What's the Difference Between Leads and Qualified Leads

Written by
Luke Marthinusen

Before any marketing and sales activities begin, it is essential to understand the difference between Leads and Qualified Leads. It's straightforward to do and enables us to prioritise future marketing and sales activities.&

A Lead is anyone who has interacted with your company, although they may or may not become a customer.

A Lead is anyone who has engaged with your company in some way, whether through a call-in, website inquiry, network event, or other means. However, simply being a Lead doesn't necessarily mean that this person will become a customer.

A Qualified Lead is someone who has gone through qualifying criteria to assess their quality, fit and readiness to buy.

Leads can be categorised into different types based on their demographics and behaviour, which makes them easier to sort and work with.

This process is called segmentation. It helps to prioritise Leads, making it easier for salespeople (and marketers) to focus their time and energy on the Leads that are more likely to close.

Qualified Leads can then be further broken down into Marketing Qualified Leads (MQLs), and Sales Qualified Leads (SQLs).

What is a Marketing Qualified Lead?

Marketing Qualified Leads (MQLs) are Leads that's been deemed good prospects for sales outreach based on their position, company revenue, and type. Additionally, with modern marketing analytics, the best marketers also look at actions these Leads have taken on the company's website, email communication, Paid Ads, and Social Media. 

The assessment of a Marketing Qualified Lead is typically done by the marketing team. It is based on predefined criteria that have been established to determine which Leads are most likely to convert into customers.

By identifying Marketing Qualified Leads, the marketing team can prioritise their efforts by:

  1. Focusing on nurturing and developing the Leads that are most likely to close.
  2. Quickly passing on hot Leads that are ready to buy to the sales team.

What is a Sales Qualified Lead?

A Sales Qualified Lead (SQL) is a Lead that a salesperson has spoken to and has confirmed as sales-ready. This means that the Lead has shown a high level of interest and is likely to close. Salespeople use various qualifying methodologies, of which BANT (Budget, Authority, Need, Timely) is one of the most commonly used. 

The sales team is responsible for qualifying Leads as Sales Qualified Leads and closing the sale.

By focusing on Sales Qualified Leads, the sales team can prioritise their efforts by:

  1. Focusing on the Leads that are most likely to close.
  2. Providing feedback on Lead quality so that marketing can adjust and improve.

Lifecycle Stages

As you may have noticed by now, Leads go through a series of stages. Collectively we call all of these stages - Lifecycle Stages.

Sales Qualified Leads ultimately become Opportunities, and with a successful sale, they convert into Customers. Customers that sing your praises are called Evangelists.

lead lifecycle stages
But back to Leads. Categorising Leads helps salespeople focus on the Leads that are more ready to buy. This ultimately helps them be more efficient with their time and close more deals.

What's the difference between a Qualified Lead and a Prospect?

A Lead refers to an individual or organisation that has shown interest in your company but has not yet been qualified as a potential customer.

In contrast, a Prospect is a Qualified Lead who has undergone a sales qualification process and has been moved into your sales process. 

To turn a Lead into a Prospect, walk them through the sales qualification process to assess if your company's products or services offer the right solution to their problem.

The different types of qualified Leads

Some companies take it further and introduce more stages. Some of these are outlined by Square2Marketing as Sales-Ready Leads, Sales-Opportunities and Sales Agreements.

The use of these labels is dependent on the company, but at MO Agency, we use Leads, Marketing Qualified Leads and Sales Qualified Leads.

This is our qualifying criteria:

Lead: Anyone who has interacted with our company (Call-in, website Lead, networking, events)

Marketing Qualified Lead (MQL): A Lead that, by virtue of their position, company revenue/ type and tracked actions they have taken on our website and/or email communication, qualifies as a good prospect for sales outreach.

Sales Qualified Lead (SQL): A Lead that a salesperson has spoken to, has passed a BANT (Budget, Authority, Need, Timely) evaluation, and is confirmed as sales-ready.


The above graphic outlines how a marketing and sales funnel is structured. Once a Lead completes specific actions, they move down the funnel and become a Marketing Qualified Lead or Sales Qualified Lead.

Leads near the top of the funnel need a lot of nurturing to close. This can be achieved through sharing information, emails and sales meetings. At this point, it's all done by the marketing team.

Leads near the bottom of the funnel are near conversion and require a different set of actions to nurture to close.

Why defining your Lead Qualification Stages is Important

Going through the exercise of categorising Leads can seem like an arduous process, but defining what qualifies different Leads is crucial to both your marketing strategy and your sales strategy.

While the best salespeople know intuitively if a Lead is likely to close, they can get entirely thrown off if you send them too many leads or, worse yet - you send them every single lead that comes into the company. 

By defining the different stages of Lead qualification, the marketing team is better able to understand what makes a Lead qualified or not, they can categorise the Leads, and ask the sales team to work the best Leads first. 

Additionally, the marketing team will begin to see patterns in how these high-quality Leads convert. They may all come from a specific webinar or eBook download. With this information, they can then produce more of the same content to encourage more of these high-quality Leads. 

What to do with Disqualified Leads?

Disqualified Leads have gone through the qualification process, but have not been qualified as suitable potential customers. There are several strategies that you can follow when dealing with disqualified Leads:

  1. Remove them from your sales pipeline: If a Lead made it through to your sales process, but has since been disqualified, it's important to remove them from your sales pipeline so that you can focus your efforts on more promising Leads.

  2. Offer alternative solutions: If a Lead has been disqualified but still has a need that you can meet, consider offering them alternative solutions that may better fit their needs.

  3. Nurture the Lead: If a Lead has been disqualified but has the potential to become a customer in the future, consider nurturing the Lead through your marketing efforts. This could include sending them relevant content, keeping them informed about your company, and building a relationship with them.

  4. Keep the Lead in your database: Even if a Lead has been disqualified, it's essential to keep their information in your database. If they surface again, you can instantly disqualify them without having to rerun the qualification process. Their circumstances can also change, and they may become a customer in the future, or they may provide valuable information to help you improve your sales and marketing processes.

  5. Follow up periodically: Consider following up with disqualified Leads periodically to check in on their needs and see if they may have changed their mind about your products or services.

It's important to note that disqualified Leads can still be valuable to your business, even if they do not become customers. By following these strategies, you can maximise the value of your disqualified Leads and improve your overall sales and marketing efforts.

Final thoughts

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

You can find out more about how we qualified our Leads and used our sales funnel in our ebook on HubSpot. Click on the button below to get your copy.


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