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 itself 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 represent 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, such is not an excuse for failing to generate 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 in some communication. This has been successful 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.

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. In other words, Phase One is also a natural stepping stone to Phase Two.

Regardless, the main point about the struggle of this first phase of lead generation is that if you don’t move into 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 it’s not uncommon for businesses or salespersons in this phase to complain about insufficient leads or the quality of leads, the reality of Phase Two lead generation represents 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 profit is being routinely generated to keep the notion of “struggle” as a distant memory. (If not, you’re probably still in Phase One).

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 activity in operation. (See examples further below).

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 who has carved out a profitable niche.

Another representation of Phase Two lead generation could be a business that has no strong competitors. In this 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. Sweeping changes, such as pandemics, artificial intelligence, or some major technological progress, can and do alter the very foundation of entire industries.

Success today should be appreciated. 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 even Phase Two), it’s important to respect 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., if/when appropriate), in addition to a number of online sources. This would also be an example of full-funnel, multi-touch marketing, specifically tuned to your product and services.

A mature marketing funnel in Phase Three would likely include some 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 and abundance of ongoing prospects and sales.

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

    • Search PPC focuses on keywords and geographic targeting and can capture the lowest-hanging fruit. Search PPC represents less inventory (less opportunity to show ads) than Display PPC because Search PPC is targeted to people who are searching for your product or service, right now, at this instant.
    • Display PPC features demographic targeting and geo-targeting and the opportunity for enormous reach since it doesn’t rely upon people seeking your product. It’s in your best interest to target likely prospects, but the point is you can put ads in front of people who aren’t currently thinking about your product or service. This is the most intuitive advertising since we are all bombarded with this every day.
    • Retargeting, also known as remarketing, is a form of PPC advertising that can help keep your brand in front of visitors after they leave your website. For most websites, only 2% of web traffic converts on the first visit. This provides a greater opportunity to turn those visitors who went away into real prospects at a later point. It represents the best value in the PPC arena and is used in addition to Search PPC and/or Display PPC.

      Most businesses can benefit from each of these types of PPC, although some may find their best success with only one of them. 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 to consume the content. These consumers will simultaneously be engaging with your brand and some (even if a small percentage) will become customers/clients. 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. In brief, it represents a marketing approach of generating leads by way of higher search rankings, so that your website will receive more visitors, which is the goal of SEO. Although it’s more challenging nowadays to generate high search rankings in competitive industries, making your web pages friendly to search engines should not be ignored, even though it’s a longer-term runway toward creating leads. Some amount of SEO should be integrated into any website: the more the merrier.

  • Social Media Marketing. Paid social media 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 without paying. 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. It’s worth repeating that the most predictable opportunities for lead gen via social media are through paid social media advertising.
  • 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 so long — but it works. It’s not as effective as it was years ago, but it’s still a tried and true form of lead gen today

  • 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.

  • Referrals. Getting referrals from existing clients can be the most cost-effective way to generate leads — but for most businesses, it doesn’t represent a sufficient volume of leads.

  • Trade Shows. Although this works better for some businesses than others, it is a tried true way to get in front of potential prospects.

  • Trade Magazine Ads. Advertising in trade magazines may or may not directly result in enough prospect calls to cover their cost, but the very activity of keeping your brand circulating in your industry can make it easier to generate leads through any of the other lead-gen methods.

  • Advetorials. Speaking of Trade Magazines, if there is a way to pay for long-form articles in magazines that are targeted to readers of your industry, this can be more effective than ads. But like all lead gen activities, only proper testing will prove what works best for your business vs your industry.

  • Direct Mail. This may seem old-fashioned to some, but it’s still a valid channel for lead gen, especially for a target demographic that is too narrow to identify with other channels and/or with an older demographic.

  • Radio and TV: This wouldn’t be the first choice for most businesses. In fact, for many businesses with prospect demographics that are more narrowly defined, this may never be a good option. But for certain ones, this can be a meaningful source of leads itself, although its impact is greatly magnified by using it in harmony with online advertising.

The above does not represent an exhaustive list of lead-gen opportunities. However, it serves to highlight how multiple lead generation channels can contribute to Phase 3 of Market Dominance.

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.