Sales Lead - Meaning, Importance, Types, Process & Example

Published by MBA Skool Team in Marketing and Strategy Terms Last Updated: October 17, 2023Read time:

What is Sales Lead?

Sales lead is a potential customer who has shown interest in buying product or service from an organization through a clear intent which prompts a sales person to follow up on the possibility of purchase. Sales leads are identified through a generation process which utilizes various channels like referrals of existing customers, trade shows, direct advertising/publicity, emails etc. Contacts are qualified as leads if there is a clear opportunity for a sale or quote.

The marketing or CRM process starts with a contact and then gets converted into a lead followed by opportunity, quote and eventually an order.


Importance of Sales Lead

A sales lead is the most important part of the sales funnel. The journey to discussing or closing a deal starts with a lead. Without a lead, sales team would not be able to actionize any of the sales efforts or show benefits and features to specific customers.

Without leads being identified, sales efforts would go waste by talking to people who may not be interested at all and were contacts who are not qualified for next stage.

Lead generators are extensively using technology to identify a potential consumer and appropriate channel of addressing them.

Sometimes an organization takes help of another organization specialized in identifying potential customers. Some software tools which can present detail analysis of the leads are also available in the market. a robust organization puts efforts in identifying potential customers so that it becomes easier for them to make a sales plan and a business plan.

Types of Sales Lead

There are mainly two types:

1. Lead from sales channels:

It is a generic type in which a potential customer expresses his/her interest in a particular type of offer instead of specific company or brand. This is mainly through the efforts of the sales and marketing teams which helps create a list of contacts which can then be qualified to leads.

Example: A person willing to opt for a life insurance policy but needs information on various policies before finalizing one policy is a sales lead for all insurance companies.

2. Lead through customer intent:

Here the customer specifically mentions the name of the company or brand in which he/she is interested and may contact the company on their own. Example: A person looking for Reebok retail outlet to buy shoes is a marketing lead for Reebok company and cannot be taken away by Adidas or Nike.


Sales Lead Process

To identify potential customers, there is a 3-stage process. This can be explained as below:

1. Generators:All activities related to publicity and marketing of offerings of an organization.

2. Nurturing:The specific method an organization follows to close sales with a potential customer.

3. Scoring:The method in which customers are analyzed and graded on the basis of their importance to the organization.


Example of Sales Lead

Let us say a company sells cars. Now they have a booth at a big automotive exhibition. Many people who are part of the target audience visit them and check the features of the car. Few even leave their details when asked. All these are contacts but not leads.

Some of the people actually like the car and want to know more and show an intent to know more about the car and especially the price and other options. These potential customers can qualified as sales lead. The sales person would follow up on these leads to know the probability of sale.

Hence, this concludes the definition of Sales Lead along with its overview.

This article has been researched & authored by the Business Concepts Team which comprises of MBA students, management professionals, and industry experts. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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