What is a Lead? How to Generate and Convert Leads Effectively

What is lead? –– one of the frequently asked questions among business newbies.

In the business battleground, think of leads as more than just a map to your destination; envision them as individuals who might transform into loyal paying customers in the future.

Leads are the lifeblood of marketing and sales, representing those who’ve taken a keen interest in your products or services, either through direct sales outreach or your marketing efforts.

But hold on, there’s a whole classification of leads out there, and each one requires a different strategy to transform them into real customers. This article is your leads 101 lesson—to navigate the world of leads in the right meaning with some pro tips to help you become a master of generating and converting leads.

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Understanding Leads

Imagine a big, triangle-shaped funnel that splits the business process into four parts––awareness, interest, consideration, and finally, decision. This is the journey of your potential customers, and leads are the ones actively moving through it.

As these potential customers journey on, they reach a stage called ‘consideration’. Here, they become ‘leads’. They’re not just casual browsers anymore; they’ve engaged with your social media posts, started following your pages, or filled out a form on your website. That’s some serious engagement right there, and it’s like a green light for your marketing and sales teams.

At this point, your sales team takes the lead. They start interacting with these leads, sending personalized emails, making phone calls, or setting up meetings, all to guide them toward the final stage––the decision to make a purchase.

Types of Leads

Leads can be classified by degrees of interest and qualification, each at a different stage in the sales funnel. Let’s break down these categories of leads into two main types that every marketer should be familiar with:

Lead Type 1: Based on Qualification:

• Information-qualified Leads (IQLs): These are your budding leads, standing at the very start of your business journey. They’re aware of their problems, but they might not know that you hold the solutions. Your mission with IQLs is to gently nurture them by serving up engaging content, and gradually introducing your products or services as potential answers to their woes.

• Marketing-qualified Leads (MQLs): MQLs are the fruit of your marketing labor. They’re the ones who engage with your content on social media, read your SEO-optimized blogs, or visit your website through Google Ads. While these leads show interest, they still need a bit of coaxing before they’re ready to make a purchase. Personalized marketing campaigns or special offers can help nudge them further down the sales funnel.

• Sales-qualified Leads (SQLs): SQLs are the cream of the crop. These are the leads that your sales team has deemed worthy of a direct sales follow-up. They’ve shown a strong intent to buy, perhaps by requesting a demo or contacting sales directly.

But you might also be familiar with terms like ‘cold’, ‘warm’, and ‘hot’ leads. To make sense of these, let’s look at our second category of leads:

Lead Type 2: Based on Interest

• Cold Leads: Much like IQLs, cold leads are those who haven’t shown much interest in your products or services. They’re mostly reached through outreach methods like cold calling or fitting into your targeted demographic groups.

• Warm Leads:  Similar to MQLs, warm leads have shown some interest in what you’re offering. They may have asked questions or requested more information about your business, but they haven’t yet shown a strong intent to purchase. For example, people who messaged to your Facebook’s inbox. 

• Hot Leads: Hot leads are your SQL equivalent when it comes to interest. These leads are almost ready to make a purchase. Your sales team typically engages directly with these leads to address any final queries or concerns and guide them to the checkout.

Lead Generation

Lead generation is the first step in getting folks interested and excited about your business so they eventually become loyal customers.

It’s all about combining effective marketing and sales efforts to ensure that every lead becomes a promising SQL (Sales Qualified Lead) or a hot lead, rather than staying cold.

Here’s a simplified breakdown of the lead generation process:

1. Identifying your target audiences: Start by figuring out who your ideal customers are. Consider factors like demographics, interests, and behavior to ensure your sales and marketing efforts are directed at the right people.

2. Attract your target audiences: Now, it’s time to show off your marketing efforts to the right crowd. Plan your marketing moves, like social media posts, Google Ads, or even offline events, to grab their attention and get them curious.

3. Build a powerful landing page: Your landing page is like the doorstep to your business where potential customers first interact with your offerings. Make sure it’s user-friendly with an interactive product page, testimonial page, and contact information to facilitate visitors and encourage them to take action.

4. Gather lead data: Use your landing page to create short and easy-to-fill lead capture forms. Ask only for information necessary for follow-ups and make sure the form is prominently displayed on the page.

Lead Management

Once you’ve got that treasure trove of data and contact info from your leads, it’s time to ensure your in-house sales team steps up to the plate and works their magic. 

Nurturing leads is like building a network of relationships at every twist and turn of the sales journey. It’s not just about collecting info; it’s about tracking, handling, and guiding potential customers to the finish line––becoming loyal, paying customers.

Here’s where lead tracking steps into the spotlight. When it comes to tracking sales leads, the data you gather and analyze should align with the unique needs of your marketing and sales teams.

Here are some key pieces of information your sales team should keep tabs on:

• Lead’s Contact Info: Names and how to get in touch.
• Lead Source: Where they discovered your business.
• Sales Team Member in Charge: The hero handling this lead.
• Lead Acquisition Date: When the connection was first made.
• Products or Services of Interest
• Lead Status: Where they stand in the sales journey.
• Conversion Events: Actions that bring them closer to a purchase.
• Feedback and Special Remarks: Nuggets of insight they share.

But here’s a handy tip to make lead tracking a breeze for your pros––consider using Customer Relationship Management (CRM) systems. These tools automatically capture leads from websites, social media, emails, and more, organizing all this information in one convenient place.

CRM also facilitates lead nurturing by automating certain tasks like sending out personalized emails, reminders for follow-ups, and delivering targeted content. Examples of popular CRM software in use these days are Salesforce, Zoho CRM, Sales Creatio, Nimbles, and many more.

Qualifying Leads

So, you’ve gathered a treasure trove of potential leads, and your lead management strategy is finely tuned. But now, it’s not just about the quantity of leads; it’s all about their ‘quality.’

As said earlier, not all leads are created equal, which is where lead scoring comes into play. It’s like giving each lead a scorecard that tells you how promising they are and how quickly they might become paying customers. This helps you prioritize your leads effectively and speed up the conversion process.

Lead Scoring: each lead is assigned a numerical score based on specific criteria. The higher the score, the more potential the lead holds. In fact, about 68% of marketers take it up a notch by considering both behavioral and demographic factors in their lead-scoring strategy.

Here are some key criteria to consider:

• Demographics: Start with the basics like company size, industry, location, and job title. Leads that match your ideal customer profile in these areas are your top picks.

• Engagement: Pay attention to how leads interact with your business. If they’re exploring your website, downloading resources, attending webinars, or requesting product demos, they’re showing serious interest.

• Behavioral Scoring: Give scores to actions that reveal a lead’s interest and readiness to buy. For instance, asking for a pricing quote or diving into a free trial is a strong signal they’re eager to make a move.

• Lead Response Time: Consider how quickly leads respond to your outreach. Leads who engage promptly may be more motivated to make a decision.

Conversion and Sales

After we gathered up all data and insights about our qualified leads, sales teams play a crucial role in merging human interaction with data to effectively engage customers and secure purchases. This involves excellent customer service, diligent follow-ups, and adept feedback management. 

At the same time, we’ve compiled some additional strategies to maintain relationships and fast-pace the lead conversion:

• Personalized Remarketing Messages: Craft personalized communication that speaks directly to the individual needs and interests of your leads. You can refer to the lead data and either send an email with targeted messages that resonate or use the data to create custom audiences for retargeting on social media with engaging content.
• Sense of Urgency: Creating limited-time offers or promotions can motivate leads to take action sooner rather than later.
• Exclusivity Events: Plan special events or webinars specifically for your leads, providing them with unique offers and a sense of inclusion in your brand community.
• Lead Scoring Refinement: Regularly update your lead scoring criteria based on real-world outcomes. This involves gathering feedback, proactive response, and adjusting the scoring system to accurately focus on the most promising leads.
• Social Proof: Utilize user-generated content, customer reviews, testimonials, and case studies to demonstrate the value of your product or service. Positive feedback from existing customers can significantly influence potential ones.

Mastering Lead Now

Now that we’ve explored the world of leads and their pivotal role in business, it’s clear that marketing and sales make a formidable team, transforming potential customers into paying ones. We’ve met various lead types, from the cooler IQLs to the fiery SQLs, each requiring a tailored approach based on their level of interest.

Quality triumphs over quantity in this journey. Remember, nurturing and managing leads is an art––one that involves consistent tracking, monitoring, and the helping hand of your sales team to guide customers across the finish line.

Success in your lead strategy is within reach, and we hope this article serves as a valuable tool on your path to fruitful outcomes!