What is a Sales Lead?

A sales lead is a prospective customer or information about a prospective customer.

How Does a Sales Lead Work?

For example, Company XYZ sells widgets. Its salespeople want to sell more widgets to earn more commissions, and so Company XYZ purchases a list of people who have recently visited the widget convention website and provided their contact information to the site. Company XYZ's salespeople see these folks as people who like widgets, so they call on them, which generates sales.

Why Does a Sales Lead Matter?

Sales leads are of various quality, and that quality can depend on how the salesperson obtains the lead. For example, calling on a person who has already visited the company showroom and has provided contact information is more likely to lead to a sale than calling a random person in the phone book (whose contact information is also available). For this reason, there is an entire industry devoted to compiling lists of people who have indicated interests in certain products and have provided contact information. These lists of 'qualified' sales leads can fetch thousands of dollars -- and are worth every penny if they generate sales. The heart of any sales lead is valid contact information, and that can influence the price of those leads as well.

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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

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