What are Unqualified Leads: Identification and Management

Unqualified leads in a sales funnel can hamper advertising budgets, waste sales rep’s time, and impact the marketing team’s KPI reports. As marketers, we have often heard that not all leads that enter the funnel will convert.

It is harsh but the truth. A lot of leads doesn’t mean many conversions until you nurture and focus on the right ones. If unqualified leads are reaching the marketing team’s sales rep, businesses must look into their lead qualification method and optimise it.

According to research, 67% of lost sales are because of businesses not correctly qualifying their potential customers. There can be many reasons behind weak lead qualification methods, one of which is a need for a deeper understanding of what is an unqualified lead.

In this blog post, I will explore what unqualified leads are and how businesses can identify leads and deal with them.

Let’s get started with the basics.

What is the Difference Between a Qualified And Non-Qualified Lead?

Though both are part of the sales funnel, unqualified and qualified leads differ greatly in user behavior. Businesses must create a buyer's journey to understand high-intent buying behavior and integrate it with the lead qualification system.

Let's understand the difference between unqualified and qualified leads through definition.

Suggested Read: What are the Three Stages of the Buyer’s Journey?

What are Qualified Leads?

Qualified leads are individuals who have been identified as having a higher likelihood of becoming paying customers. They meet certain criteria, such as having the right budget, authority, need, and timeline to purchase a product or service. In short, they are closest to one of your buyer’s personas.

But a close approximation of a buyer’s persona is not enough. A lead becomes qualified when it fully understands its pain point and what could be various solutions available for it.

But a close approximation of a buyer’s persona is not enough. A lead becomes qualified when it fully understands its pain point and what could be various solutions available for it. Therefore, marketing-qualified and sales-qualified leads both come under the ambit of the qualified lead category.

On the other hand, an information-qualified lead, though considered a warm lead, doesn’t pass as a qualified lead.

Some common user behavior showcased by qualified leads is:

• High email open rate for email nurturing campaigns.
• High CTR for marketing campaigns.
• Download lead magnets.
• Attended a webinar.
• Booked and attended a discovery call.

What are Unqualified Leads?

Unqualified leads are potential customers who do not meet the criteria or standards set by a company for their ideal target audience.

For example, if a company sells enterprise-level software solutions to large corporations, a lead who is an individual freelancer would be considered an unqualified sales lead. Similarly, if a lead has shown no interest or engagement in a company’s products or services, they could be considered unqualified.

Such leads can enter the sales funnel at the awareness stage and are termed information-qualified leads. They are still in the research phase and do not fully understand their pain points.

Some common user behaviour showcased by unqualified leads is:

• Lack of interest or engagement with your product or service.
• Failure to provide accurate or complete contact information.
• Unresponsiveness to your communication attempts.
• Lack of understanding or knowledge of your industry or offering.
• Limited budget or resources to invest in your solution.
• Inability to make a decision or commit to a purchase.

The distinction between qualified and unqualified leads is essential in the sales cycle and marketing, as it helps companies prioritise their efforts and allocate resources more efficiently. Pursuing unqualified leads can be a waste of time and resources, so identifying them is crucial.

How to Identify Unqualified Leads?

Here are some ways to identify unqualified leads:

1. Glued to Awareness Stage

The awareness stage of the sales funnel is the first stage in the customer journey. It is where potential customers or early leads are just becoming aware of their pain points and are seeking a solution.

At this stage, the primary focus of the marketing efforts is to educate the new leads. This education process can take many forms, such as blog articles, social media posts, videos, webinars, whitepapers, and other types of content.

But if a user is stuck in the awareness phase for a very long time, it can be said that they are either conducting content research or unable to understand the content being shared with them.

2. Reluctance to Involve Decision Makers

If a prospect is hesitant to involve decision-makers in the buying process, it may indicate that they are either seeking a free solution or are not yet fully aware of the problems in their business.

While nurturing such leads can be a valuable way to build advocacy, it’s essential to ensure that decision-makers are involved in the conversation to address the organisation’s needs effectively and reach a conclusive point.

3. Check their Lead Scores

Lead scoring is a highly efficient part of lead qualification. It is a method through which scores are awarded to leads based on their interactions and behaviour with the brand. It is to be understood that some user actions are considered high value and some not so much.

For example, signing up for the newsletter and reading blog posts are positive actions but aren’t huge indicators of buying intent. Hence, such user behaviour ranges between +2 to +5 lead scores. Whereas booking discovery calls and a high email CTR indicates high buying potential and range between +10 to+20 lead scores.

By studying the way, a lead has acquired points and become qualified can reveal a lot about their buying intent. If a user has qualified but with a maximum of +2 or +5 actions and a minimum of +10 or +20 actions, they should not be considered a qualified lead.

A better way to sort this issue is by using negative lead scoring. You can read more about it in this blog post: How to Create a Lead Scoring Model.

In this way, we can effectively manage our lead scoring systems to more accurately identify leads and qualify them.

What Should You Know Before Pursuing Unqualified Leads?

Before pursuing unqualified leads, you should keep a few things in mind:

a. Time and resources:

Before deciding to pursue unqualified leads, you have to take into account the time, resources, and effort that your sales team will need to invest. It is important to determine the value of the potential outcomes concerning the cost of acquiring those leads.

This assessment should determine whether these leads align with your buyer personas and have the potential to convert into customers. Moreover, focusing on unqualified leads can decrease the performance and morale of the sales team as their attention will divert from high-potential prospects, leading to frustration and inefficiency.

The identification of qualified leads will ensure that your sales team focuses on the right target, which will help in higher conversion rates as well as efficient management of resources.

b. Define your ideal buyer persona: 

Before pursuing any lead, it is important to understand your ideal client as it will help you to identify which leads are worth pursuing and which are not relevant and fit for your business. This process involves developing a detailed profile established on factors such as demographics, interests, pain points, and buying behavior.

c. Qualify leads‍

Developing a standard qualifying process is very helpful in identifying the potential customers that will produce the most revenue for your business. This process involves developing parameters that will determine if a lead is a good prospect for your business based on factors such as demographic information, budget, authority, need, and time (BANT parameters). 

Regular implementation of these criteria in evaluating leads provides a more consistent approach to prioritizing leads and working on listing the ones with the greatest potential.

Shifting from the traditional manual way to the modern way of using technological tools that include CRM software and automated lead scoring can help reduce the time used on qualification and management. 

Another factor in lead qualification is establishing harmony of outlook between the sales and marketing departments regarding criteria used for lead qualifications, alongside periodic assessment and modification based on feedback from the field and results observed.

Suggested Read: 5 Steps to Build a B2B Lead Qualification Checklist

d. Establish communication guidelines

Establishing clear communication parameters with unqualified leads is highly crucial for any organization’s sales function. These guidelines assist in avoiding the further waste of time and possible financial resources on the leads who are not yet ready for further interaction. 

Specify how often to contact the leads to ensure that the frequency of communication does not become overwhelming. Create templates or scripts for common interactions to maintain a consistent message and approach.  

e. Keep track of your data

Keeping track of your lead generation and conversion data helps refine your lead qualification and targeting processes over time. It helps in deciding the kinds of leads to target in the future since one gets to know the degree of efficiency of the strategies and techniques used in the process of acquiring high-value leads. 

This data is used to properly assign the available resources and concentrate efforts on those channels and approaches that contribute to better outcomes, as well as to discover trends among the converting leads and improve the criteria for lead qualification to target the leads more accurately.

By keeping these factors in mind, you can approach unqualified leads more strategically and efficiently while maximizing the potential return on your sales and marketing efforts.

How to Deal With Unqualified Leads?

To maximize the potential of unqualified leads, consider the following strategies: 

Step 1: Dynamic Lead Evaluation

It is important to review and update the lead qualification criteria from time to time in the lead management process, given that business grows, and so does your understanding of your ideal persona. Thus, when adjusting the criteria, it filters out the non-potential customers, thereby effectively saving the time and effort of the sales team.

This can be further improved by integrating lead scoring into this process. Lead scoring categorizes leads according to demographics, behavior, and engagement level which would allow the sales team to work on the leads that have the biggest chance of conversion.

Achieving these benefits increases the conversion rate, enhances customer relationships, and provides better insights into your target market and competitors. 

Step 2: Segregate Unqualified Leads

To segregate unqualified leads, categorize them separately in your management system. This assists in directing your efforts towards potential clients who are likely to purchase your products or services which ultimately leads to improved conversions and higher ROI.

Step 3: Leverage Automation 

Most unqualified leads tend to become a problem in CRM processes since it is difficult to deal with them manually, but the use of automation can help solve this problem. Several marketing automation tools help automate your marketing processes, and these include sending out marketing emails, sending follow-up emails, and monitoring the engagement rate.

For instance, sending automated e-mails to your leads with messages that adapt to their previous interactions with your brand makes your brand relevant at the right time when the lead is engaged and close enough to your product or service.

By using the data presented, it is possible to identify the specific interest and activity level of your leads and adjust the marketing approach. Automation of the lead management process can help you increase effectiveness, efficiency, and improve your marketing strategies.

Step 4: Revisit Lead Management Process

It is a best practice to revisit your lead management system and check for the changes periodically as this will ensure that it remains effective and properly aligned with your ICP and business objectives.

This process involves evaluating and updating your lead qualification criteria, refining the segmentation of unqualified leads, and optimizing the use of automated workflows. 

Another crucial aspect of this process is the evaluation of previously deemed leads as unqualified. By re-evaluating their interactions and behaviors, you can identify any potential conversion opportunities that may have arisen since the last assessment.

Incorporating this practice in your lead management process, you can adapt easily to changes in your market and industry, while at the same time increasing your conversion rates and general productivity.

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Aligning your business with a targeted lead strategy saves you valuable time and resources, concentrating on leads with higher conversion potential. Let's collaborate to turn unqualified leads into pathways for substantial growth.

Get Rid of Unqualified Leads

Unqualified leads can significantly impact the sales funnel, resulting in wasted resources and lower conversion rates. To avoid this, businesses must understand what constitutes an unqualified lead and how to manage and identify leads effectively.

By better understanding qualified and unqualified leads, businesses can prioritize their efforts and allocate their resources more efficiently, resulting in higher conversions and overall sales success.

A robust lead nurturing system can help you persuade quality leads towards conversion; check out my guide to learn about it: B2B Lead Nurturing: The Ultimate Guide

Also, Check:

B2B Startup Marketing Guide: Key Elements and Strategies
Lead Nurturing Email Examples: Successful Samples to Follow
Proven Techniques for Generating Inbound Leads