One of the hotly discussed topics in the sales stratosphere is the difference between cold, warm & hot leads. However, before delving deeper into the differences, you should have a basic understanding about the types of leads that exist and how they essentially operate.
What are sales leads?
Wondering what sales leads are? These are businesses or people who can eventually turn into clients for your organization. Companies can usually manage sales leads via online and offline platforms, third party sources, direct advertisements, promotional campaigns, trade shows and the like. Getting proper leads is always vital for any organization and generation of the same is the vital cog in the wheel which usually kick-starts the process. Leads are people or companies who may have interest in your services or products although you do not have full context as to the reason for their interest or when they are likely to take a purchase decision.
What are Cold Leads?
What are cold leads? If you’re asking this question, know that cold leads are those people or organizations who never contacted your organization or displayed any interest in your service/product and were annoyed or put-off by your efforts to contact them in some cases. Cold leads are those which have to be nurtured more carefully and over a longer period of time in order to yield sales. These are majorly leads which are kept in view most of the time.
What are Warm Leads?
Warm leads represent people or companies who have already shown interest in any of your services or products. They may have indicated their interest by following your profile on social media networks, filling up contact forms, signing up for your newsletter or email marketing campaign, following up on referrals from other clients or people and so on. These leads are prospects that want to know more about your products and services and are more likely to finally convert to customers. These leads also require nurturing before they translate into sales.
In this context, it is important to talk about qualified leads as well. These leads are always regarded as better leads since these are people or companies who are nearing the end of the sales cycle. A person searching specifically for a particular item on Google or other online platforms counts as a qualified lead since they have a demonstrated and specific need which is making him/her seek out an organization like yours.
What are Hot Leads?
Hot leads are those that can also be called qualified leads in this context. They meet all the criteria for being qualified leads and the BANT method can be applied to determine their nature:
B- This stands for Budget, namely the fact that the prospect in question has already prepared a budget and is ready for spending the same once the proposal for the project has been approved by the management.
A- This stands for Authority and means that the person dealing with you is either the one in charge of things or the one taking the decision, with the final authority to say either yes or no to the transaction.
N- This letter equates to Need which means that there is an identified need for a particular product or service as far as the prospect is concerned. Some of the sub-aspects involved in this process include the specific type of need, whether the product/service has to solve any particular issues, whether personalization is required and so on.
T- This stands for the Time Frame or duration. This means the entire period of time from when you first engaged with the prospect till the expected duration of the transaction. The key aspect here is when the prospect wishes to purchase any particular product or service.
Difference between Cold, Warm & Hot Leads
The difference between cold, warm & hot leads can be enumerated through a short and simple table:
|Cold Lead||Hot Lead||Warm Lead|
|Not interested in product/service||Highly interested in product/service, looking for solutions||Have shown interest through providing contact details, signing up for newsletters and initial activities|
|Does not respond to outreach or engage with the company/organization||Engages immediately with organization||Engages periodically with organization, can be drawn towards further engagement|
|Purchases are highly unlikely||Most likely to result in a sale||Could result in a sale although at early stage of sales cycle|
|Unidentified need||Specifically identified need||Need not identified yet|
|Can never be classified as a qualified lead||Is classified as a qualified lead||Can translate into qualified leads with nurturing|
|Needs huge levels of nurturing||Does not require nurturing; requires careful management and handling till the end of the sales cycle instead||Needs moderate levels of nurturing|
What are the Stages that explain each lead?
There are several stages of the entire sales cycle that can depict each lead in a more innovative manner. Here’s taking a look at the same:
- Cold Leads– These are the leads right at the beginning of the sales cycle who reject your calls/emails/other marketing outreach initiatives. These are ones who do not show any interest or do not respond to the company’s efforts. While you may nurture these leads over a longer period of time, only a few of them may transform into warm leads.
- Warm Leads– These are people or businesses who you notice as those in periodic engagement with your company or marketing channels. These are the people who start reading your posts, liking/following your organization, sharing contact details and signing up for email newsletters. They start engaging with your organization likewise. You start nurturing these leads likewise and learning more about their needs, issues and how you can solve the same.
- Hot Leads– These are qualified leads that have been nurtured and are ready to make the purchase or any other transaction. These are people who are now directly seeking a particular service for fulfilling a need which has already been identified by you and you are engaging for fulfillment of the same. These are leads which have to be now managed for closing the final transaction.
LeadX shortens the sales cycle tremendously
Qualified leads can be captured via several methods including revolutionary ones like LeadX, where every member of the organization is empowered to generate qualified leads for the sales team. They are rewarded and recognized for generating qualified leads and this works as a major incentive.
Progress is tracked in real-time even after the handoff to the sales team and hence, organizational revenues go up with a shortened sales cycle. Qualified leads are generated mostly since employees and partners tap the same from their own personal networks. This eliminates possibilities of having to deal with cold leads while opening up more warm leads and qualified leads for the sales team to tap.