What’s the difference between cold, warm and hot leads

Generating leads
Date
5 Nov 2019
Category
Online Marketing

Generating leads for your company can be very time consuming and frustrating for the sales professional. Starting in sales 20 years ago, cold calling, print advertising or golf-course networking were pretty much the only route to getting leads around. And as much as I miss the simplicity of this, modern marketing has now made it possible to generate leads from 100s of different platforms – if used in the correct way of course (hint: strategy, tactics and planning are everything!).

What hasn’t changed however, is the best way to deal with the leads that you generate. How do you know which ones to best focus your efforts on? Is it worth pursuing some more than others? And when do you give up? This blog will explore the best way to handle your different level of leads, and ensure that you supercharge your sales to grow your business.

It’s cold out there….

Cold leads are your target market. You want them to know who you are, but they don’t know that they need you until you speak to them, or spend some time getting in front of them to dazzle them with the delights of what you have to offer. They are cold, so of course you need to invest the time in your marketing to warm them up. Depending on your product or service, this can be done in many ways. From a meaty target-led strategy, to mass market advertising. But ultimately these are the ones who will take the most time to convert into sales. Let’s use a car analogy to keep it simple:

Kevin drives a blue car. Kevin is happy with his blue car. Kevin has a car that works, and it is more than adequate for what he needs. One day, Kevin is contacted by a car dealership who has a cold calling strategy in place to gain new business. They have targeted all the people in the area who own blue cars of a certain age, live in a neighbourhood that people who are likely to spend money on cars live, and within 5 miles of their local dealership. The dealership has an offer on whereby Kevin can upgrade his current blue car, for a more attractive red which will save him money on fuel and offer a long warranty. All Kevin has to do is pay a small monthly amount and he now gets the car of his dreams.

What the dealership is doing is taking an educated guess that this cold call may just work. Kevin is their target market demographically and if he says no, then his next door neighbour may well be instead!

You can of course do this in the digital marketplace. If you know your target market  you can place Social Media ads in front of the eyes of people who are likely to fit your demographic. Which means you can leave the phone alone and do your cold-calling in the modern social way!

Kevin is not interested on this occasion, but shortly after the car salesperson hangs up he texts his brother-in-law who is in the market for a new car, and lets him know that it may be time to upgrade.

Things are getting warmer….

Warm leads can come in many forms. This could be some clicking a like on a well structured Facebook ad, a website tool telling you that someone is looking at your website, or in the case of Kevin, a recommendation which are always the best kind of leads (think about how you would source a plumber, mechanic or electrician).

These leads are great. You know the person needs the product or service you offer, but they just need to find the right company to provide this. It is up to the sales person in this instance to craft their pitch to ensure that they are front and centre of warm lead at the right time.

Kevin’s brother-in law Paul, calls the car dealership and enquires about the deal they have, They invite him to come in and have a test drive so that he can see for himself how great the car is. Again this can be matched in the digital space by offering a free trial, a free sample, or a free download. Anyone who requests these are warm leads. They are interested in the product or service enough that they will take action.

Unfortunately for Paul, the car dealership had everything he wanted, within the price range he was looking for but being environmentally aware, Paul was after an electric car. The car dealership directed Paul to their other showroom which offers the same make in an electric version.

Hot stuff….

Hot leads are pretty much a promised sale for the company or service provider. The person who needs the product or service will call, ask the price and if it is within the scope of what they need, they will buy. In the case of Paul, he has driven to the car dealership wanting to buy a car that is sitting in the forecourt. Bar from the sales person telling him the wrong price, or being rude it is likely that Paul is going to drive away in a brand new, red and eco-friendly car.

In the digital space, a hot lead would likely come from someone wanting a replacement of their current product or service, or are in urgent need of what you have to offer. Hot leads normally have a quick turn around and are from your target market. The beauty of the hot leads is that if you treat them well, the likelihood is they will be your best lead generator for more warm leads.

Getting the temperature right…

To conclude, any lead you have can be put into the three categories that we have explored above. How you take these to the conversion stage of your business is all down to the strategy you have in place. These key features will help you:

Cold Leads

  • Have no idea they need you until they see you
  • Takes time and resource to find
  • Requires a watertight strategy

Warm Leads

  • Are likely to be a recommendation, or someone looking for what you provide
  • May take several attempts to convert
  • A strategy needs to be applied for that particular lead, not for a group in a target market

Hot Leads

  • Want your product or service now, and are at the right buying stage
  • Will convert in a very short time
  • Will not require any strategy as they land in your lap

When a warm or hot lead goes cold…

We can’t have them all.  As we have seen in the examples above, the cold lead led to a super hot one. But throughout that process, the salesperson had to decide when to walk away. Both Kevin and Paul were left alone after they decided that it was not the right time/car to buy. Which for the salesperson involved in the process, meant that the prospect fell right back into the cold lead bucket. Not all hope is lost however, lost leads can quickly come back, and don’t forget that they will always remember the great company who sent them on their way with great advice!

AUTHOR:

Colette Cooper

Business Development Manager Colette is usually the first friendly face new clients meet and is always ready to impress with her marketing knowledge and experience. She’s a fitness fanatic, devoted to her family and a sucker for charitable causes.

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