“What is a lead” may seem like an easy question. It goes without saying that leads you turn into clients are a crucial part of any business – but while the goal of converting leads into clients may seem like a simple enough concept, there’s a bit more to it! So, what is a lead?
What is a lead?
A lead is a person or company that has shown interest in your product or service. Very straightforward, but not so fast! We’ve answered the question of what is a lead in its most basic form, but there are two kinds of leads you’ll encounter at certain stages in your sales pipeline: a marketing-qualified lead and a sales-qualified lead. Understanding the different types of leads you’ll have and how to approach them is the key to finding the right potential clients and closing the deal.
What is a marketing-qualified lead(MQL)?
When you market your small business, you’re trying to generate interest and awareness in your product or service to create leads. This is generally done through obtaining your leads’ email or contact information through digital marketing, like your website intake form, a free consultation, or sign-up for a newsletter. They may also follow you on social media, like an ad of yours, or subscribe to your blog. Because they’ve shown interest, they have become a marketing-qualified lead. You can break down your marketing qualified leads into two further segments:
A warm MQL has shown some interest – they’re now aware of your brand through your marketing efforts like social media, ads, or a blog you write. They may have signed up for your newsletter or followed you on social media. While they’re interested in the content you’re producing, they haven’t yet actively inquired about your product or service. You want to have a marketing strategy in place that will slowly nudge these types of leads into a conversation with you through an Email Nurture Campaign so you can nurture the lead from a warm MQL into a hot MQL. You can learn about Email Nurture Campaigns with Campaign Monitor’s helpful tips and breakdown.
A hot MQL is someone who has actively reached out to you to learn more. This means someone who’s booked a free consultation, filled out a form on your website, or actually contacted you in some way about your business. A hot MQL is ideal because you’ll be able to have a conversation, letting both you and the potential client find out more about each other and whether or not you’re a good fit to do business together.
Becoming either type of MQL is only the first part of the lead’s journey. So they’re interested in your newsletter or free consultation – that’s great, but how do you know they’re the right fit for your product or service? To be able to identify the perfect lead for you, you should be able to answer questions like these:
- What is a lead who’d be a perfect fit defining as success?
- What is a lead who’d be a perfect fit struggling with?
- What is a lead who’d be a perfect fit likely to object to?
You can tweak these questions based on your business and the things you need to know. You may need to factor in location, age, budget, or several other things related to your industry. Once you’ve formulated your questions and answered them, you now know your ideal type of lead. Now, this is where qualifying your leads becomes important!
What is a sales-qualified lead(SQL)?
A sales-qualified lead is a potential client that you’ve spoken with to assess their needs, pain points, and problems. They aren’t just interested in your marketing materials like an MQL, but they’re actively looking for an answer to their needs or pain points. If after your initial conversation you’ve been able to confirm that your business can provide the solutions they’re looking for and they’re an ideal potential client, they are a sales-qualified lead that you want in your sales funnel.
Now is when you want to work towards closing the deal – you’ve had your first discovery conversation and you’re ready to make your pitch. As you move through your sales process, this can mean booking a longer consultation, lots of follow-ups, or sending an estimate – it can vary depending on your business. Your sales process is crucial here to continue nudging the lead through your pipeline so you can win their business. For help on building a sales process, download our free Ebook
Why you should qualify your leads
While all the sales jargon can sometimes seem tedious, the importance of the correct terminology here functions to get you in the right position to generate more leads and close more deals. By separating your leads into the MQL and SQL categories, you’ll be able to invest your time in the right opportunities while also understanding which of your marketing strategies are working to create MQLs. You wouldn’t send an MQL who’s only shown some interest the same content that you’d send an SQL who has already contacted you – each lead is on a different stage of the buyer journey. Understanding where that potential buyer is in their journey and what type of content you should send them based on where they are will help your message resonate effectively.
Qualifying your lead means confirming that they’re the right fit for your business. You want your product or service to provide a solution to their problems or pain points. If you can’t see yourself meeting all of their needs, while your business may be fantastic, it just may not be the right fit for your lead’s requirements and they have not been sales-qualified. This is a waste of time and energy for both you and your prospect and prevents you from going after the leads that are the right fit.
When you qualify your leads, you know the time you’re investing in closing the deal is worthwhile. Your chances of closing the deal are higher because you know that you can actually provide a solution for your potential client, and you’re also providing a better client experience. When you win your lead’s business and your product or service follows through the way you said it would, you increase the chances of repeat business, referrals, and great reviews.
How to qualify your leads
Asking your lead a series of questions to find out about their needs, pain points, and problems is cruicial to qualifying them. Based on your industry or business, you can come up with questions that will uncover the root cause of why they went looking for solution.
You first conversation shouldn’t be about your business and what you can offer, so don’t jump right into your sales pitch! Leading with curiosity and open-ended questions will get them talking and allow you to dig deeper. Some example questions are:
- What made you reach out?
- Why now?
- What problems are you trying to solve?
- Where are you feeling stuck?
- What does success look like?
Learning the answers to these questions will help you assess if you’ll be able to meet their needs and if they’re a sales-qualified lead who is ready to be moved into your sales funnel. If you know you can provide a solution, you’ve qualified this lead and can move them into the next stage of your sales process.
Now that your question “what is a lead?” has been answered, you can focus on further improving your sales process to close more deals. Check out our free ebook on building the ultimate follow-up process to close more deals.