As a sales professional, the origin of a lead is important to know, especially when establishing expectation for a lead. Lead generation is not a cookie-cutter process and because of this, all leads are not equal. Understanding the difference between qualified leads helps to properly layout your sales strategy for each individual opportunity as you advance it through the sales process.
The Origin of Leads
First, let’s look at common ways leads come to life:
- Referral/word-of-mouth
- Online research (i.e.: website, SEO, PPC)
- Social media
- Self-generated (i.e.: cold calling, telemarketing, email or mail campaigns)
Commonly, sales people will look at each of these avenues of lead generation as equal, or very similar. Therefore, a sales person will subconsciously assign the same level of expectation and approach to all leads, no matter its origin. With this mindset, some leads will fall short of expectation, no matter how good they are. Additionally, leads run the risk of dying if opportunities are not properly planned and nurtured.
The Difference Between Qualified Leads
How are leads different? In the broadest perspective, there are two forms of lead generation:
- Buyer-generated: Created by the potential buyer, reaching out in an effort to find a solution
- Seller-generated: Created by the seller, reaching out to identify potential buyers
Buyer-Generated Leads
Selling opportunities created by the buyer are usually the most qualified and advance through the sales cycle faster than seller-generated leads. This can be attributed to the fact that the buyer has a need and is looking for a solution; the need is creating enough pain that the buyer starts actively looking for a company who can solve the problem. Not much legwork, such as cold calling and other telemarketing efforts, is required of the sales person up to this point. From a typical sales person’s expectation, these are the best kind of leads to receive.
However, downsides exist. Commonly, there are not enough buyer-generated leads to satisfy sales quotas and sales people have little control on generating a volume of them (referral or word-of-mouth). Also, they can become expensive to produce (online and social media advertising). Ultimately, in most business-to-business situations, there are not enough of these leads to fully distribute to and satisfy a whole sales team – certainly not enough to achieve overall company sales success.
Seller-Generated Leads
Selling opportunities created through seller-generation usually occur when a sales person initiates activity that stimulates conversation (i.e.: cold calling, telemarketing, email or mail campaigns) with a prospective company. Conversation usually starts with probing-type questions. If you are lucky and the timing is right, good questions become the start of a new lead opportunity. In this situation, similarly to buyer-generated leads, your Q&A session will coincide with an existing pain the prospect might be dealing with; however, this is the exception, not the rule.
Read more about how to write a telemarketing script.
More frequently, you will stimulate a level of interest. But, timing is dependent upon many less controllable factors such as being inside an existing agreement term, the need for the prospect to research new solutions, or the prospect having to decide if making a change to your solution is worth the effort.
The Journey
It is important to recognize the point in a prospect’s journey where you, as the seller, get involved. With seller-generated leads, the journey begins when the prospect expresses a level of pain associated with their current solution. With buyer-generated leads, the journey is well underway by the time the sales person gets involved. Understanding your point of entry will help guide you into setting proper time lines, expectations, and upcoming sales strategy.
A seller-generated lead can feel colder early on because the buyer is at an earlier stage in the journey; however, when properly nurtured, the selling opportunity becomes more valuable. During this development, you start building a relationship with the prospect, which ultimately becomes an advantage for you. Frequently, seller-generated leads have fewer competitors involved.
In Summary
Expressing a level of pain by the prospect and the action you take to resolve this pain can take time and sales skill to advance. Because of this, it is important to apply a fair expectation on each, as the value of each opportunity is different and the amount of time and work involved with each opportunity varies. The close rate of buyer-generated leads is higher than seller-generated leads; however, there is a finite number of buyer-generated leads available and that number is not enough to satisfy company sales goals in most business-to-business environments. This is the point where it becomes important to realize the value of seller-generated lead generation. In most organizations, sales professionals should also maintain an adequate number of these leads inside the sales funnel.
In almost any instance, a proper balance of buyer-generated and seller-generated leads are required for a company to be successful and exceed sales goals. With both types of leads inside the sales funnel, always remember the difference between qualified leads.
For more information on this topic, please contact Mike Dunlap at miked@dunlapmarketing.com.