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What Is a Lead? Understanding Marketing Leads and Sales-Qualified Leads

By Todd M. Zielinski and Lisa Benson

May 17, 2024

Lead generation is the cornerstone of sales growth. While there are often additional growth opportunities with current customers, the potential is finite, while the pool of new prospects is immense. Implementing lead generation strategies for new business development allows for scalability and exponential growth that can’t be accomplished through the current customer base alone. However, not all leads are created equal, nor should they be given equal attention. So, what is a lead?

The term “lead” by itself is extremely broad. When referring to sales and marketing, a dictionary definition of lead is “a person or thing that may be useful, especially a potential customer or business opportunity.” The word “may” is the key here. It is the role of the sales and marketing teams to vet them and move them through the sales pipeline.

What’s Not a Lead

First, let’s be clear about what a lead is not. Many unscrupulous companies are willing to sell you hundreds or thousands of leads, and most will be garbage. Lists of companies or people with contact information are not leads—even if the North American Industry Classification System codes classify them in an industry that uses your packaging or products.

If you compile a list of contacts from companies that fit your target market profile—they match company size, spending potential, product mix, etc.—these are still considered prospects, not leads. They don’t become leads until they have demonstrated a desire to learn more or explicitly stated they need your product or service.

Leads can be broken down into two categories: marketing leads and sales-qualified leads.

Marketing Leads

A marketing lead is a prospect that has shown interest in your product. These are generally generated when they engage with your content through inbound marketing, social media, trade shows, or other events. This is someone who has demonstrated interest by performing actions such as submitting contact information, signing up for a webinar or newsletter, downloading materials, or repeatedly visiting your website.

A lot of junk can come through your website and online forms, so some level of investigation may be needed to weed out spammers, competitors, students looking for information, and others with no potential to become a sale.

The primary goal with marketing leads is to engage and educate them, gradually moving them down the sales funnel until they are ready for a direct sales approach. Your marketing team may nurture marketing leads through the sales cycle by providing information relevant to where they are in the buying journey. This is often done through email campaigns, which may include lead scoring. These leads are not ready to buy and must be further vetted to ensure they align with your target market profile.

Sales-Qualified Leads

Sales-qualified leads are further down the sales funnel. Once a marketing lead has been further vetted to fit your target market profile and has demonstrated an interest in speaking with your sales team, they become a sales-qualified lead.

Often, prospects or market-qualified leads become sales-qualified leads through outbound calling. An inside sales rep calls the prospect and, during the course of conversations, uncovers answers to predefined qualifying questions that ensure they are a fit. If the person is interested and has been vetted as a fit through the qualifying questions, the inside sales rep sets up a meeting with an outside sales team member. Outside sales discusses the lead’s needs in detail, offers solutions, and moves them toward the quoting phase. In some cases, the journey from marketing lead to sales-qualified lead can happen quickly; in other cases, it might take much longer.

The primary goal of sales-qualified leads is to convert them into customers. Since they are ready and willing to discuss their challenges and your solutions, the sales team focuses on direct engagement and closing the sales.

Why Differentiating Matters

Understanding the difference between the two types of leads is crucial for several reasons directly impacting the efficiency and success of sales and marketing strategies within your organization. Those reasons are as follows:

  • Resource optimization: Understanding the difference allows for better resource allocation between the sales and marketing teams and ensures sales teams focus on tasks that lead to closing sales.
  • Improved sales cycle efficiency: When the sales team focuses on qualified sales leads, the sales process becomes more streamlined, potentially shortening the sales cycle and increasing the chances of closing more sales.
  • Enhanced customer experience: Understanding the difference allows you to provide a personalized experience. Marketing leads may require more educational information to move them through the funnel, while sales-qualified leads may
    benefit from targeted solution-
    oriented communication.
  • Increase in conversion rates: Sales-qualified leads are further along in the buying process, so allowing your sales team to focus solely on these leads will increase conversions. When the sales team’s time is split or they are chasing unqualified leads, opportunities to close may be lost.
  • Better collaboration between sales and marketing: It’s well known that sales and marketing often clash. By differentiating between marketing leads and sales leads, both teams will be on the same page regarding their roles in the lead generation and nurturing processes.

Process-Driven Conversions
Increase Return on Investment

Without a strategic approach to converting marketing leads to sales-qualified leads, you may face low conversion rates, inefficient use of resources, poor lead quality, misalignment between sales and marketing, and lost revenue opportunities.

A repeatable process incorporating a customer relationship management (CRM) tool and a marketing automation system combines foundational elements for consistently converting marketing leads to sales-qualified leads. A repeatable process ensures that every lead is nurtured and assessed through a consistent framework. This consistency is critical to reliably moving leads through the sales funnel, as it eliminates guesswork and variability that can lead to leads slipping through the cracks.

A process streamlines operations, creating greater efficiency while allowing you to scale your efforts up or down as needed. A consistent process makes measuring performance easier and enables you to identify bottlenecks or trouble spots and implement continual optimization of the lead-conversion process.

A CRM system centralizes all lead and customer data, which is crucial for maintaining an up-to-date understanding of each lead’s status and interactions. CRM and marketing automation tools enable sophisticated segmentation of leads based on various criteria that support highly personalized marketing and sales outreach, increasing the relevance and effectiveness of communications and allowing sales marketing to provide information relevant to where they are in the buying cycle. With a marketing automation tool, the outreach can be automated, creating greater efficiency in the process. Plus, both tools provide valuable analytics and reporting features to allow teams to track conversion rates, understand lead behavior, and adjust the process when required.

Understanding the difference between marketing leads and sales-qualified leads is essential for optimizing your sales and marketing efforts. A defined process and proper tools provide the structure, efficiency, personalization, and insights necessary to nurture leads effectively, prioritize sales efforts, and ultimately close more deals. By leveraging technology and a systematic approach, you can enhance your lead-conversion capabilities, driving growth and maximizing the return on investment.


Todd M. Zielinski is managing director and CEO at Athena SWC LLC. He can be reached at 716-250-5547 or tzielinski@athenaswc.com.

Lisa Benson is senior marketing content consultant at Athena SWC LLC. She can be reached at lbenson@athenaswc.com.

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