In leads management, lead status denotes the state of engagement the lead is with your sales rep. Each company may define the list of lead status differently. A clear lead management process is crucial for accurate pipeline and revenue target projection and sales and development of marketing activities plans to meet business goals.
New Leads Status
- Open – the lead has not been contacted by your sales rep
- Attempting – the lead is in the process of being contacted, but there is no firmed next step
- New Opportunity – the new lead has been successfully engaged and has a genuine buying need
- New Appointment – the lead has agreed to a meet up with your sales rep or executive
- Handover – the lead is not new and is already being handled by a sales rep and is sent back to the rep to continue the engagement
- Disqualified – reasons to disqualification include unresponsiveness to repeated attempts of outreach, has no purchase need, does not meet the BANT (Budget, Authority, Needs and Timeline) requirements, and wrong contact details
- New Prospect – a quote has been sent to the lead and is now part of the sales pipeline funnel for the first time
- New Customer – the lead has made a purchase and is now a customer
Some companies prefer more granular lead status definition. They differentiate new from renewed leads, prospects and customers to determine the incremental number of new companies they have reached in the marketplace in each period. What this means is that parties who have enquired with the company previously are labeled as renewed leads or who have requested for a quote previously are labeled as renewed prospect. A new lead which has been engaged by a sales rep over a period of time (usually between 3 to 6 months) but does not progress to “new opportunity” or be “disqualified” is returned to the nurturing pool. If they respond to a subsequent marketing campaign, they will re-enter the lead management process under the renewed status. In most instances, timing is critical to leads progress and conversion and renewed leads have been seen to have a higher rate of conversion if the previous engagement with the company has been positive.
Renewed Leads Status
- Open – the renewed lead has not been contacted by your sales rep
- Attempting – the renewed lead is in the process of being contacted, but there is no firmed next step
- Renewed Opportunity – the renewed lead has been successfully engaged and has a genuine buying need
- Renewed Appointment – the renewed lead has agreed to a meet up with your sales rep or executive
- Renewed Prospect – a new quote has been sent to the renewed lead and is now part of the sales pipeline funnel again
- Renewed Customer – the lead has made another purchase after ending its relationship with the company previously and is now a renewed customer
Marketing Qualified Lead
Marketing campaigns seek to generate leads which fit a profile pattern similar to that of existing customers so as to generate a higher rate of conversion success. In additional to demographics, activities and behavioral patterns, lead scoring and BANT (Budget, Authority, Needs and Timeline) qualification are also often used to determine quality of leads and can be set as a criteria for leads acceptance from vendors. Leads that match the profile requirements and BANT parameters (if desired) are known as Marketing Qualified Leads usually have a higher lead conversion rate and are deemed to have high value because they have been determined to have a fit with the product or service and a buying intent. The buying cycle varies across different leads but good lead qualifiers would be able to sift out those that appear more genuine and urgent. Marketing Qualified Leads are subsequently allocated to sales reps for next level of follow-up and their progress is tracked through a lead management process through their lead status.
Leads that are not Marketing Qualified are usually not allocated to sales reps. They would go into the lead nurturing pool and will re-surface as renewed interest when they have a buying need. Sending leads that are not qualified to the sales team is not a good use of the sales reps’ time and would create a poor customer experience especially if they are hounded to buy when they are not sales-ready.
Sales Qualified Lead
A Sales Qualified Lead is a lead that has been engaged by the assigned sales rep after phone discussions or over meetings and further assessed and determined to be sales ready or have a fit with the company’s product or service. Usually, a sales rep build relationship with Senior Executives and decision makers of the project and re-ascertain the BANT (Budget, Authority, Needs and Timeline) criteria with them to verify the sales readiness. Not all Sales Qualified Leads are ready to buy at once; the sales rep would continue developing these leads, mapping their intent to buy to ensure that there is a good funnel of prospects for each period to meet their sales targets.
Leads Conversion Rates
Organizations observe how well leads become prospects and customers by tracking conversion rates at each different stage, which will help to pinpoint and troubleshoot performance gaps in marketing and sales. Leads conversion rate at each stage can be calculated as such
- Leads to Customers: total number of unique deals divided by the total number of unique leads
- Leads to Prospects: total number of unique prospects divided by the total number of unique leads
- Prospects to Customers: total number of unique deals divided by the total number of unique Prospects
Leads conversion rate calculation is also often done at lead source level to determine the effectiveness of each marketing channel.