In marketing, ‘bad leads’ are essentially prospective customers that have been targeted by a company’s sales and marketing efforts, but that don’t represent actual good sales opportunities. Bad leads tend to be customers who are unlikely to convert into paying customers, or who are a poor fit for the product or service being offered.
When it comes to lead generation, companies can invest a considerable amount of time and money in targeting prospective customers. However, if those leads are bad leads, no sales will be made as a result of the efforts and the investment will be wasted. To ensure that leads generated are of a quality that will result in successful sales, it’s important to critically examine and assess the leads to ascertain whether they are quality prospects or bad leads.
The general guidelines for identifying bad leads are as follows:
- Make sure the lead’s company size is appropriate for the product or service you’re offering. For example, if you have a SaaS product that's designed for large businesses, it wouldn’t make sense to contact very small businesses.
- Verify that the lead has the authority to make a buying decision and the means to do so. Look for job titles that point to decision making roles, and check for relevant information on the prospects’ financial situation.
- Consider the lead’s geographical location in relation to the territory your business covers. If you’re only covering certain regions and you’re generating leads in other areas, there’s a chance you may not be able to fulfil the lead’s requirements and they may quickly lose interest.
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- Do some research into whether the prospective customer has ever purchased anything similar to what you’re offering. That will help determine how likely they might be to purchase your product or service.
- Analyse the lead’s behaviour. If you’re generating leads through digital channels, assess how prospects are interacting with your website (i.e. how long they’re spending on each page, which pages they’re viewing, etc.), to get an idea of the degree of interest they have in your product or service.
It’s also important to assess whether a lead is a good fit for your company in terms of values and objectives. Consider whether the prospect is in line with your company’s core principles and whether there would be any overlaps.
Finally, it’s wise to strategically review the timing for reaching out to any lead. If a lead is already in talks with another company and has already set up a meeting, no matter how perfect they are, it may be too late.
By following the guidelines above and regularly assessing the quality of your leads, you can dramatically reduce the amount of bad leads you generate and spend more time and energy on quality leads that convert into sales.