Win more of your leads · Every business
What Are Leads in Business? A Plain Definition With Examples
A lead is the first sign that someone might buy from you, and in a small service business it usually arrives as a call, a text, a form or a referral that someone has to answer.
A lead is a person or business that has shown interest in buying from you and has given you a way to reach them, such as a phone call, a text, a website form, a booking request or a name passed along by a current customer. A lead becomes a customer only after someone follows up and the person books or buys, so a business with plenty of leads and slow follow-up can still have an empty calendar.
In a salon, a lead might be a missed call from a new number on a Tuesday afternoon; in a plumbing company, a quote request through a website form; in a dental office, a parent asking through the Google listing whether the practice takes their insurance. Each one has a name or number attached and a reason to reach out, and each one is worth the most in the first hour after it arrives.
The terms owners hear most, in plain words
| Term | Plain meaning | Example in a service business |
|---|---|---|
| Lead | Someone who showed interest and left a way to reach them | A text asking, "Do you have anything Saturday?" |
| Qualified lead | A lead who needs what you sell, in your area, at a price that fits | A homeowner in your service area asking for a water heater replacement |
| Prospect | A qualified lead you are actively talking with | A client who received a quote and asked a follow-up question |
| Customer | A lead who booked or bought | The first appointment is on the calendar |
| Lead source | Where the lead came from | Google listing, referral, Instagram, a paid platform |
| Referral lead | A lead sent by a current customer or partner | A client's sister who calls because she was told to |
| Paid lead | A lead bought from a platform, charged per contact | A contact sent by a pay-per-lead service |
| Response time | How long it takes to answer a lead | A missed call returned 12 minutes later |
| Booking rate | The share of leads that become customers | 8 of 25 inquiries booked last month, or 32% |
A five-step routine for every lead
- Answer within the hour by phone, text or message, using whichever channel the lead used.
- Ask two questions that show whether the lead is qualified, such as what they need and when.
- Offer a specific time or a price range in the same conversation, rather than "let us know."
- Follow up twice if they go quiet, once the next day and once a few days later.
- Write down the source of every lead and whether it booked, so you know which sources to keep paying for.
Why it works
The first step in that routine is also the best measured. In a study published in Harvard Business Review, firms that tried to reach a new inquiry within an hour were nearly seven times as likely to qualify the lead as firms that waited an hour longer, and an audit of 2,241 U.S. companies in the same article found that 23% never answered a new web inquiry at all.
Sources
- Oldroyd, J. B., McElheran, K. and Elkington, D. The Short Life of Online Sales Leads. Harvard Business Review, March 2011. Audit of 2,241 U.S. companies.
Related reading: What a Lead Is Worth: From Inquiry to Booked Job, Step by Step · How to Find More Leads for a Small Service Business, and Stop Losing the Ones You Already Get
Email hello@osnovaops.com about turning more of your leads into booked customers
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