Is your marketing department wasting time on leads that will not convert? Your process of qualifying leads must need a little fixing.
Imagine having a steady flow of leads coming in without spending hours cold calling or spamming people on social media. It’s possible, and you’re about to find out how.
In this step-by-step guide, we’ll show you how to qualify leads so you can focus on the ones that are most likely to turn into customers.
Lead Qualification Process Defined
A lead is an individual or organization that has the potential to become a paying customer for a product or service. The lead qualification process determines whether or not a lead is worth pursuing. Typically, you can do this by evaluating the lead’s fit with your company and its products or services.
You must consider the lead’s demographics, interests, where they are in the buying process, and how much money they are willing to spend. If all of these factors indicate that a lead is not a good fit for your company, you may disqualify them.
Steps to the Lead Qualification Process
How do you decide whether or not a lead is worth pursuing?
The first step is to understand what your company or product offers and who your ideal customer is. Once you have that information, you can build a buyer persona.
What is a buyer persona?
Think of the buyer persona as a semi-fictional image of your ideal customer based on market research and actual data about your existing clients. When building a buyer persona, you’ll want to include the following information:
- Demographics: age, location, gender, job title, income, etc.
- Psychographics: interests, hobbies, values, media consumption habits, etc.
- Behaviors: how they make purchasing decisions, what objectives they have when researching a product or service, what problems they need to solve, etc.
The goal is to find leads that match as many of the characteristics of your buyer persona as possible.
The next step is to decide what information you need from a lead to determine whether or not they are qualified. It will vary depending on your company, product, and buyer persona. But there are common data that your sales team needs, such as:
- Contact details (phone number, email address, etc.)
- Company name and size
- Job title or role
Now that you have collected all the needed information, start contacting them and ask questions about their needs and requirements.
But who to call first?
You may use lead scoring to prioritize the most promising prospects.
Lead scoring is the process of ranking leads to determine how qualified they are as potential sales prospects.
Typically, lead scoring models are built using qualitative and quantitative criteria that reflect a lead’s engagement level with your brand and their potential fit for your products or services. Lead scoring aims to help sales and marketing teams prioritize their outreach efforts to spend their time and efforts on the most qualified leads.
Lead scoring models can be as simple or complex as you need them to be, but they all start with two key components: criteria and values.
Criteria and Values
Criteria are the characteristics that you’ll use to score your leads (job title, company size, location, or industry). Values are the numeric scores you’ll assign to each criterion (for example, 1-5). Once you’ve determined your criteria and values, you can build your lead scoring model.
There are different ways to score leads, but the most common approach is to assign points for each criterion based on how likely it is to indicate a high-quality lead.
For example, if the job title is one of your criteria, you might give higher scores to leads who have titles like “VP of Marketing” or “Director of Sales” than you would to leads with titles like “Assistant Manager” or “Intern.”
Once you’ve assigned scores to all of your criteria, you can add up the total score for each lead, so you get their lead score. Those with higher point values are your most promising leads.
Classification of Leads
Leads are classified based on their engagement level with your brand.
MQLs (Marketing Qualified Leads)
Marketing Qualified Leads are individuals who have been identified as having a higher likelihood of becoming customers. These leads have engaged with your marketing and sales teams by subscribing to a newsletter or downloading a white paper.
SQLs (Sales Qualified Leads)
Sales Qualified Leads are those MQLs who have progressed further down the sales funnel and are more likely to convert into customers.
These leads have been contacted by a sales rep and determined to be a good fit for your product or service.
PQLs (Product Qualified Leads)
Product Qualified Leads have shown interest in your product by downloading a product brochure, requesting a demo, etc. These leads may not be ready to buy yet, but they’re further in the sales cycle than MQLs.
CQLs (Customer Qualified Leads)
Customer Qualified Leads are those who have already purchased your product or service and are now interested in learning more about upgrades, additional features, or buying again. These leads are at the bottom of the sales funnel and are the most likely to convert into customers or repeat customers.
Unqualified Leads do not meet the basic criteria that you’ve established for your ideal customer. For example, if you sell products or services to businesses in the United States and a lead is based in Canada, they would likely be considered unqualified.
Other reasons why a lead might be considered unqualified include:
- Not having the budget for your product or service.
- Being in the wrong stage of the buying cycle.
- Showing no interest in your brand.
So, when is the right time to disqualify a lead?
Some people believe that there’s never a right time to disqualify a lead, while others believe that there are certain red flags that indicate it’s time to do it.
Here are a few signs that may help you in your decision:
They’re not interested in your product or service
There are a few clear signs that a customer is not interested in your product or service. They may ignore your attempts to engage them; they may be evasive when you ask questions about their needs or clarify that they’re not interested in what you’re offering.
If you see any of these signs, it’s best to move on and find customers who are more likely to be interested in what you offer.
They can’t afford your product or service.
Even if the customer is interested in your offering, if they may not be able to afford it, there’s no point in continuing the relationship. There’s nothing worse than getting a customer’s hopes up only to be disappointed when they realize they can’t afford your product.
If you think a customer may not be able to afford your product, it’s best to ask directly and find out.
They’re not ready to buy now.
If a customer is interested in your product but not ready to buy, what you can do is nurture them until they are ready. You may send them helpful information about your product, stay in touch with them regularly, and offer them discounts or coupons.
They’re not in your target market.
If a customer is not in your target market, it’s unlikely that they’ll ever become a customer. They have no pain points that your product or service can solve, so there’s no point in selling to them.
They don’t have the authority to make a purchase decision.
In some cases, the person you’re talking to may not be the decision-maker. For a sale to be made, you need to speak to the person who has the authority to make a purchase decision.
If you’re unsure of who that is, you can ask the person you’re talking to or do some research on the company’s website.
What Questions to Ask?
Sales reps need to know the right questions to ask during the discovery call.
First, you need to know if the lead is interested in your product or service. You can determine this by asking questions about their specific needs or pain points. If they express interest in your solution, you might have just found your next qualified lead.
Next, you need to determine if the lead is ready to buy. You will know this by asking questions about their budget, timeline, and decision-making process. If they can provide specific answers, they are likely ready to buy.
You also need to determine if the lead is a good fit for your business. This can be done by asking questions about their business size, industry, and success criteria. If they meet your ideal customer profile, you know you have a good lead.
Sample questions sales reps usually ask during a discovery call:
– What need does your product or service address?
– What are your current solutions? Are you happy with them? If not, why?
– Have you tried our product or service before? If so, what did you think?
– How soon do you need a solution?
– What is your budget?
– Who else is involved in the decision-making process? When do they need to be involved?
– What are the key decision criteria?
– Are there any other factors we should be aware of? (e.g., timeline changes, budget constraints, etc.)
Qualities of a qualified prospect
High-quality leads must be or must possess the following:
- They are the decision-maker and have the purchasing authority
- They financially able
- They have no existing contract with a competitor
- They have pain points that your product solves
- Their timeline to make a decision is amenable to you
- Their company’s size and type are a good fit
- They are reachable
Lead Qualification Frameworks
Now, let’s talk about qualification frameworks.
Top-performing organizations know that acquiring a new customer is greater than the cost of keeping an existing one.
For this reason, these companies are always on the lookout for ways to improve their customer retention rates. They do this by lead qualification frameworks, which help them weed out unqualified leads and focus their energies on prospects that are more likely to convert into paying customers.
So, what is a lead qualification framework? In short, it is a set of criteria that you can use to determine whether or not a lead is worth pursuing.
You can do this through various methods, such as the CAN-AM method or the MEDDIC process discussed below.
Lead Qualification Methods
The Bant method is a sales technique that helps identify and qualify potential customers. The acronym BANT stands for Budget, Authority, Need, and Timeline. By asking questions about each of these criteria, salespeople can determine whether a potential customer is a good fit for their product or service. If a customer does not have the budget to purchase your product, there is no point in trying to sell it to them. Asking questions about funding, authority, need, and timeline can help salespeople save time and energy by focusing on customers who are more likely to purchase.
The FIRST method of qualifying leads is reliable for determining whether a potential customer is worth your time and energy. The acronym stands for Fits, Interest, Budget, Schedule, and Trial Close.
To use this method, ask your lead if they meet each criterion. Fits refer to whether the product or service is a good match for the customer’s needs. Interest refers to how interested the customer is in purchasing the product or service. Budget refers to whether the customer can afford to purchase the product or service. The schedule refers to whether the customer has the time to use the product or service. Trial Close refers to whether the customer would be willing to try a product or service sample.
The Challenge, Authority, Timeline (CAT) method is a simple yet effective way to qualify leads.
The Challenge refers to the prospect’s problem or need. Does the candidate have a challenge that your product or service can help with? If not, then they are not a good lead. The authority refers to the decision-making power of the prospect. Is the prospect someone who has the authority to make a purchase? If not, then they are not a good lead. The timeline refers to the prospect’s timeline for making a purchase. Is the prospect ready to buy now or in the near future? If not, then they are not a good lead.
The CAN-AM method of qualifying leads is a standard tool used in the sales industry. It stands for Capability, Authority, Need, Ability to Pay, and Motivation.
Capability refers to the ability to purchase your product or service. This can be determined by evaluating factors such as the lead’s budget and whether or not your offering is well-suited for their needs.
Authority refers to a lead’s ability to make decisions within their organization. It includes the job title and decision-making authority within the company.
Need refers to a lead’s need for your product or service. It can be determined by evaluating factors such as the business pain they are experiencing and how your offering can address them.
Ability to pay refers to a lead’s ability to budget for your product or service. It is determined by evaluating their price sensitivity and willingness to invest in your offering.
Motivation refers to a lead’s motivation for purchasing your product or service. This can be determined by evaluating factors such as their timeline for making a purchase and the urgency of their need.
The MEDDIC process is a well-known and effective method to qualify leads. It stands for Market Need, Economic Buyer, Decision Criteria, Decision Process, Identify Competitors.
Market Need involves understanding the customer’s business pain and what they are trying to achieve. It requires research and discovery on the part of the salesperson.
Economic Buyer is about understanding who has a budget and decision-making authority.
Decision Criteria involves understanding what factors will influence the decision-makers when they choose a solution. It includes price, features, reputation, etc.
Decision Process is about understanding how the decision will be made. Will it be a committee? Will multiple stakeholders be involved?
The fifth and final step, Identify Competitors, is about understanding who else the customer might be considering as a solution to their problem.
Sales are all about qualifying leads- determining which prospects are most likely to buy what you’re selling. There are different methods sales professionals use to qualify leads. Understanding each step of these processes and how they can be applied to your business is your ladder to success in sales.
You can have your custom version of these methods (or others) based on their specific products/services and target industry. The important thing is to have a well-thought, practicable process for qualifying leads so that your sales teams can focus their time and energy on the most promising prospects.
Here are other questions about Qualifying Leads that we have not discussed in the article.
A sales pipeline is a systematic, often automated process that companies use to score, nurture and convert leads into customers.
The idea behind a sales pipeline is simple. By breaking down the sales process steps, companies can better identify potential leads and craft targeted messages to move those leads through the funnel toward becoming customers. By understanding where each lead is in their buyer journey, companies can more effectively market to them and ultimately close more deals.
Sales qualification is determining whether a potential customer is likely to purchase your product or service. This involves assessing their needs and understanding their budget and decision-making process.
Similar to the lead qualification process, you can qualify a sales lead according to the following:
· How well they understand their current situation and what their objectives are
· Whether they have the authority to make decisions and allocate resources
· Their financial situation and budget constraints
· The timeline for making a purchasing decision
· The likelihood of them using your product or service