In the world of sales, the focus is most often on how well you close a deal. The art of deal-closing is usually the priority for companies. However, opening a deal is of equal importance and matters a lot in the sales process. You have to follow prospects that need your product or service along with the budget for it. Only then can you successfully close a deal and ensure that the customer ties up with you over the long term. Identifying sales leads that have potential is by and large the most essential part of the sales process. Therefore, you should have a step-by-step approach for qualifying sales leads. Before getting into the lead qualification process and what a lead qualification checklist is, let’s look at what lead qualification is all about.
Lead Qualification involves determining whether a prospect matches the ideal customer profile you created and how likely he or she will turn into a customer (even better if there’s a chance of becoming a long-term customer).
To qualify leads, you must gather all the information you can about them. It will help make you pick the most promising leads out of the lot and proceed with them. That works well in saving resources.
When you prioritize the highly qualified leads, your conversion rate is more likely to increase, and you will be working with customers who value your product or services.
For instance, consider this, a person had 10,000 leads but contacted only 11 qualified leads out of them. Out of them, he got 7 customers. Here he got a 64% conversion rate.
The person above targeted only the highly qualified leads and was able to get what he wanted.
The above example stresses that by pursuing qualified leads, you can achieve your goal with much ease. In the real world, contacting all the 10,000 leads would result in mental fatigue without getting such a good conversion rate.
Here’s how lead qualification works,
1. The first step involves collecting your leads. They can be via email subscriptions or social media.
2. You have to see whether the lead fits into the ideal customer profile you made. (You will learn about this later)
3. After the lead qualification, it is up to you to choose to customize the proposal for them or pursue a different lead.
Not following all the leads may seem like missing out on the opportunity to convert them into customers. However, this is not the case. Pursuing prospects who don’t fit into your ‘ideal customer’ definition will result in more churning and unsatisfied customers. That is why qualifying sales leads first is essential. Most often, in the attempt to close a deal, one can approach a lead that doesn’t seem to fit in. The result of such an action is not so desirable. It can lead to disappointment later on.
Lead qualification is a part of the sales funnel. It enables you to determine whether your product or service will satisfy the prospect’s needs and whether the person has the finance to make a purchase.
By going ahead with qualified leads, you won’t be investing time, money, and effort on prospects who are not likely to turn into customers. It is better to focus on those who seem to have the potential to purchase your product or service. You will be saving resources by not pursuing prospects who are less likely to convert. That reduces the workload of the sales team and increases their productivity in the long run.
In short, when you qualify leads, you can find out whether a person has the intent and ability to purchase your product or service before you proceed with them.
The lead qualification process has three levels. All leads have to go through the funnel to get the label of being ‘sales ready’ leads.
A marketing qualified lead refers to a lead that a marketing team analyzes and labels as a potential customer ideal for targeting.
To find out how interested a lead is in your product or service, the marketing team comes up with freebies such as content, free trials, or e-books. These are lead magnets, and if leads opt for them, they turn onto MQL or marketing qualified leads. This way, you can move the interested leads further down the sales funnel.
SAL or Sales Accepted Lead is an MQL that the marketing team nurtures, qualifies and sends ahead to evaluate further in the sales funnel.
After passing the first 2 stages, a lead becomes an SQL or Sales Qualified lead. That is when the sales team accepts it as it meets all the criteria to become a potential customer.
The marketing and sales team have to be on the same page to get the sales funnel moving smoothly. There are also occasions in organizations when the two teams disagree over the leads. That is when SAL helps in bridging the gap the marketing and sales teams have in between them.
At times, the SAL is not a part of the sales process in many organizations as they don’t find the need for it. However, for B2B organizations, SAL is essential. They have to add this step as it is crucial for the demand creation process.
Qualifying leads need not be a daunting task, especially when you have a step by step approach to it. Here is a process that works every time.
Lead qualification is way ahead in your sales funnel. You have to work on an ideal buyer profile before even starting lead generation. So, you have to build an ideal profile by asking specific questions:
a. What makes an ideal buyer? You want to work with whom?
b. What is the revenue they make over a specific time period?
c. What are the problems /challenges that they face?
d. In which industry are they?
e. Who are you selling to – an executive, manager, or the owner of the company?
Using the above, you have to build the buyer profile in detail with the sales and marketing team’s consent. You can qualify leads based on it, which will undoubtedly help save a lot of time and energy. There is nothing more disappointing than following up with a lead who doesn’t convert.
With the help of CRM, you can have a look and track the activities of leads. You would know which are the ones that are worth pursuing. If you get to know that they are reading your blogs and leaving comments on your posts, it means that they have an interest in your company’s product or services.
If they happen to visit your sales page and search for the pricing of your solution, it means that they intend to buy.
So, who is the better of the two? You can label leads with a buying intent as the more qualified leads compared to those who only have an interest in your product or service.
Depending entirely on technology is not the right thing to do. When you see that a prospect has a high score on your CRM software, it doesn’t automatically mean that they are the right leads. Know who you should get in touch with before you invest your time, money and efforts.
For instance, if you sell to executive level people and the lead in front of you is a low level IT manager, it is not wise to go ahead. However, you can use this opportunity to get into the organization and get in touch with the organisation’s decision-maker
To find out more about the lead, you need to look at the prospect’s company’s website. You will get the information you are looking for, such as their ability to purchase your product and service. You will get an idea of the software they are using and how likely they are to implement what you have to offer. It is an important step.
In case you are not using CRM right now. You must get one because it is essential for lead qualification. It will help you handle high volumes of leads quickly and efficiently.
Instead of getting one CRM tool, it is much better to choose an all-in-one platform that helps you with prospecting, outreach, and closing. SalesBlink is one such platform that reduces the workload of sales teams tremendously.
Here are some questions that should be present in every lead qualification checklist,
It may seem like a fundamental question, but the answer can be tricky. Those who look like qualified leads may not have the interest in committing to a deal. The reasons why they have been showing interest in your product or service can be:
-Their urge to stay updated with news through your newsletter
-The freebies you are offering
At times, they may be genuinely interested in your solution but cannot buy it immediately.
To find out if a person wants to buy your solution, you can straight away ask them. Here are a few you can ask via email, phone or chat,
-Do you want to purchase our solution?
-Can I suggest a pricing plan that will be suitable for you?
-Are you interested in knowing more about our solution?
When the answer to any of the above is a ‘No’, or the lead doesn’t reply to you at all, it means that the lead is not qualified.
There can be instances when those who want to purchase your product or service do not need it. They may realize this eventually, and as a result, you have to face rejection or negative reviews if they go ahead with the purchase.
Here is what you should ask them,
a. What are your present goals?
b. What is stopping you from achieving them?
c. What steps are you taking to overcome them?
After you get to know the lead’s needs, you can define whether your product or service is suitable for them or not.
Finance is not always an easy topic to discuss. Asking leads whether or not they can afford the solution is quite rude. You can’t ask someone whether they have the money to buy your product or service. There is a need for diplomacy, and you have to ask the question tactfully to a lead.
Here is how you must ask,
-Which solution are you using currently?
-Do you think that their price is fair enough?
-What is the price range that seems fair enough to you?
With the above questions, you can get an idea of the lead’s budget without asking it directly. You get your answer without hurting the other person.
A lead would want your solution but not be prepared to make a purchase. However, they will be ready for it one day. You can segment your leads and know where they are in the sales funnel so that you can reach out to them when the time’s right.
Here are some questions that you must answer to know the status of the prospect,
-Where are your leads in the buying process?
-What is the time frame they need to make the purchase?
-What is preventing them from making a purchase currently?
When the prospect is not ready to make a purchase immediately, ask them when would be the right time to approach them for closing the deal.
As you have read above already, you have to make sure you are talking to the decision-maker. You can ask about the prospect’s purchasing authority by posing the questions mentioned below,
-Who decides what solutions the company requires?
-Who is the best person to talk to for a potential solution to resolve your organization’s problems?
-Do I need to speak to anyone else?
You will get your answer and if the lead has no authority, he will direct you to the decision maker.
There are specific frameworks that sales reps use to qualify leads, to make their job easy. The most widely used frameworks are as follows:
BANT stands for the four characteristics – Budget, Authority, Need, Timing. It is the brainchild of IBM and is a lead qualification framework that is in wide use today.
Based on the 4 characteristics, the potential BANT questions are the following:
1. Budget – Is the product or service fitting into the purchasing budget of the prospect?
2. Authority – Does the prospect have the authority to make the buying decision or is someone else the decision-maker?
3. Needs -What is the extent to which the prospect needs your product or service? Is there a real need, or is the prospect only exploring the product or service?
4. Timeline – Is the prospect ready to purchase the product or service?
The BANT technique is suitable for expensive products or services that everyone cannot afford. This has B2B brands on the list.
Pros and cons of BANT
1. It is simple.
2. You can use and implement it easily.
3. It has a proven track record.
1. It is slow and not suitable for fast-moving organizations.
2. It cannot handle clients who have an unknown need.
3. It cannot tackle multiple stakeholders.
InsightSquared devised this framework. CHAMP stands for Challenges, Authority, Money, and Prioritization. It makes sure that one asks the important questions first. It starts with the challenges, needs, and pains that the prospect’s company experiences.
1. What are the objectives the prospect wants to achieve by solving the problem/pain? (Challenges)
2. How do they make purchasing decisions, and who is the decision-maker? (Authority)
3. How much should the investment be for the product or service? (Money)
4. When can implementation commence from? (Prioritization)
The CHAMP technique suits situations where the leads are not aware of what your product or service is all about. This framework understands the challenges of prospects first. Your sales team will be able to determine whether the product or service is suitable for the prospect or not. It helps disqualify the leads who don’t need the product or service.
Pros and cons of CHAMP
1. It focuses on the needs of the client.
2. It qualifies leads who are not aware of their needs.
1. It is not swift enough (slower than BANT)
2. It requires you to find the ROI
MEDDIC is a framework of lead qualification that has an emphasis on overlapping factors.
Metrics: What is the prospect expecting in numbers out of the solution you provide?
E.g.: It can be to increase their revenue by 10% each year
Economic buyer – Who is making the purchasing decisions?
Decision criteria: How does the prospect decide whether to make a purchase or not?
Decision process: While contemplating a purchase, what process does the prospect follow?
Pain point identification: Which problem does the prospect want to resolve with the product or service?
Champion: Is there a person in the prospect’s company who trusts your products or service and can play the role of a champion for it?
MEDDIC framework is suitable for high-ticket products and services that have a low sales volume. Most often, it is for software products that cost a bomb. The sales team can afford to have an in-depth conversation with the lead and gather all the information for such products or services. It doesn’t work for low-cost products sold in huge volumes.
Pros and cons of MEDDIC
1. It helps you understand the likelihood of the lead making a purchase.
2. It enables you to increase the knowledge of the buying process of prospective buyers.
1. It needs the right software to manage information.
2. The focus is not on the needs of the leads.
3. Someone from inside the company has to pitch the solution.
ANNUM has factors similar to the BANT framework. It is just that the order is different. ANNUM stands for Authority, Need, Urgency, and Money. Here the prospect’s decision-making authority is crucial, and the money is the last one on the list.
It suits those prospects where you don’t know who has the authority to confirm the purchase process. It is usually the case for startups where there are no well-defined processes.
Pros and cons of ANUM
1. It works for budgets that fluctuate.
2. It helps in prioritizing the needs of clients.
3. It gives excellent outcomes when you reach out to the right person.
1. It doesn’t work when clients have no previous experience with your solution
2. It cannot qualify leads who have not decided that they need to buy your solution.
FAINT stands for Funds, Authority, Interest, Need, and Timing. It is also a form of BANT where the main factors are the prospect’s budget and the purchasing authority. In addition to that, there is an ‘interest’ factor. Both the sales and marketing teams have to determine the degree of interest the prospect has in the product or service.
This lead qualification framework works for those prospects who are not aware of your product or service’s existence. It is in clear contrast to those who know about your products or service well and for whom the BANT technique is suitable.
Pros and cons of FAINT
1. It is ideal for new customers who don’t know about their needs.
2. It helps in getting a better and more customized sales pitch.
1. It doesn’t work for clients who know their needs already
2. It is time-consuming.
This lead qualification framework stands for Goals, Plans, Challenges, Timeline, Budget, Authority, Negative Consequences, and Positive Implications. This framework is from HubSpot and has the following potential questions,
a. Does the prospect’s company have any specific goals?
b. Do they have the resources to implement the plan?
c. How are they dealing with the present challenges?
d. When can the plan’s implementation begin?
e. Are they using the budget already to solve the problem?
f. What would those who have the decision-making authority say?
g. How would achieving the goal help with personal consequences or implications?
Pros and cons of GPCTBA/C&I
1. It focuses on the goals of the leads rather than their needs.
2. It helps salespeople gather a lot of information.
1. It is too thorough for companies having basic needs
2. Too much information can make one misinterpret it.
3. As a sales rep, you have to thoroughly understand the business’s goals, challenges, and needs beforehand.
Now that you know how to go about qualifying sales leads, it is time to buckle up for the ride. Start evaluating and analyzing leads before reaching out to them. In other words, do your homework well so that you are ready. Walk the extra mile and take the time to work on your leads and identify the ones that qualify. Track their behavior carefully so that you know who is more likely to make a purchase.
Most importantly, keep the ideal buyer profile in your mind when you approach a new prospect. That is the first step of the whole process. Also, don’t attach a negative connotation to disqualifying a lead. You are doing nothing wrong and can do so without any second thoughts. It is for the good of the company in the long run. Doing so will save you from a lot of trouble in the future in the form of unsatisfied customers who don’t need your product or service.
The lead qualification process is easier when you have a checklist in hand. You won’t miss out on anything. Seek the help of lead qualification frameworks as they tell you how to qualify sales leads. In addition to that, many tools can make the lead qualification process simpler for you. Use automated tools to bring down the burden on your sales team to focus on other activities of the sales funnel.