3 Phases of Lead Generation

Which of the three phases of lead generation represents your business? Although these phases are relative between any company and its respective industry, this article is intended to provide a simplified categorization of lead gen potential.

Starting out with Phase One, it could be stated that most struggling businesses are in this category.

A business with a predictable flow of leads to sustain themselves sufficiently would be in Phase Two.

Phase Three represents an absolute abundance of leads, facilitating significant expansion or even market dominance.

Following is additional context for the three phases of lead generation.


This phase represents a low- to minimally-viable volume of lead generation. It can barely sustain a business and some may be on the verge of failing. Although a minimally viable amount of lead generation may reflect an insufficient amount of labor in terms of prospecting, it can just as well represent a significant volume of labor that is not paying off. For example, someone in a position to make cold calls all day would represent a lot of labor; but also an unfulfilling level of satisfaction when no meaningful prospects are uncovered.

Phase One can include doing what may have been successful in the past, even though it’s simply not as effective anymore, due to rising ad costs or shifting dynamics in a specific marketplace. Shifting dynamics can include the increasing challenge of getting decision-makers on the phone. Although this is not a new challenge, it illustrates a reality that any salesperson or small business encounters when attempting to drum up new business when it’s becoming even more challenging than it was at an earlier time. Shifting dynamics can also include reduced demand and/or increased competition. Even so, these are not an excuse for not generating more leads through more effective means; it’s merely an acknowledgment of market reality.

Phase One lead generation might include salespersons or small business owners who review LinkedIn profiles and send out personal emails to prospects in the hopes of engaging some communication. This is workable for some, but it becomes less workable over time as the target recipients become less and less inclined to even read such messages, let alone respond to them.

Don’t get me wrong, if this type of lead-gen practice — or any type at all — is working for you, then, by all means, it should be continued. But for many, this type of prospecting constitutes an uphill battle of increasing costs and labor with reduced effectiveness.

By the way, Phase One also includes persons or companies that are new to the practice and as they get better over time, they can become more effective.

Regardless, the main point about the struggle of this first phase of lead generation is that if you don’t move to Phase Two as quickly as possible, you’ll either go away due to frustration and exhaustion, or you’ll be destined to endure an unenviable career.


Although many businesses or salespersons complain about not enough leads or not a high enough quality of leads, the reality of Phase Two lead generation represents a relative success. The lead flow and resulting sales correspond well to the existing production level of your product or service. And more to the point, enough revenue and especially enough profit is being generated to keep the notion of “struggle” as a distant memory.

Bear in mind that Phase Two does not represent a specific type of lead generation; it can be any method that works well. However, it’s likely that there would be more than one type of lead gen production in operation.

If your business has strong competitors in the industry, then your lead generation efforts are likely tuned and optimized enough to enjoy the market share you’ve achieved. You are likely a stable competitor in your industry.

Alternatively, you might also be a small player that has carved out a profitable niche.

Another representation of Phase Two lead generation could be a business that has no strong competitors. In which case, it’s possible that your lead generation efforts are simply “good enough” relative to the lack of strong competition. This can make for a successful business — for now.

Of course, even the concept of “success” itself is relative. For some business owners, having a profitable business with happy customers and employees is a model of success and significant expansion beyond that may not be desired.

Yet, nothing stays the same for long in the business world. New competitors come into the industry. Old competitors get more aggressive. People in your own company may retire or move on to other careers or even to other competitors. Cultural changes, such as pandemics, artificial intelligence, or other major technological progress, can alter the very foundation of entire industries.

Success today should be enjoyed. But the hard reality is that it can go away.

Hence, the surest way to achieving long-term success for any business is continual expansion, which is an apt segue into Phase Three of lead generation.


Phase Three represents such an abundance of continuous new prospects, that you’re either the #1 company in your industry or you’re in the small handful of the top businesses that dominate your market.

The use of lead generation systems, automation and technology is by no means limited to Phase Three of lead generation. However, in Phase Three, it’s hard to imagine achieving this level of success without implementing such systems.

As part of Phase Three (or Phase Two), it’s important to appreciate that any abundance of leads from a single source, no matter how productive it may be, represents a risky foundation for your long-term business expansion.

In Phase Three, typically a business would have multiple streams of optimized and coordinated lead streams including offline lead gen (direct mail, radio, TV, etc), in addition to a number of online sources. This would also be an example of a multi-touch, custom marketing funnel, specifically tuned to your product and services.

A mature marketing funnel in Phase Three would likely include some or all of the following types of lead generation.


The following types of lead gen outreach are not limited to Phase Three. Yet, Phase Three implies multiple types of lead generation activities to provide a stable source of ongoing abundance of prospects and sales.

  • Pay-Per-Click (PPC) advertising. Whether through Google, Facebook, LinkedIn, Amazon or any other platform, PPC represents a foundational type of paid lead gen. And once you’ve built a workable campaign, it can be readily scaled up.
  1. Search PPC focuses on keyword and geographic targeting.

  2. Display PPC features demographic and geotargeting.

  1. Social media paid advertising would fall under the display aspect of PPC, which again is primarily demographic and geographic targeting.

  2. Retargeting is arguable the most productive part of PPC, which provides the opportunity to show the same or new ads to earlier prospects who did not convert. You’re likely aware that prospects need to touch your brand a number of times before they’ll make a purchase. That’s why retargeting is vital.

The trick is to make PPC profitable, which can be more challenging in hyper-competitive markets or for low-cost products (which requires that you lose money on the first sale, and rely on follow-up sales to make a profit).

Furthermore, PPC can be a useful tool for uncovering high-converting keywords, which can (and should) be used to inform your SEO and content marketing.

  • Content Marketing. In brief, content marketing is about creating value for potential prospects of your products or services. Content marketing includes the creation of articles, videos, courses, infographics, reports or any educational materials that can help people learn about topics related to your products or services. The idea is to create enough valuable content that search engines will direct people to your website, who will simultaneously be engaging with your brand. It’s common to share content on social media and even use PPC to connect with prospects (and then retarget those who visited your content with ads about your products or services).

  • SEO. Some would categorize content marketing as a subset of search engine optimization (SEO), which is intended to attract prospects organically without paying for their visit. Although SEO should be integrated into any website, positioning SEO as a subcategory of content marketing represents a more predictable way to generate higher search rankings, which is the end goal of SEO. Regardless, this does not suggest that making your web pages friendly to search engines should be ignored, but it’s a longer-term runway towards creating leads today.

  • Social Media Marketing. Social media paid advertising (see PPC above) is a predictable way to generate leads. On the other hand, small scale prospecting can be accomplished, one-by-one, via LinkedIn or other more specific industry platforms. This method requires labor instead of cash. Nevertheless, if your business can gain social traction organically, this can be a productive source of lead generation.
  • Automated Email Marketing. In contrast to emailing prospects one at a time, automated email marketing includes inviting visitors (via PPC, content marketing or social media) into your email database where they will receive automated messages featuring content they need or want, sprinkled with offers to become a customer. Automated email marketing includes numerous personalization possibilities and offers high ROI relative to other channels. Compared to internet technologies in general, this may seem old-fashioned — because it has been around since the beginning of email — but it works. It’s not as effective as it was back in the 90s, but it’s still a tried and true form of lead gen in the 2020s.

  • Video Marketing. You already know from your own experience that in so many circumstances, videos do a better job of conveying a message than plain text or even photos. Videos can and should be integrated into every category of lead-gen campaigns. They can be featured via PPC, they are certainly a foundational part of content marketing, they can be the primary content on landing pages and they should be promoted via email. The very fact of their importance to all parts of lead generation is why it’s designated here as its own category of lead-gen.

Regardless of which phase of lead generation you might be in, no phase allows you to be complacent. It’s imperative to continually optimize and expand your lead gen initiatives — at least if you want to continue to grow.