What exactly is a qualified lead and how do you know leads are qualified?

Leads come in all shapes, sizes and definitions. Just trying to keep up with the terminology makes my head spin. You may call them prospects, inquiries, demos, or even hot buttered customers in waiting (ok, I took a few liberties there).

Whatever the nomenclature, we are talking about the companies who are interested in your services.

Since this isn’t a wedding speech or a meeting of toastmasters, I’ll spare you with the Webster’s Dictionary defines a lead as… tactic to get us on the same page.

Why? Because any definition I give you is obsolete before it hits your computer screen. It doesn’t matter what you call your leads. What matters is the terminology that you adopt in your own business; how you talk about those prospective customers.

If you do your job well, you’ll get a lot of them

There’s a weird phenomenon that happens with service providers. You want more customers, and you want to command higher rates. You try a bunch of stuff to market your business, and sometimes a small fraction of it actually works!

You see that other providers seem to be having success by keynoting conferences, so you read a book on getting over stage-fright.

You see all the shares coming from blog posts going viral, so you give blogging a shot.

You start a Facebook live session.

And then crickets……….

But you persist.

Eventually… the floodgates open. You have more leads than you can process. Sometimes a small fraction of them are actually qualified!

The psychology of an inquiry

No matter how you generate interest in your business, inbound leads seem to funnel in one of two ways. Through your contact form or through a personal email introduction. Occasionally, you may even have a lead call you on the phone if they are old school like that.

This act of reaching out to a service provider may not seem like much, but it is one of the most vulnerable acts that a prospective customer can do. They are putting themselves out there. They don’t know who will respond or when, how you will react, or what they will hear.

They don’t know everything about your business, but they have a feeling you might be able to help with theirs.

You don’t know if they have discovered your company through a Google search or if they saw you speaking at a conference, or myriad other reasons why they became interested in your services.

But they are interested. Enough to put themselves out there and ask for help. Sometimes a small fraction will be a good fit for your business.

Do they really fit your target customer profile?

Qualified leads. That magical act of service provider and service seeker engaging in courtship. You’re not exactly exclusive, but you like it (and are thinking about putting a ring on it).

Snap out of it. A good business doesn’t fall in love at first sight. A good business is pragmatic in approach. They look at the situation with a level head. They get real.

Most of these people who are interested in your services are not qualified to work with you.

Their budget is too small or their business is.
Their budget is too big (and you can never deliver on expectations).
Their ambitions are too high (and won’t put you in a position to succeed).
They have no idea what they need (and they expect you to develop their strategy for free).
They are throwing good money at bad ideas. Or they are throwing bad money at good.
They were burned in the past, and want to take it out on you.
Or maybe you just don’t have a good feeling about them.

Red flags. Everywhere.

If it sounds too good to be true…

My website contact form has received well over 1,000 inquiries (that’s a bigger cross-section than the average political poll). With that many entries, I can confidently disqualify a lead based on the information they provide in that little contact form.

While my instincts aren’t right 100% of the time, there are some general rules that I follow to sort out the qualified leads.

These rules are specifically for service providers in the marketing space, but likely apply to other types of service businesses. The types of businesses to avoid will be explored in depth as the subject of a future article.

Here are a few of the types of leads I love to disqualify (that may sound counter-intuitive).

Startups – Big dreams, small budget, high likelihood of failure. You can’t pay your employees with stock certificates.

Big talkers – Big dreams, YUGE budget *pending budget approval, coming any day now*, high likelihood of driving you crazy. Asks for way too much up front, and promises riches in the end. The Nigerian prince inheritance of customers.

Overmatched – No budget, no plan, no idea how any of this stuff works. Hoping that you will solve their problems, because you rank #1 on Google for the term “marketing” – so you must know what you are talking about.

Know it alls – Lots of knowledge, little time to execute. Steady budget that is pin-pointed on an exact plan for “domination.” They want to work with you, but ONLY on a small part of a project, and without “any of that overhead you charge other clients.” Basically, they want to use and abuse you, but don’t want you to make a profit.

Revenue shares – Big plans, few resources. But with some great marketing, they will be printing money. Instead of paying you for the work you do, how you get a piece of the up-side? You can’t pay employees with upside.

These are just a few of the many archetypes that you will come across in your service business. Not all of these clients are destined to fail, but they are not ideal either.

And if you don’t believe me, wait until I share the story about how a startup offered me the “opportunity” to work out of a house in San Francisco (not even the nice part) at 1/5 of my quoted rate. And they needed me to drop everything to get started right away. Thanks, but no thanks.

Do you mind if we dance with your dates?

So what do you do with unqualified leads? Don’t discard them like trash. Let them down softly.

When you aren’t a good fit, offer an alternative. Offer resources to get them started or point them to a great article you read recently that can solve the problem.

Think about consultants who may be looking for any client to get started, and make a connection. Build good will, even if they aren’t a good fit.

But don’t think that you can make lemonade out of every lemon that comes in. That’s putting yourself on the fast track to insanity. It’s a one-way ticket to being unprofitable.