Unqualified Leads: What Should Sales Do With Them?

Every company strives for more leads. However, more is not always synonymous with better. In my experience, businesses celebrate growing pipelines, only to discover that a very large portion of those leads have improbable odds of ever converting to a sale. These are unqualified leads who may engage briefly but are highly unlikely to become customers.

Unqualified leads are inevitable. So… what do you do with them? That choice determines whether they drain your revenue engine or augment it.

What Is an Unqualified Lead?

Just to clarify what an unqualified lead is, it is any contact that does not align with your Ideal Customer Profile (ICP) or meet your defined buyer readiness criteria. Unqualified leads lack the budget, decision making authority, need, or timing required to become customers.

That said, it is important that unqualified doesn’t always mean worthless. Many leads are simply "not qualified yet." With thoughtful engagement, some can be nurtured into real opportunities or help influence the acquisition of a future customer.

Here’s the million-dollar question...Should your sales team chase leads that are not ready? Well, it depends. 

When Following Up Makes Sense

Potential in the Pipeline: A lead might be a future customer and just is not ready now. Six months from now, the probability improves.

Market Education: Short calls can position your company as an informed, helpful partner. Being helpful has many positive benefits.

Long Cycle Value: In B2B with extended sales cycles, early proactive touches can pay long term dividends.

When It’s a Waste

Time Drain: Statistics indicate that up to 50% of a sales executives time, time you can never get back, is spent on unqualified prospects.

Forecast Pollution: Many Customer Relationship Management (CRM) systems overflow with low quality leads, skewing sales forecast accuracy.

Burnout: Repeated rejection from mismatched prospects can demoralize sales executives and put them on the hot seat for not meeting conversion expectations.

Best Practice

Implement clear qualification frameworks that are best suited for your business like BANT (Budget, Authority, Need, Timing) or MEDDPICC (Metrics, Economic Buyer, Decision Criteria, Decision Process, Paper Process, Implicate the Pain, Champion, Competition). 

These help your sales team know when to engage and when to punt, but there is some gray area that requires reasonable judgement. 

As an example, say your ICP is the CEO of a B2B company with a strict minimum of 10 employees. You get handed a lead. She is the CEO of a newly launched small company with three employees. Your product or service is overkill for her needs today. She knows it as she has done a lot of research on your website to plan for the future. She is bootstrapping growth organically, has strong momentum, and wants to be ready. The company is on track to have 10 or more employees within the next 18-24 months. 

What should you do? The lead doesn’t meet your ICP criteria. Budget (no), Authority (yes), Need (no), Timing (yes/no). It won’t contribute to you or your company hitting commitments this quarter, year or next year. Is this a qualified or unqualified lead? Should you spend any time on it?

The answer is yes, you should follow up and have an efficient discovery call. You should start the process of forming a relationship. Marketing should efficiently nurture the lead. Sales should share content they think will help and set a cadence for future follow up. While today it is not by definition qualified because of the ICP, this lead has downstream potential and CEO’s have strong peer networks which cannot be discounted.

Friction Between Sales and Marketing

No topic inflames inter-departmental friction between marketing and sales like unqualified leads.

Marketing’s viewpoint: They delivered leads. What is sales doing or not doing? It looks like many leads have not been followed up with yet. What the heck?

Sales’ viewpoint: They’re drowning in bad names and tire-kickers that aren't serious. It is a waste of time. What is marketing doing? What the heck?

The root cause of this is misaligned definitions of what constitutes a marketing qualified lead (MQL) versus a sales qualified lead (SQ). Without clearly shared and agreed upon criteria, both teams are often optimized for different goals.

Once those are defined, a clear Sales and Marketing service level agreement (SLA) is critical. It should outline how MQLs are defined and evaluated, sales’ commitments around feedback and follow-up, turnaround times, and escalation paths.

Companies with aligned sales and marketing see up to 208% more revenue.

Agency & AI Sourced Leads: Quantity Over Quality?

Small and mid-sized businesses often rely on agencies or AI tools for lead generation. While they can add value, many of these come with hidden risks:

Agencies may deliver lots of leads. However, if most end up unqualified, then they have not fulfilled their commitment. It is time to pivot.

AI-generated outreach can scale, but misfires with mismatched contact profiles or low buying intent are very common.

Regularly audit your sources and hold vendors accountable for the right metrics. It is not the number of leads, it should be the number of leads that convert to paid customers.

Extracting Value from Interaction with Unqualified Leads

Even when a lead isn’t ready to buy, like the example provided earlier of the growing small business, every interaction can still deliver business value. As a best practice:

Gather data: Learn what tools the lead is currently using and why they are not a fit now. You may revisit this in two years when they grow and establish a relationship because you retained that knowledge.

Raise Brand Awareness: Be the friendly, helpful voice they remember later. Remember six degrees of separation is a real and powerful thing. 

Ask for Referrals: “Who in your network is struggling with this issue?” This commonly opens new doors if you ask.

Test Messaging: Use these unlikely conversation opportunities to refine your pitch, positioning, and frameworks.

Remember to make these calls, but to keep these calls short, structured, and purposeful. Do not drain your limited time.

The True Cost of Unqualified Leads

Unqualified leads cost far more than they appear when you measure only acquisition costs.

Wasted Sales Time

As stated earlier, sales executives spend up to 50% of time on unqualified leads. One analysis estimates reps lose about 1,393 hours a year on unqualified calls.

Hidden Expenses

Even “cheap” leads rack up costs. For instance if a business has 100 unqualified leads and each costs $10 to get, that is $1,000. Next, add the sales executives' time ($3,000), follow-up cost ($1,000), lead management ($250), and that adds up to $4,250. The real cost for yielding no revenue is $5,250 or $52.50 per lead. In contrast, 20 qualified leads at $70 each may convert and while the leads seem more expensive, they deliver a lower real cost per lead given the efficiency gained in spending time on 20 good leads instead of 100 unqualified ones.

Forecast and CRM Chaos

Poor quality leads clutter the pipeline and your companies CRM systems, leading to poor forecasting, missed opportunities, and missed quotas.

Customer Experience Damage

Pursuing mismatched leads not only wastes resources, it harms your brand. If an unqualified lead feels like a misfit, they ghost you or worse, they may harm your reputation.

What Small Business Leaders Should Do About It

Navigating unqualified leads are part of the role as a small business founder and a sales executive. By optimizing your sales process, small and mid-sized businesses can turn them from burdens into strategic assets:

Align Early and Often: Have marketing and sales define ICP, MQLs, SQLs and govern handoff with an SLA.

Adopt Qualification Frameworks: Train teams on your framework, whatever it is. Enforce this.

Automate Where It Counts: Use lead scoring, routing logic, and disqualification rules to protect sales time.

Track the Right Metrics: Go beyond cost per lead and focus on cost per qualified lead and pipeline to revenue conversion.

Audit Your Lead Sources: If agency or AI vendors deliver unqualified leads, address it quickly, renegotiate or switch.

Nurture Proactively: Design automated drip campaigns for the MQL leads who may have some potential at some point.

Final Takeaway

Unqualified leads should not result in finger pointing or thinking things are failing. Left unmanaged, they negatively impact time, money, and morale. Treated strategically, they provide education, early touchpoints, and brand awareness.

For SMBs, the difference between accelerating growth and flattening out often comes down to focus. By tightening alignment, reinforcing qualification, and mining insights even from leads that are not the perfect fit, you can turn a liability into an advantage.

Let us know how we can help you get focused on the right leads and then convert them quickly into loyal customers. 

For additional sales tips, sales insights, and revenue growth best practices, visit Justellus’ Sales Growth Blog.