A sales lead is an individual or organization that aligns with your target market but is not presently ready to make a purchase. Leads play a crucial role at the top of the sales funnel, as they’re the starting point for initiating contact and pursuing potential business opportunities.

Sales leads can be generated through marketing channels, referrals, campaigns, social media, lead magnets, paid ads, website enquiries, and networking events. They can also be handpicked through your own research (or by using lead gen tools).

If you start with better quality leads to begin with, and hone your lead nurturing process, you’ll move more leads through the sales funnel to become prospects.

On the flip side, if they don’t respond, or if are unwilling or unable to buy just yet, they remain a lead. If they continuously ignore your efforts to get in touch, these leads are sometimes called “cold leads.”

Types of sales leads

Properly identifying and segmenting sales leads is crucial for a smooth and successful sales process.

The first three standout types are based on how close they are to making a purchase.

Cold leads
These fit your customer profile but haven’t had an interaction with your company. They’re the most difficult type of leads to convert as they don’t yet have an active interest in your business. There are techniques to help with reactivating cold leads.

Warm leads
These haven’t shown interest in buying from you, but they’re very much aware of your existence and what you offer. They might follow your social media channels or drop by your website occasionally.

Hot leads
Those who show interest in your offering but haven’t committed to a purchase yet. They’ve given strong indications that they’re considering your brand. For example, they’re in active talks with your sales team or undergoing a free trial.

The next four lead categories are based on the type of content they’re looking for, which impacts your marketing and sales strategy.

Information qualified leads (IQLs) are simply trying to locate an answer to a question, or a solution to a problem. They respond well to informational content such as videos, blog posts, and case studies. Avoid a punchy sales pitch – focus on delivering the answers they’re looking for, which in turn communicates expertize.

Marketing qualified leads (MQLs) are further down the sales funnel. Similar to a warm lead, they’re familiar with your brand and engage with you in some way. There’s a high chance you already have their email address from a lead magnet content download, webinar registration or newsletter sign-up. Informational marketing messages blended with persuasive sales copy and content can be effective with MQLs.

Product qualified leads (PQLs) have already received some value from you – whether through a freemium version of your product, or a free trial. They might be further down the funnel but still require key information including reasons to upgrade to a higher product tier or answering queries that came up during their trial.

Sales qualified leads (SQLs) have been thoroughly evaluated and deemed more likely to convert into actual customers. They have undergone a more thorough evaluation by your sales team. This is the stage of direct sales pitches: calls, meetings and personalized outreach go a long way in persuading SQLs to become serious prospects.

What is a prospect?

A prospect is the next stage of the sales funnel.

For a lead to become a prospect, they need to fit three criteria.

They match your target market
They have intent to buy what you’re offering
And they have the authority to make a purchase

Building relationships and adapting sales and marketing strategies to the unique demands of each prospect are key for conversion.

How do you identify when a lead is becoming a prospect?

As well as a gut feeling from your sales team, look for heightened interest and positive responses such as clicks, video views, read time, downloads, regular social engagement, and webinar attendance. If you can see leads are looking at pricing pages and contract terms, that’s a pretty strong indicator that they’re considering a business relationship. These signs collectively characterize the transition from lead to prospect, helping both sales and marketing teams know where to focus their attention and efforts.

Keep a close eye on these signs. The sooner you recognize when a lead is evolving into a prospect, the sooner you can plan targeted approaches, like creating personalized content to nurture the relationship further and guide them to conversion.

Types of prospects

In B2B sales, prospects can be categorized into various types based on their level of engagement, readiness to buy and the nature of their interest. Understanding these types allows marketing and sales teams to tailor their approach even further.

First up are hot prospects – the ones that are actively seeking solutions, have an urgent need and are ready to buy. They require prompt and focused attention to capitalize on their immediate interest.

Then you move down the thermometer to warm prospects, those that have shown interest and engagement, but need additional information and nurturing before making a decision.

Next are qualified prospects. Those that meet your criteria and appear a great fit for your offering. They possess the budget, authority, need and the right timing to make a purchasing decision.

New prospects are recently identified leads that have demonstrated interest, but are still in the early stages of the sales funnel. They require initial outreach, education and engagement to move further along the funnel.

Re-engaged prospects are those that were previously cold, but have re-engaged with your content or shown renewed interest. They may require a tailored approach to address any concerns or changes in their requirements.

Stalled prospects are actively engaged but have slowed down in their decision-making process. Reassessing their needs and providing additional information or incentives can reignite their interest.

Inbound prospects are generated through inbound lead generation. , These prospects may have a self-driven interest and need targeted nurturing to convert.

Outbound prospects are identified through (you guessed it) outbound sales efforts. While these prospects might not be actively seeking solutions, they’ve been strategically targeted due to their potential to fit with your offering.

Leads vs prospects: what’s the difference?

Leads and prospects are two different categories of people – who require two different types of communication.

Leads

Leads are at starting point of the sales funnel and have not engaged with your content very much.

Shown initial interest but might not be fully qualified or ready to make a purchase.

Identified through website visits, content downloads or responses to promotional campaigns - as well as lead gen content.

Represent a broad pool of potential customers that require further evaluation to determine their suitability and likelihood of conversion.

Communication is focused on generating awareness of, and interest in, your offering.

Prospects

Leads that have advanced in the sales funnel through increased engagement and qualification.

Have expressed interest and have conversion attributes. They demonstrate a need for your offer, have budget and decision-making authority.

Are at a more advanced stage in the buying process.

Sales teams focus their efforts on nurturing and converting prospects into customers.

Communication is focused on turning interest into a relationship to move prospects toward conversion.

If you’d like to create better lead generation content, Turtl helps you make online documents that clearly show where leads and prospects are in your sales funnel.

Turtl Docs are designed to hold attention and maximize engagement. In the back end of the platform, users can use Turtl Analytics to surface intent data so they can manage, score and nurture leads quickly and accurately. So much lead generation content is published as PDFs that simply return a list of leads, making lead management a far slower, more cumbersome process.