How to Identify Hot Leads vs Cold Leads – (SaaS Sales)

Hot Chillies

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.

Prequalifying Leads

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 ilovecats2000@gmail.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@yahoo.com – will probably be more profes­sional in their outlook and there­fore be stronger candi­dates for consideration.
Research Website

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?

Request 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.

Qualifying Leads

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.

Workers at Computer

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.

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