What is lead generation?

Learn what lead generation is and everything you need to know about the two major types of lead generation

Entrepreneur Handbook uses cookies to personalise advertising and content for you. We also share this information with external parties for analytics & advertising.

Lead generation as a sales process has changed drastically over the years. It’s now common for multiple marketing/sales channels to be used to create/capture leads. These most popular channels for lead gen include telephone, direct e-mail, PPC and display advertising.

Related: What are qualified leads?

What is lead generation?

Lead generation (also referred to colloquially as lead gen) is the process of driving and capturing interest in a product or service with the purpose of driving sales. A lead by itself is a potential client who is qualified and interested in your product or service and is what we call sales ready, that is ready to start being sold into a product or service.

Two types of lead generation

Overall lead generation activities can be classed into two distinct groups, inbound and outbound.


Generating inbound leads involves creating a range of information, assets, and incentives that prospects can follow towards a company, product or service. For example, this page you’re currently on would be classed as an inbound lead generation technique, the page uses detailed information around our service to draw in prospects (you) through Google search.


The generation of outbound leads is all about directly contacting your target prospect group with a message promoting your company, service, or product through various channels. For example, direct email campaigns target and reach highly curated prospects with a custom message about a service or product.

Inbound vs Outbound

Inbound is a very tried and tested way of generating leads for your business but in recent years the results of this type of inbound activity have been diminishing whilst costs increase. With inbound there’s no extensive way to really qualify who is clicking your advert, content, or asset until they become a lead. This creates massive problems as the lead may not be right for the product or service, they may not have the necessary budget and they may not even be that interested so your sales team loses time on leads that will never close.

Outbound lead generation is the opposite of this when done well. It’s pinpoint in targeting and qualifying prospects before and after contact, ensuring your sales funnel is filled with highly closable prospects, the only problem is the data collection required to do great and personalised outbound activities is significant. Overall lead generation is typically pursued across both inbound and outbound channels for most successful campaigns.

Related: 21 ways to get your first 100 customers