A sales lead represents the first stage of a sales process. It is the identity of a person or entity potentially interested in purchasing a product or service. The lead may have a business or corporation associated (a B2B lead) with the person or persons. Sales leads come from marketing lead generation processes. These are such as trade shows, advertising, direct marketing, Internet marketing or from sales person prospecting activities (such as cold calling). Qualification must be performed and evaluated in order to qualify a sales lead as a sales prospect (or equivalently to move a lead from the process step sales lead to the process sales prospect). These actions usually involve identifying by direct interrogation the lead's product applicability, time frame for purchase and availability of funding. This is also the entry point of sales funnel, sales tunnel or sales pipeline.
Once there is a qualified lead, additional operations may be performed. These operation involve such as background research on the general market of the lead, lead's employer, contact information beyond that provided initially or other information useful evaluating and contacting a lead for elevation to prospect, which is the next sales step.
The terms conversion and closed sale mean a situation, when a sales lead eventually makes a purchase. The conversion rate often refers to the ratio of sales leads that convert. The conversion rate is a way to measure the effectiveness of a sales process, sales person, or sales team.
The Rule of 45: The Rule of 45 is the basic premise from which you can measure the effectiveness of virtually all lead generation programs. The Rule of 45 is a reliable, steady benchmark number that, very simply stated, says that 45% of all inquirers will buy someone's product.
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