When it comes to sales in the software as a service (SaaS) marketplace, being able to distinguish between hot and cold leads is essential. After all, quality leads are the life blood of any successful sales force. They also have a heavy bearing on salesperson priority-setting and efficiency: to maximize their chances for closing a sale, sales professionals should focus more of their time and attention on leads further along in the buying cycle. In that context, care must be taken to identify and segment leads that are closer to making a purchase decision from those with general interest. In this article, we take a look at the different stages of lead qualification and how you can use these steps to tell hot leads vs cold leads and go on to maximize productivity and effectiveness in your own sales efforts.
Ultimately, differentiating between hot leads vs cold leads can be reduced to two major stages:
- Prequalifying leads — the stage at which you use data to determine whom you should contact
- Qualifying leads — the stage at which you carefully ask questions to find out if your product is a good fit for your lead’s requirements.
This first stage of action will center on prioritizing the leads that will be best to call first. Second-stage efforts will focus on evaluating the quality of the lead during your first few emails and on your first phone call. It will involve asking the right questions: What exactly are the lead’s needs? Does your software solution fit what the lead’s needs are? Will the lead himself or herself offer a solid customer relationship for your company?
Here are a few things to keep in mind at each of these two stages. Remember these, and you’ll be more effective in the time and effort you pour into converting your leads into clients.
At this stage, efforts will focus on “pre-screening” leads before you contact them. In other words, this is where you look for telltale signs as to a lead’s quality before you make contact.
1. Rely upon usage statistics to determine who’s actually seriously considering the merits of your software solution
The importance of using data in the sales process cannot be overstated, and it begins from the start. Usage statistics will be a great indicator of the leads that are actually evaluating your software solution for their needs. In the case of our desktop sharing software, usage statistics refer to online meeting stats. How often the lead uses our online meeting software in the two-week trial can provide solid insights into his or her level of interest.
The people who are actively investigating the merits of your product for their unique demands will definitely be better-quality leads—or have higher sales conversion potential. Don’t be afraid to reach out to those with lower usage stats, or none.
2. Evaluate the lead’s email address, company, and website
Other foretelling indicators of quality leads lie in the information they’ve given to your company. In particular, their email address will be helpful. Points-of-consideration here include:
- Based on the lead’s email domain, is the lead from a good company, or is the lead using an unknown foreign email provider? If it’s the latter, it’s probably better to classify that lead as someone who’s a colder lead.
- If the lead’s using an email provider like Google or Yahoo, is the first part of their email address professional-looking? Many leads will not give their company email addresses.
- The leads with silly email names – such as email@example.com – are less likely to be high-quality leads (unless you sell cat products!) and therefore shouldn’t warrant priority contact. Leads that provide straightforward, no-nonsense email addresses – such as firstname.lastname@example.org – will probably be more professional in their outlook and therefore be stronger candidates for consideration.
3. Did the lead give a phone number?
When capturing lead information, some companies require a phone number. But if your company doesn’t require one, whether the lead left a phone number is oftentimes another foretelling sign of his or her seriousness. Leads that gave their phone number are more open to a sales call. If they’ve left an extension, that’s further icing on the cake—they’re likely interested in talking with you about how your software solution can help them.
Another point to consider: if leads are in your target industry, and their phone numbers can be taken from their company website, it’s also worth the time and effort to contact them.
4. Has the lead requested support?
Has the lead reached out to ask a question or request support if you offer a trial period with your software solution? Here at Mikogo, if someone has used our online support ticketing service for assistance, that can be another indicator that he or she’s a higher-quality lead. Likewise, if leads have contacted you, your company, or have reached out via social media, it’s also worth paying more attention to them.
Keep in mind, though: the questions they ask will be the strongest indicator of how serious leads are. It really depends on the questions they put forward.
So you’ve gone through your leads and determined which ones to contact. Now the real qualifying begins and you can really focus on the hot leads vs cold leads.
1. Find out whether the lead is the correct person to whom you should be speaking
When it comes to pitching your product, you want to be sure you’re talking to the correct person. He or she should be someone who either has purchasing power or has the seniority or authority to make a strong recommendation to an actual decision-maker.
At times, the decision-making process on the lead side will involve several people. In those cases, you’ll likely have to pitch to someone who’s a non-decision-maker. However, those people will pass their feedback onto the decision-maker. In those instances, it’s advisable to keep aware of those dynamics and respect these people’s time and attention. After all, if you do so, you will be more likely to earn their internal endorsement of your software solution.
2. Once you’ve established contact with the decision-maker, determine their buying motives
There are a few things to consider at this point:
- What will they use your software solution for?
- Does your product fit their requirements in terms of features?
- It’s advisable to determine what constitutes the decision-maker’s “must-haves” and “nice-to-haves.”
For judging the hotness or coldness of the decision-maker directly, evaluate the following:
- Will use of your product be part of the lead’s regular business each day?
- Or will it be a case of the lead using your product every once in a while?
If the lead will be using your software solution each day, he or she will be a solid lead. Alternatively, if his or her use will tend to be on the less frequent side, he or she will be a less-suitable candidate.
3. Determine their specific needs
If your product doesn’t line up with what the lead needs, it’s simply not going to be a good match. You should be sure that your software solution truly meets the lead’s unique demands. To gauge this, consider the following elements:
- How many accounts will the lead need?
- If the lead’s using another software offering, how much is he or she currently paying?
- What’s the lead’s budget?
- What does the lead like and dislike about the software he or she’s using, if applicable?
- Is the lead more “price-sensitive” or “feature-sensitive?”
In the case of the last point, some people want the best tool available and will pay top-dollar to have it. Construct a lead profile based on what you learn from these questions, and then in the sales presentation you can pitch your product according to the lead’s profile accordingly.
4. What time frame is the lead looking at?
Of course timing’s a big component of qualifying the lead, as well. You should be aware of when the lead’s planning to evaluate his or her options and then make a purchase. With that knowledge, you can be timely in your emails, phone calls, and overall interactions with him or her.
5. What other software solutions is the lead considering?
You should know the other options the lead’s considering on top of your own. That way you can position your product and the value it offers in relation to competitors’ own. Doing so will also enable you to draw strong comparative advantages between the benefits offered by your product and how that can be more valuable than competitors’ product benefits.
This brings up an important side-note: it’s important to keep up-to-date about the latest trends in your industry. That way you’ll be able to communicate your product’s pros and unique benefits, shore up its cons, and address how your product stands out from your competitors’ offerings in terms of how it can help the lead.
Hot Leads vs Cold Leads – Concluding Thoughts
Careful deliberation in pre-qualifying and qualifying your leads during the sales process will help you not only in your sales outreach efforts, but also in closing deals. By taking a strategic approach to how you approach your leads, you can increase your efficiency, productivity, and effectiveness. If you’re looking for more information on how to prepare for an upcoming sales call, I recommend our article on 5 Things You Must Do Before Meeting Online with a Prospect.
Our screen sharing software, Mikogo enables sales professionals to be more efficient and effective as they’re able to deliver online sales demos with ease. Online demos have become a staple in the software industry, so don’t hesitate to contact us with any questions.
Also, be sure to check out our free white paper on delivering effective online sales demos.