Leads are the lifeblood of any business. Without them, companies wouldn’t be able to consistently sell, generate profits, and unlock new growth opportunities. However, what many beginners in the sales landscape don’t realize, is there are many different types of leads, and each needs to be approached, nurtured, and converted into customers using different strategies and methods.
Understanding which types of leads you’re dealing with within a sales landscape ensures you can develop the right strategy for success. This could mean figuring out how to build rapport with cold leads to increase their trust in your business, or exploring strategies to convert hot leads with urgency.
Here’s everything you need to know about the most common types of leads in sales.
1. Cold Leads
Many salespeople spend the majority of their time conversing with cold leads. These are individuals who haven’t yet shown any interest in a product or solution sold by your company. However, they’re not just random individuals. The best cold leads are chosen with a clear understanding of who your target audience is, and what kind of people can benefit most from your solution.
Cold leads are collected via a number of strategies, from cold calling and emailing, to connecting with people face-to-face at events and networking opportunities. Though they’re the easiest to find, cold leads are considered the hardest to convert, because they need to be educated about your product or solution, and convinced your offering is right for them.
How to convert cold leads
Converting cold leads is a time-consuming process. Often it requires companies to take the time to get to know their target customer, their pain points, and their goals. The more you learn about your customer, the more you can tailor your sales pitch to their specific interests.
Converting a cold lead also requires persistence. You’ll need to follow up with a series of social media messages, calls, and emails based on your customer’s communication preference. Regular conversations will help you to nurture your leads into customers, by building trust and credibility.
2. Warm Leads
Warm leads are another of the most common types of leads nurtured by sales professionals. They’re slightly further along in their sales journey than cold leads. Though they haven’t shown any distinctive interest in buying from you, they may be aware of your brand, and might have engaged with your company on social media, through email, or by reading your blog posts.
Warm leads are aware of your presence, and already have a basic knowledge of what you can offer. They can be acquired through inbound marketing methods like SEO and content marketing, or through a tactic known as “warm calling”.
How to convert warm leads
Converting warm leads in sales is a little easier than converting cold leads. You don’t have to spend as much time explaining your service to these prospects, so you can jump straight into identifying their needs, pain points and goals. It’s worth setting up times where you can meet and discuss opportunities with your warm leads, so you can cater your offer to their requirements.
Similar to converting cold leads to business customers, warm leads will require you to develop a relationship with your audience over time. You’ll need to focus on regular communication, and building rapport.
3. Hot Leads
Hot leads are some of the most attractive types of leads in the sales landscape. Hot leads have already shown overt interest in your service, product, or company. They might have applied to access a demo of your product, or they may have reached out to your team through a contact form. While they haven’t committed to a purchase yet, they’ve indicated they’re already considering buying something.
Hot leads can have a massive impact on your profits and revenue. However, you need to know when to strike to reduce the risk of your customers losing interest in you before you’ve had a chance to make a sale.
How to convert hot leads
Converting hot leads can be a lot easier than converting cold or warm leads, because they already have a clear interest in your solution, and the intent to buy. The key to making sure you close a deal with one of these leads, is offering them something they can’t afford to ignore.
Make sure you’re talking to the right person from day one, by checking to see whether your lead has the authority to make purchasing decisions. Next, define exactly what your lead wants or needs from your company, and create a tailored offer based on their goals and pain points.
4. Information Qualified Leads (IQLs)
Information Qualified Leads, or IQLs are individuals who have begun researching a solution to their problem. They might not have directly reached out to your company yet, but they’re actively looking for something to address their specific needs and goals. They may spend a lot of time consuming content on your website, watching your videos, or asking questions on social media.
IQLs are acquired typically through inbound marketing campaigns which focus on developing thought leadership, and showing your authority in your space.
How to convert IQLs
The best way to convert Information Qualified Leads in sales environments is to ensure you’re providing these customers with the information they need to make the right purchasing decisions. Research the kinds of questions your customers usually ask before making a purchase, and produce videos, blog posts, and other articles which provide useful information.
Offer your IQLs access to additional information in the form of eBooks, free downloads, and calculators they can access in exchange for giving you their contact details or email address. This way, you’ll have a way to consistently reach out to your leads and encourage them to contact you. It may even be worth offering IQLs free consultations or quotes.
5. Marketing Qualified Leads (MQLs)
Marketing qualified leads are slightly further down the sales funnel than IQLs. They’re similar in a lot of ways to warm leads, because they’re already familiar with your brand, and they’re likely to have engaged with your company in some way before. For instance, your MQLs might be signed up to your email newsletter, or may have registered for an event in the past.
Like IQLS, MQLs are looking for information and guidance to help them make the right purchasing decisions. As such, they’ll benefit greatly from your commitment to producing regular content with valuable, actionable information included.
How to convert MQLs
Marketing Qualified Leads are already familiar with your product or service, but they may need a little extra push before they’re willing to buy something. Providing them with useful content, such as videos on how your services or products work, free demos, or even access to webinars, can help them to make more confident purchasing decisions.
Marketing Qualified Leads can also be excellent potential advocates for your brand if you can encourage them to share the marketing copy you produce on their social media feeds, and other channels. Even if your MQL doesn’t convert, they can still deliver amazing value.
6. Sales Qualified Leads
Perhaps the most valuable of all types of leads, Sales Qualified Leads are a type of “hot lead” located towards the bottom of the sales funnel. They’ve actively expressed interest in whatever you have to sell, and they’re on the verge of making a purchase. Sales qualified leads have already shown their “intent to buy” by trying a product demonstration or reaching out to your team.
To understand whether a lead is “sales qualified”, most companies will look at a number of factors, from how willing the prospect is to spend money, to whether the time is right for them to consider a major purchase. Sales-qualified leads are ready to interact with your sales team, but they still might not convert straight away.
How to convert SQLs
Converting sales qualified leads revolves around your ability to approach each lead with the right offer. Take the time to research the needs and goals of the lead you’re going to be connecting with, and make sure you’re offering them something that’s going to provide genuine, immediate value.
Don’t just use a one-size-fits-all sales pitch, make sure you tailor your strategy to the specific requirements of your leads, and commit to building a long-term relationship with each client.
The Most Important Types of Leads
While many companies spend a lot of time focusing on sales qualified leads and hot leads, you need to be able to embrace a full, holistic strategy to generate the right results. Knowing how to connect with different types of leads throughout the sales and marketing funnel should ensure you have a better chance of cultivating conversions.
