Sales

The distinction between cold, warm, and hot lead is one of the most frequently discussed topics in the sales world. However, before you get into the differences, you should have a basic understanding of the various kinds of leads that exist and how they function.

What are sales leads?

What are sales leads, and how do they differ from marketing leads? These are companies or individuals who might become clients for your organization in the future. Sales leads can usually be managed using online and physical platforms such as trade shows, press releases, direct advertisements, promotional campaigns, and so on.Getting adequate leads is critical for any business, and generating them is the key component in the wheel that typically starts the process. Leads are individuals or organizations who may be interested in your services or products but whom you do not have full knowledge of their interest or when they will make a purchase decision.

What is Cold Lead?

What exactly is a cold lead? If you’re wondering what a cold lead is, be aware that they’re individuals or organizations who never contacted your company or showed any interest in your service/product and were irritated or put-off by your attempts to contact them.Cold leads are those which have to be nurtured more carefully and over a longer period of time in order to yield sales. These are majorly leads that are kept in view most of the time.

What is Warm Lead?

Warm leads are people or businesses who have expressed an interest in one of your services or products before. They might have expressed their interest by following your social media profiles, filling out contact forms, signing up for your newsletter or email marketing campaign, following up on referrals from other clients or consumers, and so on. These contacts are more interested in learning about your products and services and are more inclined to convert into paying customers. Before they result in sales, these leads require careful nurturing.

Qualified leads are, in this case, crucial to discuss. These leads are frequently considered superior since they represent people or businesses who are nearing the conclusion of the sales process. A qualified lead is one that is looking for a certain product on Google or similar internet platforms and has a demonstrated and particular want that is prompting him/her to seek out a company like yours.

What is Hot Lead?

Hot lead is a sales term that refers to a potential customer who has shown a high level of interest in a product or service and is considered more likely to make a purchase. A hot lead may have already expressed interest by filling out a contact form, requesting more information, or engaging in a conversation with a sales representative. In contrast, a cold lead is a potential customer who has not yet shown any interest in a product or service and may require more effort to convert into a paying customer. The term “hot lead” is commonly used in sales and marketing to describe the most promising prospects for a business.

In conventional business, a lead is simply any person who inquires about your goods or service. However, in the world of affiliate marketing, a lead is someone who has expressed interest in your brand and may be interested in purchasing from you. The BANT method can then be used to determine their nature:

BANT:

B – This is the significance of Budget, which implies that the prospect has already made a budget and is ready to spend it once the project’s proposal has been authorized by management.

A – Who is the authority figure in this sale? Who makes the ultimate decision?

N – Does the prospect have a true need for my product? Is this a universal need on the team?

T – The Time Frame is the duration, also known as the duration. How much time will the prospect need to come to a purchasing decision?

Difference between Cold, Warm & Hot Lead

The difference between cold, warm & hot lead can be enumerated through a short and simple table:

What are the Stages that explain each lead?

There are a number of stages in the entire sales cycle that might be used to express each lead in more creative ways. Here’s how it looks from another angle:

Cold Leads – These are the leads right at the beginning of the sales cycle who reject your calls/emails/other marketing outreach initiatives. These are ones who do not show any interest or do not respond to the company’s efforts. While you may nurture these leads over a longer period of time, only a few of them may transform into warm leads.

Warm Leads – These are people or businesses who you notice as those in periodic engagement with your company or marketing channels. These are the people who start reading your posts, liking/following your organization, sharing contact details and signing up for email newsletters. They start engaging with your organization likewise. You start nurturing these leads likewise and learning more about their needs, issues and how you can solve the same.

Hot Leads – These are qualified leads that have been nurtured and are ready to make the purchase or any other transaction. These are people who are now directly seeking a particular service for fulfilling a need which has already been identified by you and you are engaging for fulfillment of the same. These are leads which have to be now managed for closing the final transaction.

Leadfellow shortens the sales cycle tremendously

Qualified leads can be obtained using a variety of approaches, some of which are revolutionary, such as Leadfellow, where each member of the team is empowered to develop qualified leads for the sales staff. They are rewarded and acknowledged for generating qualified leads and this helps to create a sense of urgency.

After the handoff to the sales team, organizational revenues rise with a shorter sales cycle. Qualified leads are most often generated as a result of employees and partners utilizing their personal networks. This eliminates the need to deal with cold leads while also allowing for more warm leads and qualified leads for the sales department to use.

Cold calling

Cold calling is one of the hardest marketing activities. If you know how to do it well, however, the closing percentage can end up being pretty sweet. On average, the closing percentage is 1-3% and the success is often dependent on the price and quality of the product or service.

Cold calls are being made also today. They are vitally important for companies that are just starting out and who do not yet have proper resources for marketing or for hiring external salespeople. Nearly all successful salespeople have done cold calling during their lifetime and probably will do it again.

Tips for cold calling

Here are 5 tips we have gathered from their success:

#1 Focus on the client, not yourself. Listen to the client and to what they have to say, identify their needs and focus on those needs. Don’t talk extensively about yourself or your company, but instead, focus on them.

#2 Don’t build your sales calls on a set scenario. Do not build a script. Premade scenarios and scripts will turn you into a robot who is clearly reading pre-written words. No one is interested in hearing that, so a real dialogue never gets born. Every sales call is different and making a call without listening to the client is a waste of time. Build your call on an interactive conversation.

#3 Ask strategic questions. Questions lead to answers. Questions help to create a dialogue which helps you build your sales pitch and answer questions. Without strategic questions your call can turn into small-talk from where it is difficult to get to the point. Come up with some important questions first and ask them in the right place as part of the dialogue.

#4 Don’t try to close the sales with the first call. Statistics show that salespeople sell the least during their first call and that success factor grows with time. Naturally, this depends on the price of the product/service but it can be said that 80% of the sales are closed during the 5th call.

#5 The key is in simplicity. The easiest you can define your product/service in a call, the easier it is for the client to buy it. Complicated description of a complex product – FAIL. Clear and simple description of a complex product – SUCCESS.

To understand how we make sales calls today one needs to know the history of telemarketing.

The roots of telemarketing date back to the mid-20th century when a group of housewives started calling people to find potential cookie buyers. Around 1965, telemarketing became more popular, and more people became professionally trained to make sales calls. Five years later, telemarketing became widely recognized.

From ground rules to laws

In 1991, the Telephone Consumer Protection Act was passed by the US Congress which established some rules that telemarketers had to follow. For example, they were not supposed to call potential customers before 8 am or after 9 pm or use artificial or prerecorded messages. They also had to maintain an internal Do-Not-Call list and always state their name and the name of the company they were working for.

The act created some ground rules but the rising amount of sales calls and the assertive behavior of salespeople created a public uproar in the US in 2003. That resulted in the passing of the Do-Not-Call Registry Act law. This law created an option for consumers to willingly opt-out of telemarketing by registering their phone numbers on the list.

The Do-Not-Call list, caller IDs, and answering machines made it easier for people to ignore cold calls and telemarketers and to eliminate them completely. That forced salespeople and telemarketers to reinvent their methods to be more acceptable and less intrusive to potential clients.

From assertiveness to personalization

Today, cold calling isn’t as cold as it used to be. The tone of sales calls is mostly nonintrusive, personalized, and genuine. The internet and social media have given salespeople and telemarketers a huge potential to learn about their potential clients beforehand and to personalize their message for each client.

The future of telemarketing will be directly related to constantly developing technology. There are already some companies out there that are using automated but human-assisted telemarketing where the voice of the talker is pre-recorded. The salesperson just chooses the right answers through an interface and the so-called sales bot does the talking.

Read more about personalized cold calling from How to make more efficient cold calls?

Hang Up on Telemarketing

Gone are the days of dreaded telemarketing calls interrupting our dinner or stealing our precious time. It seems like the universe has finally come to its senses and handed over the reins to a much more delightful and effective approach: referral marketing.

Picture this: You’re peacefully enjoying a meal with your loved ones, savoring each bite, when suddenly your phone rings. But fear not! Instead of an awkward conversation with a stranger trying to sell you something you don’t need, your phone buzzes with a notification from a friend recommending a product or service they genuinely love. Cue the collective sigh of relief.

Referral marketing has stepped up as a breath of fresh air, replacing the tired old ways of telemarketing. It harnesses the influence of personal connections, capitalizing on the trust and authenticity inherent in recommendations from those closest to us. Imagine it as a virtual grapevine, transmitting uplifting vibes and practical advice, all without the cringe-worthy sales pitches and mechanical monologues.

A warm lead can be defined by the word itself. Warm means positive, closeness, good contact and safety. A good example is a children’s game where one kid hides something and the other one has to find it. When the searcher is getting closer to the object, the hider shouts “Warm!”.Therefore we can say that a warm lead is someone who is ready to close a deal. A cold lead is exactly the opposite: you are far away from closing a deal or finding a lead, and there is probably a long way to go until the cold lead turns into a warm one.

What does it mean in sales?

Sales activities are set in place to get from point A to point B. Point B stands for a successful deal or sale. There are many different possibilities and channels for getting to point B. [Check out our post Sale channels – how do they work?]

Sales channels create a way that can be either easy or hard. The easy way means that you have to put in less effort to achieve the same results compared to doing it the hard way. The key component in an easy way is a warm lead.

A warm lead is an icebreaker, a conqueror of the first barrier, the remover of the first filter – you have quickly made your way to a point where it would otherwise take a long time to get to. Figuratively, you have just taken an elevator straight to the top of a skyscraper by just pressing one button, while your competitors have to take the stairs instead.

The most common channels to obtain a warm lead, starting from the warmest and ending with the coldest, are:

Recommendations – a friend, a partner, a relative, a client, a competitor or whoever recommends you as someone selling great products or services.

A current client – they know you, and you have an established relationship.

Re-marketing – a person who has seen your brand somewhere and knows something about you. This could happen through newsletters, advertising campaigns, websites, and social media.

LeadFellow is focusing on the first channel – recommendations. Refer someone through our software and control and monitor your best salesman basically for free!