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The system comes with some lead statuses. You can add more or remove statuses to cater to your needs. However there is one lead status called Customer, which is a system default one and cannot be removed. The status of a lead changes to Customer, when a lead is converted to a customer.
- To add new lead status go to Settings > Leads > Statuses and click New Lead Status.
- To setup default lead status navigate to Setup > Settings > Leads and chose Default Status