What is a Qualified Lead?

Mary McMahon
Mary McMahon

A qualified lead is a person who has the interest, ability, and authority to make a decision about a purchase. For example, a person with a prequalification letter for a mortgage from a bank who has requested information about homes for sale and is the head of a household would be considered a qualified lead for real estate sales. Qualified leads are extremely valuable for salespeople, as they represent a strong possibility of making a sale.

Businessman giving a thumbs-up
Businessman giving a thumbs-up

There are several approaches to developing qualified leads. Some companies pay for lists of people meeting particular qualifications with the goal of developing them into qualified leads. They can ask for people in a certain income range and narrow that list to people making purchasing decisions before approaching individuals to see if they are interested in a product or service, hopefully generating a qualified lead. Other salespeople may start by establishing contact with people who are interested in a purchase, reviewing these leads once contact is made to see if they are qualified.

People researching products and services are not necessarily qualified or able to buy them, and salespeople want to be able to weed the crop of sales prospects to focus on people who will be making actual buying decisions. Salespeople may look for tell-tale signs when deciding if a sales prospect is strong, like nice clothes on a person preparing for a big purchase, or the presence of a couple on the sales floor, suggesting that both parties involved in a purchase are present. Occasionally, these assumptions can backfire, which is one reason salespeople are usually careful to be polite to everyone they encounter, as anyone could be a qualified lead, regardless of appearance.

Sales companies may pay substantial bonuses for qualified lead listings. The expense is considered worth it as the company has access to a ready-made list of potential customers and can take action quickly to secure sales. This contrasts with the painstaking process of identifying interested customers, seeing who among them can afford purchases, and determining which of those are actually empowered to make the decision to buy something.

Lead generation is a complex process and many sales people are nursing along leads of a number of types at various points during their day. Even as people are making contacts with new leads to develop relations for potential future sales, they are meeting with established customers to try and secure deals, and researching new leads to see if they are worth following up on.

Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a wiseGEEK researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

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