Success in sales depends largely on the quality of the leads you choose to pursue. You may generate hundreds of leads, but not all of them are worth following. So how do you determine which leads are valuable? Through lead qualification. Lead qualification is an important step in the sales process that tells you which leads have a high probability of converting into customers.
Lead qualification is a time- and effort-intensive process, though. It requires some solid strategy and techniques to verify which sales leads can turn into paying customers. If lead qualification is done efficiently and accurately, the rest of your sales process becomes a lot more streamlined.
Let’s try and better understand the lead qualification process. We will also be looking at how you can optimize the process to identify the best sales leads.
- What Is Lead Qualification?
- What Is A Sales Qualified Lead?
- Why Proper Lead Qualification Is Critical
- Benefits Of a Quality Lead Qualification
- BANT In Lead Qualification
- The Four-Step Process to Improve Your Lead Qualification
- A Step-By-Step Guide to The Lead Qualification Process
- Popular Lead Qualification Frameworks and Strategies
- Tools That Can Help You Qualify Leads Faster
- Summing Up
What Is Lead Qualification?
Lead qualification is the process of identifying the most valuable leads for a business that are likely to make a purchase. Lead qualification is an important activity for both marketing and sales teams, but it is sales that uses it more often.
Every business has an ideal customer persona (ICP), which is a customer profile created based on historical sales and marketing data and newer research. Lead qualification requires the sales team to ensure that a particular lead fits this ideal customer persona.
The lead qualification process can be carried out at any time during a buyer’s journey with your business. But the sooner in the journey, you are able to qualify as a sales lead, the better for your business. Knowing which leads are worth pursuing early on will save you time and effort.
The lead qualification process can be divided into several stages. It starts the moment the marketing or sales team captures a lead and collects their contact information. Lead qualification can be carried out before you make initial contact with the lead. Or it may be done after you have interacted with the prospect.
After capturing a lead, sales and marketing teams try to determine if the lead fits in your ideal customer profile. You may also track the lead’s actions on your website or their responses to your communication to see if they have shown any interest in your product.
What Is A Sales Qualified Lead?
A sales qualified lead is a lead that is approved as a valuable prospect by the sales team. After the marketing team sends a lead forward to the sales team, they need to determine if the lead is the right target for them. They usually look at certain key factors like the lead’s need, preferences, buying power, authority in decision-making, and so on.
For gathering this information, the sales team may make a discovery call, which is usually the first interaction with a lead.
If the lead has the need, authority and intent of purchasing, it is considered a sales qualified lead. A sales qualified lead does not mean that they will make a purchase decision right away. But there is a high likelihood that they could buy from you with a little pursuance.
Sales qualified leads are also referred to as prospects. A sales-qualified lead can be sent to the next stage of the sales funnel, while unqualified leads are dropped out of the process.
Why Proper Lead Qualification Is Critical
Lead qualification saves you time and resources. If your sales team had to follow each lead with the same amount of attention, imagine how much time they would be wasting. Not all of those leads would convert. So giving equal attention to every lead and realizing midway that most of them have no intent or need for purchasing can be bad for both business and morale.
Proper lead qualification lets your sales team focus only on those leads that are important. It gives them more time to concentrate on converting these valuable leads. It eliminates all those leads who are not interested, have entered incorrect information or do not fit the ICP.
As a result, salespersons can be more productive and deliver better results with each lead. Eventually, it increases the conversion rate for your business.
Benefits Of a Quality Lead Qualification
Some key benefits of having a quality lead qualification process are –
- Your sales team can close more deals in less time
- Quality lead qualification processes give you enough data to personalize your messages and increase the chances of conversions
- By building better relationships with qualified leads, you may get long-term deals
- Lead qualification keeps your sales funnel clutter-free
- Better conversion rates improve the profile of your salespeople
- Lead qualification optimizes the sales cycle by eliminating redundant and unproductive efforts
- Proper lead qualification gives you precedence and makes identifying valuable leads easier in the future
- Quality lead qualification can eventually translate to more revenue for the business
BANT In Lead Qualification
BANT is a lead qualification approach first invented by IBM. It focuses on four key criteria for determining whether a lead is valuable and relevant.
Budget refers to determining whether the lead can pay for the product you are selling. In the case of B2C sales, it refers to the customer’s buying power. In B2B sales, companies usually have their annual budget fixed. So if the company cannot accommodate the purchase in their budget, they are not worth pursuing.
Authority refers to the decision-making authority of the lead in the organization. This is not much of a problem in B2C sales, as individual buyers are their own decision-makers. But in B2B sales, the contact person may not always have the sole authority to make a purchase decision. So determining what position the lead holds in this regard is important.
Need in sales lead qualification refers to determining whether the lead has a need that the product or service you are offering can fulfil. The idea is simple. If a buyer prospect does not need the product/ service you are offering, they won’t purchase it. So only when a lead has a need that they may or may not be aware of, can it be considered a qualified lead.
The last factor considered is time, which refers to their urgency or the timeline within which they wish to purchase. If the lead shows an interest in the product or has a need but does not intend to but any time soon, it may not be worthwhile following it. It depends on a lot of other criteria, though.
For high-value products or large orders, you may want to invest more time. But if, say, you can close three more deals in the time this one lead would take, you would rather let it pass.
BANT is a framework for sales teams to build their lead qualification process on. You don’t necessarily have to take it word for word, but it can be the basis of your lead qualification process. What details you look into may vary from one organization to another.
The Four-Step Process to Improve Your Lead Qualification
The lead qualification process can be divided into four steps. These four steps include –
Here’s a little more about the four-step process of lead qualification.
Setting up the Process
The lead qualification process must start with properly defining the process. The sales and marketing teams need to work together to define what a lead means for the organization. They also need to decide what are the different stages they want to have in their lead qualification process. You need to decide what a Marketing Qualified lead means for your organization and when does it turn into a Sales Qualified Lead. Historical customer data may help improve these definitions.
Based on the lead definitions and sales goals that you formulate, the marketing team will have to add relevant qualifying questions on lead forms or during interactions. This makes it easier for sales reps to identify high-potential leads later.
In this step, you obtain an outline of the lead qualification process.
Refining the Lead Qualification Process
The next step is to fine-tune the process that they have formulated. Sales and marketing teams have to brainstorm and find out what to add or remove to make the process more effective. This can also be called the baking stage, at the end of which you get the final template of the lead qualification process.
In this step, you decide the framework that you plan to use to differentiate a qualified lead from an unqualified lead. You may be using BANT or other similar frameworks, like ANUM, CHAMP or others. You also need to decide at which stage of your sales process you want to include lead scoring.
Lead scoring has to be included in most of the initial stages of the process so that you can have only the best prospects in your pipeline towards the end.
Optimizing the Process With Lead Scoring, Nurturing and Automation
Another study from Marketo found that businesses that nurture leads enjoy 50% more sales. They also found that those sales cost an average of 33% less than non-nurtured prospects.
Once the standard template of the lead qualification process is ready, you need to optimize it by deciding on the right lead scoring and nurturing strategies. You also need to choose the right tools that can help you optimize the process. Automation in sales lead scoring and nurturing play a very important role in this.
You need to see how you can save time in your lead qualification process. None of your team members must be overloaded. Deploying a good sales CRM platform can take much of the load off your shoulders. It will let you automate most of the mundane tasks and also help organize all the lead data, streamlining the process further.
Tracking the Process to Measure Success
After implementing the process, you will be able to gather insights on it. Whatever is working for your business is great and must be retained. Wherever there is a scope to further optimize your lead scoring methods, you will need to pay more attention.
The idea is to continuously improve the process to maintain and increase your conversion rates. You will need to gather feedback from your sales reps and set meaningful metrics to gauge the performance of your current process. You will also need to keep track of market changes to ensure that your process evolves along with customer demands.
A Step-By-Step Guide to The Lead Qualification Process
We have discussed how the 4-step process above helps you establish your lead qualification process template. Here are the steps that a lead qualification process usually involves, irrespective of your company size, product or other variables.
Creating an Ideal Customer Persona
The first step is establishing your ideal customer persona. Based on who you have sold to in the past and what your product offers, you can create an ideal customer profile for your business. The customer persona tells you everything you need to know about your target customer. For B2B sales, these details may include company size, industry, funding status, location, and so on.
So when you carry out lead qualification, the aim is to match the lead with this ICP. Leads that don’t fit in the ICP on most points can be immediately disqualified.
The next step in lead qualification is lead scoring, where you need to evaluate the leads on various factors and assign scores to see which ones have the highest value. There are lead scoring models that you can adopt or you may create one of your own. Higher scoring leads are supposed to be further down the sales funnel.
So you know what stage the lead is in and how far they are from making a purchase decision. This helps you decide when to reach out.
This is the step where you will probably have to invest most of your time. After lead scoring, you now need to qualify or disqualify your leads. But that cannot be done instantly. You will need to take three more steps here – research, outreach and qualification.
Firstly, you need to gather all the information that you can about a lead. This includes general information, financial information and whatever else is needed. This is lead research.
Research may not reveal everything you need to know, though. So the next thing you need is outreach. Initiate your first interaction with the lead and if they show any interest, go on to ask some critical qualifying questions about their needs, challenges, budget and so on.
Finally, with all this data gathered, you can go ahead and qualify your leads.
Popular Lead Qualification Frameworks and Strategies
Similar to the BANT framework discussed above, there are other frameworks that organizations use as well. Some of the most popular frameworks include the following:
- Challenges – Challenges that the lead is facing
- Authority – Authority of the lead to make purchase decisions
- Money – Ability of the lead to spend money on the purchase
- Prioritization – The priorities of the lead that show their urgency to purchase
- Authority – Decision-making authority of the lead
- Need – Need for the product/ service
- Urgency – Urgency of the need
- Money – Budget or spending power of the lead
- Funds – Funds available for the purchase
- Authority – Decision-making authority
- Interest – Interest in the product or service
- Need – Need for the product or service
- Timing – Time the lead might take to make a purchase decision
Apart from these, there are other frameworks that organizations often use, like –
GPCTBA/C&I (Goals, Plans, Challenges, Timeline, Budget, Authority, Negative Consequences and Positive Implications)
MEDDPICC (Metrics, Economic Buyer, Decision Criteria, Decision Process, Paper Process, Implications of Pain, Champion, and Competition)
Tools That Can Help You Qualify Leads Faster
The best tool for optimizing your lead qualification process is a sales CRM platform. A sales CRM platform helps you organize all your lead and customer data in one place, making lead research much easier. It also has analytics and reporting capabilities that give you more insight into your sales processes.
Kylas is a sales CRM platform designed for growing businesses. It helps you identify the right leads. You can capture, segment and organize all your leads from various sources, including lead capture forms and third-party sources, on the platform. Kylas also helps you with sales pipeline management by customizing your lead and deal pipelines with unlimited stages.
The platform also supports easy collaboration with your team. Features like mobile call tracker, SMS and email integration and call logging make it easy to track customer conversations too.
A tool like Kylas can prove to be very useful in optimizing your lead qualification process.
Lead qualification is an effort-intensive process. But when you are familiar with the frameworks, key steps and tools for the task, you can achieve much better outcomes. Lead qualification might mean that many of the leads you spent time capturing will be dropped out of the funnel. But that’s okay. Ultimately, the quality of leads that you pursue is far more important than the quantity.