Cold leads vs. warm leads: does it matter when sales prospecting?

Wondering whether you should target cold leads vs. warm leads? We’ll show you how you can shorten your sales cycle by focusing on warm leads that convert.
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If you got a dollar for every time you tapped “delete” or “report spam” on cold emails, how rich would you be?

Despite our experience of how annoying cold emails can be, being the salesperson on the other side of the keyboard means you risk being the bearer of an intrusive cold email, no matter how well written it may be.

Prospects read only 24% of sales emails as reported by HubSpot. So, how do you ensure that you reach the right prospect at the right time? 

The answer lies in your prospecting strategy. Here we explore the difference between warm leads vs. cold leads and how it affects your B2B prospecting success.

Is there any difference between cold leads and warm leads?

cold leads vs. warm leads

What is a cold lead in sales?

Traditionally, when we define cold leads, we refer to 

  • People or companies who are potential customers because they match your ideal customer profile (ICP).
  • People or companies who have never heard of your products.
  • People or companies who have never indicated an interest in your products or interacted with you.

What is a warm lead in sales?

Warm leads, on the other hand, refer to

  • People or companies who match your ICP.
  • People or companies who are familiar with your products.
  • People or companies who have indicated an interest in knowing more about your product.

The challenge warm leads and cold leads present when prospecting

Not only do your cold leads not trust you or your products, but there’s also a chance they don’t need your products, which results in awkward conversations or an email that gets ignored and deleted.

You are shooting blindly, and yes, we know that sometimes that risky shot gets a win. But do you have to bet the success of your B2B prospecting on a 1:100 chance?

That raises the next question. Are warm leads better than cold leads when prospecting?

Technically, yes and no. 😂

Cold and warm leads start to blur in the modern world

The traditional definition of warm and cold leads leaves many loopholes. By this definition, when someone shares their contact in exchange for a lead magnet, they’ve indicated an interest in your product and can be classified as warm leads. Considering the modern B2B buyer’s journey, this definition is reductive.

The age of personalization and dark social means that most leads are now warm in some way. Companies now introduce their products to customers through content marketing or paid ads and capture leads with lead magnets.

Yes, they are familiar with your company, but that does not mean they are ready to buy. As B2B buyers now prefer to research before speaking to a salesperson, an outreach because they downloaded an ebook can be premature.

”Cold leads typically require more qualification and discovery. There’s a higher chance of them needing to be nurtured. Additionally, because of this, they can take longer for me to move them through the top of the sales funnel.” -Aron Johnson, Outreach Partner, Panorama Education

You can track sales trigger events to overcome this challenge

You should look out for sales trigger events when prospecting cold and warm leads to improve your win rates. A sales trigger event such as a job change, new funding announcement, or new management could kickstart a new sales motion.

How to generate warm leads

Tracking this before contacting leads ensures that your outreach is both timely and relevant. Additionally, it keeps you in the loop regarding potential leads when they are ready to make a buying decision. ‍

The traditional definition of warm and cold leads leaves many loopholes. By this definition, when someone shares their contact in exchange for a lead magnet, they’ve indicated an interest in your product and can be classified as warm leads. Considering the modern B2B buyer’s journey, this definition is reductive.

”The reason warm is preferred over cold is that whether your hitting the lead's email inbox or ringing their phone, the lead recognizing your company or product's name makes for an easier transition into a conversation.” -Marc Lewis, Senior BDR, GRIN

Where can I find warm leads?

warm leads

1. Social media

I-scoop states that 84% of B2B buyers use social media to research solutions for purchase, making it an excellent medium to “warm-up” leads before contacting them. So how can you position your company to connect with warm leads on social media?

  • Provide value with your content: Content is the beacon that draws in your target audience and shows that you are familiar with their pain point. Before launching your social channels, create a strategy to convert leads to prospects through targeted content like use cases, ebooks, or case studies. Share expert opinions that speak to your ICP’s pain point, and when you provide value, it’s easier to pique their interest in your solution.
  • Targeted virtual events: Hosting virtual events like webinars and live interactive sessions that interest your target audience is another way to find warm leads on social media. Attending an event is a clear indication that they are interested in learning more about your product. Also, buyers appreciate the opportunity to learn about new trends in their industry and network with their peers.

2. Past customers and prospects

Lowest hanging fruit to identify warm leads for your demand gen. ? Identify where your customers are working now. This includes your former buyers, champions, and product users. These alumni customers are 3X more likely to convert than new leads.

Past prospects who didn't close the deal for the reason that has changed are also valuable warm leads. Let's say they couldn't afford your product before but just got funding. Or one of your champions just changed roles where they can influence the buying decision. 

This type of data enrichment will fill your CRM with warm, high-converting leads.

To find them, track job changes, and identify their new work email address and information to target them with email automation, gifting (direct mails), and ads.

3. Referrals and loyalty programs

Continuing from using customers as a resource for finding warm leads, you can also get referrals from them. When a past or existing customer refers you to another business, it’s a vote of confidence. 

And because the referral is coming from someone within the same industry with similar needs, these are usually qualified leads. We all agree that word-of-mouth recommendations speed sales deals, but how do you get your customers to make those warm introductions and referrals?

Here are three simple ways you can find warm leads with referral and loyalty programs

  • Ask past and existing customers: Based on the sales cycle of your industry, work with your marketing team to identify touch-points where you are most likely to get a referral from your customer or prospect. Some touch-points to consider are when they’ve used the product happily for a month or two, or when they give you positive feedback on your product.
  • Make it easy for them: Of course, you shouldn’t pressure your customers to refer to your company, but you can make it easier for them. Your referral system could be an easy-to-remember code, a customized link, or an email template they can use to introduce you and your product to new prospects. 
  • Provide rewards: Making sure you provide excellent service is the first way to get referrals. Giving incentives through loyalty programs wouldn’t hurt. You can provide a discount on your products or grant them some extra perks. 

Warm leads = warmer paths into accounts and increased B2B prospecting success

Winning cold emails is possible. If it weren’t, no one would still have it as part of their sales prospecting strategy. You can use these 8 Email Examples for UserGems Leads.

For shorter sales cycles and more successful prospecting, focus on warmer leads and finding the warmest paths into an account through sales trigger events like job changes. With UserGems, you can say bye-bye to irrelevant cold outreaches. We use AI to track when your past customers and prospects change their jobs and automate outreach at the best time. 

Why UserGems

UserGems helps companies generate more revenue by combining relationship data with trigger events to surface the most relevant buyers within target accounts. With UserGems, customers get a bigger pipeline and win more often.

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