At Funnel Clarity, we believe a sales lead is defined as someone who is committed to making a change that your product or service can help accomplish. This is not someone who is merely interested in your product but rather goes beyond interest and is committed to action.
Every qualified sales lead should meet the threshold above. Beyond that, however, every company will have to come up with its own standard for what counts as a qualified lead. Let’s explore how you can develop a customized standard for determining a qualified sales lead.
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One of the most common and misguided ways of determining a sales lead is BANT. The acronym BANT (Budget, Authority, Need, Timing) is misguided because it is far too limiting and strict of a definition. In many cases, buyers don’t have to have pre-defined projects with set budgets and timeframes to develop a sales opportunity. Therefore the budget and timing standard are far too limiting and could prevent legitimate opportunities from entering the funnel.
Modern sales leaders have addressed this issue by crafting different acronyms. Ken Krogue, founder of InsideSales.com, proposed ANUM (Authority, Need, Urgency, Money). Another popular acronym is by InsightSquared, who proposed CHAMP (Challenges, Authority, Money, Prioritization). These models still look for money and budget, which is important, but it’s not a prerequisite to a sales opportunity. If the leaders of an organization are committed to making a change, the budget will be created.
Instead of focusing on pre-existing budgets, salespeople require the skills to develop need and urgency with the C-Suite at a prospective account. Once you have leadership buy-in and a desire for change, you are able to build urgency and help them figure out how they are going to fund the changes in their organization. There are already a lot of models and acronyms but the best course of action is to learn from them and focus on developing your own customized standards for your team.
In the realm of sales, leads can vary in their level of engagement and readiness to make a purchase. Here are some common types of sales leads:
These leads are more inclined towards making a purchase as they have shown some form of interest or engagement with your brand, products, or services. They might have signed up for a newsletter, downloaded a free resource, or interacted with your content on social media.
These are individuals or businesses who have not yet shown any specific interest in your offerings. They might not be familiar with your brand, products, or services. Reaching out to them requires a strategic, tailored approach, turning these unfamiliar prospects into engaged ones.
Inbound leads are generated when potential customers initiate contact with your business. This could be through filling out a contact form, calling your company, or reaching out via email after finding your website, blog, or social media presence. Inbound leads tend to be more receptive as they have taken the first step in engaging with your business.
These leads are generated through proactive efforts by sales teams. Outbound lead generation involves reaching out to potential customers through methods like cold calling, cold emailing, direct mail, or targeted advertising campaigns. This approach involves identifying and reaching out to potential customers who haven't yet shown interest in your services or products
These leads come from recommendations or referrals made by existing customers, partners, or affiliates. Referral leads often have a higher chance of conversion due to the trust established through the recommendation.
By recognizing what kind of sales lead exists, salespeople can narrow down the terminology when it comes to their sales lead definition.The lead qualification process is a crucial step in determining whether a lead has the potential to become a valuable sales opportunity. Based on the above-listed types, you might be wondering what a qualified lead in sales is. But this type is in a category of its own. Qualified leads are those that have been assessed and determined to have a higher likelihood of becoming customers based on specific criteria set by the business. These criteria could include factors related to ANUM or CHAMP. To identify a qualified lead, here are some steps to consider:
Leads can be generated through various marketing efforts such as inbound marketing campaigns, content marketing, social media, SEO strategies, paid advertising, trade shows, webinars, and more. Each of these platforms brings in a diverse set of leads, starting your journey towards finding those who might need what you offer.
Once leads are generated, they often enter the company's database through forms, landing pages, or other touch points. At this point, contact information and initial data are collected, including details like name, email, phone number, company name, and any other relevant information that can help you understand their needs better.
Lead scoring involves assigning points or scores to leads based on specific criteria like demographics, engagement level, behavior, company size, budget, or any other relevant factors. This helps prioritize leads and identify those with a higher likelihood of conversion.
Sales teams engage in direct communication with the leads to assess their needs, budget, timeline, decision-making authority, and overall fit with the company's offerings.
By following these steps, salespeople can better identify what a qualified lead looks like. This process not only supports the sales cycle, but also plays an important role in determining the ideal sales lead definition as it relates to your organization.
To do this effectively, you will want to decide how loose or strict you want your sales lead definition to be.
An organization might want to consider a loose sales lead definition if they:
With this approach to a sales lead definition, the goal is to let a lot of leads through and give the sales team lots of ‘at bats’ to build their opportunity pipelines. A heavier focus on outbound prospecting will yield meetings with people who are interested but not necessarily committed to changing. For the sort of companies described above, it’s more important to develop opportunities rather than figure out who is in an active buying cycle already.
On the other end of the spectrum, you can employ a much tighter sales lead definition. We have a client organization who defines a qualified lead as meeting with the right person (C-Level) at the right account (shares characteristics with target accounts) as well as having a specific need, urgency to take action, and an understanding of the source of money to fund the purchase. This organization doesn’t define a lead as qualified unless all of the criteria above are met.
Organizations might use a tight sales lead definition if they:
This strategy for a sales lead definition focuses on passing highly qualified and winnable leads. If you are getting a high volume of inbound inquiries or have a high volume of sales in general, it makes sense that you limit the number of opportunities you focus on. In this scenario, you are not trying to develop a lead but instead, find the deals that are most likely to close now. Therefore, a more rigid threshold for defining a qualified sales lead makes sense.
No company wants to keep winnable opportunities from the sales funnel. Sales leaders also don’t want their sellers’ funnels to be larded with junk opportunities. So, you don’t want your company's threshold for a qualified sales lead to be too loose or too narrow.
Using this blog as a guide, take some time to reflect on what the right definition of a qualified lead is for your organization. If you have any questions, we're always available for a consultation.
The terms "prospect" and "lead" are often used interchangeably in sales, but they represent distinct stages in the buyer journey. Think of prospects as unrefined materials and sales leads as more polished and ready for engagement.
A prospect is anyone who has shown interest in your product or service. They may align with your Ideal Customer Profile (ICP), but their engagement with your brand is still in its early stages. They require more nurturing to move further down the sales funnel.
Sales leads, on the other hand, have progressed beyond the prospect stage. They not only fit your ICP but have also demonstrated a clear intent to buy. They are more informed about your offering and are ready for deeper, more personalized engagement from your sales team.
Another way to look at this is:
This will depend heavily on the business and its products or services, alongside what you consider your qualified sales lead definition. Consider what we mentioned above, whether you operate based on loose leads or tight ones. As a refresher:
A structured way to understand a high-quality sales lead within your scope is to outline the characteristics of your ideal customer, including industry, company size, pain points, and budget. With this framework, you can better discern whether a lead is merely curious or actively seeking a solution. More often than not, high-quality leads are those ready to make a change and are seeking the right partner to help them do so.
Leveraging the right tools can streamline your sales lead management process in more ways than one. Consider these options if you’re looking to update or refine your approach:
The use of all of these tools may not be needed depending on the size of your sales team, so take some time to research and identify the ones that make the most sense based on your current processes.
Each sales team will face its own challenges related to sales lead generation. The sooner you can understand bottlenecks or issues with yours, the better you can focus your efforts to mitigate them in the future. Here are some common ones to look out for:
The first crucial step in prioritizing sales leads is to clearly define your target audience. Identify key characteristics such as industry, company size, pain points, and change to focus your efforts on leads that are most likely to convert and provide value. Once this foundation is established, you can take the following steps:
Assign scores to leads based on their behaviors and interactions, such as website visits, email opens, and demo requests. This quantifiable system helps in identifying which leads are more engaged.
Group leads based on their specific needs, behaviors, and readiness to buy. This allows for more personalized communication and targeted marketing efforts.
Ensure leads are ready for deeper engagement by the sales team. This involves assessing them based on a strict criteria.
Rank your leads not just by their likelihood to convert but also by their potential revenue and strategic value. This helps in focusing resources on leads that can bring the highest return on investment (ROI) and long-term benefits to your business.
Use Customer Relationship Management (CRM) tools to manage and automate the prioritization process. CRMs can track interactions, score leads, segment them, and streamline follow-ups, ensuring that your sales team focuses on the most promising leads efficiently.
All sales leads benefit from initial segmentation and categorization. This may be by interest level, industry, or behavior. By determining these key characteristics, you can then develop a prompt follow-up and response schedule that accurately reflects the needs of your sales lead. Keep in mind that personalized messages are preferred over canned ones at this point in the sales lead’s journey.
As an additional measure, you might include useful and relevant data or content in your correspondence to help the lead understand why your product or service is the exact right solution. By equipping them with quality information, they can feel confident in making the right decision.
Tyler Vance works closely with the participants and managers of Funnel Clarity’s training programs to ensure they achieve their expected results. Throughout Tyler’s career, he has experienced both a seller’s and buyer’s point of view bringing a unique perspective when working closely with Funnel Clarity clients. Whether Tyler is answering questions from participants, running a coaching session, webinar series, or working with managers to develop a reinforcement plan, he brings a unique and fun element into every part of his role.