What Are Leads In Sales?

A sales lead is a prospective consumer of a product or service, created when an individual or business shows interest and provides contact information. (Source)

There are certain behaviors a person or entity exhibits to be deemed a sales lead. These actions, which must demonstrate an interest in your product or service, could be of the person:

  • Downloading a lead magnet on your website, like a whitepaper or guide
  • Filling a contact form on your website.
  • Signing up for a free trial

It is at this stage the person or the company they work for becomes enters your sales pipeline. They will remain a sales lead until there has been two-way communication between them and yourself conforming they are genuinely interested in your product.

Here are other ways a lead may enter your sales pipeline:

4 Common Ways Leads Enter Your Sales Funnel

what is a lead?

1 Names on a list

You either create this list or purchase one from a list broker. It’s important that you have a list of leads that are qualified to purchase your product or service. Unless they have a need for what your company sells, you can’t call any names on a list sales leads.

Proper sales leads include individuals who:

  • Recently purchased from you, but did not make a second purchase within the time you would normally expect a repeat purchase,
  • Abandoned their shopping cart before completing their order,
  • Visited your site and took no further action (no contact information)
  • Have never been in touch with you.

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2 Referrals

You can acquire leads from referrals. These are people that you know, like your current customers. If they have nice things to say about what you offer and the quality of your service then their friends or family members might want to give your product a try too.

If you’re looking for an easy way to earn more leads on a daily basis, you may want to lean in on your customers and incentive them to share their experience with other people they know who may have similar needs.

3 Responses to advertising

The idea behind this type of lead generation is that someone sees your ad or marketing message and calls up in order to find out what you’re all about.

For instance, the responses to an advertisement for a house that is up for sale might come from someone who’s also looking for a new home in your area. They see the ad about what you have to offer and are interested enough to contact you or call up just to ask more about it.

These types of leads can be very valuable because they’re people with needs that match what you’ve got on offer right now. They are a type of lead that can be differentiated as ‘warm’ or more likely to buy.

That’s the great thing about this strategy – it eliminates any wasted advertising time because you’re reaching out to potential customers who are already interested in what you have for sale or other services that they need from your business.

It also means a higher conversion rate, which is key when trying to grow a successful and lucrative business venture over the time you’re running a business and want to make the most of what you’ve got.

4 Inbound marketing and SEO


what is a lead in seo

(Image Source: HostPapa)

These two strategies focus on attracting traffic to your website and other online assets from people who may be interested in what your business sells. 

SEO (search engine optimization) positions your website content so that people can find it organically. Essentially it targets people who use search engines like Google to find answers to questions they may have or solutions for problems they may be facing. All these are potential sales leads; all you need to do is to get them on your website through your content.

Inbound marketing is also known as “marketing in motion” because it’s based on generating an ongoing flow of traffic from many different channels that will eventually lead to a conversion.

Many people think inbound marketing is just blogging, or creating online content to attract potential customers and then convert them into leads—and while it’s true that this strategy does include these two things, the idea of inbound marketing goes much deeper than that.

The concept of inbound marketing is based on the idea that “lead capture” or generating leads, should be built into everything you do online.

This means you need to think about what generates sales lead for your company before creating content and designing your website. Pair inbound marketing with SEO for your B2B business and you’ll have a solid foundation for success.

For example, if your company is a law firm that handles auto accidents, what do people search for online when they’ve been in an accident? They might be looking for attorneys or injury lawyers to help them file their cases in court.

This means you should have blog posts about how to find the best lawyer after being in an accident, what to do immediately after a car accident, and what your rights are as a motorist and as a pedestrian.

You should also have blog posts about the different types of injury lawyers so people can find someone who specializes in their needs- whether it be motorcycle accidents or personal injuries from dog bites.

These four ways boil down into two broader categories that we’ll briefly go over:

  • Marketing

Depending on your sales/marketing process, there may be a time when you are trying to reach those who are “unaware” of your brand (or even your industry).

Example: You advertise on any platform (e.g. Facebook, Adwords) hoping to eventually get people/businesses to give you their contact information.

If they were unaware, they become aware through your ad.

If they respond to the call-to-action, it’s now a bonafide lead.


  • Cold Outreach

This is a bit different.

If your sales process is less about advertising and more about finding quality prospects to cold pitch (many B2Bs operate this way), your leads can be leads before they are aware of your brand. This may sound confusing for some, so we’ll explain with another example:

Example: You get a list of high-quality through LeadFuze that you email or cold call to see if there is a fit with your product. These are people who can potentially become customers but who had not expressed any interest in what you are selling.

With that out of the way, let’s get into the different labels that you may place on a lead. Keep the difference between cold outreach and traditional marketing in mind as they’ll come into play throughout.

What Are the 3 Types of Basic Sales Leads?

There are three types of leads that you should know about, namely:

Lead Type #1: Marketing Qualified Lead (MQL)

Once a contact becomes a lead they are ready to be nurtured, which is the process that qualifies them for the next stage of the funnel. All this means is that the lead is ready to receive materials and content that will move them closer and closer to the point of becoming sales-ready.

Depending on how you acquired the lead, your process here will again be different.

Learn more about what a Marketing Qualified Lead is here.


In many organizations, leads are “scored”.


The role of marketing here is to feed with content in order to provoke a response and gauge readiness to buy. That readiness is given a score. The score rises when the lead makes a move, clicks on a CTA, or otherwise engages with your material.

Once the lead reaches the right level of perceived value, they are ready to move to the next phase of the sales process.

Cold Outreach

For the cold outreach, folks, you’re going to want to quickly figure out whether your lead is a suspect or a prospect.

Resource: We have an entire post devoted to this suspect/prospect problem. Check it out here.

Essentially, suspects are leads that look good but have no real interest in making a deal. They should be identified and thrown out quickly.

Prospects are the real deal. They need your stuff and are close to buying.

You may want to do an “are we a fit” call to separate the suspects from the prospects. It’s the best way and we go over it in detail in the post linked above.

Lead Type #2: Sales Accepted Lead (SAL)

This title represents a stage that not all organizations have, but most should.

Once a lead reaches the score that indicates they may be warm enough to be sold to, too many businesses ship them to the sales department to be a part of that process.

Often times this creates a divide between the marketing team and the sales reps.

When it doesn’t end up in a conversion, it’s not good for anybody.

Sure, communication between departments go a long way. But what if you could have a step added to the process that will help your marketing team score leads better (over time) while ensuring only the best leads move onto our next label?

Here’s how…

Once a lead meets the prerequisites to move to sales, schedule an exploratory call with the lead and a sales rep.

Not a sales call/demo, but a call that further qualifies the lead’s readiness. There are a few basic things you are looking to find out on this call:

  • Do their needs fit our solution?
  • Are they looking for a replacement solution?
  • Have you identified the decision-maker?
  • Are they ready to make a move?

Doing this sales accepted lead process helps in several ways including:

  • Immediate feedback to marketing on the lead scoring.
  • Sales is more informed about the lead before the sales call and is not so “in the dark”.
  • The process seems more professional to the lead and could be used to prime them for the sales call later.

Note: If you handle the entire process from lead to close (cold outreach), you won’t call the lead a SAL.

That said, you could (and should) do a similar call to figure out whether the lead is a fit and qualified for a pitch.

After this style of call, it’s either back to the funnel (or email cadence), gone forever, or onto the sales process.

Lead Type #3: Sales Qualified Lead (SQL)

In this last stage, the sales department puts the lead through their own process to determine if they are truly ready to be sold to.

In some organizations, this means that they’ve hit the lead score and went straight to sales for processing, or the sales team has had a preliminary crack at them to give the final go-ahead and now they are actively working to close the deal.

If you have sales reps (or are one), this stage is the same for both traditional marketing efforts and cold outreach. It means you are ready to do a demo, make a pitch, and have that final conversation to ask for the sale.

More importantly, it means the lead is ready to talk to a sales rep.

During the marketing process, coax the leads into clicking here or signing up for a webinar there.


Resource: Learn more about what a Sales Qualified Lead is here.

What is a Closed Won/Lost Lead

There are three possible results at the end of every sales prospecting effort. It’s a NO, YES, or MAYBE.

We’ll get to maybe in a minute. Let’s talk about the definites – yes and no, first:

  • Closed Won: This means you got the deal, it’s done. The sale is officially recorded and the lead is now a customer.
  • Closed Lost: You didn’t get the deal and the lead expressed that they would not be purchasing your solution.

How to deal with the maybes

Even after you’ve done the best screening you can think of, you’ll still have a lot of maybes. These are leads that are just not ready to buy. They will go back into your funnel to be nurtured again if you are using a marketing funnel.

If you’re doing cold outreach, they’ll go back in “the rolodex” for 3-6 months.

You’d be surprised by just how many leads will warm up after a few months and end up making the purchase decision. So don’t get discouraged.

What Does a Lead Mean in Sales? – Summary

In sales, a lead is any person or entity who can potentially become a paying customer for your business. As we have learned, they don’t all share the same level of readiness to buy and may need to be nurtured until they can be sold to. In the same way, they are classified differently.

What techniques are you using to get, attract, and qualify leads at your company? If you are struggling to fill your sales pipeline with high-quality leads, give LeadFuze a try today.



Editors Note:

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Justin McGill
About Author: Justin McGill
This post was generated for LeadFuze and attributed to Justin McGill, the Founder of LeadFuze.