What are Sales Leads? Definition, Examples and Tips

By Indeed Editorial Team

Published 3 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Finding promising leads and converting them into paying customers is crucial to a company's continued success. There are many ways to generate sales leads and various methods of converting them into purchases. If you're interested in pursuing a career in sales, learning more about sales leads can help your career advancement. In this article, we answer the question, "What are sales leads?", provide examples of different sales leads, list tips on how to convert them into paying customers and describe the essential skills of successful sales professionals.

What are sales leads?

If you're wondering, "What are sales leads?", they're individuals or organisations that are potential paying customers. Sales leads are often the first step to securing a sale. They may be people who've expressed interest in a product or service by clicking an advertisement, filling out a form or signing up for newsletters. Many companies have databases to track sales leads, which sales professionals can use to secure customers. Organisations use advertisements and marketing campaigns to generate sales leads.

Related: 9 Common Sales Positions (With Primary Duties and Salaries)

Types of sales leads

Here are the three major types of sales leads:

Cold leads

Cold leads are people or businesses who are unfamiliar with a product or service. They may not have expressed any specific interest but have certain aspects that suggest they could be potential customers. Cold leads may come from professional directories or recommendations from existing customers. Some organisations utilise lead generation services, especially when trying to expand into new markets. With no market presence, it's often more cost-effective to purchase a database of relevant cold leads. Converting cold leads often require significant effort to convert.

Warm leads

Warm leads are individuals or companies that have shown some interest in a product but have not expressed a desire to make any purchases. They may have responded to a social media post or signed up for a company's website. Warm leads are often interested in the company's mission or brand. They may have also contacted the company or responded to any general marketing content. Warm leads have the potential to become customers with minimal effort, as they're already interested in the company or brand. Large marketing campaigns, such as television advertisements or posters, often aim to generate warm leads.

Hot leads

Hot leads are leads who have already expressed an interest in buying a product or service. Hot leads are often already well-informed on a product, agreeable to the pricing and willing to support the company. Some hot leads may express an interest in a product without any targeted promotion from the company. These leads might be consumers who found a company while browsing online or heard about a product from acquaintances. They often conduct independent research, such as reading reviews or watching tutorials. Companies often generate hot leads through targeted advertisements, such as email promotions or direct phone messages.

Related: What Does a Sales Representative Do? (And How to Become One)

Tips on converting leads

Here are some tips on how to convert leads into paying customers:

Ask directly

No matter what type of lead, it's essential to contact them. Converting some leads may only require asking them if they're interested. Even if they don't purchase the product at that moment, asking them increases their awareness of the product. Asking cold leads may turn them into a warm or hot lead as they may do their own research afterwards.

Offer an incentive

One of the most common lead conversion methods is offering incentives, which can include discounts, gifts and vouchers. Incentives also help generate new leads, as customers may spread the news of any promotions to their friends and acquaintances. The timing of incentives is also crucial, such as holidays, as many customers expect promotions during certain times of the year. For example, a common time to have promotions for flowers is during Valentine's day.

Related: What Is Marketing Communication? Definition and Career Paths

Explain the return on investment (ROI)

ROI is a common selling point for products or services marketed to businesses. It's crucial to provide concrete numbers on how a service could benefit an organisation. Referencing existing customers already benefiting from a product can also be a powerful selling point, as this may increase a potential customer's confidence in the company. You can still use ROI even when selling consumer products to individuals. For example, you can explain how the product is of higher quality and can last four times as long as a competitor, while only being twice as expensive.

Set time limits

It's important not to waste too much time on any single lead. Consider setting a deadline for customers to continue any communication. For example, you can remove any leads that don't respond for longer than 30 days. Before removing a lead, you can send the last communication that may inspire the lead to follow up. Consider waiting longer for warm and hot leads, as cold leads that don't respond are more likely to be disinterested in the product.

Communicate regularly

It's crucial to keep regular communication with leads, especially warm and hot leads, as they're the most likely to purchase products. You can set up a standard follow-up schedule with reminders to ensure you stay in contact with your leads. It's essential to follow up after a customer has purchased products as well, such as suggesting related products or providing vouchers they can share with friends. Consider keeping minimal contact with cold leads, as too much information and follow-up could overwhelm them.

Ask questions

When communicating with leads, asking questions can often lead to more follow-up than just sending advertisements or statements. A lead may feel obliged to answer when they receive a question. Some questions you can consider asking leads are:

  • Have you had a chance to go over the brochure and make a decision?

  • Have you taken a look at our newest products?

  • Did you know there is a promotion going on right now?

  • How did you hear about us?

  • Have you tried any similar products before?

  • Did you have any problems with other brands?

  • What's your budget?

  • Are you facing any challenges right now?

  • What functions are you most interested in?

  • Do you have any concerns?


The more you research leads, customers, products and competitors, the better you can refine your lead conversion strategies. Look up competing products to see what the product you're selling is better at. Getting feedback from leads and customers can also help you continually improve your sales strategies. You can read reviews and send out product feedback surveys to see what people like most about a product. Warm and hot leads are likely to have questions about certain aspects of products.

If you notice a lot of criticism about a product's feature, you can prepare answers to quickly respond to any concerns from leads. Also consider getting feedback on your customer service, such as how informative you were. The more knowledgeable you are on a product, the more confident you may sound when describing it to leads.

Essential skills for sales professionals

Here are some essential skills you can consider developing to become a more successful sales professional:


Generating and converting leads requires a variety of communication skills. You can use active listening to ensure you fully understand a customer's needs. Written and verbal communication is crucial to properly exchange information about a product and any promotions to leads and customers.

Related: 20 Important Sales Skills and How You Can Develop Them


Products often have many competing options in the market. Sales is also a common career path. Being able to distinguish yourself from other professionals requires creative thinking to develop unique sales pitches.

Related: Creativity Skills: Examples and Steps to Improve Them

Data analysis

Companies often have large amounts of data on leads, products and customers. Devising practical methods to convert leads requires the ability to draw useful conclusions from abstract data. The ability to understand different metrics can help you determine which leads are the most promising.

Cold calling

One of the most common duties for many sales roles is cold calling, which involves calling cold leads. The ability to start conversations with strangers is crucial to succeeding in a sales career. Keeping leads talking requires critical thinking to quickly determine how to keep them on the call. It's also important to steer the conversation towards topics relevant to the products you're selling. For example, if you're selling children's products, you can try to ask whether they have kids or plan to.

You can practise cold calling by regularly conversing with strangers in public, such as when taking public transportation, which can help you recognise common cues people give when talking, such as their tone or word choice when they're disinterested in a conversation. This can also help you build confidence.

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