Leads are the lifeblood of any sales and marketing department. Last week we spoke about the plant-nurture-harvest model of the sales funnel. Leads then are the seeds that you plant. So where do you go to get those seeds? There isn’t a lead bank you can visit to purchase them from – although there are things like this in the business world. And even then, not all leads are created equal. What makes a good lead different from a bad lead? And how can we tell them apart?
When sales people talk about leads, they typically have three categories in mind. There are cold leads, warm leads, and qualified leads. These three basic categories seek to encapsulate the different relationships that a lead can have to your company.
Leads of All Kinds
Cold leads are just that – they haven’t had any contact with your company in a long time, if ever. They are not engaged with the brand and haven’t expressed interest. This doesn’t mean that they wouldn’t buy from you, it just means that they aren’t aware of you. Everyone has probably been on the receiving end of this type of lead prospecting. Being called or emailed out of the blue is frustrating because chances are if you were interested you would have called them. Keep this in mind when working with cold leads for your business! The goal of working with cold leads is then not to close a sale, but to create awareness and stimulate interest.
Warm leads are those that are aware and have expressed interest in your product or service by interacting with the brand in some ways. This is your hot list – the people that are further along the buying cycle and more likely to buy from you. Their awareness of your brand could have come by interacting with social media posts, having done business together before, or something else entirely. While you certainly don’t have a right to harass anyone, these people are generally safe to contact. The goal of working with warm leads then is to gauge how interested they are and if they are able to buy.
Finally, there are qualified leads. These are the best of all. These leads have reached out to you, indicating that they are interested in buying from you and demonstrate the behaviors and characteristics of others you’ve sold to. Lead qualification is a critical step to ensure you don’t waste valuable time on leads who are not ready or cannot buy. There are several models to follow, one being BANT – Budget, Authority, Need, and Timing. The likelihood of converting a lead into a customer increases with each one of these criteria that are met.
Each of these types of leads will come from different sources. Cold leads can be purchased from online sources. Think of that promise most companies make not to sell your data to third party sources. The ones that don’t make the promise – that is where you can buy cold leads based off different demographic characteristics. This is a sheer numbers game since most of these leads are not interested in buying.
Companies that have a well-developed content marketing strategy can start to produce warm leads through their outreach efforts. In addition, warm leads can be sourced from referrals. Encouraging existing customers and partners to refer leads to you is one of the most effective ways to fill your sales funnel. Once you have enough metrics, you can structure a referral program that generously rewards both referees and referrers while still being profitable.
Qualified leads are not found but developed. Following BIG’s farming analogy, cold leads are planted and nurtured into warm leads. Prospecting through your field, you identify and qualify leads that are most likely ready for harvest. By differentiating between leads, we can recognize the different techniques we need to pursue to have success with each of the three types of leads. This is what we will be discussing next week, when we go into the different strategies required for each type of lead. Since the leads themselves are different, the approach one takes should reflect that.