What do leads mean?
Few companies are not hunting for new leads every day, and working to convert them into customers. Knowing this word, what it means and how to work to collect leads can benefit you and your business greatly.
Let's start with the meaning...
As written above, a potential customer can be called a lead. The word lead has exactly the same meaning as if we said customer in English.
The definition seems so simple that "what is a lead" does not seem to be a real question worth answering.
But it's not true.
Because the question "what is a lead?" is perhaps the biggest debate between a marketer and a salesperson.
If the definition of a lead is not in place, sales can quickly think that their colleagues in marketing have become somewhat narrow-minded.
In many cases, marketers can focus a lot on the number of leads they have generated but turn a blind eye to the sales department's further work with these leads, which may from time to time complain about the quality of the leads collected.
They therefore end up delaying follow-ups and losing opportunities that might have converted. Ultimately, the blame lies with the marketing department for not generating quality leads.
Depending on what you're selling, a lead can be an individual or a contact at a company - what they both have in common is that they've expressed an interest in a service or product you're selling and would like to be contacted about it.
Necessary lead information
Note! A lead only exists if you as a company have information on the potential customer that enables you to contact the person afterwards. This could be, for example:
- Name
- Telephone number
Why are leads important?
Leads are essential for your business to grow into more potential leads. The more people who know about your business, the more likely you are to experience interest from other customers who may be a potential lead. However, it is important that your marketing strategy is targeted, as other businesses in the same industry will do everything they can to get as many leads as possible to grow their business. If your marketing strategy is imprecise, it will be difficult for your business to know which customer segment to reach out to and therefore it will be difficult to attract leads.
What is the difference between hot and cold leads?
Leads can be divided into two groups - hot and cold leads:
- Hot leads deals with potential prospects who are more likely to buy your company's products or services.
- Cold leads deals with the potential prospects who are less likely to buy your company's products or services.
It goes without saying that cold leads usually require more work from the company to convert them into customers. There are different ways to approach this. One option is to improve your marketing strategy by running online social media campaigns to get your business out to your cold leads.
In addition, it is important to hold on to your hot leads. Since your warm leads already know your company, they are more open to communication. Thus, it is obvious to send personal inquiries such as emails, phone calls or physical meetings that keep your warm leads updated with relevant information about your company. If your warm leads are not maintained with relevant communication over time, they will lose interest and eventually turn into cold leads.
How do I get leads?
The way you receive leads can be many - for example, a potential customer may send you an email because they heard about your company from a colleague or friend, while other leads are ones you need to get out in the "field" and collect yourself.
The leads you have to work to get come through what we call lead generation.
What is lead generation?
Lead generation is about generating leads - the process of collecting data on potential customers for your business through lead generation tools.
It's not enough to just focus on collecting leads. The focus should also be on generating leads, where quality is more important than quantity, as mentioned earlier. You can find out more about how to do this in the post on lead generation.
What does a lead cost?
The price of a lead depends on your industry and the lead generation tools you use. Here, you should research which media your target audience uses so that your potential leads can gain insight into your company and at the same time get them further in the buying process.
In addition, the price varies according to the level of the lead. In the case of a C-level lead, the cost of converting this lead is generally higher than converting a lead that is a student assistant.
Examples of payment methods:
- Payment can be made by your company paying a price for each lead you receive
- This can be done by your company paying a fixed monthly fee, for example, to run a lead generation ad on social media.
As a rule of thumb your cost of capturing leads should not exceed the life time value, that they can represent in your company.
If you're interested in learning more about the difference between visitors and digital leads, read our post on digital leads.
Frequently asked questions about leads
A warm lead is a customer who knows your business and is likely to buy your products or services. Cold leads are customers who are not familiar with your business and are therefore less likely to buy your products or services. Leads are important for your company's turnover and publicity. The more leads you get, the more your business will grow. If you don't have any leads, you will experience a lack of revenue in your business as well as miss out on the opportunity to grow your business to a larger audience. When a lead has shown interest in your company's products or services and has expressed interest in being contacted by your company by providing, for example, their name, email and phone number, then you have a lead.What is the difference between a hot and a cold lead?
What impact do leads have on sales?
Why are leads important?
How do I identify a lead?
