Industrial Marketing

Lead qualification: From leads to prospects

Understanding how to create an effective lead qualification process can assist in resolving many issues and save you significant time and money.

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Do you ever feel as though you have to make accurate guesses about your prospects’ thoughts during the sales process? Do you have leads that appear to be highly good, then vanish without a warning? Are your lead conversion rates continuously low, and your return on investment from lead generation is lower than it should be? Understanding how to create an effective lead qualification process can assist in resolving a number of these issues and save you significant time, money, and stress.

qualified leads are sales prospects which are extremely important for sales growth

Definition of lead

I’m sure you’ve heard the term lead several times before. Lead is a potential customer that is not qualified yet. Leads are companies that have the potential to be your customers. Here are some examples for leads:

  • A company that has recently entered the sector that your customer has mentioned to you.
  • A purchasing officer of a company who has visited your website and asked about your products.
  • The owner of a company you did not hear before who came to visit your stand at a fair you attended.
  • A company that you found in online directories that looks like your existing customers.

 

Those companies may be interested in your products and services due to their requirements or problems. However, you do not have detailed information about them. Since you know very little about a lead, you must research. You need to collect more data about leads to qualify them as prospects.

Leads are the lifeblood of successful B2B sales companies. It doesn’t matter what industry you are in or how large your company is, you need to have a steady flow of leads in your sales funnel to follow an effective customer acquisition strategy.

finding and gaining high-quality leads is the key of effective customer acquisition

Lead quality

Before we get started with the lead qualification process, let’s define lead quality. Lead quality is a metric that indicates how near that a potential customer is to placing a purchase from your business. As a lead company progresses through the sales funnel, lead quality level increases once it gets closer to making a purchase.

Another critical element to remember is lead value. Lead value refers to the amount of revenue you can expect to receive from a single lead. If you anticipate a lead will make only one or two low-quality transactions from you, their worth will be decreased. However, if you believe a lead will become a valuable repeat customer, particularly one that makes large purchases, it’s a far more valuable lead.

What is lead qualification?

The term “lead” refers to a potential customer who has demonstrated an interest in your product or service. Leads can be generated via a variety of methods, including blogs, websites, industry activities, social media and client referrals. The source of the lead is critical in deciding if the lead is eligible to become a MQL (marketing qualified lead).

Each B2B seller company (manufacturer, supplier or distributor) has its own lead qualification criteria for classifying leads as qualified or unqualified. This means, each sales or marketing executive should have a modified lead qualification checklist. Non-qualified leads are immediately deleted from the sales funnel, while the remaining leads are nurtured via several sales and marketing automation initiatives.

Lead qualification is the method of recognizing marketing qualified leads and turning them into sales qualified leads. Multiple rules frequently come into play when determining qualified leads.

Definition of lead qualification

Lead qualification definition is determining if a lead fits your customer profile. This process guides you through concluding whether you can sell to and establish a productive relationship with a company.

In the qualification phase, you ask some questions about their requirements and problems by contacting the company. These lead qualification questions are required to confirm that the company’s needs or problems match your products and solutions.

Lead validation is the most crucial stage of the B2B sales process, without a doubt. Any lead that is not accurately qualified is a waste of time for you and your company. Of course, this doesn’t mean that you must forget every unqualified lead. But you should spend time and effort on unqualified leads to nurture them.

lead qualification is the most important stage of sales prospecting

What is a prospect?

Definition of prospect is a qualified lead (a customer candidate) that discovered by the help of lead generation or sales prospecting strategies. Prospects are industrial companies operating in one of your target markets and may require your products. They have enough financial power and intention to purchase.

Once a lead has agreed to consider your products, and you qualify it as a good fit for you, that lead converts into a prospect. So, prospects are the industrial companies that have passed the qualification stage and are accurately suitable to be your customer.

Qualifying a lead into a prospect is the essential aim of outbound sales prospecting and inbound lead generation efforts. By the way, there is an expression in some online sources called opportunity. These sources claim that opportunity is a re-qualified prospect.

There is no such thing in the industrial sales system. Every industrial prospect is a valuable sales opportunity. If it is not, that means you misqualified the lead as a prospect.

always keep your sales funnel full of new sales leads and manage the qualification process excellently

Basic significance of lead qualification

Qualification is a systematic lead validation process that enables you to assess and forecast the quality of your prospective customers. Qualification is the most important phase of sales prospecting and this approach is based on the data you collect about various leads. Therefore, you don’t need to simply guess which leads are most likely to convert to customers. Additionally, you can dismiss leads who are unlikely to provide significant value, saving you time and resources.

B2B Lead qualification must be at the center of all sales and marketing activities for the sake of your business. You will not achieve the ROI you require from marketing if you continue to act blindly in the hope of reeling in the expected quality customer. Lead qualification organizes these efforts, enabling you to make smart marketing decisions and allocate resources effectively.

Why should you invest time and money on lead qualification?

Lead qualification is one of the most effective strategies for increasing the return on your lead generation investment. It elevates your lead generation efforts from random guesswork to revenue-generating actions.

Qualification can also help you improve the customer experience, as you’re customizing the experience for each lead. It minimizes the time and money spent on non-generating leads. Additionally, it integrates your marketing and sales teams by streamlining their processes and enabling them to work more effectively.

effective qualification of sales and marketing leads improves customer experience and satisfaction

Why do you need lead qualification?

Every B2B company requires leads that will eventually convert into pleased customers. Without leads, your company would suffer from a lack of clients and will eventually cease to exist. After all, lead generation is not the most difficult task.

When your marketing team executes campaigns across numerous channels, you generate a significant amount of organic leads. Additionally, if you have paid advertisements running, you will receive leads from these as well. Essentially, your leads pass through three stages of purchase before becoming paying customers. These stages are: Marketing Qualified Leads (MQL), Sales Accepted Leads (SAL), and Sales Qualified Leads (SQL).

Lead qualification entails completing two broad qualifications: SQL and MQL. The SAL stage is more akin to a sub-stage of SQL. Therefore, we don’t need to put it into marketing qualified lead vs sales qualified lead comparison. As a result, lead qualification is highly dependent on the degree of eagerness and ready to purchase. Typically, this degree is designated as warm, hot, or cold.

follow up your conversion rate from marketing qualified leads to sales qualified leads. It is an important performance indicator for your marketing strategy.

Find optimal qualification criteria

The overall quantity of marketing qualified leads should, in an ideal world, equal the total amount of sales qualified leads. However, sales teams frequently eliminate a large number of MQL leads as non-potential for a variety of reasons, including the customer’s optimal budget or the conversion time frame.

Determining the optimal criteria for lead qualification might be difficult. You should constantly keep in mind that a balance must be struck between the quantity of leads desired and the quality of the interactions you want. The more stringent your criterion, the less garbage you will encounter.

As a result, you direct more of your resources toward qualified leads. Often, marketing initiatives convert a large number of cold leads to warm or hot leads. Thus, there is no hard and fast rule, but it is critical to strike a reasonable balance between the two. The absolute motivation here is to keep testing, adjusting, and improving your lead qualification strategies.

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