What is a business lead? I have had the opportunity to head, coach, consult with, observe and sell through sales organizations in many different industries and have found that perhaps one of the most used and abused terms would have to be “lead”. In reality business machines are often clogged with pseudo leads which become hiding places from accountability and efficiency.
If you think about what takes the most time, cost, effort and maintenance in business it is often lead generation, development and cultivation into a sale. Whoever wrote the line that, "nothing happens until something is sold", was probably only looking at the bottom line.
The term "lead" has become almost a sacred currency in business especially in terms of driving business from the Internet. But like any currency, there are different denominations and valuations attached. Contact lists are not worth much more than pennies in lead currency. Even though there are companies happy to sell you these with varying amounts of information, you will really have to work the list to generate any dollars. These do not even qualify as suspects when only on a list.
Suspects are a bit more valuable, perhaps a nickel. There is some reason or driver for them to be likely to do business. Whether they have identified themselves or through data mining you have determined that they belong on your target list.
A prospect is a bit more valuable like a dime. Prospects have usually identified themselves, stated a need and, in many cases, given an indication of their interest in working with you. They are not yet a lead but have a higher likelihood of becoming a lead and turning into dollars. These still require a lot of work, need definition and guidance. They will really clog the gears of the business machine if treated as a lead.
Leads, like state commemorative quarters, come in many variations. They have identified business needs, a time frame and are able to do business. Until qualified, all leads have the same value and won’t get you very far if you want to buy something. Lead qualification must be done before they are processed in the business machine as a lead. If I were to try to forecast business results on the basis of the number of leads (a KPI – Key Performance Indicator) my predictions would be worthless without qualification.
“A” leads have all three key criteria - ready, willing and able. They can usually consummate business by going to contract, agreement or sale within a very short time frame. In most businesses, this is 30 days or less.
“B” leads are missing one the three key criteria – ready, willing or able. They are often 2 – 3 times longer in the sales process than an A lead.
“C” leads are missing two of the three criteria – ready, willing or able. The time frame can be 3 times longer than an A lead to never, as they are also usually missing motivation.
“D” leads are really dead. They have either been mistaken as a lead or are a lost opportunity. A lot of time and money are wasted on these thinking that they will be future business.
No matter what type of business you are in, your sales and management processes should focus on capitalizing the “A” leads. The Baltimore study mentioned in the blog post “Knock, Knock – Who’s Here?” gave a pretty good example of lost opportunity. Knowing and managing the differences in leads, prospects and suspects makes a real bottom line difference.
67 comments:
I like the way you suggest as a means to classify a lead as "A" "B" or "C". I have also seen them classified by % likelihood to convert to a deal.
I admit, I have not been on this webpage in a long time... however it was another joy to see It is such an important topic and ignored by so many, even professionals. I thank you to help making people more aware of possible issues.
Regards,
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