7 Types of Sales Leads and How to Close Them
You’re wondering who to prioritize among all the website traffic from your last ads campaign. There are too many leads, however, your time and staff are limited. You have to figure out how to invest your resources for maximum ROI.
Learning about the 7 key types of sales leads will make it easy for you. It’ll tell you who’s ready to buy, who needs a little convincing, who needs additional incentives, or who needs more information.
Let’s jump right to it so you can categorize your leads effortlessly, and strategize accordingly.
What are sales leads
We always have to stay updated on tech trends, be it for personal interests or professional requirements. Knowing about a great tool one week later is one week too many. So, we follow authoritative industry journals and check out their suggestions. We also conduct our own research when we need tools for specific purposes.
If you released a new tool, your job would be to get it featured in those journals and/or build authority on your website for initial discovery. Then comes the part where you prove your value, and how effective your tool is in serving our purpose.
The next part is convincing, why we should get your tool over its alternatives. We might consider what features we are getting for what value, whether it is the best return on our investment, what our terms of agreement are, if our data is safe, etc.
If your answers satisfy us, we get your product.
We are your sales lead throughout this process. First, we’re a cold lead who hasn’t heard of you yet, then we’re a warm lead who’s seen your value, and finally, we’re your hot lead when we’ve made our decision to buy from you.
Let’s learn about the types of sales leads in detail in the following section, and how you can generate and convert them.
7 Types of Sales Leads and How to Close Them
Some leads are closer to making a purchase than others. Sales leads are categorized based on their readiness to buy from you.
Your sales process is like a funnel. Usually, the wide end (top-of-the-funnel) attracts a wider range of people to your business. Your goal is to move them down the funnel so they pass through the narrow end (bottom of the funnel) and become customers.
The key 7 types of sales leads are discussed below.
1. Cold leads
Cold leads are those who fit your ideal customer profile perfectly but haven’t yet shown any interest in your business. In fact, they may or may not be aware of your brand. They’re at the top of the sales funnel.
Example
Say, you sell wood and rattan cane furniture. Businesses and individual buyers both fit your customer profile.
On the B2B level, your cold leads might include interior designers, especially those who favor the boho style, VRBO and Airbnb owners, home staging companies, student dormitory/rentals, short-term and vacation rentals, studio apartments in central locations, offices, hotels and restaurants, etc.
On the other hand, cold leads on the B2C side of your business are more elaborate and scattered. Any individual looking to redecorate, about to buy a house or remodel, recently relocated to town, changing apartments, etc. might need new furniture. That’s where you step in.
Generation
You don’t usually need a personalized approach to generate cold leads. Typically, you acquire them in bunches through research, paid advertising campaigns, networking events, purchased email lists, etc.
You can target locations near tourist spots, colleges, office buildings, etc for advertising, build connections from real estate seminars, or buy contacts from painting material suppliers to gather a primary email list. After that you can you can conduct further research to optimize your list of cold leads.
Conversion
Converting a cold lead is hard. However, as a business enthusiast, you know that you only need to move them one step down the sales funnel.
Your task with the cold leads is to get them to recognize how you can add value to their lives.
You can do that by showing them targeted content that addresses their pain points, makes their life easy, provides a unique solution to their problems, etc.
Cold leads are important because your chances of qualifying leads are directly proportional to how many cold leads you can generate. So, the more cold leads you can find, the higher your chances of gaining familiarity and recognition.
2. Warm leads
Warm leads are those who have shown some interest in your business. They range from remembering your brand’s name to following your posts regularly.
They know what you do and have seen value in what you offer. They might have checked out your website, read your blogs, downloaded a resource, subscribed to your newsletter, followed you on social media, etc. In some cases, they’re considering getting your products or services.
Warm leads are in the middle of the sales funnel.
Example
An Airbnb owner who has downloaded your ebook on a DIY accent wall, an interior designer who saved your pin on a sunroom idea, etc.
Generation
You do your research to find cold leads for your business. Generating warm leads is making sure you come up in the research of your cold leads with something valuable.
Simply appearing in their search result isn’t enough. Unless your leads see value in what you’re offering, they won’t engage. Which ultimately harms your brand. You can track this by evaluating your website traffic, page visits, time spent on pages, etc.
Create great lead magnets to generate quality warm leads. Conduct keyword research to find out what your audience is looking for and create content that meets search intent.
Create downloadable resources like ebooks, checklists, infographics, etc. Moreover, grow a strong and consistent social media presence. Finally, Incentivize your loyal customers to spread the word about your brand.
All these result in building your authority and recognition as a trusted brand. These will help you gain popularity and help those cold leads see your worth.
Conversion
Once you start growing warm leads, offer them a further incentive. Provide personalized content that solves their specific problems, offer a product demo, free trial, etc.
3. Hot leads
Hot leads have shown strong interest in your product/service. They’re seriously considering buying from you and doing their final research before making a decision. Hot leads are at the bottom of the funnel and need little motivation to buy.
Example
A hotel owner who visited your shop or asked you about your pricing
Generation
Website contact forms, landing pages, social media posts, product demos, personalized emails, tailored suggestions, etc.
Design your forms and web pages beautifully to match your brand theme. Share good-quality, professionally taken photos and videos of your products.
Conversion
Find your leads the plan that suits their need best. Offer further incentives like special discounts, loyalty programs, etc.
4. Information qualified leads (IQLs)
These leads have engaged with your content and are actively seeking information about your products or how they solve their specific problems. Information-qualified leads are more common for B2B companies because businesses conduct extensive research before making a deal.
These leads are at the top of the funnel.
Example
A restaurant owner researching the material you use or the durability of your furniture.
Generation
Post educational content on your blogs or social media.
Research your industry to find out your prospect’s queries and pain points. Offer insightful solutions that are fresh. Provide different perspectives.
Make sure your content is uniquely valuable and not a summary of 10 other content on the internet.
Optimize for SEO and AEO, so your content appears on the SERPs and is easily discoverable.
Build authority on a topic by covering all the related topics thoroughly, interlink them so readers can easily navigate between relevant content.
Conversion
Personalized content that tells them how your product/services solve their specific problems, targeted email campaigns.
5. Marketing qualified leads (MQLs)
MLQs have asked direct questions about your products/services. They might have filled out a form, requested a demo, or asked how your products benefit them. These leads are in the middle of the funnel.
Example
An individual who visited your store and checked out your products, or discussed his/her requirements.
Generation
Track your prospect’s website behavior, email open and click rate, social media engagements, etc. to find out which leads are more inclined to get your products or services. Use exclusive resources and gated content to lure them in.
Conversion
Personalize your approach and message towards each lead. Listen to their pain points or requirements carefully and offer tailored solutions.
Don’t keep them waiting when they ask you a question. Offer exclusive product demos or free trials to further convince them about your product’s value.
6. Product qualified leads (PQLs)
Product-qualified leads are those who have experienced your products/services firsthand. It can be the free version of your product with the key features, or a free trial. And now they need a little convincing to become a paying customer. PQLs are in the middle of the sales funnel.
Example
You offer some patio chairs as a free sample to a prospect who owns some vacation houses. He/she likes them and wants to buy more. Before making the decision, s/he approaches you with some final concerns like which table or accessories would go best with them, how to maintain them, etc.
Generation
Free trials, free samples, freemium models, and product demos. Keep in mind that the solutions/products you offer for free trial should solve the specific issues a prospect is facing, or add unique value to their lives.
Conversion
Elaborate on the value of the paid version, highlighting advanced features and benefits. Resolve their final concerns and offer personalized onboarding, priority support, and regular updates.
7. Sales qualified leads (SQLs)
Sales qualified leads have a clear need for your products/services, have the means to buy them, and have the authority to make the purchase decision.
Example
A prospect who contacted your sales team and expressed their interest in a couple of your products, and now wants their suggestion on which one s/he should go for.
Generation
Offer your leads tailored suggestions via personalized messages/emails. Demonstrate how the products/services will add value to their lives.
Conversion
Ask the right questions to find out their concerns and provide satisfactory answers. Offer your expert opinion on which products/services/deals are the best fit for them.
Be polite and prompt with your response. Make sure that there are no miscommunication regarding the terms of your agreements.
Now that you’re clear on the types of sales leads, let’s see how you should prioritize them.
How to balance your focus among different types of sales leads
The further a lead is down the lead generation funnel, the more you should prioritize them.
This means that the sales-qualified leads get the most priority, while the cold leads get the least attention from you.
Implement lead scoring (a process where you give points to leads for each positive factor such as website visits, social media interactions, newsletter subscriptions, email opens/clicks, content downloads, making contact, filling out forms, requesting a demo, sampling free trials, etc.) The leads who score the most are the most ready to purchase, and they’re the ones you should focus on most.
Use help from the right tools. There are marketing automation tools, CRMs, project management software, AI tools for various purposes, etc. Use them to help with repetitive tasks, analytics, performance tracking, etc. while you focus on planning and strategizing.
Additionally, keep the demographic, psychographic, and firmographic information in mind while converting a lead. Leads are more likely to convert when their location, profession, age group, style, etc. match your preferences.
Moreover, use retargeting cookies to retarget prospects who engaged with your brand before by tracking their browser activities.
Lastly, use the lead conversion metrics and formulas to track how your efforts are performing. Analyze and review your strategies regularly, and always look for room for improvement.
What’s next
Quality lead generation takes time. Your leads need time to become familiar with your brand and to understand the full value you offer. The more they come across your content or demos, the likelier they are to favor your brand.
That’s why you should post consistently, ensuring they add unique value to your leads’ lives. Create separate content for each stage of their buyer’s journey, that is, awareness, consideration, and decision.
Use the strategies mentioned in this blog to generate and convert different types of sales leads. The further you move a lead through the sales funnel, the more personalized your approach should be towards them.
Once your leads become customers, ask them for feedback and reviews. Use the positive reviews to convert other prospects, and look into the matter very seriously in case of any negative reviews.
Let us know what you think of our tactics, and share your insights in the comments section!
Sarika writes for Fluent Forms and loves to offer insights into small businesses. She’s curious and enjoys discussing ideas, interests, and perspectives. In her free time, she’s either marvelling at architectural beauties or trying different cuisines.
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