To have a clearer view of your clients (e.g. separating them into prospects, regular clients, etc. or another classification of your choice), you can classify them using coloured labels.
First of all, you have to define your labels in Settings > Labels.
Then, to assign a label to a client, you have to click on Edit > Labels in the client concerned.
The label will appear next to the name of the client in the clients list.
You can also filter using these labels in the reports.