What is the difference between leads and qualified leads?

Knowing and applying the difference between a lead and a qualified lead is critical before marketing and sales activities begin. A lead is anyone who has come into contact with your company. He can become a customer, but he doesn't have to.

A qualified lead is anyone who has gone through qualification criteria to assess their quality as a lead, their suitability as a customer, and their readiness to buy.

On the basis of their demographic data and analyzed behavior, leads can be categorized. Categorizing leads makes them easier to sort and work with.

Leads eventually become opportunities and convert into customers. Customers who speak highly of your company are called evangelists. All of these stages together form the lifecycle stages of your business.

Qualified Leads - But back to leads. Categorizing leads helps sales reps focus on the leads that are most likely to buy. This ultimately helps them use their time more efficiently and close more deals.

The different types of qualified leads

Qualified Leads can be further divided into Marketing Qualified Leads (MQLs) and Sales Qualified Leads (SQLs). Some companies go even further and introduce additional levels. 

Marketing Qualified Leads (MQLs): A lead that qualifies as a good prospect for sales based on their position, company revenue/type, and the actions they have taken on our website and/or email communications.

Sales-qualified leads (SQLs): A lead that a sales representative has spoken with and confirmed as ready to sell.

The graphic above shows how a marketing and sales funnel is structured. Once a lead takes certain actions, it moves down the funnel and becomes a marketing or sales qualified lead.

Leads that are at the top of the funnel need a lot of nurturing to close. This can be achieved through information sharing, emails and sales calls.

Leads that are at the bottom of the funnel are about to convert and will require a number of other actions to nurture and close.

Why should you define different leads?

Categorizing leads can be a tedious process, but defining the qualifications of different leads is critical to both your marketing and sales strategies.

While a salesperson is well equipped to know when a lead is more likely to close, which they seem to know almost intuitively, the marketing team may not know what to look for.

By defining the different levels of lead qualification, the marketing team is better able to understand what makes a lead qualified or unqualified, and then create content that encourages behavior that marks them as marketing qualified.

These marketing-qualified leads are passed on to the sales team, who classify them as sales-qualified, and just like that, the sales team is able to sell more by focusing on the qualified leads.

Closing considerations

A well-defined sales funnel is the key to generating and converting better-qualified leads and the first step to a better sales enablement strategy.