Lead generation in its simplest form within the call center industry is when a call center makes outbound calls on behalf of a client in an attempt to identify prospective customers. As a function of a call center it can be a substantial subset of a telemarketing company. 

Within the call center industry lead generation plays a major role. It is not uncommon for a call center to specialize in this type of outbound calling activity. Similarly, creative forms of compensation for the call center can often be arranged with the client. 

Compensation for lead generation can be arranged in a number of ways depending on how flexible the call center company is.  A few scenarios included paying a commission on the leads the call centers generate (pay-per-lead) or the sales made (pay-per sale) or a combination thereof.

By outsourcing your lead generation you free your internal sales people to focus on closing deals rather than trawling the waters all day. It can be cost effective if done correctly and when considering a vendor you should do your homework and talk with their references.

At the end of the day lead generation is largely a rendezvous problem where there is a set of well-matched candidates for product purchase within a larger set of poorly matched candidates. Various methods including outbound telemarketing are used to try to identify the well-matched candidates which are also called sales leads.