Cold, Warm, & Hot Leads: Classify & Close Any Sales Lead

Last updated on August 9th, 2023

In this article, we’re going to talk about how to classify leads most effectively so you can make more sales.

Every business wants more leads; they’re the start of every sales journey… 

And the only way to make more sales is by acquiring more leads.

But don’t be fooled: 

All leads are not created the same.

In fact, the way you treat the various types of leads is a critical factor in your conversion rate.

Don’t believe me?

Let’s get to it.

• What is a lead?
• What are cold leads? (and how to sell to them)
• What are warm leads? (and how to sell to them)
• What are hot leads? (and how to sell to them like crazy)
• Make sure any lead is qualified
• How to classify leads with ease

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What Defines a Lead?

As most of you probably know, a lead is an individual that you’ve collected some type of contact info from but hasn’t purchased from you yet.

This could be via referral, email signup, or through various other direct or indirect marketing methods.

That also means it could be someone right at the beginning of the customer journey or someone who’s all the way on the other side of it and ready to make a purchase.

The distinction — is an important one.

A lead that’s almost ready to buy should be handled completely differently from one that doesn’t know who you or your company are yet.

Understanding Your Leads —  It’s Crucial

Imagine this:

You sit down to take a rest after a long day, turn on your favorite show, and lean back to unwind before you eat.

Two minutes into your show and the phone rings.

It’s not an ID you recognize, but you answer it anyway. And lo’ and behold, it’s a salesperson.

They’re trying to introduce you to their product; it’s a neat new app that could really help you in your professional life.

But let’s face it: 

You’re already pretty annoyed that you’ve been interrupted at this point.

And then the salesperson has the nerve to try and sell you on their app right on the spot!

If you’re like most people, you’re not going to buy that app right on the first call; even if it’s an app that would help tremendously. No one likes getting spam-called, let alone hearing a sales pitch on that spam call.

And that’s exactly why classifying your leads is so important.

You should almost never try to sell to a cold prospect right away. If a salesperson takes the time to organize their leads, they’ll know how to take the right approach.

The Differences Between Lead Types: Cold Leads vs. Warm Leads vs. Hot Leads

Let’s get into the different lead classifications and the best lead generation approaches for each. 

What are Cold Sales Leads?

Cold sales leads are the ones who’ve shown little to no interest (or awareness) in your brand. You might’ve only just gotten their number, scraped their email from the web, or perhaps they’ve given their email through an opt-in form on your website.

The main point is that they don’t really know who you are or that they need your products or services just yet. Therefore they haven’t shown interest in any of your products or services.

But that doesn’t mean you can’t close a sale with them (and at scale once you get good).

Because the vast majority of your leads will start somewhere between cold and warm, you shouldn’t expect most of your customers to start in the hot zone.

So how do you get those initial cold leads?

Using Outreach to Increase Your Cold Lead Flow

There are some great ways to obtain cold leads, some good ways, and some — err — not-so-great ways to get them too.

We’ll keep this brief to save some time for the rest of the post.

Acquiring cold leads can be as simple as running outreach campaigns to book meetings for your B2B company.

There are plenty of different channels you can use to engage with and stay in contact with cold leads, from emails and phone calls to social media posts, retargeting ads to drive your prospects to your website, and more. Whatever approach you take to contact potential customers, there’s one important thing to remember:

The more relevant those leads are, the higher your conversion rate will be, and in turn, the higher your profit margin.

It’s not unheard of to purchase email lists to give early outreach efforts a boost, but the problem with that method is those email lists probably aren’t going to be full of relevant prospects. This means you’ll waste resources on plenty of people who never intended on buying in the first place. (Plus, you don’t want to come off as spam.)

So take it from us, always aim to obtain relevant, targeted leads rather than opting for a quantity-over-quality approach.

Want to learn how to run a quality client outreach campaign? Check out our guide on the steps you need to take to get your sales machine generating quality meetings.

Warming Up a Cold Lead

To prepare a cold lead for the close, you’ll need to warm them up first. For most businesses, your chances of converting an ice-cold lead are slim to none.

So let’s talk about how you can take them from icy-blue to red-hot.

Increase Your Close Rate with the Toughest & Coldest of Prospects

With a cold lead, you’ve got one main problem:

They don’t trust you.

And you probably haven’t uncovered their pain points.

People are naturally skeptical of any company trying to sell to them, and for a good reason.

To close with any given lead, your job is to show them that you’re the real deal and you can fix their problem.

Here are a few ways you can do that:

• Social Proof

Social proof is some of the most powerful marketing there is. If you can show that you’ve already delivered on your promise for other customers, it speaks volumes. A few excellent ways to do this are through testimonials and case studies.

• Relationship-Building

You need to nurture your leads and build that essential trust personally. During the “warm-up” process, you should have various personal touchpoints such as discovery calls and demos where your sales team can connect with them on a deeper level and build a valuable relationship.

• Target Your Dream Prospects

There are probably particular types of companies and personality types that you can sell to with ease. So make sure you’re getting on calls with those pre-qualified marketing leads who have already expressed interest in your product or service to increase your conversions. 

What are Warm Sales Leads?

Warm leads are the ones right between cold and hot; they might not be at the end of the customer journey yet, but they’re on their way. 

A sales lead that’s at the warm stage might not be ready to buy, but you’ve still probably got some amount of rapport and trust with them. 

The main thing that distinguishes the warm leads from cold and hot is that they’ve shown interest in and are aware of your product, but just don’t have that full trust — yet.

 And with the right actions, it likely won’t take much to get a warm sales lead to hot.

How to Acquire More Warm Leads

Some of the best ways to get more warm leads right off the bat are funnels that only bring in interested prospects.

Free webinars are great ways to do this. Think about it; if a lead isn’t already interested in your product, they won’t sign up for a webinar about it. You can be fairly certain that most of your webinar signups have more interest than cold leads.

Another excellent way to funnel in warm leads? Affiliate programs, SEO, Youtube, and other content marketing strategies.

How to Sell to Warm Leads with Ease

Since warm leads already have an interest in your product, the job is already halfway done.

Instead of solely convincing the lead why you have the solution to their pain points, the key to closing with warm leads is continuing to build trust so you can move them towards hot status.

You can close these warmer leads just like cold leads — but a ton easier.

Warm leads will have fewer pushbacks and require less sales effort for them to close.

And now onto the best part: hot leads.

What are Hot Sales Leads?

Hot sales leads are where the money is at, and that’s because they’re practically ready to make a purchase.

Selling to hot leads is efficient and effective.

A hot sales lead is someone who has an interest in your product, trusts your company, and really just needs a small nudge to make the final decision.

If you can warm up a lead to hot, you’ve done 99% of the work already.

How to Get More Hot, Ready-to-Buy Leads

The most reliable way to get more hot leads is by nurturing your warmer leads through the customer journey.

In many circles, this can be accomplished with a sales funnel or value ladder (which you’ve probably heard of before).

A structured sales funnel is a critical part of creating a consistent stream of new hot leads.

But one of the best ways to get hot, ready-to-buy leads?

Referrals. So make sure you’re always making clients happy and asking for referrals from them.

Selling to Hot Prospects — Like Selling Candy to Kids

Once you’ve classified a lead as hot, your next step is to get them on a call and go for the close.

That’s right. You probably won’t need multiple meetings to close a hot prospect.

Your focus should be on clearing any smaller, final hurdles, making sure they’re a good fit to be a client, and turning them into a loyal customer. 

Again, since you’ve done most of the work already — congratulations — as long as you’ve built up the foundations in the earlier stages, you’ve practically made the sale already.

Hot leads will practically sell themselves because they already know who you are.

The Most Important Factor of Any Lead: Are They Qualified?

Now, there’s one factor that’s more important than any classification there is: 

Is your lead qualified?

Qualifying your potential customers should be one of the first actions you take during the sales funnel.

Why?

Qualified leads are the ones who fit into your potential customer base. If a lead would never have any use for your product, what’s the point in moving them through the funnel?

A prospect that moves all the way through your sales funnel without any intention to buy is known as a “dead-end lead,” and qualifying leads helps prevent them from slipping through the cracks.

So for a recap:

Qualifying leads makes sure your leads need what you’re offering — and it makes sure they’re your ideal client.

Hot Leads & Qualified Leads: Are They the Same?

So with that being said, are hot and qualified leads the same thing?

No.

Qualified leads can be cold, warm, or hot — the thing that separates the qualified and unqualified leads is that the qualified ones are the perfect fit.

And this is an area where tons of sales teams trip up. A study found that only 5% of salespeople think they get high-quality leads — and qualification is the secret to changing that.

If there’s no potential to buy, they’re not qualified, and you shouldn’t waste resources on them, which is why it’s so important to get this part out of the way early on. 

What about hot, unqualified leads?

If you’re a B2B business, and a prospect really (really) wants to work with you, they still might not be a good fit for your company when it comes to things like budget, goals, and personality.

How Do You Classify Leads?

So, we’ve explained leads, how to get them, what each classification means, and how to move them through a funnel, but there’s still one more question:

How do you know where a given lead fits in the funnel?

You could have sales reps manually keep track of every lead, but that becomes a problem of scale as you grow. The more leads your team acquires, the more time everyone will have to waste with admin tasks, you know, the ones that aren’t directly making money.

And that’s where CRMs come in.

How CRMs Fit into the Lead Capture Puzzle

CRMs help teams in various parts of the sales process, but one of the most valuable parts of a CRM is automation.

CRMs help move your customers through the sales funnel without any sales reps having to lift a finger.

Then, they rank how qualified these leads are with lead scoring systems.

Using CRMs: A Way to Automate Your Lead Organization 

VipeCloud is a do-it-all CRM for marketers, sales teams, and SMBs; it helps teams automate and streamline the sales cycle with features like auto-scheduling, data entry automation, and lead scoring systems.

And the great thing about it is that we’re offering a demo for free.

Rather than bragging about what our CRM can do, we’d rather show you (and we’ll even help migrate your current system at no extra cost).

Request your free demo of VipeCloud today to transform your sales process.

Cold, Warm, & Hot Leads FAQ