For most sales reps and leaders, targeting and capturing leads is crucial in maximizing conversions. You aim to reach out to people who fit the ideal prospect profile. These users are most likely to buy your product or service.
But, it is half a step done. You usually reach out to several leads through discovery calls but only convert one or two. Why does it happen? Because the leads you are targeting are not qualified leads.
As a sales rep, you must filter the lead generation process to reflect the potential prospects that suit your ideal customer profile. Every user who expresses interest in a product or service doesn’t make a purchase.
A study revealed that more than 65% of B2B salespeople forget to include lead qualification as a part of their sales process. The article will discuss the importance of qualified leads and some proven ways to qualify their leads.
What are Qualified Leads?
There is a difference between prospects expressing interest in a product or service and prospects with a buying intent and who is on the verge of converting into long-term customers. The difference separates qualified leads from the leads.
Sales and Marketing teams create Ideal Customer Profiles (ICP), and the prospects who match all the criteria and standards of the profile are considered qualified leads. For example, you take 100 potential users into consideration, but you end up targeting 40 people. Those 40 are qualified leads because they are most likely to bring conversions.
An Ideal Customer Profile refers to the creation of a desired profile by listing the sociographic, demographic, firmographic, geographic, and behavioral aspects of an account that has the potential to become your most valuable customer. ICPs are mostly used for sales targeting.
Without qualified leads, you may risk your B2B company’s resources, budget, etc. As a sales rep, you would invest time in nurturing qualified leads resulting in better engagement and conversions.
The stats reveal that only 56% of B2B businesses perform a lead qualification process before pitching their product or service.
What is the importance of qualifying leads?
Filtering out qualified leads who are likely to convert into customers from prospects brings paramount benefits to the table. Qualifying the leads is a crucial part of the sales funnel. As a sales rep, your ultimate goal is to make it easy for Account Executives to close sales, and only qualified prospects help you achieve the last step of the sales funnel. Let’s discuss the importance of the lead qualification process!
You like to invest your time in targeting and nurturing users with the maximum chance of conversion. Qualifying the leads who fit your ideal buyer persona and nurturing them saves time and resources. Targeting random people brings engagement and overall efficiency down.
- Improves Overall Performance
Separating leads having buying intent from random prospects allows the overall performance of the sales team by maximising revenue and closed deals. Also, qualifying the leads and adhering to the buyer persona before targeting them makes the lead nurturing process easy.
Prerequisites to qualify leads
Sales reps and sales leaders map out a process to qualify leads. We will break down the whole lead qualification process step by step in detail. Here are the steps to qualify leads:
- Customer persona and ICP
The first and foremost step is to create a customer persona, and an ideal customer profile, who you think will suit your product or service. It allows you to choose prospects likely to benefit the most from your product or service.
Creating an ideal customer profile needs research. For example, If you have a B2B business, research factors like industry, company size, niche, etc., to embark upon an ideal customer profile.
- Lead scoring
Lead scoring is a prioritization model helping find qualified leads. It also helps determine the right time to reach qualified leads by assessing their actions. Under this model, you assign points to different leads based on their actions, like taking a webinar, clicking a link, etc. Using the point system, you can determine where a lead is in the sales cycle.
The more points, the more qualified the lead is. Also, it reveals that the leads are at the last stages of the sales cycle. Now, it’s time to pitch a product or service.
How do qualify leads?
To qualify leads, there are specific lead qualification frameworks that assess the prospects and ascertain if they are the right fit to become sales-qualified leads. These frameworks intend to filter qualified leads from unqualified prospects by placing some common characteristics.
Mentioned below are 3 different frameworks used by teams to qualify leads. These could be used in isolation or jointly based on your product.
BANT means Budget, Authority, Need, and Timelines. It emphasizes these questions and then assesses if the lead is qualified.
Budget – How much budget does the lead have?
It is essential to assess the purchasing power of the lead. If a lead has a budget to close the deal, only then it’s a qualified lead.
Authority – Does the lead have the authority to initiate the purchase?
The framework states that a qualified lead must have the decision-making power to buy the product or service. If you are selling a software process to a B2B sales rep, it is paramount to figure out (1) his involvement in the decision-making process (2) who all would be involved in the decision making and (3) if possible then could they be a part of the follow-up call..
Need – Does the lead have a pain point your product addresses?
If the prospect benefits from your product or service and it addresses the pain points, then the lead certainly needs the product. Hence, it qualifies as a qualified lead.
Timeline – When will the lead buy the product or service?
Some leads close the deals early, whereas some take more than six months. If a lead takes a long time to complete the deal, it may not be qualified.
MEDDIC means Metrics, Economic Buyer, Decision Criteria, Decision Process, Identity pain, and Champion. It states the importance of understanding the lead’s buying process and criteria. The framework states the following questions.
- Metrics – How much impact does your product make on the lead’s revenue and profits?
- Economic Buyer – Who has the ultimate decision-making power? Who creates the budget?
- Decision criteria – What are the lead’s buying decision criteria? What are the factors he looks at while buying a product?
- Decision process – What is the lead’s process of closing a buying deal?
- Identify pain points – What are the lead’s pain points he is trying to solve or address?
- Champion – Does your lead know somebody who believes in your product or service?
CHAMP means Challenges, Authority, Money, and Prioritization. It focuses more on the lead and how the product can solve his challenges. For example, if the lead is not even the decision-maker, you should still emphasise questions to understand how to reach the ultimate decision-makers. Let’s break down the components of the framework
Challenges – What are the challenges faced by the prospect?
Authority: Is the lead the ultimate decision maker?
Money: Does the lead have enough budget to invest in the product or service?
Prioritisation: Does the lead prioritise the solution your product offers?
Wrapping it up!
We have outlined the importance of qualified leads and the frameworks used to qualify leads. The article has revealed that qualifying the leads before reaching out improves efficiency and maximises conversions. Qualified leads are the people having a buying intent and who are at the last stages of the sales cycle.
We have also discussed leading frameworks addressing the common questions a sales rep or sales leader needs to address or answer before qualifying a lead. These frameworks have helped businesses, especially B2B businesses, determine the qualified leads to close maximum sales.
Frequently Asked Questions
Q. What is lead scoring?
Lead scoring is a prioritisation model to find qualified leads. Under this model, sales reps or sales leaders determine the qualified leads and the appropriate time to reach out. Under the model, points are given to potential prospects based on their actions. The points determine the sales cycle stage they are at.
Q. What are the prerequisites to qualify leads?
To qualify leads, creating an ideal customer profile is mandatory. You should have basic information on your perfect customer’s qualities. It allows you to compare the prospects with the ideal customer profile, thus leading to qualified leads. Qualified leads are the prospects who are likely to benefit from your product or service the most.
Q. What are some popular lead qualification frameworks?
Some leading frameworks helping in qualifying leads are CHAMP, BANT, MEDDIC, etc.