What is a lead?
A lead is an individual or organization with an interest in products or services that a business offers. Identified early in the sales process, they are considered potential clients, and salespeople generally need more information to determine the quality of the sales lead and the likelihood they will convert to a customer. Businesses use marketing methods such as advertising, networking, outbound sales calls, social media campaigns, and email marketing to generate sales leads.
Companies trust lead intelligence software to verify the caliber of lead information and ensure data validity. Salespeople make better-informed decisions during the lead generation with this kind of software because they can manage customer data and nurture opportunities.
Types of leads
In most cases, organizations can segment leads into one of three categories:
- Marketing qualified leads (MQLs) reflect a company’s typical buyer persona and engage with marketing activities such as attending webinars or downloading case studies. Marketing teams are usually the ones responsible for managing and qualifying MQLs.
- Product qualified leads (PQLs) refer to individuals who have used a product through a free trial or another offer and experienced value from the product. A PQL is more likely to convert than an MQL since they already understand the product's value and its usefulness in their role or workflows.
- Sales qualified leads (SQLs) are a good example of how to align sales and marketing. SQLs are first vetted as MQLs by the marketing department and then passed to sales to determine their status. If the sales team concludes that the prospective buyers are more likely to become a client than MQLs, they graduate to SQLs. Sales teams are usually the ones responsible for managing and qualifying these leads.
How to generate leads
Organizations should use a variety of techniques to generate leads. Some examples of strategies for lead generation include:
- Asking customers for referrals: Sales and marketing teams request word-of-mouth marketing referrals from current customers to generate new leads. This method gets brands in front of more people, increasing the chances of finding leads and closing sales. Account management and client success teams that support clients can assist with lead nurturing.
- Prioritizing in-person and online networking events: Networking is an effective way to build relationships and identify leads in conversations. Sending sales and marketing team members to industry events is a great way to increase brand awareness and search for new leads to contact after the event.
- Interacting on social media: Similar to networking, using social media sites like LinkedIn generates high-quality sales leads. Salespeople should approach relevant connections and companies by posting about the problems the product or services solve.
- Using email marketing: Clever marketers run campaigns through a series of emails to build interest in the company’s product or services. To attract sales leads using this method, emails must clearly explain the product's or service's value and how it can make customers’ lives easier.
- Publishing informative and helpful content: While blog posts and case studies are typically part of content marketing strategies, businesses can also use the content for lead generation. Informative, high-ranking content conveys expertise to users, which drives potential buyers to learn more about the company. It’s essential to include a call to action in the content.
Best practices for closing leads
Not all leads will become customers, but team members can increase their chances with the right strategies.
- Humanize the sales approach. Personalized, warm interactions are more likely to entice potential buyers than cold outreach or vague email templates. Following up with leads on a personal level fosters stronger connections and adds a human element to the sales process.
- Avoid coming across as pushy and demanding: There’s a fine line between making sales effectively and coming across as annoying. Examples of behaviors that may feel too pushy include reaching out repeatedly without receiving responses, interrupting potential buyers during conversations, and forcing leads to commit under tight timelines.
- Answer questions and address concerns honestly: In the heat of a sales deal, leaving time for questions may unintentionally fall to the wayside. Leaving time for leads to ask questions during conversations and responding in a reasonable amount of time when they reach out with questions is a great way to keep the sales pitch going.
- Don’t force a sale: Sometimes, customers might express interest in a product or service that isn’t a good fit or match for them or their business. Instead of strictly focusing on closing the sale, salespeople should explain to leads why something isn’t suitable for them and provide better recommendations instead.
Lead vs. prospect
A lead is an individual or business at the top of the sales funnel. Leads typically express interest in the company’s product or services, but they’re deemed “unqualified” since they’re early on in the process.
A prospect is an individual or business that fits the criteria to be a potential customer and is further down the sales funnel. Unlike leads, prospects may not express interest in products and services but instead meet target customer qualifications.
Learn how to engage leads with a compelling call to action (CTA).
Alyssa Towns
Alyssa Towns works in communications and change management and is a freelance writer for G2. She mainly writes SaaS, productivity, and career-adjacent content. In her spare time, Alyssa is either enjoying a new restaurant with her husband, playing with her Bengal cats Yeti and Yowie, adventuring outdoors, or reading a book from her TBR list.
