Part 1/3 of our Converting clients 101 series: what is lead qualification, why is it important and what are some best practices that you could use to improve the ROI of your sales cycle?
Simple sales fact: the better opportunities are qualified, the higher the chances of turning them into a closed deal. But not every lead is a good fit - no matter how badly you want them to be.
Simple fact of life: quality trumps quantity (pretty much all the time). And how do you define quality? Through qualification!
This article is part 1/3 of our Converting Clients 101 series. To read the second part on negotiations & objection handling, click here. Part 3 on closing the deal is coming soon!
What is lead qualification?
In the first place, lead qualification is all about discovery and validation. You want to find out everything you need to know about your prospect, such as:
- Why are they interested in your product?
- What are the pains you can solve?
- What kind of value are they looking for?
- How are they currently solving or coping with the problems they face?
As soon as you passed the discovery phase, you want to establish there is a fit between the expectations and needs of your customer and what you can offer. In other words: does the shoe fit?
How do you qualify leads?
There’s a few tricks to help guide you through the murky waters of unqualified leads. One of them is called SPIN(Situation, Problem, Implication and Need), another is called BANT (Budget, Authority, Need and Timing). Both of them stand for certain points sales reps should clarify, and they are related to situational things such as pain points, but also to practical things such as budget and timing.
But qualification isn’t a science, no matter how many fancy acronyms and methods you follow. In large part it means empathising with the person you’re talking to - so really, really, putting yourself in their shoes and imagining what drives them, what they’re looking for, etc, and reading between the lines of what they are saying - or NOT saying. This will go a long way in helping you to understand whether there is a match, how the customer defines value, and how to speak in the customer’s terms.
To put it simply: it’s about quality, not quantity. In every business, time and resources are of the essence. Time is money, and nobody wants to spend time (or money) on a prospect that most likely will not buy, cannot buy, or is actually looking for something you can’t offer. No matter if you’re filling a job position, or going on a date, or looking to do business with someone - there is always a set of criteria we apply to filter out people and things we don’t want, don’t like or don’t need.
Questions to ask:
- Does the lead find the status quo acceptable?
- Is there a deadline, an opportunity, and a Compelling Event?
- What is the priority of the project?
- What are the risks and benefits involved?
- What would success look like for him, and how would it be measured?
Important side note: change isn’t easy, and if there’s no real problem the lead is trying to solve, there’s no real reason for him to buy - yet. Timing is everything. A Compelling Event, such as a change in leadership, a market shift or even a dwindling budget runway, means the lead will want to deal with the issue now rather than later - which creates a perfect sales opportunity.
Insight selling versus solution selling
Not every lead is in the same situation, so not every sales pitch should be the same. If your lead knows what they want, then solution selling is the way to go. If they haven’t identified their own problem, you should be the “consultant” that guides them to enlightenment - and offering unique insights will go a long way in solidifying your credibility. Here’s a quick overview of the differences:
Aligning your Unique Business Value (UBV) with a Compelling Event (CE)
Basically, unique business value is what makes your product or service special. It’s what separates the cream from the crop. Asking these questions will help you figure out how to show exactly that to your lead:
- What specific (measurable) results can you deliver?
- How does your value differ from that of competitors?
- How does the customer define value?
- How does your value quantify in the customer's terms?
It has to be something of value to your customer, and something you and you alone can offer them. If either the Compelling Event or Unique Business Value is missing from the equation, chances are you’ll never reach a sale.
And above all else, your Unique Business Value has to fit in with your prospect’s Compelling Event. What’s the point of explaining your value if it isn’t linked to their needs? If your customer is looking for the juiciest burgers on the market, don’t focus on the price. Speak to them about juiciness. By explaining your unique business value in the same terms as the customer, you'll do a much better job of qualifying - which leads to a smoother sales machine.
This article is part 1/3 of our Converting Clients 101 series. To read the second part on negotiations & objection handling, click here.