Leads are hard enough to get. When you do finally have people to sell to, you already know not everyone is going to turn into revenue. So why do so many companies treat every lead equally?
Here’s the reality: at any given time, less than 5% of your market is actively buying… And according to Gleanster Research, only 25% of your leads are legitimate and should advance to sales.
But many marketers are still sending every lead they generate to sales, regardless of how sales-ready those leads are. The result, of course, is a massive waste of time, money, and energy in chasing leads that your sales team has no chance to close.
Adding lead nurturing and lead qualification to your process is a great way to prevent this. I have already written an article about lead nurturing so I’ll focus here on lead qualification.
Lead qualification is how you determine whether a prospect fits your ideal customer profile (ICP), has a high chance of becoming a customer, and, most importantly, has a high chance of becoming a successful long-term customer.
Here’s how lead qualification works and why it’s critical to your sales success.
When is a good time for leads to be handed over to sales?
Leads can enter your sales funnel at various stages. For example, you might get leads from webinar signups or a download of a whitepaper, or you might have leads that fill out a request form for pricing. All have shown some level of interest in your business, but they are starkly different types of leads.
The leads that sign up for a webinar or other types of content are closer to the top of the funnel: they have become aware of a problem, and something you’ve done has attracted their attention. To help them learn more about who you are and what you do, you won’t want to send these leads straight to sales. Rather, you want to nurture these leads through marketing to establish a relationship.
Leads that request pricing are a different kettle of fish because they’ve shown some interest in purchasing. Maybe they want to compare your pricing with another company or maybe they’re comparing different packages against their budget. The signs are there to say that they’re no longer spinning around the top of your funnel. They have identified the solution to their problem and are closer to making a decision.
These are the leads that are ready to speak to a salesperson. Your sales team’s goal isn’t to generate interest in a product but rather to help interested parties find the best fit solution.
With the right approach, your sales team members can focus on the best opportunities to convert prospects into customers and avoid spinning their wheels with leads who aren’t ready for a sales conversation. They can also spend more time with each lead instead of “turning and burning” them by letting follow-up slip through the cracks. In turn, closing rates increase alongside profitability — a win/win for everyone.
How to create a Lead Qualification process
No salesperson wants to waste their time on a lead that will never convert. Yet, that’s the reality for many businesses because they’re not implementing a lead qualification system.
To start qualifying your B2B leads, there are many frameworks available. Which framework you should go with will depend on the type of business you are in, the type of clients you deal with, and who your target audience is. I have listed below the ones that are the most commonly used.
BANT: Budget, Authority, Need, Timing
This is the framework that we are actually using at Workbooks. Originally created by IBM the BANT method, which stands for BUDGET, AUTHORITY, NEED, and TIMING. These are the four criteria you use to judge each lead and determine their potential to convert.
You can create qualifying questions as part of your sales process to uncover these answers. If the answer is “No” to the BUDGET, AUTHORITY, or NEED questions, the prospect is considered unqualified, and your sales team can avoid wasting their time. If they meet these criteria but feel no urgency to purchase, then it might be wise to send them back to marketing to continue nurturing the relationship.
Another caveat worth noting is that leads that don’t pass the AUTHORITY portion may still be salvageable. In this case, do your research and find out who the decision-maker is and see if you can create a new lead to hand over to marketing. You’ve already done a thorough job at getting someone from that company on your side, and they can advocate to the decision-maker while your marketing team continues to nurture the relationship. At some point, the real decision-maker may start to engage.
MEDDIC: Metrics, Economic Buyer, Decision criteria, Decision process, Identify pain, Champion
The MEDDIC lead qualification framework is one of the more modern methods. It was designed primarily for B2B sales. The MEDDIC lead qualification framework is arguably one of the most effective sales processes out there as it acts as a checklist ensuring you have all the information you need to make a thorough and convincing sales pitch and drive an effective sales cycle.
Meddic stand for:
· Metrics: How much money will your product or service make or save the prospect? What does the prospect expect to gain if they buy your product or service? What is the expected ROI?
· Economic buyer: Who is the decision maker, who is going to sign the cheque?
· Decision criteria: What are the factors that will affect whether the lead purchases your product or services?
· Decision Process: What is the prospect’s decision-making and purchasing process?
· Identify pain: What are the business objectives of the initiative?
· Champion: Who is going to sell your product or services on your behalf to the rest of the business?
GPCT: Goals, plans, challenges, timeline
The GPCT framework is focused on customer success and work well for companies that sell products where budget isn’t typically an issue. GPCT examines what a buyer wants to accomplish, how they plan to do it, and the issues they expect along the way. Sales can easily identify if they can help the buyer reach their goals and overcome the expected obstacles.
NEAT: Need, Economic Impact, Access, Timeline
NEAT is about uncovering a prospects true pain points. It requires deeper questioning to dive through the perceived pains and discover the true nature of the motivation for change. It also considers economic impact rather than budget (budget can always be adjusted to accommodate the right product especially if it delivers strong ROI). Another difference is that ‘access’ replaces authority, as a foot in the door is considered just as good as the actual decision maker.
FAINT: Funds, Authority, Interest, Need, Timing
Rather than budget, FAINT considers “funds,” which simply means that the prospect has the financial capacity to purchase your product or service. This method also factors how interested your prospect is, and therefore how motivated they are to purchase your product or service.
ANUM: Authority, Need, Urgency, Money
ANUM is an updated version of BANT that prioritises getting to the decision maker, hence ‘authority’ is the first factor. The ‘need’ factor has also been raised to priority number two. With this method, getting to a decision maker who wants a product is the sales rep’s goal.
CHAMP: Challenges, Authority, Money, Prioritisation
CHAMP is the framework that literally puts consumer needs first. Having money and being a decision-maker isn’t what makes you buy – having a need or desire is. CHAMP is similar to ANUM but puts challenges before authority. That means even if a lead isn’t a decision-maker, that doesn’t mean you’d automatically dismiss them as an unqualified lead.
Qualifying leads is all about finding people who are the best fit to buy from you. When you can do this at scale, you can understand what a qualified lead looks like from the start. CRM can be a valuable tool to help you identify sales-qualified leads. By automatically capturing buy-ready behaviours and finding common denominators among people who fit your ideal customer profile, you’ll be in a better position to capitalise on the best leads and preserve your sales team’s time and energy.