In the CRM a profile can have one of many baseline statuses like "Active Client", "Inactive Client", or "Prospect". We think of a "Prospect" simply as anyone who is a "non-client", regardless.

A "Lead" in the CRM is simply an added designation on top of the baseline status. For all intents and purposes, if someone has a "Lead" designation all that means is they will show up on your designated "Leads" page. That's all.

So... you would most likely always have your prospects marked as "Lead" so they show up on your leads page for easy management. If at any point you determine this "prospect" or "non-client" is not going to result in a sale, you can easily remove the "Lead" designation and now they wont show up on your leads page. They will still be in your database, you will just have to search for them to access their profile page.

You could also give a lead status to an "Active Client" if you so wish. This doesn't change their baseline status but only allows them to show up on your Leads page.