Marketing

Understanding the different types of sales leads

Businesses need new clients to survive and grow. And for that, you need a capable sales team with a knack for quickly identifying and nurturing promising leads.

Businesses need new clients to survive and grow. And for that, you need a capable sales team with a knack for quickly identifying and nurturing promising leads. 

But this is easier said than done in a modern market scenario, where potential customers have numerous channels to find and connect with a business.  

This is where a thorough understanding of the different types of sales leads comes into play – without it, your sales teams would be left shooting in the dark! 

What are sales leads? 

One definition of a sales lead is simply any individual or organization that has expressed an interest in your product, service, or brand. Another definition would be any firm or individual that has the hallmarks of an “ideal customer” for your business.  

Different types of leads

During the routine business activity, your company will come across many different types of leads, each with unique features and requirements for conversion into a prospect and eventual sale. Here are the main categories: 

Cold Leads

This is any lead that fits your ideal customer profile but has not yet reached out to your company in any meaningful way. Since they may not even be aware of your existence, cold leads require a lot of work. 

Your sales teams will have to initiate contact through methods like cold calls, emails, and targeted online ads to gain their attention. Businesses often accumulate lists of cold leads through research or lead generation software. 

Warm Leads

Unlike cold leads, warm leads are entities that already know your brand, product/service, or company. This knowledge could be through minor interactions in the past, exposure to ads or blog posts, or some third parties. 

The added familiarity makes it much easier for businesses to engage in meaningful conversation with warm leads and convert warm leads into prospects. 

Hot Leads 

These are the leads that require your urgent attention. They are entities who have actively sought your business out and expressed an interest in knowing more about your products/services. To qualify as a hot lead, it should have the following qualities: 

  • Has a problem that you can solve
  • Fits your ideal customer profile
  • Involves an authority figure/purchase decision-maker 

Hot leads are the easiest to convert into a prospect/sale, but they also present a risk – they may also be in contact with your competition. Even the slightest delay in responding on your end may result in a loss of sales to your rivals. 

Information Qualified Leads vs Market Qualified Leads vs Sales Qualified Leads

Companies that fit your ideal customer profile are often involved in long-drawn-out purchase journeys. In the very early stages, they may be researching a potential problem they have. 

During this process, they come under the radar of your marketing teams  – often by filling up some webforms (to download a PDF, etc.). Entities at this stage are classified as information-qualified leads (IQL). 

When an IQL proceeds to the next step in the purchase journey – where they are seriously considering how your company can help solve their problem – they become a market-qualified lead (MQL). 

An MQL is an entity that has consumed all your customer-facing content and marketing resources, signaling a clear interest in your product. While the conversion chances are pretty decent, they are not 100% guaranteed. 

Leads that are one step further ahead of an MQL are called sales-qualified leads (SQL). Apart from showing definite interest, they also have a decision-maker ready to initiate a conversation. At this point, your marketing team will hand the SQL over to the sales team. 

Converting Leads into Prospects

When there is successful two-way communication between an MQL or SQL and your sales team, that lead gets converted into a prospect. If the lead does not respond to your communications, its status remains unchanged.

To efficiently convert leads into prospects, your sales team has to rate and prioritize them based on certain specific factors.  

Type of Lead 

You should take a close look at the definitive features and attributes of the lead. How big is this company? What is its revenue size? Which industry does it belong to? Do all these factors fall within the definition of your ideal customer? These are the main questions your sales team has to answer. 

Behavior of the Lead

Have they opened or forwarded your emails, or responded to your calls? Do they engage proactively on your social media profiles? How about the frequency of website visits and the overall quality of online engagement? Do they download your content, or attend your webinars? Rate the lead based on how actively they react and engage with your brand. 

Generating New Leads

There are many different ways of generating new leads in business. These can involve both active and passive methods. They can be broadly classified into three basic models: 

  1. Leveraging existing clients – through referral programs and other initiatives, you generate new leads. Maintaining high levels of customer satisfaction can elicit lead generation through word of mouth.  
  2. Marketing to many – this is a wider strategy using ads, online blogs, social media to attract potential customers to your website for lead generation. Marketing tactics increase the visibility of your brand, bringing in warm and information-qualified leads. 
  3. One-on-one marketing – this is a more focused approach where you use cold calling and email marketing to reach out to potential leads. This strategy is almost entirely focused on the conversion of cold leads. 
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