Hot Leads vs. Cold Leads: Here’s How To Stop Chasing Your Tail

In a recent article, I told you that one of the best skills of top salespeople is time management. A very large hurdle against time management is the lead qualification process. After all, only 25% of leads are legitimate and should move onto the sales process. However, qualifying those prospects and separating them from hot or cold leads is a heavy undertaking that if done incorrectly wastes valuable time for both sales and marketing teams.

By now, most people know the difference between a hot or cold lead but properly identifying that difference is where the real challenge lies. Here are some tips to qualify leads and avoid wasting valuable time on non-leads:

Time to pre-qualify

It’s simple. This segment of lead qualification is to see if the contacts coming in are even relevant to your business. Getting a hundred prospects to fill out your form is great but if they all submitted incorrect emails, work for make-believe companies, and don’t have any semblance of budget or need for your product, then they’re a waste of time.

One struggle that comes with lead qualification but can be solved with pre-qualification is wrong information. 88% of users leave wrong information when filling out forms. Wrong telephone numbers, misspelled names, and prank emails all take up valuable space in your database so correcting them before they get to your outreach team can save time in the long run. Using email plugins like Rapportive will help identify who’s coming through the pipeline immediately or better yet, through most marketing and sales automation tools, you can implement email or phone number validation software directly into your contact forms so prospects have to give you a real information.

These are easy ways to pre-qualify the person but what about pre-qualifying the company they work for? The first things a prospective company needs in order to purchase your product or platform is a head decision maker and money. A good place to start is by going to their website and scoping out their leadership or team page. It’s quicker than stalking LinkedIn and shows the company to be transparent. You’re also likely to find social links for the decision makers there. Next step is to check their news, investment updates, and hiring/firing notices. If a company has recent funding, been acquired, or is hiring like crazy, it likely means that they have more money to play around with, some of which can be yours!

Another pro-tip: Look out for the size and relationship quality between prospects and their main customers. You can identify their customer size and the vibe of their relationships through online reviews, shout-outs in blogs, and partner programs. If the customer size and strength of relationship are good, then the prospect is likely to have enough revenue/need to constantly innovate all facets of their business.

Finally, look out for consistent, recent and relevant content being put out by the prospect’s company. In a world where everyone is tweeting, posting on Linkedin, blogging, etc., a quiet online presence is usually signs of negligence, lack of resources, or old-world management – none of which are great when trying to start a sales conversation.

Do you like your leads served hot or cold?

This is where lead qualification actually starts and where in-depth analysis should begin. Now that you have a list of contacts who could all be potential customers, it’s time to utilize one of the strongest sales traits, curiosity, to ask the right questions:

Who:

“Who is this lead?” is the first question you should ask. You should not only find the identity of the company this contact works for but what role the contact plays within that company. It’s common sense that finding the decision maker early will lead to a quicker buying decision so look to see how relevant this contact is in the decision-making process. Director-level and higher is usually the perfect place to start, but realistically, most leads that come in aren’t the primary decision makers. Great salespeople realize that in a company sized between 100-500 people, an average of 7 people are involved in the buying process, so getting to the right 7 people is key. If you can identify decision makers or even people who help move the buying process forward, then the lead is much warmer.

What:

What does the lead’s company do? Uncovering what a prospective client does, who their primary customers are, and the industry landscape they play in, will lead to better lead qualification, and ultimately, better selling. Whether using a database such as Hoovers to get that information or simply, doing your due diligence through your professional network, the end result should be able to identify whether this is a good lead.

When:

63% of people requesting information aren’t ready to purchase for another 3 months and 20% will take more than 12 months to buy. When a lead is looking to purchase is very important in how they should be classified in the funnel. A lead with no plans to ever purchase your product or from a competitor is a non-lead and a lead that is looking to buy in the next 3 months is a hot lead. Every other lead should be classified as warm and should be kept in the funnel through proper nurturing until they’re ready.

Why:

Similar to what, knowing why a lead is requesting information or why they may be in need of your product is extremely important in not only lead classification but in your sales approach. If the lead is aware of issues that your product can solve, then the conversation tends to be more fluid and with less objection, however, if the lead has no idea why your product would be helpful, be ready for an uphill battle where educating the prospect is key.

The more leads you touch, the more you’re likely to close. This we can all agree on, however, the real trick is to effectively pursue hot leads and identify cold leads you can convert later. Pre-qualify to get rid of all irrelevant non-leads then focus your attention on the details that matter. Because up to 35-50% of sales will go to the vendor that reaches out first,

set up your funnel to ensure that hot leads are always in front and warm/cold leads are always being engaged through insightful nurturing.  

What’s your take on hot vs. cold leads and lead qualification in general?