How To Qualify Sales Leads: The Ultimate Guide to Sales Leads Qualification
Not so happy with your sales performance despite making immense efforts to generate more leads?
We have good news and bad news…
You may have been chasing vanity metrics, such as the number of new leads. And that has wasted your valuable time and resources for too long.
On the bright side:
The answer to actually enhancing your sales cycle is in sales leads qualification.
In today’s article, you’re going to learn:
- What is sales lead qualification?
- Why is sales lead qualification important for your company?
- How to qualify sales leads more effectively?
Let’s dive into that.
What is Lead Qualification?
Lead qualification is the practice of evaluating how well your prospects fit in the sales cycle. In other words, it’s the process of shortlisting leads based on quality and their likelyhood of converting in later stages.
Qualifying leads helps you determine which potential buyers are worth your time and effort. You’ll be able to tell early on which a prospective clients are interested in your products and services and whether they’re going to convert.
Why Lead Qualification is so Important?
Imagine if you had a tool that tells you — with a high degree of accuracy — how likely is a prospect going to convert.
Such a software is yet to exist in the real world. But the closest you can get to that is a brilliant lead qualification strategy that can save you time, money, and a lot of frustration.
Here are four reasons why developing a lead qualification is a vital for success in sales:
1. Save Time and Resources
More often than not, unqualified prospects are a huge waste of your time and money. They’ll blend in with quality prospects in your funnel, making it impossible for your sales team to decide which prospects they should reach out to and try to nurture.
Efficient lead qualification can do wonders in saving your sales representatives’ time and efforts. It will allow them to only focus on the leads that matter to ensure the highest conversions at the bottom of the funnel.
2. Understand Your Client Base
Qualifying leads allows you to better understand your customer base and what type of leads are most likely to buy from you. That’s because developing a lead qualification strategy takes some serious planning and research.
You must analyze your best customer profiles to identify what has worked in the past and what things you could change to improve sales performance. You’ll also spend a lot of time studying new buyer personas so you can set new metrics for your team to aim for.
By understanding prospect is worth pursuing, you’ll set a clear vision for your sales team on which customers you’re trying to convert.
3. Improve Your Sales Team Effectiveness
It doesn’t take a genius to realize that focusing on high-quality leads improves sales performance.
Depending on your products and services, the whole sales process can be quite long and time-consuming. Thus, getting your sales reps to focus on bad leads will only drain them out and kill their motivation.
That’s why disqualifying prospects that don’t fit your ideal lead criteria is the best favor you could do your sales team.
Because on the contrary:
Focusing on qualified leads will cut down customer response time, which eventually leads to a shorter sales cycle that keeps both you and your sales team happy. Your SDRs will be more efficient and have more time to generate new leads or reach out to other important clients in your industry.
4. Close More Deals
This is the ultimate goal with any step you take in your sales journey.
It should come as no surprise that companies that prioritize lead qualification grow a lot faster and close more deals than those that don’t.
Lead qualification enables you to double down on high-quality prospects that can bring a lot of business to your company in the near future. You know you’re only focusing on potential leads with the highest level of interest and a bigger chance of conversion.
3 Crucial Steps to Qualify Sales Leads More Efficiently
The truth is…
Implementing a winning lead qualification strategy is tricky.
On one end, it’s hard to judge whether you’re only talking to the right people and avoiding the time-wasters. On the other, you may be disqualifying perfectly fit leads that you could’ve easily converted into customers.
It’s important to ask the right questions and approach lead qualification systematically. Only then will your sales team be able to focus its attention on the right opportunities.
Here are three tips to help you develop a streamlined lead qualification system for your company:
1. Identify Your Ideal Buyer Profile
Identifying your ideal customer profile (ICP) is one of the most practical steps you can take during the lead qualification process. It should come early during the sales process, even before you start prospecting and generating new leads.
Creating an ideal customer profile allows you to focus on the most valuable buyers while you disqualify any leads that could waste your time in the sales process.
How do you identify your ICP?
There are a lot of factors to consider, and it’s never clear which variables you should prioritize when shortlisting leads. You can find a lot of answers by looking at the most loyal, satisfied customers you have at the moment.
Here are some of the most essential characteristics to take into consideration:
- Company size
- Yearly revenue
- Geographical location
- Needs & challenges
- Business goals
On an individual level, you may also develop an ideal buyer persona by looking at:
- Job position (decision-making power)
- Demographics (age, location, educational background)
- Character and personality
- Professional background
- Level of awareness
2. Develop a Lead Scoring System
How can you tell if a potential customer is interested? How do you measure their level of interest? And how do you qualify different leads based on interest?
The magical answer to all three questions is this:
Using a lead scoring system.
Lead scoring is the process of ranking the leads in your sales funnel based on the probability of them converting. The system relies on assigned numerical values to determine which prospects are interested so they can be passed on to the sales team.
To score your leads effectively:
Assign a numerical value to each lead based on various qualifiers — such as demographics and how much they fit your ICP. You may also consider behavioral data and how receptive each prospect is to your outreach attempts.
- Cold leads (<30 points): Prospects that have never interacted with your marketing messages that are not so interested in your solution.
- Warm leads (30 – 75): Visitors who have filled out a lead generation forms may be highly interested in trying your product.
- Hot leads (75 – 100): Leads that have visited a product page or asked about pricing might have a highest buyer intent.
Lead scoring is a critical stage in your lead qualification process because it gives sales reps a more accurate way to evaluate prospects. It enables your sales team to only focus on potential clients with the highest chance of converting.
3. Zero In On Reputable Decision Makers
Although this may seem obvious, you’ll be surprised by how many deals never close due to the sales representative talking to a gatekeeper. The worst part about this is that you’ll only know you’re wasting your time and efforts when it’s time to make the final decision.
You want to make decision-making authority an essential factor in your lead scoring system.
Make sure you’re disqualifying any leads that have no influence on the decision-making process within your target company. It’s better to get in touch with the right person from the start to maximize your chances of closing the deal in the end.
4 Lead Qualification Frameworks to Boost Your Sales Process
Using an appropriate lead qualification framework will simplify the whole process and allow you to qualify leads more accurately.
Here are four tried-and-true lead qualification frameworks that you can adapt to enhance your sales cycle:
BANT is one of the oldest and most popular lead qualification methods that can help your sales team uncover promising opportunities. It stands for budget, authority, need, and timeline — which are the four criteria it takes into consideration when qualifying leads.
This framework asks the four following questions:
- Budget — Can this prospect afford my solutions?
- Authority — Do they have the decision-making power to move the deal forward?
- Need — Are they in an excruciating need of my products or services?
- Timeline — When do they intend to make a purchase?
You can consider any lead “qualified” if it meets at least three of the four criteria positively. Meaning — they’ll have both the budget and authority to close the deal, as well as the need to make a purchase the soonest possible.
Some of the biggest drawbacks for BANT is that it’s somewhat outdated and too seller-centric. By only focusing on your side, you’ll be overlooking some of the most essential attributes that help you qualify prospects more accurately.
CHAMP is a buyer-centric framework that prioritizes challenges and pains points instead of focusing solely on the budget. It was developed to make up for BANT’s shortcomings and give sales reps a better way to evaluate lead quality.
- Challenges — What challenges and customer needs does the prospect have?
- Authority — Is the prospect involved in making the final decision?
- Money — Does the company have the budget to afford my solution?
- Prioritization — How crucial/urgent is the problem to the company?
Although CHAMP is a more advanced and customer-focused than BANT, it can be a time-consuming method that can slow down your sales progress. So be sure to keep that in mind from the start so you can meet your sales goals within the timeline.
GPCTBA/C&I is an advanced sales qualification framework that aims at gaining a deeper understanding of the customer. It goes beyond asking usual lead qualification questions to actually adding value and helping prospects make better decisions.
You can qualify potential leads using GPCTBA/C&I by asking about their:
- Goals — What are your company’s main objectives?
- Plans — How do you plan to achieve these goals?
- Challenges — What are the difficulties you’re facing with the current plan?
- Timeline — How urgent is the solution for you?
- Budget — How much are you willing to spend on what I’m offering?
- Authority — Who is responsible for making the buying decision?
- Consequences — What will happen if the primary goal isn’t achieved?
- Implications — How will implementing this solution help your business?
This framework will bring a lot of depth to your lead qualification process and enable you to better understand potential leads. However, it might take more time and sales expertise for your team to be able to implement it to the fullest.
MEDDIC is a modern lead qualification process that focuses on bridging the gap between the prospect’s needs and your offers.
It includes six main steps:
- Metrics. Identify which quantifiable metrics the target company is looking to measure and improve.
- Economic Buyer. Make sure you’re contacting the right person in the company.
- Decision Criteria. Define the definitive criteria that the prospective client will rely on to make the final decision.
- Decision Process. Understand the step-by-step process required for the company to close the deal so you can accelerate your sales cycle.
- Identify Pain. Tie your solutions to their pain points while proposing a plan to help them solve those problems.
- Champion. Find an influencial employee from within the company to help you push for a quicker buying decision.
MEDDIC is the perfect lead qualification framework for B2B companies with complex products and services. It has become the go-to option for sales representatives who are looking to maintain a more accurate pipeline without losing deals to the competition.