Is every contact a lead? Tami and Joe talk about the difference between a prospect, a lead, and a qualified lead. Listen now!
Episode 7 Transcript:
Tami: Welcome to High Energy Marketing! A podcast with us, the digital marketing agency Ajax Union, where we interview our CEO, Joe Apfelbaum, on key marketing topics and we share everything you need to know to properly grow your business online.
This is a question and answer podcast where, I, Tami, will ask Joe questions about different topics and trends in marketing, based on his book, High Energy Marketing. You can get the book at ajaxunion.com/book to follow along with us. And you can learn more about the podcast at ajaxunion.com/podcast. This is the seventh episode of our podcast about High Energy Marketing and today we are going to discuss prospects, leads, and qualified leads. What are these three things? And how do they differ?
But first, a little housekeeping. You can rate us on Apple Podcasts, that little purple icon. Give us a five-star rating, leave a review, let us know if you’re enjoying the podcast. That would be amazing. And subscribe, wherever you found this podcast on your podcast app, you can go ahead and subscribe and you’ll get the next episode when it comes live.
So first, a little inspiration of the day. Joe, do you want to hit us with a quick inspiration minute before we get started?
Joe: Alright, love that. Thinking creates reasons. We as human beings, are meaning-making machines, and the thoughts that are going through our heads, are just always going through our heads, I want you to realize for just a moment that those thoughts and the meanings that we make to everything that happens in our life. They’re not who we are. They’re just like what we do naturally.
So becoming aware of that, becoming aware of your thoughts, and knowing that it’s not who you are, allows you to optimize those thoughts. We have 50,000 thoughts every single day. And only 20% of them are positive, or predominantly thinking negative thoughts because our DNA is programmed for our survival.
I want you to think about that. Think about how hard it is to be positive, and how hard you have to work on being positive. And when you start thinking of that you will ultimately become more positive and have a more positive influence on your whole life.
And you’ll come up with better reasons why things happen, which ultimately will make you feel better experience more joy, and have a better life.
Tami: That is so true. Thank you so much, Joe.
Let’s jump right into it. So first, I have one question for you. We’re talking about the difference, right, between prospects, leads, and qualified leads.
So let’s say, I have a list of contacts of people that I can reach out to I just have a list are all of these people on my list considered leads?
Joe: I remember when I started Ajax Union, I was looking for leads. I was looking for leads all over the internet. And I found this website that sold leads. So I said, wow, they have millions of leads on their website. Let me go and buy some of those leads. So what did I do? I invested in leads. I bought leads. But it turns out, they were not leads. I just purchased a list of people’s contact information.
I hadn’t just a random list of people, they’re not leads. If you have a list of contacts, you can identify a few people that might be good clients. But that’s not a lead. That’s a prospect. That’s a prospective customer. A lead is somebody who said that they’re interested in your products and services. Now, not all leads are prospects, and not all prospects said that they’re interested in your products and services and become leads.
Contact information is just contact information until you determine that that contact information is of a prospective customer. It’s just a piece of information until that person raises their hand and says I’m interested in your products and services. They are not a lead.
So please don’t confuse leads and contacts. Instead, realize that a contact is just a contact and you have to qualify that contact in order for it to become a prospect and eventually a lead
Tami: And then eventually hopefully a qualified lead right. So, what criteria does someone have to meet to be considered a qualified lead versus just a general lead or a prospect?
Joe: If somebody reached out to you, for example, a 12-year-old child, and said, I would like you to market my lemonade stand? You might say, well, we only work with companies that are a few million dollars in annual revenue and have a marketing budget, and that maybe have a marketing director and that we can actually support.
Although that person that called you, that 12-year-old child is a lead, right, because they reached out, it’s a human being interested in marketing. They’re not qualified because they can’t afford your services, and they have a lemonade stand, what are you going to do give out flyers for them or a digital marketing agency, it’s ridiculous.
And often I’ll get people that don’t have a business that will call up and they’re just not a qualified lead. If you can’t serve as somebody, they’re not qualified to work with you.
That’s what it means to be a qualified lead, we’ll get into actual criteria that you can break down, there are popular criteria we’ll get into after, but just the idea of is this person even qualified to work with me.
Some people think that every customer is a good customer. Every customer is not a good customer. Some people are just horrible customers, I was sitting in a restaurant today and there were a group of very rowdy customers that were sitting there. And they were being very rude to the waiter. And they said, I want to speak to the manager, I want to speak to the owner and the owner came down and they said, I don’t want to tip the waiter because tips were included in that restaurant. And I was just watching this whole thing and thinking to myself, wow, these are not ideal clients for this restaurant.
And the owner was like, “Hey, guys, listen, I totally understand if you never want to come here again, but the tips are mandatory here because that’s how the employees get paid.” And so you have to give them it and they said, we’re never coming here again.
Those are not qualified people for that restaurant, he doesn’t want them to ever come again. He didn’t want them to refer their family, their friends, or anything like that. You have to know that there’s a difference between having a qualified lead, someone who’s qualified to do business with you, and has the right mindset that has the right budget that understands that you can actually serve them that you can actually help them you don’t just want any customer, you want the most ideal customer.
And so my goal is to try to find clients or customers for the businesses that hire us as a marketing agency that are actually qualified leads.
Tami: So also in your book, you talk about MQLs and SQLs. I don’t know what these even what this even stands for, let alone what’s the difference? Can you tell me more about MQLs and SQLs?
Joe: MQL stands for marketing qualified lead. And SQL stands for sales qualified lead. So you can have a lead that’s qualified because they’re qualified to do business with you, but they’re not ready to buy it.
So I would consider them an MQL, a marketing qualified lead, they need to go to marketing and they need to get further nurturing, especially in business to business. Often, the timing is not right. I’m not ready to buy right now we don’t make our decisions till 2024. That’s a great lead. Right?
They’re interested in marketing, but not anytime soon. So we got to keep them warmed up. We got to keep sending them emails, and we got to keep targeting them through social media and through forms of advertising and staying in front of them. And sometimes even with direct mail.
A sales qualified lead is someone who’s ready to buy, they’re qualified. And sales need to work on them to be able to deal with their objections to going through the sales process. To follow up, follow up, we know that you have to follow up many times. So a sales qualified lead should go to the salespeople so they can go and close the deal. And a marketing qualified lead is someone who expressed interest, they’re qualified to do business, but maybe the timing is off.
Maybe they still need to make more decisions. Maybe they still need to think about it. So it’s not ready for the salespeople to get busy with because then they’ll be spinning their wheels following up with someone that’s not ready to buy. If someone’s not ready for sales, they’re ready for marketing, especially if they’re a qualified lead.
Tami: Okay, so if someone is ready for sales, then they’re ready for a proposal. Is that right?
Joe: Not necessarily.
Tami: Okay. So when should you send proposals to your leads?
Joe: You have to go through a process to identify if this lead is really qualified. When a salesperson speaks to a lead, the salesperson has to deal with something called objections. And often we deal with many of those objections through our marketing process by educating the customer and getting them to understand our process and understand many of the common objections that we come up with so that the salespeople don’t have to deal with those objections.
But often there will be objections a salesperson has to deal with. And the last thing you want to do is send a proposal to somebody who still has objections. Because they’re not going to tell you what the objections are, once they get their proposal. Once they know the price. Once they know I’ll have all their information, they have no reason to speak to you anymore, and they’re not going to trust you, to tell you their objections.
That’s why it’s key for you to get all their objections before you send a proposal. The reason why people ghost you is because they’re not qualified not because you’re not a good business. It’s because you don’t have a great process to qualify people. And we understand what the qualifying process is. And we also educate our customers, if they don’t already have a system and process to be able to qualify leads from a sales perspective so that when you send proposals, people don’t go see you.
Tami: So in your book, High Energy Marketing, you talk about BANT, B-A-N-T, budget, authority, need, and timeframe to create sales qualified prospects. Can you explain this more?
Joe: So the concept of BANT, budget, authority, need and timeframe are actually four steps you need to go through in order to create a sales qualified lead. And actually, with each person that you speak to within an organization, you want to re-qualify them for BANT. And the reason you want to do this is because if you don’t take them through this particular criteria, you’re probably going to be spinning your wheels.
Salespeople are so eager to send proposals that they skipped this process. And then they are having a bunch of unqualified leads in their pipeline and they end up suffering by following up with leads who are simply just not qualified.
So the first one in BANT, the B stands for budget, you have to understand if the organization or the individual that’s purchasing from you can actually afford your products and services. Not everybody has the cash, the capital, or the willingness to invest in what you’re selling.
The next thing you want to look into is the authority. Does this person have the authority to make the decision to buy? And often the person that you’re speaking to doesn’t even have authority/ So why are you going to send a proposal to somebody who might have a budget, but they don’t have authority. Now, if the person does have authority, you have to identify if they have a need.
Now sometimes we get a need from someone that doesn’t have authority. And then we end up thinking that we’re talking to the right person, but the person who actually has the authority, the decision-maker doesn’t actually have the need, or they have a different need, that you maybe can’t meet. And so it’s not likely that you’ll be able to close the deal.
So that’s why you want to make sure that you not only understand the budget, not only understand who the decision-maker is and how the authority process works within the organization, but also you understand whether or not there’s an actual need for your products and services and how urgent the need is. And when I talk about urgency, I talk about the timeframe, if the person is not going to be buying in the next 30 to 60 days, then they’re probably not sales qualified.
So you want to make sure that you go through this BANT process, which is budget, authority, need, and timeframe before you can call something a sales-qualified prospect. And once you have sales-qualified leads, those are the ones that you want your salespeople to be working with. And to further qualify to be able to succeed to be able to close deals and to be able to get an ROI from your marketing.
Tami: So last question, why do so many companies fail at sales?
Joe: The reason why so many companies fail at sales, is because they don’t understand how to qualify leads because they don’t understand how to nurture leads, it’s because they’re not doing marketing correctly, to be able to prepare the leads and the prospects for the sales team to be able to close those leads and prospects. So understanding that will allow you to be able to have better sales.
You see sales rely on marketing, and marketing relies on sales. If you do a webinar for a group of qualified marketing, qualified prospects, and a few raise their hand, a few people on the webinar raise their hands that are interested in learning more. Those people are not yet sales-qualified leads. They’re just leads that raise their hand. You got to take them through BANT, budget, authority, need, and timeframe in order to determine if those people are actually sales qualified.
And once you determine that they are, then going through a process that allows you to be able to uncover all the different objections, and uncover everything you need to uncover before you actually send a proposal is going to be key. And educating them about your process and about how you work so that they understand that and then understand how to do a trial close.
Sales can be complicated. But if you have systems and processes and you work with a competent marketing professional or marketing agency that can educate you about this, and help you build processes to streamline your sales, you’re much more likely to succeed, and you’re much more likely to get an ROI from your sales and marketing organization.
Tami: Thank you so much, Joe. That was amazing information. We hope everyone listening got as much out of that as we did. On next week’s episode, we will be talking about how to know how much you should be investing in marketing. So make sure to hit that subscribe button to catch the next episode. You can follow us on Instagram at Ajax union and follow Joe on all social media platforms at Joe Applebaum. And you could follow him on LinkedIn at Joelinkedin.com. If you didn’t catch that, you can check our description for all of our social media links. And if you want to learn more about the podcast, you can go to ajaxunion.com/podcast. If you have any questions you can shoot us an email at firstname.lastname@example.org.
Our music is by Michael Suarez. This podcast was produced by Sarah and Shannon and edited by Sami Mititelu. Thank you so much for listening. We will see you next time!