Updated 03 December 2020
Every business needs to find customers. And in order to find customers, you first need leads. Here’s how to identify leads, assess their quality, pursue them and finally convert them into profitable clients.
A business lead (also known as a sales lead) is a potential client or customer for your business. It can be either be an organisation (e.g. a company) or an individual. The key thing is that you have good reason to believe they will be interested in your product and/or service.
Business leads can also be split into two main types: sales qualified leads (SQL) and marketing qualified leads (MQL). The first is normally someone (or some company) that has shown an immediate interest in what your business has to offer, such as by sending an enquiry about a product. An MQL, on the other hand, is a lead that has shown interest by engaging with you in some way, e.g. by signing up to your communications.
You can further categorise your leads as hot, warm or cold. These terms can apply both to SQL and MQL leads, though SQL may tend to be more towards the hot end of the spectrum, and MQL towards the cooler end.
A hot lead is a potential customer who may only need a small extra push to make a purchase. A warm lead is one who has expressed a level of interest but probably needs some more persuading before they become a client.
A cold lead is a company or individual that could conceivably become a customer if you were to engage with them. For example, they may fit your target customer profile, or strongly resemble some of your warm or hot leads. A cold lead probably hasn’t engaged with you yet (and may not even have heard of you) but has good reason to be interested in your product or service.
Here are some factors to look for in a lead. The more you can tick off, the hotter the lead should be.
Look for any ways in which an individual or business is already engaged with your brand, and for any similarities to your existing customers.
Generally, leads don’t come to you – you have to get out there and chase them. Remember your competitors will be chasing the same leads as you, so you need to chase harder and smarter.
Here are some of the popular lead generation tactics.
A crude but useful way of generating leads is to buy a database containing details of potential clients. You can filter the database to find those individuals or businesses that fit your customer profile, and then make use of their contact details to market to them directly.
Mingling with the right kinds of people can be a great way to turn them into potential leads. You can do this in person by attending relevant events or by using social media. Channels such as LinkedIn and Facebook can be a great way to engage with potential new clients, particularly for consumer-facing businesses. You could also host a Webinar, where you discuss something relevant to your customers (and how it relates to your own offering).
Physical events can be even more effective, as you can engage with people in person. Hosting a stall at a trade fair can garner lots of business cards – but beware of trading lead quality for quantity. You don’t want your sales people chasing after people who aren’t really interested.
Public relations (PR) can be vital to lead generation. Issuing press releases, for example, can create a buzz around your product or service, which you can then build upon with other forms of marketing (see below).
Referrals from existing customers can be one of the most efficient lead generators. You may want to consider offering incentives for referrals, such as discounts or free offers for the referrer or new customer (or both). The best thing about referrals is that the lead is likely to be hot or at least warm.
Your overall marketing strategy will probably be your richest source of leads. It is here that you will most closely define your ideal customer and decide how and where to connect with them effectively. Find out more about marketing.
When you have a lead, chase it quickly. Leave it too long and your potential customer may spend their money elsewhere.
If a lead isn’t ready to spend money with your business right away, don’t dismiss them and don’t pressure them either. Keep them as a warm lead by gently engaging with them, such as by inviting them to sign up to your communications or follow you on social media. This in turn makes it easier for you to ‘heat up’ the lead by making your name more familiar to them, telling them more about your products, and making special offers or promoting sales.
When you’re sure you have a hot lead, go in for the sale. Act too soon and you risk pushing the customer away, so you’ll need to develop a keen sense for when a lead is ‘warm enough’. Aim to make use of what you know about that lead – what are their priorities, what do they care about, and why are they showing interest in you? Sell them your offering in the way that appeals to them personally, and you should have a new customer.
Finally, if a lead keeps disengaging, move on and chase some others – there are plenty more fish in the sea.
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