A sales lead is the identity of a person or entity potentially interested in purchasing a product or service, and represents the first stage of a sales process. The lead may have a corporation or business associated (a B2B lead) with the person(s). Sales leads come from either marketing lead generation processes such as trade shows, direct marketing, advertising, Internet marketing or from sales person prospecting activities such as cold calling. For a sales lead to qualify as a sales prospect, or equivalently to move a lead from the process step sales lead to the process sales prospect, qualification must be performed and evaluated. Typically this involves identifying by direct interrogation the lead's product applicability, availability of funding, and time frame for purchase. This is also the entry point of a sales tunnel, sales funnel or sales pipeline.

Once a qualified lead exists, additional operations may be performed such as background research on the lead's employer, general market of the lead, contact information beyond that provided initially or other information useful for contacting and evaluating a lead for elevation to prospect, the next sales step.

If a sales lead eventually makes a purchase, this is called conversion and a closed sale. The ratio of sales leads that convert is often referred to as the conversion rate, a way to measure the effectiveness of a sales process, sales team, or sales person.

Leads can be generated by many different marketing campaigns or can have many different sources. Leads can be generated through mailings (fax, paper, and email), fairs and trade markets, phone (call centers), database marketing and the websites. Leads from websites are often called web leads.

A new lead source is called a live transfer lead. These leads are generated by a dialer that dials a set of phone numbers, plays a message to the individuals and then those individuals have the opportunity to press 1 to be connected to a live agent. Sometimes live lead transfers are sent to a call center agent who then qualifies the individual before sending to the sales agent.