What is the difference between a lead, a prospect and a qualified lead?
In a small service business, a lead is anyone who has got in touch or asked about a service: a call, a form or a message. A prospect is a lead you have replied to who could still hire you. A qualified lead is one you have checked against a few questions, such as the service, the area and the timing, and found to be a good fit. The words matter most when an agency or lead seller reports leads: ask what it counted.
The words, in your own stages
Every lead still ends as won, lost or still open. The related answer on sales pipelines covers the stages in between, and these words are only labels for where a lead has got to.
| Word | What it usually means | Where it sits |
|---|---|---|
| Lead | Someone who got in touch or asked about a service | New |
| Prospect | A lead you have replied to who still might hire you | Contacted, or a visit or quote booked |
| Qualified lead | A lead that passed your fit questions | Before you spend time on a visit or a quote |
| Customer | Someone who hired you | Won |
What qualified should mean
Qualified should mean a good fit by your own questions, not a feeling: the person needs a service you offer, is somewhere you serve, wants it on a timeline you can meet and expects something you can deliver. The related answer on telling whether a new lead is a good fit lists the questions.
Larger sales teams often split it further, with one stage for a lead marketing thinks is a fit and another for a lead sales has confirmed. A small business usually needs only one test, used the same way for every lead.
Warm and cold leads
A warm lead already knows you or asked for something: a referral, a returning customer or someone who filled in your form. What people call a cold lead has had no contact with you, such as a name on a bought list, so by the definition above it is really a cold contact, not yet a lead. Warm leads often turn into jobs more often than cold contacts, and cold outreach has its own rules: call or text only with the person's consent. The related answer on buying an email list covers why bought lists tend to disappoint.
Why the words matter in a report
When an agency or lead seller reports leads, the number means little until you know what was counted. Ask:
- What counts as a lead: any form, any call, a call over a certain length, or a tap on a phone number?
- Who decided a lead was qualified, and by which questions?
- How many of the reported leads became customers, by source?
- Can you check a few of them against your own records?
Where the counts show up
The related answer on what a marketing report should show covers what a monthly report should put next to the lead count, and the one on lead generation companies covers what counts as a billable lead when you pay per lead.
Related answers
- How do you tell whether a new lead is a good fit?
- What is a sales pipeline for a small service business?
- What should a marketing report show a small business owner?
- Should a small business buy an email list?
Lead generation and lead tracking
A lead that waits a day goes cold, and a lead with no source teaches you nothing. Ascent Vision fixes both.