Different lead types and how they fit into a business’s pipeline

In essence, the sales pipeline is the summary of upcoming and available sales opportunities managers can use to better determine the bottlenecks in their sales funnel and the revenue they will generate as well as protected cash flow.

It is a representation of where your prospects are in the sales process. It estimates how much your sales in your business expect to close in a given time (week, month, year). As a result, you can use the pipeline to estimate how much revenue is coming into your business and when.

Before we begin, the difference between a sales pipeline and a sales funnel is the sales pipeline is where the sales rep’s view of the buyer’s journey. Here it shows where reps are and what steps they need to take to close the deal. However, a sales funnel is the customer’s view of that journey, where they are in their decision process, and their next steps before making a purchase).

Seven main sales pipeline stages

Customers follow a process from the discovery stage to the sale and eventually to the returning buyer’s stage.

There are seven different types of sales leads:

  • Cold leads
  • Warm leads
  • Hot leads
  • Information Qualified Lead (IQL)
  • Marketing Qualified Leads (MQL)
  • Sales Qualified Leads (SQL)

Cold Leads

Cold leads are another common type of sales lead. They are called cold leads because they do not easily qualify and need significant effort, nurturing and hard work are required to convert this type into a successful lead. The cold leads might not have the right time frame, budget or authority, which keeps them from sealing the deal. However, their need is what keeps them on the prospect list or sales cycle.

Warm Lead

The third lead type is warm leads which are in the mid of the hot and cold leads. They do not qualify like hot leads but also do not fail on all criteria like cold leads. They have a positive ratio of reaching the end goal of the deal closure. They still require a little bit of nurturing to achieve profitability, but a lot less than cold leads.

Hot Lead

They are the leads in the sales process. The hot lead often has a better profile of offering benefits to the business and the one that qualifies the criteria of sales dealings. BANT that qualifies authority and budget need and time frame of the lead prospects to determine if the lead is hot or not.

Information Qualified Lead (IQL)

IQLs are the weakest lead entering your marketing and sales funnel. They share their contact details to get more information. However, because they are leads that are not aware of your company, the information they exchange of content is most likely often just an email address. They then may receive valuable marketing content to push the lead down the funnel to convert hem to marketing qualified leads. The content is often about your brand to help build trust.

Sales-Ready Lead (SRL)

Sales-ready lead is one of the unique types of sales leads. They have already done the research and are ready to buy, even if they aren’t part of your prospecting system already. They are the leads who reach out to your company themselves and want to speak to the sales team.

Marketing Qualified Leads (MQL)

The marketing qualified lead is another common lead. As the name suggests, they become a prospect because of the marketing efforts. They might have watched a video or attended a webinar that attracted them. These leads get to know the business before exploring the information.

Sales Qualified Leads (SQL)

The SQL has moved through the sales pipeline and reached the end stage of the sales funnel from MQL to a position where the sales team can now convert them into a customer.

The seven sales pipeline stages

The sales pipeline is the steps salespeople use to move prospective customers through to a sale, from awareness to purchase.

The sales rep must follow each step of the buyer’s journey. Sales pipeline stages represent key milestones, and each milestone presents its own opportunities as well as challenges.

There are seven B2B sales pipeline stages, although some include additional stages. It will also depend on the industry your business is in and whether or not you are selling a product or service.

  1. Prospecting
  2. Lead qualification
  3. Initial contact
  4. Scheduling demo or meeting
  5. Proposal/negotiation
  6. Closing the deal
  7. Follow up/ deliver the product

Let’s take a closer look at the seven stages and what reps can expect at each stage of the sales pipeline.

1. Prospecting

The first sales pipeline stage is prospecting and is the process of finding potential customers for a business. This is often through public relations, ads and other promotional activities. This involves identifying and researching potential customers, as well as reaching out to them with an offer to do business.

Often you apply to focus on delivering messages to potential buyers who fit the profile of your existing client base and ideal customer. Because there are different ways of prospecting, it is important to know whether or not people and businesses are interested in what you are selling. Thus having a good strategy is essential to consider. A salesperson may target a specific industry, demographic or geographic area. Furthermore, they might look for companies undergoing changes or experiencing growth. By taking the time to identify and assess potential customers, the salesperson will significantly increase their chances of finding qualified leads during this pipeline stage.

2. Lead generation

The next step is lead generation or the process of identifying and nurturing inbound leads. They most likely come in from your sales campaigns and activities in this pipeline stage.

  • Content marketing
  • Search engine optimization
  • Social media marketing
  • Press releases or media mentions
  • Trade shows or live in-person events
  • Webinars
  • Brand collaboration or influencer campaigns
  • Referral programs

3. Lead qualification

The following sales pipeline stage is lead qualification. The main point is to save time by doing a sales pipeline analysis to eliminate bad leads before your sales team speaks to them. Nevertheless, there are various ways to help qualify a lead, such as understanding if the lead is in your target market or not. If they are anot, they are less likely to be interested in your offers. You then want to review the lead’s company revenue. If they cannot afford your product or service, it is not worth pushing them further.

Thirdly, check to see if they are a decision-maker. Lastly, assess the lead’s timeline. Will they sit with the offer for a while, or are they ready to buy now? Even though this might take more time, it is worth it, it saves you time ad energy on selling to consumers who are interested and ready to buy.

3. Initial contact

The initial contact is the first interaction between the potential customer and sales rep via emails or phone calls. Regardless of the method, initial contact is crucial for lead generation and moving them through the sales pipeline stages. The reason for this stage is to gather information and confirm whether they are a good fit or not.

When you know if your prospect is promising, it is time to reach out. You can do this by:

  • Cold or warm emailing
  • Cold or warm calling
  • Social media messages
  • Or even handwritten letters or gifts

4. Schedule demos or meetings

This stage is where meetings or demos are scheduled with potential customers. This can be done virtually or in person, depending on the service or product. Here the goal is to provide information about the service and products to the consumer and increase their level of interest and therefore qualifying them further. If they are interested in learning more, the sales rep will move them to the next sales pipeline stage. If not, they will remind in this stage, and the sales rep will have to continue to nurture them.

5. Sales analysis

This is where you assess your prospect’s needs and identify opportunities to sell your product or service. In a sales needs analysis, you’ll gather information about their current situation, desired outcomes, goals, and the obstacles that stand in the way of those. This allows you to tailor a nurturing or closing strategy to that company’s needs, craft a proposal and finalize a price.

A sales analysis begins during meetings, presentations, and demos or after they have wrapped up. However, it can also include observing their long-term behavior, conducting surveys or holding interviews or focus groups. Once you’ve gathered the information, it’s important to analyze it to identify patterns. Nevertheless, during this pipeline stage, a well-executed sales analysis can be the key to closing more deals and generating more revenue.

6. Close the deal

If you get to this stage, congratulations! This is when you sign a contract or prospects have made a purchase.

No matter how excellent your service or product is, you won’t make sales until you master the art of closing the deal. There are a few key things to keep in mind during this stage:

Exude confidence

Believe in yourself and your product as it will come through in your pitch. Confidence comes from mindset, speech, approach, and even how you dress. Additionally, it is good to practice your talking points, however, don’t overdo it, or you’ll sound robotic. Your posture and body language are also important therefore make sure you make eye contact, keep your back straight, and smile. Although these may seem small and simple, they can make a big difference in your persuasiveness.

Stay on top of your pipeline management

This means deleting unqualified leads, nurturing the right people at the right time, and following up when needed. Additionally, it is important to know where your prospect is in the buying process to tailor your closing approach. Here it is also essential to give resources to those customers who compare you to your competitors. This stage is all about making information clear and easy to access.

Equally, identify the prospect’s signs that they are ready to close. This may include your prospects asking questions about your product or service, giving detailed responses when you ask questions and engaging with your brand on social media. Additionally, it may also show up as them being consistent and giving punctual responses and communication, asking about pricing or payment plans, and monitoring sales pipeline metrics.

Likewise, never stop following up until you get an answer. This means you should continue to follow up with the potential customers until they say yes or no to your offer. Remember that even though someone says no now, does not mean no in the future. So respect their decline if they do and keep nurturing them. You can follow up months or even years later. Many salespeople continue to push even when prospects and potential customers have said no; this will only push them away, and are more likely to go to one of your competitors than if you accept their no and trust that the time will come.

7. Following up with customers

Many forget that the fortune lies in the following-up. Because if you are not in the forefront of the customer’s mind, chances are they will forget about you and are very likely to not make future purchases. So what does it mean to be following up? And how can you be effective at it without being annoying?

In this final sales pipeline stage, the goal is to keep your company and your salesperson at the forefront of the customer’s minds so that when they’re ready to buy again, you are the first person and brand they think about. There are a few different ways you can follow up with customers. However, make the communication count, as no one likes to be bombarded with sales calls or emails. Therefore, provide value and show that you’re truly interested in helping them, not just making a sale. This also helps you stand out from other salespeople they might have come across (perhaps your competitors) who had made them feel as though they are only interested in the customer’s money and not actually helping them.

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