What is a Lead?

Believe it or not, the concept of a lead can be surprisingly complex. It’s no wonder why so many business professionals still ask themselves, “What is a lead?”

In our series of sales definitions, it’s necessary to be as thorough as possible—and a “lead” takes on many forms in the life of the sales funnel.

We’ve already written on several iterations of a lead. While this post is an overview of what a lead is and all the different titles a lead may hold, the other posts offer more detail.

We’ll link to them throughout for further reading.

So what is a lead anyway? Let’s get started with a definition:

Sales Lead: 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)

Nothing too hard to grasp there. We’ll dig deeper by going over the moment a lead becomes, well, a lead.

Then, we’ll talk about the different stages and labels of a lead while finishing out the post with a look at when a lead ceases to be a lead.

Let’s get to it.

4 Common Ways Leads Come Into Your Funnel

what is a lead?

1Names 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.

This includes individuals who:

  • Recently purchased from you, but did not make a second purchase within the specified amount of time
  • 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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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 service provided by your company then their friends or family members might want to give it a try too.

If you’re looking for an easy way to earn more leads on a daily basis, referrals are just one of the best ways to do it.

3Responses 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 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.

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 time you’re running a business and want to make the most of what you’ve got.

4Inbound marketing and SEO
what is a lead in seo

(Image Source: HostPapa)

These two strategies can help you get more customers by using your website as one of the main tools that you use to generate leads.

These strategies are about how to attract traffic on the internet, and then convert those visitors into paying clients for your company or organization.

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 a lead for your company before creating content and designing your website.

Pair it with SEO 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 who handle car crashes.

This means you should have blog posts about how to find the best lawyer after being in an accident, how to know if you’ve been in a car accident, and what happens at an auto wreck.

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. Click To Tweet

  • Cold Outreach

These are 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 do another example to contrast the whole mess.

Example: You hunt for high-quality leads and the names of potential decision-makers to email and cold call in order to get the conversation started and see if said lead is a fit for your product.

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

3 Types of Leads

There are three types of leads that you should know about which are the following:

Lead Type #1: Marketing Qualified Lead (MQL)

Once a lead becomes a lead they are ready for your marketing efforts and become an MQL.

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.

Resource: Here’s our post titled, “What is a Marketing Qualified Lead?

1. Marketing

In many organizations, leads are “scored”. Click To Tweet

Funnels are set up to feed content and other items to leads in order to provoke a response and gauge readiness to buy. 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.

2. Cold Outreach

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

Resource: We have an entire post devoted to this suspect/prospect problem that you can check 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 to above.

Lead Type #2: Sales Accepted Lead (SAL)

This title represents a stage that not all organizations have, but most should (not all, of course).

Once a lead reaches the score that indicates they may be ready for a sales interaction, 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 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 the last stage, a lead will advance to being sales qualified.

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 pursuing the close of the deal.

If you have sales reps (or are one), this stage is the same for both traditional marketing efforts and cold outreach.

You are ready to do a demo, make a pitch, and have that final conversation to ask for the deal.

More importantly, the lead is ready to talk.

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

Now, they should be at a point that a decision needs to be made. You want to sell the product, that’s clear.

It’s when they are truly considering buying that they are sales qualified.

Resource: Here’s the full “What is a Sales Qualified Lead?” post.

What is a Closed Won/Lost Lead

To bookend all of those different ways to label a lead, we thought it best to end with the point at which a lead is no longer a lead.

As you may have figured out—there are three choices at the end of a sales call.

Yes, no, and maybe.

We’ll get to maybe in a minute. Other than the maybe, there are two answers to deal with on the account.

  • Closed Won: You got the deal, it’s done. The money’s in house and it will show up on an upcoming paycheck (if you’re on a commission structure).
  • Closed Lost: You didn’t get the deal and the lead expressed that they would not be purchasing your solution.

How to deal with maybes

Even if you’ve done the best screening you can think of, you’ll still have a lot of maybes. These will go back into your funnel (if you’re running 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 liven up after a few months and end up signing a deal. So don’t get discouraged.


Even though this post is a fly-by of the various ways to identify what is a lead in your sales funnel, we can hope that it has helped you see the value of proper labeling.

Take it as a look at the big picture to see how the term “lead” is used in various ways throughout the process.

There are tons of sales definitions (many of which we’ve gone over in the blog), but without a grasp of the “lead” a new sales rep will be lost.

Hopefully, our explanations will help you and your team to be better equipped and ready to hit the phones (and email).

Editors Note:

Want to help contribute to future articles? Have data-backed and tactical advice to share? I’d love to hear from you!

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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.