The Definitive Guide to B2B Lead Types and Why Alignment Matters

Successful marketing campaigns, demo requests, and freemium sign-ups—they all generate leads. However, someone who consistently uses your freemium offering is far more likely to convert to a paid subscription than someone who simply attends a webinar. It's crucial to understand that not all leads are created equal.

While some leads represent immediate sales opportunities, others are lukewarm at best, and may even be incorrectly qualified. Furthermore, different departments often qualify leads using various criteria:

• Marketing Qualified Leads (MQLs)
• Sales Qualified Leads (SQLs)
• Product Qualified Leads (PQLs)

What exactly distinguishes a PQL from an MQL? Why are some leads hot while others are cold? And is it safe to assume that every lead is properly qualified?

Many organizations struggle with the nuances of lead terminology. Sales and marketing teams often disagree on lead types, qualification criteria, and categorization.

To address this, we're providing a detailed breakdown of various B2B lead types and their characteristics. This will enable you to effectively categorize and manage the leads generated through your lead generation initiatives, ensuring no opportunity is missed.

What is a Lead?

In the ever-evolving world of marketing, lead generation and customer acquisition are always at the forefront of discussion. But before launching a lead generation strategy, your teams must first agree on a single, shared understanding of what defines a lead.

In its simplest form, a lead is someone who has demonstrated an interest in your product or service. This interest can manifest in many forms, resulting in a wide spectrum of lead types ranging from entirely unqualified to PQLs who are already actively using your product.

So, what are the key differences between these lead types?

Unqualified Leads

The adage "every lead is a good lead" doesn't always hold true. While we aspire for all leads to be promising, the reality is often different. Some individuals might merely be browsing, while others may quickly realize that your offering isn't the right fit for their needs.

These leads may not meet the essential criteria for progressing through the sales process, making them unqualified. These individuals might lack attributes or have not taken specific actions that demonstrate buying intent:

• Limited understanding of your products or services.
• Unclear needs or requirements in a solution.
• Financial constraints preventing them from affording your offering.
• Not aligning with your ideal customer profile, potentially leading to a poor fit.

Unqualified leads might not be ready for immediate sales engagement, but they should not be discarded entirely.

Consider a lead who is unfamiliar with your offering and unsure of their specific needs. By providing educational content, building trust, and carefully introducing your product, you can nurture this lead over time.

Effectively, you've transformed an unqualified lead into a warm or hot prospect. By documenting the missing criteria and guiding these leads through a nurturing program, you can significantly increase their potential for conversion.

Cold Leads

Unlike unqualified leads, cold leads typically haven't engaged with your business before and are likely unfamiliar with your offerings. These leads may not be aware of how your business can help them, and they might not have expressed any explicit interest in your company. Alternatively, cold leads could also be leads that were previously interested but have since lost interest.

Sales teams often use cold outreach (emails or calls) to showcase how your business addresses a potential pain point. While these cold leads often align with your ideal customer profile, nurturing is essential to guide them through the sales funnel and convert them into warm leads.

Warm Leads

Nurturing unqualified and cold leads can eventually lead to customer conversion. Focusing on warm leads allows you to shorten the timeframe between lead generation and customer acquisition.

Warm leads are those who have shown more than a passing interest in your company, as demonstrated through specific actions. Examples include downloading ebooks from your website, subscribing to your company blog, or engaging with your company on social media.

To identify warm leads, lead scoring is useful. Consider "Sam" as an example:

• Subscribed to your email newsletter to access gated content (5 points)
• Registered for one of your webinars (15 points)
• Visited your pricing page multiple times in one week (40 points)
• Read two blog posts (5 points)

Based on these actions, Sam's total score is 65 points. If your lead scoring system categorizes leads with scores from 0-50 as cold, 51-75 as warm, and above 75 as hot, Sam would be identified as a warm lead. You can then implement a nurture campaign using tailored content and targeted marketing efforts to convert Sam into a hot lead.

Hot Leads

Hot leads are a dream come true for any business and represent the pinnacle of potential sales opportunities. While these leads might still require some nurturing, they are often MQLs, SQLs, or PQLs ready to make a purchase.

What do hot sales leads look like?

• Registered to five of your webinars this month (75 points—15 each)
• Contacted a sales rep (50 points)
• Clicked on a blog call to action (10 points)
• Requested a product demo (25 points)

With a total score exceeding 100, this lead is undoubtedly hot. A sales representative should immediately reach out to gather critical information, including budget, purchase timeline, and buying authority, to facilitate a swift conversion.

Pro Tip: Inefficient lead management can cause hot leads to quickly turn cold. To stay on top of leads, use a CRM.

Qualified Leads

While the specific methods for scoring and categorizing leads to qualify them may vary across different organizations, most businesses group qualified sales leads into one of three categories:

• Marketing Qualified Leads (MQLs)
• Sales Qualified Leads (SQLs)
• Product Qualified Leads (PQLs)

These leads have been qualified based on expressed interest from marketing efforts, sales-driven contact, and usage of a freemium or free trial product.

Let's examine what makes these different B2B lead types unique.

Marketing Qualified Leads (MQLs)

Lead generation is primarily the responsibility of the marketing team. While generating sales opportunities isn’t solely the domain of marketing, they are responsible for attracting qualified leads that sales can convert into paying customers.

Marketing teams create the marketing campaigns, content, and experiences that generate leads. These campaigns include:

• Sales pages
• Social media content
• Blog posts
• Email sequences
• Webinars
• Live interactive events
• Downloadable assets

When these efforts result in someone expressing interest in your brand, they become a marketing qualified lead (MQL). Their behavior qualifies them as someone interested in your product.

Sales Qualified Leads (SQLs)

While marketing qualified leads show interest in your brand and may be ready to buy, they often need some nurturing before converting. Sales qualified leads (SQLs) are hot, know who you are, are a great fit for your offering, and are ready to swipe their credit cards.

MQLs and SQLs are similar, but have one distinct difference: where they are in the funnel. Sales qualified leads are further along the pipeline and looking to buy.

Product Qualified Leads (PQLs)

While red-hot sales qualified leads might be the ideal outcome for sales teams, product qualified leads come close.

Product qualified leads are already convinced about the value of your product. All sales has to do is convince them to upgrade to a paid plan.

Aligning on Lead Qualification (and Beyond)

If you work in sales or marketing, you know about the lead blame game: sales blames marketing for sending unqualified leads, and marketing blames sales for fumbling MQLs and not following up.

This creates a cycle of mistrust and disagreements on what constitutes qualified sales leads, and has a ripple effect throughout the entire organization.

If sales and marketing aren’t aligned, your lead generation efforts will likely go to waste and have a broader impact across your organization, from a poor customer experience to lost data to missed opportunities.

Getting Everyone on Board

Teams often have different definitions of sales leads and what qualifies them to move through the sales funnel. The goal is to get your teams aligned on what makes a good lead and how you define your leads.

Leverage your data to get a more complete picture of your leads and how to tailor the sales process to get them to convert. By combining product usage data, content downloads, and CTA engagement with enriched lead data, you can craft a data-driven and highly effective sales strategy.