What is a Qualified Lead?
What is a lead?
A lead or sales lead is defined by Wikipedia as ‘the identification of a person or entity that has the interest and authority to purchase a product or service’. Nowadays, leads referred to are mainly online leads, generated by filling in a form on the internet, although they could equally be the result of a phone call or a physical form filled in by hand.
Whatever form it takes, a lead typically constitutes the contact details of a person – either a consumer or representing a company – interested in learning more about a product or service, with a view to purchasing it.
What is a qualified lead?
A qualified lead is more than just contact details. It includes further information on the person or the company they represent, information that qualifies them for a certain product. Typical qualifying questions relate to the BANT approach:
– Budget: do they have enough money to buy the product?
– Authority: can they make a purchase decision?
– Need: do they have a need that the product or service in question can fulfill
– Timescale: do they have a specific time when they wish to make their purchase
By gathering answers to the above questions at the lead stage, a company can prioritize the leads gathered and focus on those most likely to convert to sales in the short term. These are then considered ‘qualified leads’.
A further definition of qualification for a lead is verification that the details provided are correct. This can be done either via automated checks on a form or, even better, by calling the person in question to confirm their details.
More or less qualified?
There is continuing debate in the marketing world as to the advantages of more or less qualified leads. Basic leads, which could be as limited as a name and an email address, will cost as little as a tenth of the price of qualified ones, but conversion rates will be very low, and potentially even non-existent. In addition, greater investment will be required in order to convert each lead to a sale. With qualified leads, a better conversion rate is guaranteed, although the higher the cost, the better the rate required to generate a good ROI.
Ultimately it is a question of testing, and of looking not just at the cost per lead for a campaign but also at the cost per sale. The solution will vary for different products, but in general, a greater level of qualification has proven to deliver better results.