What is lead generation?

Lead generation is any activity that obtains permission to contact a person in a particular group (i.e. the target market). This often involves making a free offer that requires further contact (e.g. to deliver the free product or service being offered).

Lead Generation is traditionally associated with direct marketing, and most activity now takes place on the Internet (online lead generation).

A lead is not, in and of itself, a sale. It's a clue (or lead) that a sales opportunity exists. And it's this very concept that many amateurs don't fully appreciate.

Lead generation can only deliver a sale if it's sending you people that are likely to buy your product or service. In particular, the leads you generate have to...

Want or need the product/service you're offering
Be able to afford it

Online lead generation isn't about finding people. It's about eliminating them. As a direct marketing professional, I've always viewed lead generation as the final step in target marketing.

This has implications for the free offer you make. It has to be a match for your main product or service (the one you're generating leads for). The ideal free offer in lead generation is one that...

Whets the appetite for the main offer
Has the target market see how much better life is (or will be) with the main product
Is of interest only to the main target market
Expires or runs out – forcing a purchase
Is of little interest to people who can't afford the main product

Most lead generation offers don't meet all these criteria. And the plain fact is, it's very hard to craft such an offer. Never-the-less, the rewards for doing so are fantastic. When you get the offer right, the sales results are staggering.

So what is lead generation? It's any tool that produces viable prospects for your sales team. If that tool exists on the Internet, it's an example of online lead generation.