Good Leads and Bad Leads: How To Identify Them?

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Identifying qualified leads is one of the most important aspects of any sales funnel. Not every lead is worthwhile, and you shouldn’t pursue all leads in the same way. Some leads will be ready to buy right away, while others may need more time and nurturing before they’re ready to make a purchase. 

Knowing the quality and current stage of your leads is essential to saving time and money on your sales cycle. Don’t waste time on bad leads that will never convert — focus your efforts on good leads that have a higher chance of becoming customers. 

In this article, we’ll discuss what makes a good lead and how you can identify bad leads. We’ll also offer some tips on how to boost the number of warm leads your funnel brings in.


What a good lead looks like

A good lead is someone who’s interested in your product or service and has the potential to become a paying customer. Good leads will exhibit the following qualities: 

  • They need your product or service. 
  • They’re able to make decisions regarding purchases. 
  • They can afford to pay for your product — ideally your premium offering if you offer tiered plans.
  • They’re currently in the market for what you have to offer.

Nurturing potential prospects only to find out they don’t have the authority to sign off on your contract is a huge time-waster. If the decision-maker goes a different way, that’s money and time that you could have spent on a different lead.

Identifying good leads requires attention, a focused team, and the right tools. For example, if you are managing a sales fleet, telematics can help your sales reps automate menial tasks like mileage reporting so your sales team can focus solely on qualifying and closing leads.  

There are three main types of leads: 

  • Marketing Qualified Leads (MQLs): Leads that marketing identifies as having the potential to become paying customers. Marketing will pass these leads on to sales for further nurturing.
  • Sales Qualified Leads (SQLs): Leads that have been qualified by sales as being ready to buy. These leads have had initial contact with the sales team in a productive conversation.
  • Sales Ready Leads (SRLs): Leads your marketing team believes to have buying intention based on objectives set out by the sales team. These leads are usually the result of a successful nurturing program and are the hot leads that every sales team wants.

The quicker a bad lead is identified, the less it’ll cost the business in time and money. Sales teams don’t want to waste their resources on leads that don’t have a genuine interest in the product. Not all sales will convert, but if a prospect never intended to buy from the start, it’s just a wasted effort.

However, giving up too soon can be costly. Most sales happen after rejection, so if you’ve identified a good lead, it’s worth it to follow up with them.

The tell-tale signs of a bad lead

Bad leads are those that will never convert into paying customers. They might be interested in your product or service, but they don’t have the budget to pay for it. Or, they might not need your product or service right now, but they could in the future. 

A bad lead is unique to a business, so you and your sales team must determine what qualifies as one. Once you’ve established what a bad lead looks like for your business, you can put systems in place to filter them out of your sales funnel and into an automated email campaign. 

One way to do this is by using a lead scoring system. That’s where you give each lead a score based on specific criteria that indicate how likely they are to convert into a paying customer. The requirements can be anything from job title and budget to the lead’s engagement with your brand. 

Some common indicators of a bad lead are:

Their business is the wrong size for your solution

If you’ve built a product that’s for enterprises with 5,000 or more employees, a small independent business with less than five team members isn’t going to be a good lead.

They might not have the financial resources to invest in your solution, or simply don’t need the features that your business offers. 

They don't have the budget to pay for your product or service

A prospect who simply can’t afford your product is not yet a qualified lead. Of course, while this may change in the future, right now, it’d be redundant to keep nurturing this lead.

They're not able to make purchasing decisions

Sometimes emails land with the wrong person, or the call handler transfers your sales team to a person without the proper authority. These leads might be interested, but they can’t do anything about it.

They're not likely to buy from you in the near future

Some leads might be interested, but they have no immediate need for your product. They could become customers down the line, but now it’s not worth your sales team’s time.

The prospect is uninterested in your sales attempts

If you’re attempting to contact a lead, but they’re not responding, it’s probably a bad lead. There are some exceptions to this, such as if the lead is on vacation or out of the office, but generally speaking, no response means they’re not interested.

An uninterested party may give you false or bad data just to get rid of you. If this happens, it can reduce the effectiveness of your lead generation and clog up your sales pipeline.

What to do when you get a good lead

Ask qualifying questions

When you first speak with a potential lead, it’s important to ask qualifying questions that will help you determine if they are a good lead. Here are some examples of qualifying questions you can ask: 

What's your budget?

This question cuts straight through the noise and can quickly identify whether this customer is a good fit or not. If your product is out of their price range and there’s no room for negotiation, it’d be a waste of both parties time to keep pursuing the partnership.

What are your objectives for this project?

Asking about objectives will help you understand what the lead is looking to achieve and whether your product can help them reach those goals. If their objectives don’t align with what you offer, it might not be worth pursuing the lead.

When are you expecting to see results?

This question will help you understand the lead’s timeline and if they’re expecting to see results too soon for your product to realistically deliver. If they’re expecting an outcome in a week and your product takes six months to show results, pursuing this lead may end poorly. 

By asking qualifying questions, you can quickly identify which leads are worth pursuing and which ones aren’t.

Boost your lead generation with affiliate marketing

A great way to generate new leads without overextending your marketing budget is using affiliate marketing. Setting up an affiliate network enables people to promote your product for you in exchange for a small commission on the earnings.

Affiliate marketing is a good way to identify leads. When implemented correctly, you can bring in new prospects directly to you via affiliate marketing. This means you save time on recruitment activities and free up more time on other aspects of your business.

The new revenue an affiliate program generates usually outweighs the cost of commissions. After all, if your affiliate partners don’t make any sales, you don’t have to pay anything out.

Create page-specific lead magnets to attract warm leads

Another way to boost your lead generation is by creating lead magnets. A lead magnet is an irresistible free offer that helps you capture leads and grow your email list.

The best lead magnets are specifically designed for certain landing pages, and help move the lead down the funnel automatically.

By offering something of value for free, you can capture leads that wouldn’t have otherwise been interested in your product. These leads are then ‘warmed up’ by receiving valuable content from you over time, making them more likely to convert into paying customers when they’re finally ready to buy.

To be effective, your lead magnet needs to be carefully targeted at your ideal customer and offer them real value. You should clearly feature it on relevant pages that get organic traffic and promote it through social media and other channels. You might also want to build and use a set of email templates to make your lead emails more engaging.


Qualifying your leads is essential to make sure you’re not wasting time and resources pursuing bad leads. Create profiles for what good and bad leads look like for your business.

The more time you can save your sales team, the more time they have to pursue high-quality leads that will end with more conversions for your service.

Picture of Guillaume

Guillaume is a digital marketer focused on handling content management at Wordable. Outside of work, he enjoys his expat life in sunny Mexico, reading books, wandering around, and catching the latest shows on TV.

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