What Is a Lead? 4 Strategies for Generating More Leads

a turquoise question mark against an iridescent background; what is a lead


You need more than just a great product to succeed in business. You need to connect with people who actually want to buy that product. The question is, where to start? This is where a sales lead comes in—they’re a potential customer with vague interest in your product who has the potential to become a committed buyer. 

Here’s an overview of sales leads and how you can put them to work for your ecommerce business.

What is a lead?

A lead in sales is a person or organization that shows some level of interest in purchasing your goods or services. In many cases, sales leads are members of your target audience—the people you had in mind when you designed your product, priced it, and marketed it.

Salespeople sometimes break down their leads into the following categories.

  • Hot lead. A person who is highly motivated to buy.
  • Warm lead. A person moving in the direction of a purchase but who is still in the shopping phase.
  • Cold lead. A lead that no longer seems likely to generate a sale.

Your sales department can take a different approach to each of these, focusing on those that seem most likely to lead to a purchase with the least amount of spending and effort. In the business-to-consumer (B2C) market, a hot lead might be someone who’s interacted with your social media posts, made multiple visits to your website, and maybe even placed items in an online shopping cart. In the business-to-business (B2B) market, a hot lead might be a corporate client who’s heard your sales pitch or was referred to you by others in their industry.

Types of leads

As businesses work to generate leads, they often group potential customers in two different ways: qualified leads versus unqualified leads, and sales qualified leads versus marketing qualified leads. This process is known as lead scoring, which places a numerical value on leads and helps sales reps prioritize those that are most likely to generate a sale.

Qualified vs. unqualified leads

The broadest level of lead scoring is categorizing leads as either qualified or unqualified.

  • Qualified leads. These leads were scrutinized by the company’s sales team, the marketing team, or both, and are considered the strongest of leads. These potential customers may already be in the company’s sales funnel after showing a strong inclination to buy.
  • Unqualified leads. An unqualified lead has only a vague interest in your product or services. They are aware of your brand but lack a full sense of what you sell. Or, they may understand your brand but show little interest in buying.

Sales qualified leads (SQL) vs. marketing qualified leads (MQL)

The next level of lead qualification splits qualified leads between your marketing and sales departments.

  • Sales qualified leads (SQL). A sales qualified lead is a person the sales department views as a very likely customer. A sales qualified lead interacts readily with company sales reps, responding to phone calls, emails, or a call to action on your company’s website. They seem on the cusp of making a purchase.
  • Marketing qualified leads (MQL). A marketing qualified lead is someone who shows interest in the business’s offering but is not yet ready to buy. They probably have seen content created by the company’s marketing team, or perhaps they discovered your company based on their own organic interest. Your marketing and sales teams will need to work to convert them into customers.

4 strategies for generating leads

Sustaining a small business requires a mix of inbound lead generation, where you create campaigns that encourage people to contact you, and outbound lead generation, where you contact potential leads and ask for their business. Here are four strategies for lead generators:

  1. Create and share relevant content
  2. Maintain a presence on social media
  3. Pivot back to your existing customers
  4. Solicit reviews and referrals

1. Create and share relevant content

You can connect with potential leads by capturing their organic interest in your product or service. Many businesses do this with posts featuring useful content on their websites, often via an SEO-focused blog that turns up on search engine results pages (SERPs). You can also generate leads by podcasting or by posting videos on platforms such as YouTube. This lead generation strategy, broadly known as content marketing, connects you with people who are already interested in your industry.

2. Maintain a presence on social media

Many businesses generate sales leads with social media posts. This strategy requires a social media account on the most popular platforms, such as Facebook, Instagram, and TikTok. Some social media posts qualify as content marketing: They provide useful information to a target audience. You can also embark on social media ecommerce, where you sell products via social media—an enormous pool of potential leads, with 4.2 billion people on social platforms. In fact, 76% of consumers have bought products they saw in social media posts.

3. Pivot back to your existing customers

Remember to capture leads for your business by including buyers from past sales cycles—periods in which your sales team worked to turn leads into customers. A delighted customer who loved the last thing they bought from you is a candidate for follow-up purchases. You can keep these customers engaged with an email newsletter highlighting new products and offering special discounts. You can also encourage your existing customers to follow you on social media, where they’ll get all your company updates with early sales announcements and special discounts.

4. Solicit reviews and referrals

Existing customers can be your best form of advertising. That’s because reviews and testimonials go a long way toward turning curious shoppers into buyers. Reviews offer social proof of a product’s quality to people who may have no experience with a brand. And while person-to-person referrals are fantastic, 84% of shoppers report that they put equal stock into online reviews.

What is lead qualification?

Lead qualification is the process of sifting through potential customers based on the likelihood they will make a purchase. Company sales departments lead the qualification efforts, and they may also incorporate data from their company’s marketing department. The lead qualification process is largely driven by a customer’s position in your sales funnel, based on the following stages: 

  • Top of the funnel (ToFu). A lead at the top of the sales funnel is just learning about your business. This ToFu lead may count as an MQL, but they’re not yet ready to buy. Perhaps they’ve seen your advertising or heard of your brand, and now you aim to encourage them to engage with your business.
  • Middle of the funnel (MoFu). A MoFu lead probably has visited your website, clicked on product pages, engaged with social media posts, and perhaps even contacted your sales reps. They have not yet made a purchase, but their intent seems strong.
  • Bottom of the funnel (BoFu). A BoFu lead has reached the fundamental point of the lead management process: they’re ready to buy. 

Lead scoring systems

Many businesses qualify leads using a lead scoring system, where they assign numerical values to potential customers based on their tracked behavior, their engagement with social media posts, their email open rate, and demographic information.

Your customer relationship management (CRM) software can help assign these values based on a website visitor’s activity from the landing page to checkout. A CRM can also archive and manage correspondence between a customer and your company’s sales reps. If the customer has already made purchases, the CRM can archive those records and suggest new products to those clients. You don’t need a CRM tool for lead scoring, but the data can help.

How to nurture leads

Nurturing a lead is the process of moving a potential customer further down the sales funnel. A person may encounter your business with only a vague interest in your product and low purchase intent. If properly nurtured by your sales and marketing teams, this person may turn into a paying customer—perhaps even one who refers you to other clients.

Nurturing a lead may involve the following:

  • Direct communication. Businesses can contact leads that are higher in the sales funnel, establish relationships with them, answer their questions, and educate them about company offerings.
  • Product suggestions. Using cookies and website visitor data, companies can serve online ads to their leads, highlighting products that the lead seems interested in.
  • Discount offers. A special discount might convert an uncommitted lead into a paying customer.

What is a lead FAQ

How do you know if a lead is ready to buy?

Customer behavior doesn’t always follow a set pattern, and a lead may be ready to make a purchase at any point. However, indicators of purchase intent include placing items in an online shopping cart, repeat engagement with sales reps, following your social media accounts, and opening your company emails and newsletters.

How can businesses track and manage leads?

Many businesses track and manage leads using customer relationship management (CRM) software. CRM can archive customer communications, buyer profiles, and online activity in a centralized, sortable database. Your sales team can consult customer profiles to manage and nurture new leads.

Can businesses purchase leads from third-party providers?

You can buy leads from third-party lead generation services, but expect mixed results, because your purchased leads may not match your ideal customer profile. Furthermore, if you buy an email list from a vendor, which is legal, be aware that sending unsolicited emails may violate the US CAN-SPAM Act, which established rules for commercial emailers.