What is a Qualified Lead?
November 7, 2014
A qualified lead is like a gold nugget in a sifting pan. It takes patience and a process to remove the rock and sand, but when discovered, it’s well worth it!
by Eric Sharp
Finding qualified leads is like gold mining
When I think of the process a company endures to find a qualified lead, I can’t resist the gold mining analogy.
It takes steadfast patience and a meticulous process to remove the rock, dirt, and sand while the panning for gold. But, when they hit gold, they know it was worth it!
So, what exactly is a lead? What is a qualified one? Why do companies want them and what are their benefits?
It can be a rocky subject, so let’s start digging into it. (Sorry, couldn’t resist the pun.)
The basics: what is a lead?
There’s a great disparity when it comes to the definition of a lead.
Some claim a lead is someone you have not spoken with. Investopedia says a sales lead is not a sales prospect. Other say “a lead isn’t a lead until it’s been qualified”. Okay then.
After 15 years of being in and around marketing, I still can’t seem to find a universal or clear-cut definition. Maybe it’s a rabbit hole. Nevertheless, let me add to the disparity with my definition:
A lead is an individual or company that is showing signs of buying behavior by the interest they express in a service or product.
Regardless of all this ambiguity, I believe most companies would agree that a lead:
- has a name & contact info
- is a step or two away from the sale
The nomenclature used in this basic sales funnel (Prospects > Contacts > Leads > Closed) has always made the most sense to me when it comes to lead qualification.
Furthermore, a lead can be “won”, “lost”, go “cold” or exposed that it wasn’t a lead in the first place (“non-qualified”).
Non-qualified lead (ugh!)
There’s not many things more frustrating for a sales team than getting one of these handed to them. However, it happens. Often. Studies show that only 25% of leads are legitimate and should advance to sales.
Non-qualified leads are like leeches. They come out of hiding, suck precious resources, and leave a nasty mark behind. (It is worth noting that leeches do serve noble purposes.)
As you probably suspected, non-qualified leads are the complete opposite of qualified leads.
So, what is a qualified lead?
Let’s shift our focus to every sales professional’s dream — a qualified lead.
A qualified lead has a need a company can solve, enough money to pay them, and the buying authority to make it happen in the time frame everyone desires.
I wish I were smart enough to come up with that myself, but this definition comes from the BANT formula — a sales method revolutionized by IBM 30 years ago.
Let’s break this acronym down.
- B = Budget (does the lead have enough money to buy the product/service & willing to spend it?)
- A = Authority (does the lead carry the buying power to pull the trigger?)
- N = Need (does the lead have a problem that can be solved by the company?)
- T = Time (does the lead want the product/service in the time frame a company can deliver it?)
Marketers have been using BANT for decades, and though there’s some who believe BANT stopped working, it’s — at the very least — a general framework for identifying good leads.
The benefits of a qualified lead
Every organization craves a steady clip of qualified leads. When received, sirens go off, and people get excited. I know we do at ProtoFuse! (The excitement part, not the setting of sirens.)
Why the excitement?
Well, a qualified lead – back to my gold mining analogy — is like finally seeing that glimmering nugget at the bottom of the sifting pan. The process is sometimes laborious, but the reward will always be rich!
A qualified lead:
- takes less energy & money to nurture (since their needs and time to purchase are clearly identified)
- can purchase faster (since the decision stops with them)
- helps an organization better understand their buyer persona (which ultimately refines their sale funnel)
Like I mentioned. Every sales professional’s dream.
Qualifying leads is getting easier
Finding qualified leads continues to be a challenging assignment for marketers.
However, there’s no better tool than a website to target prospects, make contact, generate a lead and help a sales team close. Furthermore, we believe qualified leads are one of the ten powerful elements to smart websites.
How would you describe a qualified lead?
With such disparity out there, what can you add to this conversation? What is a lead? What is a qualified lead? How are they beneficial?
Hey, thanks for being here!
There's gobs of information out there, so I'm honored you found this article interesting enough to make it this far. My hope is it helps you to a better performing website!
About the Author
Eric Sharp is the founder of ProtoFuse and has been in the website trenches since 1999 — right before the dot-com boom redefined websites forever. Since then, he's accumulated two decades of digital marketing experience and prides himself on creating websites "Loved by people and Google". He has 2 awesome kids, loves Da Bears, and is into that whole CrossFit thing.
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