How Do You Define A Lead?

By Hugo Bader, Director Of Business Development, DialAmerica

Answering a seemingly simple question — what is a lead? — is in actuality one of the more challenging aspects of marketing and sales. Finding a common definition of how to classify new business among different companies is nearly impossible, and what consistently surprises me is how much the definitions vary within any single organization.

Businesses must constantly uncover new sales opportunities and assess them in order to find the ones that will become the most valuable. So one of the most important questions that an organization looking to flourish can ask itself has to be: What constitutes a quality sales lead for us?

First, you must lay out and unanimously agree on your criteria. It is imperative that you clearly define, in common language for all involved with the sales process, what constitutes a good lead. Those charged with following up with potential leads should fully understand these qualifiers, be in agreement about what they are and be eager to follow up. This, above all the qualifiers we can use, is the absolute No. 1.

Then, it is time to pinpoint your “sweet spot.” Even if your products or services have a broad fit in the marketplace, there is likely to be a more niche audience where you will be the best fit. Zero in on that sub-segment and clearly identify the “qualifiers” and the characteristics of those establishments that are more likely to convert them into qualified leads and hence sales. Include industry verticals and subsets of those verticals; company size measured by revenue, number of employees and square feet; years in business; credit history; etc.

I recommend focusing 60% of your effort on that sweet spot, 20% on the “quick-hit” potentials and 20% on the “whales” — those larger-than-life opportunities that require more time and effort to convert, but will eventually be well worth the wait.

So far, we’ve identified three critical ingredients to help define a lead:

1. The owner of the follow-up task is well on-board and a stakeholder;
2. Target market verticals have been identified; and
3. We can strategically target establishments within verticals by any number of qualifications.

If you’ve met these three criteria, you’re ahead of the pack. A sensible reality check at this point is to confirm if the target market is the space your company really wants to, and can, penetrate.

Now is the time you may consider asking about BANT (Budget, Authority, Need and Timing) — and rightfully so. Once you’ve identified marketing-qualified leads (MQLs), BANT criteria will get you to another classification of those leads — sales-readiness.

My experience with clients is that applying BANT to an MQL can be very subjective. For example, would you agree that Authority and Timing data are a must, but Need and Budget could be part of the nurturing process? Consider this: A buyer may not be aware of the Need (pain or problem points) and their impact on the organization. Or, your products or services may be the solution for which a Budget can be justified and created.

Additional considerations for “good” leads might include current or past experience with similar/competitive products or services, expansion of the scope of use, introductions to other or different decision makers within an enterprise.

And there is one bonus question that must be asked: Is a referral always a good lead? Referrals do not get a free pass, and need to undergo the same qualifying criteria that are used for all of your push or pull channels. The same rules should apply to “expressions of interest” generated by any channel that pulls leads to you, such as SEO, web presence, trade shows and direct mail.

Just as there is no common definition of a lead, don’t limit your definition of leads to a single rigid classification. Score the elements of a lead to arrive at different categories of leads such as hot, warm, nurture, or A, B, C opportunity, etc. This will enable you to effectively measure each category of lead, as well as the performance of the sale team in converting leads to the next movement in your sales process. It also empowers the sales team to approach each category with the appropriate expectation and follow-up action.

What it comes down to is realizing that the task of defining a lead isn’t as daunting as it may first appear. If you apply the four criteria — 1) Buy-in from the sales team; 2) Identify your market space; 3) Zero in on your sweet spot customer types; and 4) establish categories of leads — and are sure to integrate your pre-defined business and sales process to make the most of every lead, you will find your answer to this seemingly elusive question.

With these essential elements, you’ll have a foundation for measureable and realistic results that will help monetize leads into impressive revenue.

Hugo Bader is Director of Business Development at DialAmerica, a teleservices company. He can be reached at hbader@dialamerica.com.