What are Good Leads?
What are Good Leads and What Makes a Lead Good with Examples
Case Study: How Netflix Finds Good Leads
Netflix, one of the world’s most popular streaming platforms, uses a mix of data analytics and user behavior to find good leads. By tracking what type of shows and movies people are interested in, Netflix identifies potential subscribers who are likely to benefit from its service. Netflix also uses emails and free trials as ways to attract hot leads, turning many of them into paying customers over time
What Makes a Lead Good?
1. Interest and Engagement
Why It’s Important: When a lead shows genuine interest, it signals they’re actively considering the product, which makes it easier to move them toward making a purchase. Leads who engage with your brand are also more likely to trust your offerings and connect with your value.
How to Identify Interest and Engagement: To gauge interest, keep an eye on specific actions, such as downloading resources, revisiting key pages, or reaching out with questions. Many companies use Customer Relationship Management (CRM) tools, like HubSpot or Salesforce, which help track and score a lead’s engagement level.
Example: A skincare brand might see that a lead has downloaded a skincare guide and signed up for product updates. This signals high interest, making it a good lead for nurturing.
Case Study: Netflix closely tracks users’ viewing history and engagement patterns to recommend content. By analyzing how frequently and consistently users watch certain genres, Netflix qualifies high-engagement leads who are likely to stay subscribed, allowing them to focus on content that attracts similar audiences.
Expert Insight: Marc Benioff, CEO of Salesforce, says, “The best leads aren’t just interested; they’re engaged. When people actively connect with your brand, they’re much more likely to become long-term customers.”
2. Need and Fit
Why It’s Important: When a lead has a clear need for the product, it greatly increases the chances of a sale. Leads who don’t actually need the product are less likely to convert and may end up wasting time for the sales team.
How to Determine Need and Fit: A needs assessment questionnaire or a short discovery call with the lead can reveal whether the product matches their needs. This helps the sales team qualify leads effectively, making sure time is spent on the best prospects.
Example: For a company selling accounting software, a good lead might be a small business owner looking to simplify bookkeeping tasks. This person has a direct need and would be more likely to make a purchase.
Case Study: Slack initially focused on tech startups and smaller teams, as they had a clear need for efficient, team-friendly communication. By targeting leads with this specific need, Slack grew its customer base quickly, later expanding to bigger businesses.
Expert Insight: Brian Halligan, CEO of HubSpot, explains, “A good lead has a real need. Without that need, even the best marketing won’t convert them into a customer.”
3. Ability to Buy
Why It’s Important: Knowing a lead has the resources to buy saves time. Sales teams can avoid spending time on leads who won’t be able to move forward due to budget constraints or decision hurdles.
How to Assess Ability to Buy: Ask leads about their budget early in the conversation or identify decision-makers in the lead’s company. This can help prevent wasting time on leads who may be interested but lack the means or authority to make a purchase.
Example: In B2B sales, a software provider might qualify leads by ensuring they’re speaking to a manager or director with purchasing authority before moving forward.
Case Study: Adobe targets large corporations with dedicated budgets for creative software. By verifying that leads have the authority and budget to purchase, Adobe closes deals faster and with less friction.
Expert Insight: Anthony Iannarino, author and sales expert, says, “A lead without buying power isn’t a real lead. Sales efforts should be spent on those who can make a decision and move forward.”
4. Right Timing
Why It’s Important: When a lead is ready to buy, it’s easier to close the sale. Good timing ensures that resources are used on leads most likely to convert in the short term.
How to Assess Timing: Ask leads about their timeline during early interactions. CRM tools can also help track when leads come back to the website or reopen emails, indicating renewed interest.
Example: A lead for a travel agency might be more promising if they’re planning a vacation in the coming months. This is much better than reaching out to someone who isn’t planning to travel anytime soon.
Case Study: Zillow, a real estate platform, identifies leads based on their search activity. If a user consistently looks at homes in a specific area, Zillow might flag them as ready to buy, ensuring that sales reps reach out when the timing is right.
Expert Insight: Zig Ziglar, a renowned sales expert, once said, “Timing isn’t everything, but it’s close. Reaching out to a lead when they’re ready to buy can be the difference between a closed sale and a lost opportunity.”
5. Trust and Credibility
Why It’s Important: Trust helps convert leads faster and can lead to long-term loyalty. When leads trust the brand, they’re more likely to buy and less likely to need reassurance or additional convincing.
How to Build Trust and Credibility: Provide testimonials, case studies, and transparent information on the product. Show how the brand has helped similar customers with their needs.
Example: For a financial services company, a good lead might be someone who has seen positive reviews or testimonials from similar clients, making them more comfortable with buying.
Case Study: Apple builds trust by consistently delivering high-quality products. Many Apple leads trust the brand’s reputation for innovation and reliability, making them easier to convert to customers.
Expert Insight: Seth Godin, marketing expert, explains, “People don’t buy products; they buy stories. Leads that trust your brand are more likely to buy because they believe in what you stand for.”
How to Identify Good Leads
Good leads can be identified through a few key criteria:
- Demographics: Age, income, and location.
- Psychographics: Interests and lifestyle.
- Behavior: Actions like signing up for a newsletter or visiting a website often.
Example: A luxury car dealership may look for leads with higher income levels who frequently visit automotive websites.
Expert Insights on Good Leads
According to Brian Halligan, CEO of HubSpot, “Focusing on the right leads is like rowing downstream—it’s just easier. Your marketing and sales efforts become more effective when you target the people who are already showing signs they want what you offer.”
Types of Leads
Understanding the type of lead helps companies know where each person is in the buying process:
- Cold Leads: These are people with minimal interest or awareness of the brand.
- Example: Someone seeing an ad for a skincare brand for the first time.
- Warm Leads: They have some interest but aren’t ready to buy yet.
- Example: Someone who subscribes to a fitness app’s newsletter.
- Hot Leads: Highly interested and ready to purchase soon.
- Example: A person who’s added items to their cart and visited the checkout page multiple times.
Data Point: Warm and hot leads are 3x more likely to convert than cold leads (HubSpot).
Case Study: Amazon tracks what users view, add to carts, and review. They target warm leads by sending emails on deals, and hot leads with notifications about their pending cart items.
Expert Insight: “Segmenting leads helps marketers apply the right strategy at each stage,” says Mark Roberge, former CRO of HubSpot.
Importance of Good Leads
Good leads mean higher conversion rates, less wasted effort, and stronger customer relationships.
- Higher Conversions: Good leads are more likely to buy, boosting revenue.
- Efficient Use of Resources: Sales teams save time by focusing on people likely to purchase.
- Better Customer Relationships: Happy customers mean positive reviews and repeat purchases.
Example: A gym targeting fitness enthusiasts who’ve shown interest in memberships will spend less time on uninterested people, making marketing more efficient.
Data Point: According to Gartner, businesses that focus on lead quality over quantity increase sales productivity by 25%.
Case Study: Netflix focuses on user data to identify who is likely to subscribe. By analyzing browsing behavior and viewing history, Netflix converts leads efficiently and grows its subscriber base.
Expert Insight: “Good leads are the foundation of successful sales,” says SalesForce’s Marc Benioff, “because they give direction and purpose to marketing efforts.”
Tools to Help Find Good Leads
Companies often use tools like Customer Relationship Management (CRM) software, social media insights, and lead scoring (giving scores to leads based on interest level) to identify and track good leads.
- HubSpot CRM: Helps manage and score leads based on their interactions with a brand.
- Google Analytics: Tracks website visits and user behavior, helping identify potential customers.
- LinkedIn Sales Navigator: A tool for finding professional leads with specific job roles and interests.
Deeper Dive into Lead Scoring
What is Lead Scoring? Lead scoring is a way for businesses to rank leads based on their likelihood to buy. By assigning scores to leads, companies can focus on the most promising ones and allocate resources wisely.
How Lead Scoring Works Lead scoring assigns points to leads based on certain factors:
- Demographics: Age, location, income level, and job role.
- Behavior: Actions taken, like visiting the website, downloading content, or opening emails.
- Engagement: Level of interaction, such as responding to emails, attending webinars, or asking questions.
Benefits of Lead Scoring Lead scoring helps companies prioritize leads, making it easier to focus on those closer to buying. It also improves resource allocation—sales teams can spend more time on high-scoring leads likely to convert.
Example of Lead Scoring Models
- Simple Models: For a small business, a simple model might assign points based on basic criteria, like visiting a website (10 points) or signing up for a newsletter (20 points).
- Complex Models: Larger companies may use advanced scoring models, factoring in online behavior, demographics, and purchase history.
Case Study: A B2B software company using lead scoring found that 80% of leads with scores over 70 were more likely to become paying customers. This saved them time and increased conversions.
Expert Insight: “Lead scoring aligns marketing with sales by filtering out leads who aren’t ready to buy, saving effort,” says Brian Halligan, CEO of HubSpot.
The Role of Lead Generation Strategies
- Content Marketing: Providing valuable content, such as blogs and guides, to attract leads.
- Email Marketing: Using email campaigns to nurture and engage leads.
- Social Media Marketing: Engaging with followers through posts, comments, and direct messages.
- Paid Advertising: Running ads on Google or social media to reach a targeted audience.
- Referrals: Encouraging existing customers to refer friends or colleagues.
Importance of Lead Nurturing Not all leads are ready to buy immediately. Nurturing keeps leads engaged with email updates, personalized content, and offers, moving them along the sales funnel.
Example: A health app might use email marketing to provide workout tips to leads who signed up but haven’t subscribed. By nurturing these leads, they keep their interest alive.
Data Point: Businesses that use lead nurturing see a 20% increase in sales compared to those that don’t.
The Impact of Technology on Lead Generation
The Role of CRM Software CRM (Customer Relationship Management) tools help businesses manage and track leads. By storing information, tracking behavior, and scoring leads, CRMs make it easy to understand and prioritize leads.
Example: HubSpot’s CRM allows companies to segment leads based on actions, such as page visits or email opens, helping sales teams target the most interested leads.
Marketing Automation Tools Tools like Mailchimp and Marketo automate tasks like email campaigns, follow-ups, and scoring. Automation saves time and ensures consistent communication with leads.
Importance of Data Analytics Data analytics provides insights into lead behavior, campaign performance, and trends. This helps optimize strategies and make data-driven decisions, ensuring resources are spent where they’re most effective.
Case Study: Amazon’s data analytics helps them predict which users are most likely to purchase based on browsing history, resulting in 30% higher sales from targeted recommendations.
Expert Insight: “Using data analytics in lead generation not only helps find the right audience but also fine-tunes the entire sales funnel,” says Marc Benioff, CEO of Salesforce.
Conclusion: What are Good Leads
For businesses, finding good leads is like looking for the right puzzle pieces that fit their product perfectly, making the selling process smooth and successful.
