Customers are the most important entity for any business. Your business doesn’t just revolve around them, but it depends on your customers. How you acquire customers for your business depends on your business and sales strategies. Businesses have different sales cycles and sales funnels to generate leads and convert leads into customers. But what is a lead in marketing and its types?
Let’s find out…
What is a Lead in Marketing?
A lead refers to any person who shows interest in your business or its products in any form. Leads are your potential customers who are interested in buying from your company. Businesses generate leads by marketing that could be either outbound or inbound:
For example, a person who ran a search query in Google and landed on your website. He then signed up for the lead magnet. This is considered to be a lead.
It represents a potential customer who has shown interest in your product. It is the process of converting strangers into website visitors and then leads. This is how it looks like:
A lead is generated when a potential customer shares his/her contact details with you (normally email address). Once you get the contact details, you can then convert the lead into a customer by further engagement. This is how it looks like when you generate a lead:
Here is an example of a landing page that is used to generate leads:
Interested visitors will fill the form and submit it to get started. Their details will then be further processed to convert them into customers.
Types of Leads
Leads have different types depending on their stage in the marketing funnel and how sales-ready they’re. The five types of leads are:
- Cold lead
- Information qualified lead (IQL)
- Marketing qualified lead (MQL)
- Sales qualified lead (SQL)
- Product qualified lead (PQL)
1. Cold Lead
A cold lead is a person that doesn’t know about your product or company and has no interest. But it is a potential customer because the person is in the market to buy a product that you offer.
For example, a person who is looking for an accounting app for his business is a cold lead. He knows what he has to buy but he isn’t considering any specific accounting apps. So, he is a cold lead who doesn’t know about you and your company and isn’t interested in your product but he is in the market for purchase.
Unaware persons are considered as cold leads.
You use different techniques to attract cold leads and convert them into information qualified leads such as inbound marketing, social media marketing, etc.
2. Information Qualified Lead (IQL)
This is a lead that has shared contact details with you and you can now engage with the lead.
This is the stage where a visitor shares his/her email address with your company in exchange for the lead magnet. Consider an accounting app example. The cold lead finds your checklist on “how to pick the right accounting app for your business” and downloads it from your squeeze page.
You’ll have an information qualified lead that you need to nurture using different techniques such as:
- Email series
- Newsletter
- Case studies
- Latest blog posts
- Webinars and podcasts.
3. Marketing Qualified Lead (MQL)
It is a lead that knows about your product and has shown significant interest in your product or business. This is the lead that has interacted with a significant amount of marketing material and is almost ready to buy:
Once you get the contact information of a person, you keep interacting and engaging with him/her for some time. Based on the engagement level of different leads, you’ll update their status in your CRM to MQL.
Not all leads interact with your marketing material in the same way.
For example, you’ll send the same email sequence to all the leads. Some leads open emails, others click links, and some leads simply stay inactive. This activity level shows the status of a lead as to when it becomes ready to be passed on to the sales team.
4. Sales Qualified Lead (SQL)
These are the leads that are towards the bottom of your funnel and ready to make the purchase. It is also known as a hot lead that is willing to buy your product:
For businesses that have a large sales cycle (e.g., consultation businesses), the lead needs to be contacted by a sales representative. For shorter business cycles (e.g., SaaS), leads aren’t required to be contacted by the sales team.
Here is how the process from MQL to SQL:
The sales team contacts and decides if the sale is acceptable or not. All the acceptable leads from SQL convert and become customers.
5. Product Qualified Lead (PQL)
This is an additional lead type that only applies to specific industries such as SaaS. A PQL is a lead that has used your product and is a paying customer but needs to be upgraded. It applies to products that require an upgrade or where the customer has used a limited version of your app (e.g., subscription-based online apps).
Your sales team will contact customers and offer them upgrades. This isn’t necessarily done via phone. In most cases, the sales team contacts via a series of emails.
Here is an example of such an email:
The sales team offered a 10% discount to upgrade the plan today.
Leads Are the Backbone of Your Business
Marketing leads play a vital role in marketing campaigns, sales, and revenue. Importantly, leads connect both marketing and sales departments. You need to create a marketing funnel with a proper lead generation and nurturing process.
How to do it?
Use a CRM tool and integrate it with your email marketing software. Customer relationship management software score leads automatically and transfer them from one type to the next automatically. For example, the new leads will be marked as IQL and then they’ll be moved to MQL and SQL based on engagement and sales team interaction.
Featured Image: Unsplash
