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What are Sales Leads?

Sarah D. Hunt
Sarah D. Hunt

Just like prospecting for gold, sales people prospect for sales leads or customers. These are potential contacts a seller seeks in order to close a deal or agreement for services or supplies. They are generally considered the first step in the entire sales process.

A "lead" can be an individual or business who has shown interest in a service. A sales person might seek sales leads out independently or purchase a database that lists leads. The perfect conclusion to a lead is a presentation, sale, or agreement.

Most businesses need leads to survive. An advertising agency looks for accounts, real estate agents look for home buyers, and consultants look for clients. Some businesses even specialize exclusively in lead consulting.

Some sales leads are generated online.
Some sales leads are generated online.

For example, an admissions advisor at an online college might call people who have shown interest in the school by filling out a form on the college website. The form information becomes the lead. Forms like this usually consist of a name, email address, mailing address, and phone number. Submitting this information voluntarily makes this person a sales lead.

Lead prospecting can be a full-time career, or just part of the final sales goal.
Lead prospecting can be a full-time career, or just part of the final sales goal.

Once the potential student starts giving the school money for her education, she becomes a student, and consequently she goes from lead to sale. If that person decides not to become a student, she remain in the leads database and can be contacted again for future interest. Not all leads turn into sales.

Developing sales leads can be done in many ways and is often approached systematically. The purchase of lead databases is popular with businesses that thrive primarily on outside sales. These databases consist of a business owner's name, location, phone number, fax, and any other relevant information. Sales leads are very valuable information, and often demand a high price.

Sales leads can be acquired through word-of-mouth, Internet research, and trade show participation. Lead prospecting can be a full-time career, or just part of the final sales goal. Prospecting is an important element in establishing business relationships.

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Discussion Comments


Lately, I keep hearing about MeetLeads as a free tool to generate sales leads online. Has anyone used it? Thanks.


I agree that the referrals are the best leads. I recently came across a new tool that generates referrals from your own website. It seems to be tracking your online visitors like a caller-id and turns them into leads for you. I don't know how they make money out of this service as it seems to be free. Maybe they'll have some advertising on their site, but as long as it's free it could be a good option for many of us. Anyway, the service was called MeetLeads.


Cupcake15 - You are so right. Many businesses offer their patrons referral bonuses for successfully referring a customer to them.

For example, my local bank offers $25 to the referring customer if the referral actually opens the account. It also provides the same bonus to the new account holder as well, making it more likely that the referred customer will open an account.

This motivates the existing customer to provide multiple leads to the bank and earn money for doing so. It actually creates goodwill with the patron and develops the banks business as well.


Great article, but I would like to add that referrals are the best leads. Once a sales person has made a successful sale, he or she should follow up with the current customer to see if he or she knows of additional prospects that would need the same type of product or service.

This is the most effective lead generation method, and many industries rely heavily on this method for additional sales.

Real estate agents and hairdressers rely on referrals heavily for increased sales. Happy customers not only will gladly offer referral information, but they will likely tell others about the experience as well.

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    • Some sales leads are generated online.
      By: W. Heiber Fotostudio
      Some sales leads are generated online.
    • Lead prospecting can be a full-time career, or just part of the final sales goal.
      By: Wrangler
      Lead prospecting can be a full-time career, or just part of the final sales goal.