If you are in sales or marketing, then you are likely familiar with the term “lead” (sometimes called a sales lead). That said, depending on who you ask, what that term means may vary.
If you ask a marketing specialist, they might tell you a lead is a sale that just needs to close.
If you ask an SDR, they might tell you a lead is just someone who visited your website or clicked the link on a social post.
A sales manager might tell you a lead is another chance at bat, while a marketing manager might say a lead is proof that your brand is gaining momentum.
The truth is, a lead can be all of these things and more.
What is a lead?
Broadly speaking, a lead is a potential customer who has expressed interest in one or more of your products or services.
They have demonstrated this interest by interacting with your brand in some way, indicating a likelihood of future engagement.
Some common examples of these interactions include:
- Visiting your website
- Attending a webinar
- Filling out a web form
- Signing up for your newsletter
- Downloading a piece of content
- Placing an item in an online cart
- Visiting your booth at an industry event
- Engaging with your company on social media
Depending on the type of interaction, the prospect is funneled into your sales and/or marketing process to be nurtured and developed into a future customer.
The 6 types of leads you should be tracking
Different types of interactions generate different types of leads.
Generally speaking, leads are categorized by the level of interest inferred from the interaction that generated them or by the type of interaction that generated them.
Understanding the different types of leads and having a strategy for effectively tracking and managing them can help you improve your lead conversion.
The six most common sales lead categories are:
- Cold leads- These are leads that have not yet interacted with your brand and may not even know who you are. The only requirement of a cold lead is that the individual or organization fits your ICP (ideal customer profile).
- Warm leads- These are leads that have interacted with your brand in some way but have not shown interest in buying any of your products or services.
- Hot leads- These are leads that have shown explicit interest in buying one or more of your products or services.
- Information qualified leads- These are leads that have shown interest in finding out more about your brand and/or products and services.
Alternatively, these may be leads that have come to you seeking solutions to a specific question or issue.
- Marketing qualified leads- These are leads that are familiar with your brand and/or products and services and have engaged with your marketing content in some way.
- Sales qualified leads- These are leads that have shown interest in buying one or more of your products or services and have been qualified by your sales team — meaning your sales team is interested in pitching to them.
Each lead category presents different opportunities and challenges. Understanding their unique characteristics can help you tailor your marketing strategies and sales efforts for maximum effectiveness and efficiency.
Let’s take a deep dive into each category, look at the ways a lead in that category is generated, and explore the conversion paths that will lead to the highest success rates.
Cold leads
A cold lead is a prospect who has shown no prior interest in your brand, products, and/or services.
- Lead generation- Cold leads are most often generated through purchased lists that have specified outreach cadences, such as calling lists or emailing lists.
In some cases these lists are created internally, by SDRs or marketing/sales specialists, who do their own research to find individuals and organizations that are an ICP fit for your company.
In either case, these leads require some effort to “warm up” before meaningful engagement can begin.
- Conversion path- The path to converting cold leads begins with an introduction. This can be challenging because these prospects have not reached out previously and aren’t expecting to talk to you.
Adding to this challenge is the fact that many cold leads have no need for your products or services, and those that do may actually be customers of your competitors.
This can make spending a lot of time and resources on nurturing cold leads seem wasteful.
That said, with a high volume, low effort strategy, you can make nurturing cold leads a fruitful part of your overall sales process.
Two of the most common tactics used to nurture cold leads are cold calling and email outreach.
Both of these strategies require very little work upfront. A few minutes spent learning about a prospective company is usually enough to personalize an email or identify an area of need to target on a phone call.
Success with these techniques comes down to persistence and determination as much as preparedness, with the most successful sales reps being those that make the greatest number of calls or send the most emails.
Of course, a thick skin doesn’t hurt either, as rejection is a regular part of employing this process.
Once contact with a cold lead has been made and further communication has not been outright rejected, that prospect can move down your sales funnel and onto the cadence used to nurture warm leads.
Warm leads
A warm lead is a potential customer who has shown some level of interest or engagement with your brand, products, and/or services.
- Lead generation- Warm leads are often the result of cold leads that have been sufficiently nurtured to the point where the prospect knows who you are and what you have to offer.
Warm leads can also be generated organically through engagement with content offerings, such as:
- eBooks
- Webinars
- Blog posts
- Newsletters
- Case studies
- Social media campaigns
- Conversion path- Converting warm leads comes down to demonstrating value and educating the prospect about what you have to offer them specifically.
This requires a deeper knowledge of the prospect’s role, business, and industry.
If you are able to identify specific pain points that your products or services can solve, these can serve as hooks that can propel the conversation forward.
A regular email cadence that highlights new products or features the prospect might find useful is a good example of the type of outreach that can be effective at this stage.
Case studies are another great tool, especially if they highlight a business in the same industry or facing similar challenges as the prospect.
Once you have convinced the prospect of the potential benefits of working with you, they are ready to be pitched and can now be considered a hot lead.
Hot leads
A hot lead is a prospect who has shown a high level of interest in your brand, products, and/or services and is considered very likely to make a purchase.
- Lead generation- Hot leads are often the result of warm leads that have been sufficiently nurtured to the point where the prospect is strongly considering buying one or more of your products or services.
Hot leads can also be generated through customer referrals and partnership programs or purchased from 3rd party vendors who send high-intent prospects your way.
- Conversion path- Converting hot leads requires direct action from your sales reps, leadership team, and even your product/development department.
Guided demos, free trials and/or product samples, and meetings with the key decision-makers are essential to getting a potential deal across the finish line.
Bringing on one of your engineers or product experts to address complex technical concerns is an example of the type of collaboration that can make a big difference at this stage.
The goal is to eliminate any and all objections so that the prospect is ready to move forward with a purchase.
Information qualified leads (IQL)
An information qualified lead is a prospect who has engaged with your brand or content in order to find an answer to a question or to learn more about your company.
Despite this engagement, it can’t be assumed that the prospect knows who you are or what products or services you provide.
- Lead generation- IQLs are often generated organically as a result of your marketing content efforts.
A prospect may download a free guide, click the link in a blog or social post, or sign up for your newsletter.
Alternatively, a prospect may be seeking more information about your company specifically, responding to a targeted ad, or because they were referred by someone else.
In any case, they are seeking information and that is what differentiates them from other lead types.
- Conversion path- Converting IQLs usually requires a demonstration of your knowledge and expertise.
For example, if someone downloaded an eBook you provided, you might send an email asking them if they found the answers they were looking for with links to additional resources they might find helpful.
The goal here is not to sell them on a specific product or service you provide but rather to introduce them to your company and increase brand awareness.
If the prospect was reaching out to learn more about your company, you might want to treat them like a warm lead and create a tailored response based on their role, business need, and industry.
Marketing qualified leads (MQL)
A marketing qualified lead is a prospect who engages with your brand or content regularly.
These prospects know who you are and may even subscribe to your company newsletter or engage with you on social media. Despite these interactions, these prospects may have little intent to buy.
- Lead generation- MQLs are generated organically as a result of your marketing efforts. Some examples of these efforts include:
- eBooks
- Webinars
- Blog posts
- Newsletters
- Social media campaigns
- Conversion path- Converting MQLs requires you to build trust and demonstrate value, often over a significant period of time.
Regular email cadences that highlight your latest blog posts or case studies are a great way to maintain contact.
Invitations to webinars or conferences can help you put a face to your brand, helping you build rapport quickly.
Sending branded swag to celebrate a major holiday or tagging a prospect in a relevant social post are fun ways to show off your company’s personality.
The goal is to keep your company top of mind so that when the prospect is ready to buy, you are the first one they call.
Sales qualified leads (SQL)
A sales qualified lead is a prospect who your sales team has determined is ready to buy (though not necessarily from you).
These are high-intent leads that know about your brand, products, and services and are ready to be pitched.
- Lead generation- SQLs are generated in the same way as hot leads, with referrals and partnerships being among the most common ways to acquire them.
Of course, successfully nurturing your warm leads and MQLs will also convert those leads into SQLs.
- Conversion path- The conversion path for SQLs is the same as it is for hot leads. Direct action, collaboration, and buy-in from the whole company are vital to converting SQLs to sales.
CRM can help you generate, track, and convert more leads
A Customer Relationship Management platform (CRM) can play a key part in generating, tracking, and converting more leads for your business.
Let’s take a look at each of these areas and see how a CRM system can help.
- Lead Generation- A CRM platform can serve as a centralized hub through which you can manage all of your email campaigns, calling lists, and other lead gen outreach cadences.
Not only is all the information you need to run these programs accessible, but the CRM can integrate with the other tools you need to run these campaigns.
Additionally, your CRM can capture the lead data you gather from various sources such as website forms, email, social media, and events, ensuring no lead slips through the cracks.
- Lead Scoring and segmentation- Your CRM can segment and score your leads based on various criteria such as:
- Industry
- Lead status
- Lead source
- Company size
- Company Location
You can assign leads automatically based on these criteria and focus your efforts on the most promising prospects.
- Lead tracking- A CRM platform can translate lead data into visualized dashboards and reports so you and your team can track results in real-time.
What’s more, every interaction you have with a lead is captured and stored in the CRM, making it easy to stay up-to-date on all your team’s progress.
- Lead Nurturing and Engagement- Leveraging CRM features, such as email automation, task alerts, and messaging templates, allows you to deliver targeted content and nurture leads throughout the buyer’s journey.
These tools also help you ensure your best practices are being followed and your messaging is aligned at every stage, creating a better experience for your customers and prospects.
- Collaboration- A CRM system makes collaboration between your marketing, sales, and product/development teams seamless and efficient. This leads to smoother handoffs and eliminates duplication and redundancy.
Plus, a CRM platform can help you monitor your sales process so you can identify bottlenecks, optimize strategies, and accurately measure the effectiveness of your lead gen efforts.
FreeAgent CRM can help you improve your lead conversion rate
FreeAgent CRM is designed for today’s world of work and our robust toolset is ideally suited to supporting the varied work processes of modern businesses. FreeAgent is:
- Easy to use: FreeAgent works like you expect modern apps to work, providing a user experience that feels fresh and familiar. Teams love working in FreeAgent, leading to high adoption and greater ROI.
- User-configurable: FreeAgent can be configured by you to work the way you do. This means you don’t need outside support to add a form field, adjust a CRM automated workflow, or try out a new process.
- Customizable: With FreeAgent, apps, forms, and configurations are all completely customizable, allowing you to capture and connect your data in any way you like.
To see FreeAgent in action, get a demo, and discover for yourself how FreeAgent can help you have workdays full of impact.
