What Is A Lead?

September 16, 2011
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Hagerstown, MD
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That’s a pretty in depth, philosophical question to ask, eh?

But think about it. What is a lead?

Wikipedia.com has a thorough definition on it’s website. The beginning line really sums it nicely:

¨A Sales Lead is the identification of a person or entity that has the interest and authority to purchase a product or service.¨

That’s it. A lead is someone who has interest in what you do, and has the ability to make the purchasing decision.

So, why am I writing about something as basic as that?

In my experience, the word “lead” is thrown around the office erratically, and is used interchangeably to mean different things.

Let me show you what I mean.

Let’s say I came to your office, and asked your marketing manager “How many leads did we get last month?”

They might respond back and say “We got 100 leads last month”.

OK, so now I’ll walk over to your sales manager and say the same thing. “How many leads did we get last month?”

And your sales manager might say “Our sales team ran 50 leads last month”.

But wait a second, that doesn’t add up! Did you get 50 leads, or 100?

This is exactly the point I’m referencing to.

Your marketing department might use the word “lead” to mean a new contact, a new person to schedule an appointment with to sell a job to.

But, as we know, not all of those leads are scheduled into appointments and end up as meetings between our sales staff and the prospect.

But you sales department likely doesn’t care, or even think about that. They only think about the “leads” they were given to run appointments.

 

So, in a way, both answers are right, and both answers are wrong!

 

Hopefully that didn’t confuse you. The point I’m making here is that, it’s very important that you become keenly aware of the different terminology that relates to your contracting business, know exactly what they mean, and know how to use them properly.

A lead is that person, as we originally said, that has interest in your products/services, and has the ability to make the purchasing decision.

Your sales team actually have “meetings” with prospects. These meetings are the “leads” that you started with, that have went through the conversion process of scheduling an appointment, and having that appointment  “stick” (i.e. – have not cancelled), so that your sales team has the ability to “meet” with that prospect.

So, how many leads did you get last month?


This blog post submitted by:
  • DamionRutherford
  • PerformanceYellow
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Comments (9)

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  • No-avatar-62
    MELalmost 9 years ago

    I define a lead as “a person that has made an inquiry about our service”.

    I divide them into 2 categories, qualified leads and non-qualified leads. A qualified lead is a person that has a problem that they are committed to solving, the money to pay for it, the ability to make a decision, and can tell you when they will be able to make a “yes or no decision”.

    Furthermore they have to “want” what you are selling, this is more important than “needing” it. For example a lot of people “need” to stop smoking, but many of them never will because they don’t “want” to.

    Anyone that does not meet the above criteria is a non-qualified lead. They may turn into a qualified lead sometime in the future, but if you give them a proposal before that time they will not buy anything. Typically non-qualified leads are trying to get an idea of what your price is, even though they already know they will not be buying from you at this time no matter what your price is.

  • Thumb_893b2435Author
    DamionRalmost 9 years ago

    good points Mel.

    Do you have any systems in place to stay in contact with the "non-qualified" leads? Many times, they simply may not be far enough in the "buying process" to proceed with, as you've indicated. However, this does change as time passes and the need/desire becomes more important.

  • No-avatar-62
    MELalmost 9 years ago

    Posted by: DamionR

    good points Mel.

    Do you have any systems in place to stay in contact with the "non-qualified" leads? Many times, they simply may not be far enough in the "buying process" to proceed with, as you've indicated. However, this does change as time passes and the need/desire becomes more important.

    I contact them at least once by phone and then I mail postcards once per month.

  • Thumb_b56d6ad4
    BenLandersalmost 9 years ago

    @Mel - you might also consider an ongoing email marketing campaign (especially if you received the leads via a website contact form).

  • Thumb_p1030054
    silvertipover 8 years ago

    I thought a lead was something heavy...

  • Thumb_joe-face-no-glasses
    GoodFellasover 8 years ago

    Good post Damion! You know the saying, "a lead is a lead is a lead." We all know that the conversion rates for visitors to leads is never as high as we would like it to be. So what made that small percentage of people take the time out of their day to fill out your form and contact you? They are interested in what you have to offer.

    The second that lead gets submitted to you through your website or from a telephone call the clock starts ticking. Studies have shown that you need to contact that lead within 5 minutes or the chance of converting it to a paying customer drop dramatically.

    Then there's the question of who's calling the lead or speaking with the prospect? In my opinion, the sales person has the single biggest impact as far as the lead to sale conversion % goes.

    One guy might close 10% while another guy closes 20%! We're talking some serious difference in profit margin between these two sales guys. The fastest, easiest and least expensive way to achieve greater profits is to #1 Increase your visitor to lead conversion on your website and #2 Increase your lead to sale % internally.

    You can achieve huge results without actually spending any more money by focusing on these two aspects of your business.

    And Ben's right on the money! Follow up with your leads until they're ready to move forward.

  • Thumb_mike%20bio%20pic
    MikeJeffriesover 8 years ago

    There's an age old saying that you market to someone until two things happen- They tell you to stop....or they die.

    And GoodFella is right on the money! The fastest way to improve cash flow in any business is to bump up your closing rates. You've already spent the time and $$ to generate the lead so why not improve the ROI as best you can.

  • No-avatar-62
    Phil65over 8 years ago

    Another way is to continue to market to them...maybe offer a new free report and within this report offer a coupon. Do you currently have a referral bonus program? The new thing seems to be continuity programs...finding a way to get them as customers and keep them in the sales funnel. Offer free warranty inspection with the hopes of getting more business or offering free estimate for something while you are there. Great tips that we learned. Anyone else care to offer other tips? Would love to hear them.

  • No-avatar-62
    MELover 8 years ago

    Posted by: GoodFellas

    The second that lead gets submitted to you through your website or from a telephone call the clock starts ticking. Studies have shown that you need to contact that lead within 5 minutes or the chance of converting it to a paying customer drop dramatically.


     What studies are you referring too? Are they studies of the home improvement industry or some other industry?


     Why would a prospect that fills out a web form get turned off by the amount of time that it takes to call them back when they could have just as easily have picked up the phone to call you?


     Most of the leads that I get from my website do not fill out a form, they call me. 


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