What is a Sales Lead?

Not long ago, Schneider Electric created what it calls its “digital opportunity factory.” Using data from a variety of sources, including research, accounts, orders, and customer assets, this “factory” is how salespeople are making it easier to identify sales leads that may need to upgrade, modernise, or replace their systems. As a result, the sales team reduced its time to close by 30% — an impressive figure for a company with so much competition.

As a sales professional, it’s your job to find qualified leads and convert them into customers, but the process can take some time to get comfortable with — and more importantly, good at. Read on to get a closer look at the characteristics of a qualified sales lead, how long it takes to turn a lead into a customer, how to use sales software & technology to your advantage

• What is a sales lead?
• What is a qualified sales lead?
• Types of sales leads
• How the sales lead generation process works
• Technology’s role in sales lead generation
• How to find a sales lead: methods and channels

A sales lead is a person, department, or company that may be a good fit for your product or service and has the authority to make that purchase. Without leads, you can’t sell anything, so they are vital to your sales process.

There are two many types of sales leads:

• Business-to-business (B2B) leads are businesses that have the potential to become customers for B2B products or services — such as software, manufactured goods, or raw materials. B2B customers usually have much longer sales cycles and need help with a specific business problem they are looking to solve. As a salesperson, you need to be ready to take them on that journey. They may reach out to you via your website, call a toll-free number, or attend a webinar asking for more information. B2B leads generally pay for their purchases through a finance department and require multiple levels of approval before finalising them.
• Business-to-consumer (B2C) leads are typically individuals who are interested in your product or service. Someone who walks into a store and asks about buying a new phone is an example of a B2C lead. They typically have full approval of their own purchases and complete them in one or a handful of visits, paying with a credit card or cash.

While leads are a good thing, qualified leads are even better. A qualified lead is a lead brought in by marketing efforts (e.g. ads) and then deemed likely to have a solid chance of converting based on need, interest, and product fit. For example, a qualified lead may have taken steps that correspond with past buyers’ behaviours. This was once a labour-intensive process, but with the addition of tools such as automated lead scoring, it’s become easier and more precise.

According to Gartner, the most qualified leads are recently active on your site or on social media, and find relevance in what you offer.

The difference between a sales lead and prospect is simple: sales leads are any individuals or businesses that have entered your ecosystem that you can identify by name or contact information. That lead may end up being qualified, but may not be — they might end up being a good fit for your product. A prospect, on the other hand, is a qualified lead that sellers are actively pursuing. More on that below.

There are three types of sales leads, based on where they are in the sales funnel:

• Cold leads: A cold lead has never connected with you or your company and may not know about your products at all. Often said to be in the awareness phase, these leads are exploring potential solutions to their business problem or — in the case of consumers — a need or want they have. They may be determining costs and comparing you with other companies that sell a similar service or product.
• Warm leads: These leads are in the consideration and evaluation part of the funnel. They may know about your company and understand what you do. Some might have even shown interest by following you on LinkedIn, browsed your website, or subscribed to your newsletter. They are narrowing down their options by reading reviews and testimonials and talking to different companies about the solutions they sell.
• Prospects: Prospects have been identified as ideal customers for your company and are likely to make a purchase. They’re still in the decision phase of the sales funnel, but are narrowing down their choices. At this point, they have gathered plenty of information, have probably sat in on a demo with you and some of your competitors, and are weighing their options before making a purchase.

There are many ways to find a sales lead. The easiest sales leads to bring into your pipeline are the ones that reach out to you and ask for more information. Often called a warm lead, inbound lead, or inside lead, these people find you through web searches, online ads, product or service reviews, colleague recommendations, publications, or TV ads. By learning about your company and contacting you on their own, these leads are often more receptive to nurturing and more likely to convert.

Outbound leads, on the other hand, come from doing the legwork yourself. You can reach out to potential customers in a variety of ways. According to Salesforce’s State of Marketing report, there are three channels with the highest lead generation ROI: influencers, social content/advertising, and websites. This is why you may want to try social media or in-person networking, for example, to find leads. Potential leads can also be identified through research or by purchasing a list of potential customers. You can reach these leads via email or cold calling.

When you’re first starting out, any lead you find may feel like a win. However, you need to become acutely aware of quality or quantity, according to Srinath Gopalakrishna, professor of marketing at the University of Missouri: “Prospecting is not just throwing a quote out to interested buyers,” she told Harvard Business Review. “To generate a quality prospect, you have to talk to each person to figure out their needs. You have to provide a highly informed quote. That takes time — and if you do too much of it, you won’t have enough time to close with others.”

Even if you have a well-defined sales cycle, there’s no guaranteed way to know how long it will take to turn a lead into a customer. There is, however, a basic way to calculate your organisation’s average lead time. A sales cycle length is the average number of days it takes for a deal to close. You can get this number by adding together the deal length of all closed deals from the past year and dividing by the number of deals.

Today, it’s nearly impossible to find and act on sales leads without the help of technology — unless you’re purchasing a list. From finding and qualifying leads to nurturing and closing sales, technology can help boost your productivity, automate tasks, and capture important data. In fact, companies that treat technology as a teammate can “unlock seller productivity and high-quality deals,” according to research from Gartner Inc.

Robert Blaisdell, a senior director analyst at Gartner, added: “New technologies, such as generative AI, have the potential to transform the role of the seller. Sales leaders will need to rethink how to meet buyers’ inflated digital expectations. Those who don’t, risk distancing themselves from buyers and leaving real money on the table.”

Lead generation is difficult when done manually, which is why most sales coaches will recommend getting a CRM as it allows you to keep track of everything about a lead in one place. CRMs that feature automation and artificial intelligence can be even more useful. Automation-enabled CRM systems give sellers a way to automate tasks such as auto-generating personalised emails and identifying and acting on key insights. This can help you reclaim time spent on repetitive, non-selling tasks. With AI integration, your CRM can make recommendations to help you decide which prospects are more likely to convert, and even draft emails for you to stay in touch with qualified leads.

You can find leads at conferences and networking events, as well as online and through your colleagues. Always look for opportunities to expand your network. Creating a content marketing strategy to promote your content and boost your reputation through thought leadership can also generate leads. Perhaps most importantly in this day and age, make sure you lean on technology to help with your lead generation efforts.

Common lead generation methods and channels include:

• Email newsletters: Industry-specific emails that are sent out to those who opt-in. You can place a signup form on your website and in every email signature that goes out from your company.
• Social media: One study found that 46% of all B2B buyers turn to social media at the start of their buying journey. And the connection is even stronger on the B2C side, with two in three Millennial and Gen-Z consumers saying they bought something they saw on social media. Do your own sales outreach by meeting your customers where they are, such as LinkedIn groups or forums. (Once you respond to customers’ questions, make sure you follow them on social media so you can continue the discussion.)
• Cold calling: It’s a classic for a reason. Reach out to people or companies that may be able to use your product or service. Search the web to find the names and contact information of sales decision-makers or buy a list of phone numbers from a reputable company or publisher.
• Search engine optimisation (SEO): Do a keyword analysis to find top-ranking search terms for your product or service, and optimise your content for search engine results pages (SERPs). Update your content regularly using SEO best practices.
• Paid search: Depending on your marketing budget, you might consider paying to have your website show up above or next to organic search results, labeled as “Sponsored.”
• Display advertising: You can buy ads on websites, social media platforms, or publications that target your ideal customers.
• In-person or online events: Show up at networking events, conferences, webinars, and other places where your target customers will be.

Your current customer list is also a lead resource. Apart from upselling existing customers, you can ask your existing customers for referrals.

It’s time to get out there and start finding qualified leads. A combination of lead generation methods will help you attract the best customers, and the right tools will help you track and nurture your leads through the sales cycle with ease.

Not all leads act the same, but you’ll start to recognise trends in behaviour and preferences over time. This will help you identify leads initially and then build meaningful relationships with them once they become customers.

With practice and coaching, the sales process will become second nature, helping you boost your closing rate — and your bottom line.