What is a Lead?

Updated 31 May 2026·9 min read

A lead is someone who has shown interest in what you sell but has not yet paid or committed. This page explains what counts as a lead, what does not, and how to think about leads using a real B2B sales-team example from a Bengaluru software company.

Meet Aditya

Aditya Joshi runs StoreWorks, a Bengaluru-based company that sells inventory and billing software to mid-sized retail chains across India — apparel chains, sweet shops, footwear brands, electronics stores with five to twenty-five outlets each. About 180 paying customers today.

He started StoreWorks in 2022. Before that, he ran operations at his family’s electronics business in Surat — eleven outlets, twenty-eight years of history, and a stock-take every March that was off by lakhs because nobody’s spreadsheet ever quite agreed with anybody else’s. The software available either cost a fortune and assumed you were Walmart, or it cost nothing and assumed you were a single kirana store. Nothing built for what Aditya’s family actually was — ambitious, multi-outlet, still figuring it out.

StoreWorks is the software he wished he’d had.

The sales team

StoreWorks’ sales team is ten people. Aditya hired Neha Bhargava as the Sales Head in early 2023. Neha hired three SDRs — short for Sales Development Reps, the rep whose job is to find new prospects, not to close them — and split India between them by zone. Karan Malhotra handles the North. Divya Iyer handles the West and South. Ishaan Sen handles the East. Then five closers — formally called Account Executives, or AEs — pick up from where the SDRs leave off, run product demos, and negotiate contracts. Vijay Krishnan is Karan’s closer for the North; Reshma Pillai handles the West and South handoffs; three more split the rest by industry vertical. One Sales Ops person, Anant, keeps the CRM clean.

Aditya himself still personally closes the biggest deals — anything past fifteen outlets and ₹3 Lakh in annual contract value, he likes to run the demo himself.

Here is the thing about StoreWorks’ Monday mornings: the phone doesn’t ring. Nobody’s board exam results came out. Nobody saw a billboard on the way to work. If Karan, Divya, and Ishaan don’t go out and find new prospects this week, there are no new prospects this week. Welcome to outbound sales.

The 30-second answer

A lead is anyone who has shown interest in what you sell but has not yet paid or committed — the eighteen retail chains Karan started a conversation with this week, before any of them have signed a contract. The same logic holds whether you sell software, loans, insurance, packaging, or paint. Some leads will turn into customers. Most will not. That is normal — and it is exactly why every CRM keeps leads in their own section, separate from the people you have already won.

So what makes someone a lead, exactly?

A lead is anyone who:

Has shown some interest in what you sell — replied to a message, asked a question, requested a demo, downloaded a brochure, signed up for a newsletter, came to your booth at a conference.
You don’t yet have a serious commitment from — no signed contract, no paid advance, no firm purchase order.
You haven’t fully qualified yet — you don’t know if they can pay, when they’ll decide, or if they’re even the right fit for what you sell.

And three things a lead is not:

A lead is NOT…	Because…
A customer who has already paid you	They’re a Customer now. In TatvaCRM they belong in Contacts, not Leads.
A confirmed prospect with budget and timeline	They’re past the “might be interested” stage. They’re also a Contact, with a Deal attached.
A name on a list you bought, with zero interest expressed	That’s a cold list — input to your outreach, not a lead. More on this below.

Why keep leads separate from contacts at all?

Because the way Karan treats a fresh LinkedIn response is very different from how Aditya treats StoreWorks’ 180 existing paying customers.

A fresh lead gets a phone call within twenty-four hours. Karan and his fellow SDRs have rehearsed the call to about four minutes, and they ask three quick qualifying questions:

Karan’s three qualifying questions

“How many outlets are you running today, and which cities?”
“What are you using right now — Tally, Excel, something else?”
“If we built the right thing for you, when would you actually buy?”

Three questions. Four minutes. Tells him whether this lead is worth booking a demo for, or whether it should be parked. Every business has a version of these three questions — write down yours.

Meanwhile, StoreWorks’ 180 paying customers get an entirely different treatment — quarterly business reviews, training sessions when new modules ship, renewal conversations sixty days before contract end, expansion offers when a customer opens a new outlet. None of that work belongs anywhere near the new-lead pile.

If StoreWorks mixed them up — fresh leads dumped into the same list as the 180 paying customers — two bad things would happen:

New leads would get lost in the noise. A customer asking about a billing module upgrade would look identical to a brand-new prospect from a LinkedIn message.
Reports become useless. “How many leads did Karan generate this week?” — impossible to answer if leads and customers share the same list.

That is why every CRM, TatvaCRM included, keeps Leads as its own thing. Different list. Different fields. Different daily routine. Leads get worked through and either converted (into a Contact, often with a Deal) or quietly closed out.

A week in the funnel — Karan’s eighteen leads

Last week was a typical one for Karan. He sent out 220 LinkedIn messages, 180 cold emails, attempted 35 phone calls, and followed up with eight people he met at the RAI Retail Leadership Summit in Mumbai a fortnight ago. From all that activity, eighteen new leads came in — eighteen retail chain owners or operations heads who actually replied with something more than “Not interested.”

Here’s roughly what happens to those eighteen leads over the next six weeks:

From 18 leads to 2 customers — Karan’s funnel

18 new leads come in across LinkedIn, cold email, phone, and a recent retail conference.
→ 15 reached for a real conversation. (3 went quiet after the first “interesting, send more info” reply.)
→ 12 qualified on the discovery call. (3 disqualified — wrong size of chain, no real budget, or not actually the decision-maker.)
→ 9 booked a product demo. Karan hands them off to Vijay or another closer. (3 said they’re not ready yet — Karan set a 90-day reminder.)
→ 6 attended the demo and engaged deeply — brought their ops manager, asked the hard questions. (3 no-showed or cancelled and didn’t reschedule.)
→ 4 started a 14-day trial. (2 attended the demo but said “not for us” — wrong fit, competitor preferred.)
→ 2 signed a contract. Average value: ₹1.6 Lakh annually. They are now Contacts with a Deal attached. (2 went through the trial but decided not to buy — usually price or a missing feature.)

Final tally of the 18: 2 won. 16 didn’t — split across the stages above. Every lead either converts to a Contact or gets closed out as “lost,” “dormant,” or “disqualified.” Nothing sits in limbo.

Two customers out of eighteen leads. About eleven percent. That is a healthy B2B SaaS conversion rate — not because StoreWorks is bad at selling, but because the whole point of the funnel is to quickly identify the two who will buy and not waste hours on the sixteen who won’t.

At any moment, Karan can open TatvaCRM and answer simple questions like: “How many leads are sitting at the discovery-call stage right now?” “Which of last week’s leads still haven’t been called?” “Of the leads I lost last quarter, how many cited price as the reason?”

Those questions are why he uses a CRM instead of the spreadsheet his predecessor used in 2022.

A Monday morning in TatvaCRM

It’s 9:40 on a Monday. Karan walks into the StoreWorks office on Sarjapur Road, makes a filter coffee, and opens TatvaCRM on his laptop. The Leads page is the first thing he checks.

Across the top, four numbers stare back at him: 9 new leads from over the weekend (the LinkedIn outreach sequence Karan set up on Friday landed well), 14 leads waiting for follow-up from last week, 2 demos on his calendar this week, and 4 leads going dormant in 7 days unless he reaches out.

He clicks the first new lead. “Nikhil — Bandhej Lifestyle, 12 outlets in Rajasthan and Delhi NCR, replied to LinkedIn message Sunday at 8:14 pm: ‘Interesting. We use Tally + Excel. What’s different about your tool?’”

Karan reads the lead detail. Bandhej Lifestyle fits his ideal customer profile almost exactly — apparel, 12 outlets, Tier-2-and-1 cities, headquartered in Jaipur. He picks up the phone. Nikhil answers on the second ring.

They talk for eleven minutes. Nikhil is the founder, makes the decision himself, budget is in the range of ₹2–3 Lakh annually, and yes — he’s also looking at Zoho Inventory and a tool called Vyapar. Stock-takes go wrong every quarter, mainly around their sale events.

Karan ends the call and updates the lead in TatvaCRM. Stage moves from “New” to “Qualified.” He adds three lines of notes — the pain point about sale-event stock-takes, the competitors being evaluated, the fact that Nikhil mentioned his ops manager Priya is the technical evaluator. He books a 30-minute demo for Wednesday afternoon and tags Vijay (the AE who handles the North zone) so Vijay gets notified to prep.

Two months ago, Karan was doing this kind of work across three browser tabs and a Google Sheet his predecessor had left behind. Names spilled across rows. Follow-ups missed. The week Karan picked up a lead someone else was already actively working — and called them — was the week Aditya signed up for TatvaCRM.

Conversion is one-way

You cannot un-convert a lead. Once you click Convert, the lead becomes a Contact (the buyer, e.g. Nikhil), a Company (the chain, e.g. Bandhej Lifestyle), and a Deal against the new-business pipeline — and the original lead is marked “converted” and steps out of the active list. You can edit the new records or delete them, but you can’t move them back into the Leads list. So convert when the closer has run the demo, the prospect is in a trial, and a contract is on the table — not before. Most of the time this is fine, the whole point of conversion is that you’ve decided this person is past the “maybe” stage. Just don’t convert prematurely.

Common confusions, cleared up

“The same person replied on LinkedIn and on email. Is that one lead or two?”

One. The moment you realise it’s the same person — same name, same company, same phone — merge the two leads into one and keep both source labels (LinkedIn + Email). This way your reports still credit both channels for finding the lead, but your SDR isn’t messaging the same prospect twice and looking uncoordinated. TatvaCRM has a Merge action on the lead detail page for this — pick the older record as the primary so you don’t lose the original first-touch date.

“There’s a prospect who keeps booking demos every quarter for the past year but never decides. Still a lead?”

Technically yes — but practically, no. The honest read is that this person is either using your team as free consulting, or they’re comparing every tool in the market with no real intent to buy. Move them to a “warm but parked” stage, set a reminder to check back in ninety days, and stop spending AE hours on them. If they suddenly decide, great. If not, you haven’t lost anything.

“One of our paying customers asked about a new module we’re launching. Is that a lead?”

Tricky one. They’re already a Contact (because they’re a customer for the existing modules). But their interest in the new module is fresh interest — same idea as a lead. Best practice: keep them as a Contact, but create a new Deal against them for the new module, starting at the earliest stage of your pipeline. Don’t create a duplicate as a Lead — that splits the customer’s history across two records and confuses the next person who looks them up.

“An existing customer gave me her CFO friend’s number. The CFO hasn’t reached out yet. Lead?”

Yes — add her. Warm referrals are almost always the highest-converting source you have, so the rule is simple: warm referrals always get added as leads, even before the person expresses interest themselves. Add her with source “Referral — introduced by [customer name],” set the stage to “Untouched,” and reach out within twenty-four hours. The introduction goes stale fast — if you wait a week, the customer who referred you has moved on and your reference loses its weight.

“We sent a draft contract three weeks ago. They went silent. Still a lead?”

Probably not — by this point they should already be a Deal, not a Lead. If a prospect has reached the contract-review stage they’ve been qualified, demoed, trialled, and intent to buy was confirmed. That’s the threshold for converting from Lead to Contact + Deal. Use Deal stages (“Contract sent,” “In legal review,” “Awaiting signature”) to track the silence, set a reminder for a polite nudge in ten days, and if there’s no response in thirty days mark the Deal as lost with the reason “No response post-contract.” Keeping these in the Leads list muddies your funnel reports.

“I bought a list of 5,000 retail chain owners. Are those leads?”

No. A purchased list with no expressed interest is a cold list, not leads. Treat it as input to your outreach — once someone responds positively to a call, message, or email, then they become a lead. Importing 5,000 cold contacts into your Leads list will pollute every report you ever run and bury your real prospects under noise. Many teams keep cold lists in a separate tool entirely (a spreadsheet, an outbound sequencer) and only move a record into TatvaCRM after a positive reply.

“We have a lead from eight months ago that never converted. Still a lead?”

Yes, until you say otherwise. Most teams have a rule — “if there’s been no contact in ninety days, mark as dormant.” You can still keep dormant leads around for an annual re-engagement campaign, but they shouldn’t show up in your weekly active pipeline.