Lead qualification is the process of quickly turning your leads into “sales ready” or “fully qualified” leads. I believe that this needs to be contrasted with the lead generation process, which seeks to quickly convert inquiries into leads. That is, find out who can and who can’t use your product.
For example, you only sell diesel fuel in your service station. Now, a car pulls up looking for non-diesel fuel. Is this a person that can use your product? In other words, is this a lead?