Cold Leads, Warm Leads, and Hot Leads: Sales Conversion

Today, Let’s take a look at what are cold leads, warm leads & hot leads and some strategies on how you can increase your sales conversion.

In my previous article about lead generation, I have mentioned that leads can be further filtered down so that you can elevate some of them to the status of prospects

Not all leads are created equally, you have to differentiate between leads that have zero value to you and leads that can be converted into sales

Some examples of zero-value leads that you have to discard from your sales pipeline are leads with incorrect contact details, leads from locations you don’t serve, leads that don’t have the budget to buy your product, leads that don’t need your product, Unqualified leads e.g. children accidentally filling the contact form on their parent’s device

You have to set your own criteria on which leads are of zero value to you so that you don’t spend your valuable time on unnecessary interactions

What are Cold Leads, Warm Leads, and Hot Leads?

1. Cold Leads

Cold leads are individuals or businesses that fit your client profile but have not shown interest in your offer

These may include former warm or hot leads that have lost interest in your offer or product over time

You can warm up these leads by using a good follow-up strategy that will keep you, your company, and your product/ service in the mind of the prospect

2. Warm Leads

Warm leads are individuals and businesses that are interacting with you and showing interest in your product or service but don’t have an urgency to buy it right now

These can be former cold leads that have warmed up by a targeted follow-up strategy

These leads have a high chance of closing if you can provide a good value proposition and create an urgency  in the mind of the prospect

Warm Leads are in the market to buy a product or service which is similar to what you are selling, so it’s safe to assume that they are looking at 

• Solutions offered by your competitors 
• Complementary products which can be an adequate or cheaper alternative
• Pricing and Offers from different vendors, etc.

3. Hot Leads

Hot leads require your products or services urgently

You have to be quick when dealing with these prospects so that you can close the sale as quickly as possible

Hot leads require instant response to their queries, so if you take a long time to reply, set up a presentation/demo, draft your offer, etc. there is a high chance that they will go to your competitors

Strategies to deal with Cold leads, Warm leads & Hot leads

Importance of Follow-up:

Here are some statistics:

• “60% of customers say no four times before saying yes.” (Source)
• “But 48% of salespeople never even make a single follow-up attempt”(Source)

Follow-up is the most important step when it comes to the conversion of your lead into a sale

You have to make a detailed follow-up strategy depending on your industry and your current relationship with your leads, to increase conversion

Cold Lead Follow-up Strategy

1. Email Follow-up

Since most probably you don’t personally know your leads, the safest way you can reach out to your leads is through an email marketing campaign

I have experienced that email follow-up strategy has helped me increase the visibility of my offer and increase the chances of getting an inquiry

Sending follow-up emails twice per month is ideal for maintaining good visibility

You don’t want your prospects to unsubscribe or put you in their spam folder with too many emails i.e. spam

The strategy I find most effective with my cold leads is to provide informative type of content a minimum of 80% of the time I reach out to them through email

The main goal of this strategy is to give a chance to your prospect to read and interact or make an inquiry with you so that you can pitch your offer 

Email topics you can write about –

Industry trends or insights

Challenges faced by the industry

Problems faced by your existing clients and the solution your product provides

General FAQs asked by your clients

Customer success stories

Insights on how your product or service provides value,

Changes in regulations that affect your prospect’s industry or their company/ products, etc.

This strategy works best as you don’t have to put in too much of an effort

Personalizing the emails you send is a crucial part of this process, like including mentioning the recipient’s name, a good subject line that will appeal to the recipient, content that addresses the recipient’s problems, etc.

“70% of salespeople stop at one email. Yet if you send more emails, you’ve got a 25% chance to hear back” (Source)

Warm Leads Follow-up Strategy

1. Email Follow-up

With warm leads, the email follow-up strategy changes a bit compared to that when dealing with cold leads

The main aim here is to increase the urgency of making the buying decision

A major part of your email communication should be to provide 

• exclusive offers
• promotional pricing
• bundling of products to offer higher value
• free trial, presentations or demos, POCs, webinars

Your emails should be highly personalized and address how your solution fulfills the specific needs or the pain points of the prospect 

2. Phone Calls

You should call the prospect regularly to ascertain their interest levels, provide insights, understand the decision-making process, and Keep yourself and your product or service on top of their mind

Giving adequate space between two consecutive call is important so that you don’t appear desperate

I find that calling once per week is a good spacing most of the time, unless you are going back and fourth on offers or terms of engagement

“42% of people would be encouraged to make a purchase if the sales rep called back at an agreed-upon, specified time” (Source)

3. In-Person Meeting

Setting up meetings and providing presentations/ demos helps the client understand your product or service better

Face-to-face meetings can give you a great insight into their interest level as you can observe their body language, and understand their exact pain points which will help you add value by providing a tailored solution

Business lunches are also a great way to build a strong and long-lasting relationship

Business lunch should be informal and your goal here is to understand their personal nature, values and build a personal bond and increase trust factor with the prospect

4. Webinars & Workshops

Webinars & Workshops can help your prospect understand your product or services in detail, ask questions

This will help you in increasing your authority as an expert in the eyes of the prospect, and keep your prospect engaged

5. Social Media Engagements

Since all of your prospects use various social media platforms, you should leverage these platforms to keep your prospects engaged with your content

Uploading engaging content regularly can increase the visibility of your products and offers

Engaging with content created by your prospects e.g. reposting their content, commenting, and liking their posts can help in building a strong relationship with your clients

Hot Lead Follow-Up

While following up with your hot leads you have to be proactive in your engagement

They can make purchase decisions in minutes

Their urgency can be caused by a change in the regulatory environment, due to internal policy change, or an approaching deadline e.g. payment due date

Most of the follow-up techniques we saw in the warm lead follow-up strategy above do apply to hot leads follow-up

The only change is the urgency with which you handle the hot lead

1. Email Follow-up

When you are following up on your hot leads

Your email should be providing limited-time promotional offers so that your prospects can take immediate action and convert

Alternatively, you can have a limited period product bundling to increase the value of your offering, e.g. extended service or warranty at no extra cost

Response to any query should be immediate!

2. Phone Calls

You should call your hot leads regularly to ascertain the progress in their buying decision and provide helpful insights to facilitate in quick decision making

On a cautionary note, don’t go overboard by calling your prospect continuously

Use your judgment so that you don’t irritate your prospect with constant phone calls

“If your sales tactics are overly aggressive or pushy, you could drive 84 percent of buyers away.” (Source)

3. In-person Meetings

In-person meetings, presentations & demos are a great way to build deep relationships, improve trust and most importantly showcase your product or service, they will help the prospect to see that your product can satisfy their needs

Your should schedule a detailed presentation or demo as quickly as possible with hot prospects so that they can make their decision quickly

These are the few strategies I follow when dealing with leads with different interest level

It’s always Best if you can refine your follow-up strategy to suit your style, so keep on using innovative approaches to deal with your follow-up strategy