How Sales Leads Work

By: Dave Roos

Generating Sales Leads

Many sales leads start with telemarketers.
Many sales leads start with telemarketers.
© Photographer: Andres Rodriguez | Agency: Dreamstime

Generating sales leads is the process of making contact with and collecting information from prospective clients. In larger companies, generating sales leads falls to the marketing department, since they're responsible for creating all advertising and outreach materials. However, in smaller organizations, it's common for salesmen to have to do their own sales lead generation.

There are several proven techniques for generating sales leads:


  • Networking
  • Advertising (TV/print/Web)
  • Telemarketing and teleprospecting
  • Direct mail, fax or e-mail marketing campaigns
  • Web sites and search engine optimization
  • Buying a sales lead list

Generating sales leads traditionally begins with networking. This is as simple as contacting your friends, family, former coworkers and existing clients and asking if they know anyone who may be interested in your product or service [source: startupnation]. These referrals are also called sales tips.

Besides networking, trade shows are excellent opportunities for business-to-business (B2B) networking. By setting up a table at a trade show, you can collect contact information from dozens of potential buyers and business partners [source: startupnation].

Web advertising is fast becoming the most powerful way to generate sales leads. According to Nielsen/NetRatings, in the week of September 24-30, 2007, Web surfers clicked on over 53 billion online ads selling everything from financial services to cars to travel [source: Nielsen NetRatings]. These ads often lead to short surveys or contact forms that can be accessed in real-time by sales representatives. More on real-time and opt-in sales leads later.

Telemarketing and teleprospecting are two similar but distinct methods of generating sales leads. Companies contract the services of a telemarketing firm that employs operators who read from a prepared script. Operators sell a product or service directly to the public over the phone. Telemarketing, unfortunately, has a terrible reputation for being a nuisance (calling during dinner hours, offering products that have nothing to do with the potential client, et cetera) and has led to the creation of the National Do Not Call Registry.

Teleprospecting, on the other hand, is a B2B sales technique that employs trained operators -- either in-house or from a third-party teleprospecting company -- to contact targeted business prospects [source: intouch]. In teleprospecting, the callers don't talk from a script. Instead, they familiarize themselves enough with the product or service to be able to gauge the client's interest. If a client wants to know more, the teleprospector refers the client to a salesman.

The quickest way to assemble hundreds or thousands of sales leads is to buy a sales lead list. There are dozens of direct marketing companies who collect and sell specialty lists for certain business and consumer sectors. The advantage of these lists is that a salesman can get instant access to thousands of names and numbers for a few hundred dollars. The disadvantage is that all these names are unqualified leads, meaning they haven't been analyzed individually to see whether or not they're a good match for the salesman's specific product or service [source: MindTools]. We'll talk more about specialty lists later in the article.

Now let's talk about tracking sales leads and the technology that makes it easier.