In an ideal world, it would require no effort to generate sales for your company. The second people heard about you, they’d immediately want to buy.
Unfortunately, that’s not how it works in the real world. Nurturing sales leads toward becoming customers is a process.
As people move through the sales funnel toward conversion, they become leads—that is, they express some kind of interest in your business. But not all sales leads are alike. Some leads have only just heard of you, while others—further down in the funnel—are nearly ready to buy.
Those different sales leads require different types of marketing efforts, which is why it can be helpful to understand the different types of leads and sales closing techniques out there.
Sales leads can be defined as people or companies who meet your company’s definition of an ideal customer to some degree and have expressed interest in your product or service. Of course, some sales leads may have expressed more interest than others, which will determine how your sales team interacts with them.
There are many ways a lead can show interest in your company, including:
Converting leads to sales is critical for growing your business. And because sales leads have different levels of knowledge about and interest in your product, it’s important to categorize them properly so you can determine the best way to nurture the relationship.
There are a few different ways to categorize leads in sales. However, seven sales lead types stand out from the crowd, and we’ve listed them below. Read on for an explanation of each sales lead.
Lead Type | Funnel stage | Definition of sales leads | Real-life examples of leads |
Cold leads | Top-of-funnel | Leads that fit your customer profile but haven’t yet interacted with your company | ABC Corp, a real-estate industry prospect, hasn’t engaged with our brand before |
Warm leads | Middle-of-funnel | Leads that haven’t shown explicit interest in buying from you but know who you are and what you offer | XYZ Inc. follows our updates and newsletters, indicating interest in our solutions |
Hete kundeemner | Bottom-of-funnel | Leads that show overt interest in your products or services | A&B Co. is currently engaged with our sales team about purchasing our product |
Information qualified leads (IQLs) | Top-of-funnel | Leads that are looking to find an answer to a question or a solution to a problem and can be reached with informational content | Jen found our blog while searching for team productivity tips |
Marketing qualified leads (MQLs) | Middle-of-funnel | Leads that are familiar with your brand and engage with your marketing content | Jack frequently engages with our marketing emails and downloads our guides |
Product qualified leads (PQLs) | Middle-of-the-funnel | Leads that have already received some value from your product, such as through a free trial or freemium version of your product | Emma actively uses our app’s free version, exploring its different features |
Sales qualified leads (SQLs) | Bottom-of-funnel | Leads that have actively expressed interest in your products or services | Kelly requested a demo after expressing interest in purchasing our premium service |
Cold leads are types of sales leads that fit your customer profile but haven’t yet had any interaction with your company. In short, this is the most difficult sales lead type to convert because they don’t yet have an active interest in your business.
As you might expect, this term is related to the idea of “cold-calling”—in both cases, you’re trying to convert someone who’s never engaged with your business before. That’s no easy task, and you should prepare yourself for the likelihood that many cold leads won’t convert.
Having said that, there are still ways to convert leads to sales and close a deal when you route cold leads to sales reps. The best sales closing technique is to nurture them further down the marketing funnel with top-of-funnel content like blog posts and social media content. However, you can also attempt to cold-call them or email them.
A highly effective way to generate cold leads that match your target audience is by using a prospecting tool. Nutshell’s ProspectorIQ allows you to search a vast database of over 200 million prospects. By defining your ideal customer profile, ProspectorIQ finds the best matches for you, streamlining the process and saving you time by handling the filtering process for you and your sales team.
Define your ideal customer and ProspectorIQ does the heavy lifting, so you can add new contacts to your CRM and start making more sales!
Warm leads are a bit further down the funnel than cold leads. These sales leads still haven’t shown any distinct interest in buying from you, but they definitely know who you are and what you offer.
These leads might visit your website on occasion, follow you on social media, subscribe to your emails, or keep up with your blog. They have an interest in you, albeit one that hasn’t yet developed into a desire to purchase.
The best way to market to these sales leads is to take advantage of the content they engage with by including calls to action (CTAs). Whenever they read a blog post or open an email, they should see a CTA somewhere that encourages them to convert.
You can also take a more direct approach by reaching out to these leads with a phone call or a personalized email, perhaps offering to have a meeting with them about your products or services. Many warm leads will be interested enough to hear you out.
The word “hot” can be either good or bad depending on the context, but in this case, it’s definitely the good kind. Think “fajitas sizzling on the platter as the server brings them out of the kitchen” kind of hot.
Hot leads can be defined as sales leads who show overt interest in your products or services. They haven’t committed to a purchase yet, but they’ve definitely indicated that they’re considering it. These hot sales leads might be in active talks with your team, or they might be taking advantage of any free trials you offer.
This is where your marketing can really push for a conversion. You don’t have to be subtle here—you can openly encourage hot leads to buy from you, highlighting all the advantages of your product or service while noting the qualities that help your business stand out from the competition.
When handling hot sales leads, you need to recognize and act on clear buying signals from the lead. To close the sale effectively, consider using sales closing techniques like offering discounts or limited-time deals to instill a sense of urgency.
The previous three sales lead types focused on how “warmed up” sales leads are, or how close they are to making a purchase. These last three, however, focus more on the type of content that leads are looking for, and therefore the type of marketing you should target toward them.
Information qualified leads (IQLs) are top-of-funnel leads who are simply trying to find an answer to a question or a solution to a problem. For example, an IQL might look up something like “what do manufacturers do” or “how to form a quarterly budget.”
To target these sales leads, your best bet is to pump out informational content like blog posts and videos. Don’t try to deliver a direct sales pitch to these users—simply give them the answers they need while showing off your expertise as you do so.
They’ll be able to see through the answers you provide that you’re knowledgeable about your craft, making them likely to remember you when they need your services later on.
Marketing qualified leads (MQLs) appear further down the sales funnel from IQLs. This type of sales lead is comparable to warm leads. MQLs are familiar with your brand, and many of them engage with you in some way, like keeping up with your blog. It’s possible that you already have their email address from a previous newsletter signup, event registration, or content download.
The best way to market to MQLs is to implement marketing messages into your informational content. Start putting out materials that blend informational and salesy content—maybe you publish a page that begins by explaining a particular industry term, and then talks about how that term applies to your company.
You can also push for MQLs to sign up for your email lists or even try out product demos to get more familiar with your company and what you offer.
Product qualified leads (PQLs) are sales leads that have already received some value from your product, whether through a free trial or freemium version of your product. PQLs may be further down the sales funnel than MQLs, but they might not have received certain marketing materials yet if they signed up for a free trial from your website and have had little interaction with your business.
If your business offers free trials or freemium product tiers, knowing how to convert PQLs is especially important because they’ve already interacted with your product in some way. Your sales team should have a process for:
Sales-qualified leads (SQLs) appear near the bottom of the sales funnel. These leads have actively expressed some kind of interest in your products or services, and they’re people your company has decided are worth directly marketing to.
At this stage, you can start using direct sales pitches. You want these leads to know that you’re interested in working with them, but you want to do it in a way that makes them interested in working with you, too. To that end, try calling them directly or setting up meetings with them.
Grouping your sales leads according to lead types offer several advantages that will enhance your sales and marketing strategy and improve your conversion rates.
Here are a few advantages:
Take a look at these FAQs about sales leads for the answers you’re looking for:
Leads can be categorized in several different ways, including:
The best way of organizing your leads depends on how you and your team prefer to work — and the tools at your disposal. If you’re using a CRM with pipeline management features, you can look at all your sales leads and their pipeline stage in a board, list, chart, or map view. If you’re working from a spreadsheet, you might have more limited viewing options.
There isn’t just one type of lead your company should spend time and effort to convert — all of the sales leads listed above have their place in the sales funnel. While it’s more valuable to spend the bulk of your energy on hot leads rather than cold leads, for example, you also have to figure out how to make leads hot — and that takes a multi-faceted sales strategy.
As you can see, there are different ways to market to different types of leads. The thing is, it can be tricky to figure out which leads are which, and where your prospects are in the sales funnel. Thankfully, you don’t have to figure it out all by yourself.
Nutshell makes it much easier to add leads to your funnel and drive them toward conversion. You can easily categorize leads by their funnel placement and even view custom reports on the effectiveness of your marketing to them.
Want to try out Nutshell for yourself? Get started with our free 14-day trial today!
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