How Sales Leads Work

By: Dave Roos

Sales leads can be generated by a company's Web site.
Sales leads can be generated by a company's Web site.
George Frey/Getty Images

Whether you're selling jumbo jets or Girl Scout cookies, the basic principle of sales is the same -- there's no sale if there's no client. Finding clients can be an expensive, time-consuming, often failure-ridden process. Picture those poor Girl Scouts going door-to-door with their Thin Mints and Samoas: half the people aren't home; six homeowners just went on a diet; and the competition is stiff (Becky and Nancy are working the same turf!).

The first, and, some say, most difficult task for any salesman is generating sales leads. Sales leads aren't clients; they're potential clients. A sales lead is anyone who has expressed interest in the product or service, whether by inquiring directly through a company's Web site, leaving a business card at a trade show, or by responding positively to a sales call [source: Bitpipe].


Technology has made a tremendous impact on the way that salesmen generate leads. For example, realtors used to rely heavily on costly newspaper ads to generate inquiries. But in 2005, according to the National Association of Realtors, 77 percent of prospective home buyers went online to check out listings [source: Pew Internet & American Life Project]. As consumers increasingly use the Internet to search for home information, real estate agents and other salesmen can spend less time and money on prospecting [source: Realtor Magazine Online].

In this HowStuffWorks article, we'll cover some of the most popular techniques for generating and managing sales leads, including helpful technology for tracking and nurturing leads from first contact to closing.

Let's start by exploring the basics of generating sales leads.