Looks like someone’s interesting in your product. You’ve got yourself a lead. But…
What’s a warm or hot lead? And what’s not?
How are you going to nurture that lead?
When do you give up on lead?
What the heck is a lead anyway?
These questions may be no-brainers to anyone in Sales and Marketing.
Yet ask three salespeople and three marketers and you may get six different answers.
Such differences of understanding are at the root of marketing–sales dysfunction.
They kill opportunities. They hurt efficiency and morale. They underscore the need for integrated values across a company. Otherwise, Marketing and Sales are in a state of constant conflict.
Common definitions get everyone on the same page and build greater cooperation in your corporate culture. Naturally, the stages of lead development and nurturing will vary depending on your unique customer lifecycle, but you must start with shared, and owned, definitions.
Here’s a starting point for defining leads. Customize them, agree on them, and stick to them.
What’s a Lead?
First off, a prospect is not a lead. These two are commonly confused.
A prospect is a potential customer who hasn’t specifically expressed a desire to be marketed to, yet. For instance, they may have visited your product’s site, liked your social page or post, or signed up for your newsletter.
A lead has provided contact information and clearly expressed interest. This may be through an in-person meeting (such as an industry exhibition), a webform, a live chat on your website, or passing you their business card.
Leads’ levels of interest can vary from just checking things out to being ready to buy right now. When your company agrees on what defines leads and how they will be handled, they can be properly situated in the buyer’s journey, in your funnel, and in your CRM. How they will they be handled if they suddenly fall off the radar should also be defined.
A prospect isn’t quite there yet, and needs to be nurtured. Put them in your Sansan contacts and check in on them periodically.
A lead has raised their hand and said, “I’m interested. Now hurry up and pay attention to me.” Before the next shiny object comes along.
Types of Leads
The classic sales funnel starts with a prospect and works down to the sale and beyond, ideally turning into a loyal fount of referrals. Life, sales, and people are not, however, so simple and predictable.
Lead nurturing can be two steps forward, one step back. Many view the lead nurturing structure as having only two options (1) the lead advances, (2) the lead dies. That’s a more complex and debatable issues, but in general, think broadly and don’t give up on a lead too soon, or ever.
In this classic funnel structure, the most common forms of lead are marketing-qualified lead (MQL) and sales-qualified lead (SQL).
The “qualified” part of this refers to this contact satisfying certain criteria — going through a vetting process.
Marketing-Qualified Lead (MQL)
These people have made their interest clearly known. They’re in the process of evaluating options, and you’re one of those options. They have identified themselves as being more deeply engaged and more likely to buy, just not quite yet. Typically, the marketing team judges this status.
MQLs need some more assistance from marketing. This could be content, information, or an in-person talk. Those who request a demo are solid MQLs.
When marketing determines the lead is ready to buy, such as by scoring or other predetermined criteria, it’s time to move them to sales.
Keep in mind, this is a typical linear, baton-pass type of progression. In a perfect world, leads will move along this continuum.
Sales-Qualified Lead (SQL)
The short and safe definition of an SQL is a lead that is ready to buy. The key here is that they have been qualified/scored/vetted, typically by marketing.
Sales can now proceed with working on a deal. However, sales should also be open to the possibility that an SQL was moved along prematurely. When possible, a non-SQL should be sent back to marketing for more nurturing.
Opportunities, Customers, and Tweeners
The final two stages are Opportunity, which is in concluding stage of a sale, and Customer, which is, well, a customer.
MQLs and SQLs follow a typical linear model. Life is delightfully manageable when things run like a conveyor belt, but of course this often isn’t how it goes.
Marketing may be at fault for pushing along the lead too quickly. Sales may be to blame for simply dropping a cold lead, when in fact the lead needed some more nurturing and could have gone back to an MQL.
It’s best to think of it more as a circular pattern than a straight line.
Any lead that has, at a time, been graduated to SQL, has great potential. Even if they back out right before the sale, something could fall through on their end and they may again become receptive.
Keep tabs, always.
Other Types of Qualified Leads
In the context of SaaS and more modern forms of cultivating leads, a couple of new types of qualified leads have emerged.
Product-qualified lead (PQL; sometimes also platform-qualified lead) – These people may have signed up for a free or freemium version of your product. In areas such as SaaS, this is potentially a very common type of lead. But is it a lead by definition? Well, that’s up to your company. Some may call a PQL a prospect, some may call them an MQL or TQL (trial-qualified lead).
If your company recognizes PQLs, they can be looked at as something in between, and their behavior using the product will indicate which way they are leaning.
Conversation-qualified lead (CQL) – Thanks to tools such as live chat and social media, a lead can emerge in the process of a conversation. For instance, what may start out as a straight-forward Q&A exchange about features and prices may reveal a lead who is ready to buy. The lead is thus qualified in the course of the conversation. A CQL is a quickly polished gemstone.
Looking at the terms above, you’ll find plenty of crossover. This is why they should be taken up in your company as evolving. The SQL and MQL themselves were created in an earlier time and for the sake of marketing and sales, rather than for the benefit of the customer.
Your company may scrap those entirely and look to focus on PQLs and CQLs, graduating them quickly to Opportunities and Customers.
Share the Definitions, Own the Definitions
Each company has its own set of criteria for leads. Naturally, the definitions can shift in accordance with the product or service for sale, and the way in which it’s sold.
Get sales, marketing, and other stakeholders to the table and deeply examine your buyer’s journey and your sales funnel. Work together to create clear criteria and definitions, how to treat them, and then have all stakeholders own this shared understanding.
Creation of a internal service level agreement (SLA) is one way of cementing this.
Sansan: Where to Maximize Your Leads
Sansan not only tracks the progress of customer communications and relations for company members to see and use, it lets everyone visualize inter-connections of contacts and see where a relationship originated and how it is evolving.
With this kind of tracking at your fingertips, there is much less need to declare a lead dead. Moreover, leads can be pointed in the right direction; be it for further nurturing or for a sale.
May all your leads be smoking hot and ready to make a purchase.
Article by Adam Goulston, MBA, MS