The best sales representatives develop the skill of identifying qualified leads. Qualifying a lead helps avoid wasting time and wasting money on a prospect who may not be in a position to purchase. This will increase their closing ratio and provide a better experience to their prospects.
What is the importance of classifying sales leads into different categories?
Each type of prospect will need to be addressed differently depending on their qualification. Identifying and qualifying prospects will help the sales representative perfect outreach and bring prospects down their sales funnel.
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Types of Leads:
Cold Leads
A cold lead is an individual who has not shown any interest or has no intent in purchasing a company’s product or service. For example, Outbound leads are a type of cold lead because a lead is acquired by reaching out via cold-calling, e-mail, LinkedIn messaging, etc.
Warm Leads
A warm lead is an individual who has shown interest or desire in your product, service, or company, but is not in a hurry or has no specific timeline for their purchase. For example, Inbound leads can be considered a type of warm lead because it is an individual that initiates contact with you, either directly or through one of your channels. This type of lead should be nurtured so that it can eventually develop into a sale.
Hot Leads
A hot lead is an individual, that is considered a qualified lead, who is highly interested in your product, service, or company and is ready for purchase. How can you identify a “hot lead”? Consider the following,
- The lead has a level of interest in the product, service, or company
- Your product or service fulfills a specific need
- The lead has a budget and has the authority to make the purchase
- The lead has a clear timeline for purchasing the product or service
Information Qualified Lead (IQL)
An information qualified lead is an individual that provides their contact information in return for some sort of free enticement. Some examples of these enticements include, but are not limited to, a free webinar, a free e-book, a free tip sheet, and much more.
Marketing Qualified Lead (MQL)
A marketing qualified lead is an individual, who is a reasonably qualified lead, that has downloaded a content offer or has interacted with your marketing team but has not yet entered into your sales funnel. Some examples of an MQL could be when an individual voluntarily enters their contact information, puts items in their shopping cart, or opts into a program.
Sales Ready/Accepted Lead (SRL)
An individual that is pre-qualified and scored by the marketing team for the sales department using qualifying metrics outlined by both the marketing team and the sales team. Some of the things you should look out for in an individual are company size, need or issue, genuine interest, budget, sales readiness, and urgency. This should give you an idea if the lead is an SRL.
Sales Qualified Lead (SQL)
An individual who is considered a qualified lead has moved from MQL and is ready to make a decision for purchase. This individual has a high probability of turning into a customer. For example, if your company manufactures furniture, and a customer has been in furniture stores leaning towards a purchase, this customer might be considered an SQL.
Member Service Request Lead (MSR)
A Member Service Request Lead (MSR) is a consumer-generated lead that comes when a new member signs up for your service. For example, if a customer signs up for a new account on your website, this customer is considered an MSR.
Now that you know the different types of leads in sales, the next step is to qualify them. How does the sales qualification process as a whole look? Let’s find out below.
Guide to qualify your leads in sales
Qualifying your leads is a crucial step in the sales organization process because it can significantly improve your closing ratio. Without sales qualifications, you increase the risk of pursuing leads that are not a good fit for your product.
Understanding the different types of leads in sales will optimize your time by persuading leads who are more likely to purchase the product. Here are the 4 best ways to qualify them:
1. Information to uncover when speaking to a prospect
There are 4 important questions to have answered by the end of your call with a prospect. The answers will help you score your lead and move them toward the next step in the sales pipeline.
Questions to ask:
Budget – “Do they have the ability to spend?”
Authority – “Do we know who makes the decisions?”
Need – “Does the business have a specific problem or pain?”
Timeline – “Do we know the timeframe in which they need a solution?”
At this point, a sales rep will be able to determine if the prospect has a real need for the product.
2.Create a lead score
Lead scoring refers to the process of assigning numerical points to each lead that comes through your sales pipeline. Your leads can be scored based on a variety of attributions, including any professional information they’ve provided to you and how they engage with your website and brand. This process will help your marketing and sales team prioritize high-rank leads and increase the rate at which these prospects become customers.
3. Have an organized data profile on each prospect
Keeping an organized data profile on your prospects will allow you to move them down the sales pipeline smoothly. Gather their full name, business, and notes from previous conversations. Include their budget, authority, need, and timeline (BANT) information you gathered in step one. The more data you gather, the easier it will be to track them through their buyer’s journey. By keeping information on each prospect, a sales rep will be able to tailor their proposals for maximum effectiveness.
4. Choose the most valuable characteristic
Take a look at your current customer base. Look at your best accounts and search for commonalities. For example, you might find that the best 10% of customers all own homes. Knowing this can help you create an excellent question to ask when qualifying a lead.
Effective qualification of prospects is the key to sales success. Finding the right prospects can make or break your business. Once a prospect becomes a happy customer, they will bring in more revenue, increased referrals, and the opportunity to cross-sell or up-sell. Therefore, it’s essential that you do it correctly. Attention can help train your reps on building rapport with potential customers and qualifying their leads.
