Lead generation vs demand generation

The terms are often mixed up. HubSpot describes them as two connected disciplines, where demand generation builds broad interest and lead generation captures contact details from people ready to share them 1.