If you're in sales then you know leads are important, but what exactly is a lead? For some folks it's just a name and a number of someone to call, others expect a prospect that is ready to buy with checkbook in hand. Whatever your definition is, it's important to establish accurate terminology so if you're shopping for leads you're getting exactly what you're expecting.

Cold leads

These are sales leads that haven't necessarily expressed interest in your product or service, but are a good fit. For some folks a directory of professionals can be a great source of cold leads, such as a mortgage broker that's looking for real estate agents to network with. If that mortgage broker can reach through an association and get the contact info for those agents it's definitely a lead, but they certainly haven't already expressed an interest. Another awesome way to get cold leads is to just buy them from a site like ListShack. If you're an insurance agent and looking for homeowners in your area to give quotes to, you can just go to ListShack, pay a small fee, and then pick your area and demographics then you're off to the races.

Advantages

Generally very inexpensive and plentiful

Disadvantages

Do require more work and may be tougher to convert to sales

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Warm leads

These are leads that have expressed some level of interest in your good or services, but aren't necessarily looking to make a purchase immediately. Examples of these might be survey cards taken at marketing events, prospects that have made inquiries in the past without making a buying decision, or people who have responded through more general marketing pieces/efforts. These also can be people that you've worked as a cold lead, but weren't ready at the time.

Advantages

May be easier to convert than cold leads, still can be relatively easy to generate, and can convert well.

Disadvantages

Generally take effort and expense to generate. Availability may also be limited.

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Hot leads

These are people right in the decision making process that are more or less waiting with a checkbook. This is a recent inquiry at a website, someone at a booth wanting to talk about buying your product, or someone that has reached out to you from your marketing efforts.

Advantages

Convert at a high rate, short sales cycle, very motivated customers.

Disadvantages

Can be incredibly difficult and expensive to generate. Supply is generally also very limited.

Obviously best case scenario if you're in sales is a stack of hot leads, but once you've worked through those you need ways of filling your funnel so building up a marketing plan that allows you to incorporate more plentiful cold leads or warm leads is the key to consistently hitting your sales goals.