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Not everyone is a good fit for your product or service, and that’s okay.
If you close new business with clients who aren’t a good fit for your services, chances are they’re not going to get the results they expected and will quickly churn.
On the other hand, if every customer looks similar to your buyer persona, chances are:
Your sales team should be qualifying leads during the sales cycle to ensure only qualified leads get through.
In this article, we’re going to dive deep into the topic of lead qualification.
We’ll look at:
By the end, every question you have on lead qualification will be answered.
Let’s jump in.
Lead qualification is the process you use to decide whether a lead is a good fit for your product or service.
Only 56% of B2B companies check whether leads are good before passing them to sales, but those who do are going to see higher sales close rates, and higher average customer lifetime value.
When you start qualifying leads, you will have to turn people away.
It might feel strange at first, but you’ll soon see that your team can spend more time building relationships with prospects that fit your ideal customer profile.
Your lead qualification starts with your marketing.
The channels you advertise on.
Your copy and messaging.
Your targeting criteria.
Those are all ways you're qualifying who sees your content, and your lead qualification efforts will be more effective if your sales and marketing teams work together.
While it can make sense to think of Marketing Qualified Leads as different entities to Sales Qualified Leads, the best teams are so aligned that there doesn't need to be a clear cutoff between the two.
There are a few main ways to qualify leads, and we're going to take a look at those next.
There are a variety of frameworks you can use to qualify your leads. These have been tried and tested by companies around the world, and provide a lens to determine if you should pursue a prospect or not.
Let’s take a look.
Arguably the most popular lead qualification framework is BANT.
It's popular because it's been around for a while, but the simplicity is another major part of why it's still around.
It stands for Budget, Authority, Need, Timing.
It helps sales teams focus on the opportunities most likely to convert, and also helps to determine the most suitable next actions.
For example, if a lead checks the B, N, and T boxes, but isn’t a key decision-maker, your sales team knows their next move should be to try to get a decision-maker on the phone.
To assess pipeline health, review every lead and account in the sales process to see if they meet the BANT criteria.
If they do, they’re worth pursuing.
If they don’t, it may be worth prioritizing other opportunities instead.
If BANT isn’t detailed enough for you, there are a range of other lead qualification frameworks.
Let’s take a quick look at six of the most used.
What it stands for: Metrics, Economic Buyer, Decision Criteria, Decision Process, Identify Pain, and Champion.
MEDDIC heavily emphasizes customer qualification and takes a detailed look at how you’re going to successfully sell to a customer.
Rather than simply looking at 'Budget' it looks at the Economic Buyer, which is all about who profits from the decision. Ideally, your prospect should be able to see big profits.
Another nice aspect of MEDDIC is the idea that you should look for a Champion in each target account. That person will be selling your product to their team and be heavily invested in becoming a customer.
What it stands for: Goals, Plans, Challenges, Timeline.
Like BANT, it’s a four-step process.
However, it doesn't focus on budget. Instead, it focuses on the individual and company-wide goals that your product can help your prospect achieve.
By focusing on customer success rather than budget, you can appeal to individual decision-makers’ personal interests as your product or service will help them complete their job to a higher standard.
What it stands for: Need, Economic Impact, Access, Timeline.
It was developed to replace BANT, and bring in more of a focus on the core challenges that your prospect’s face in their job, and company.
The Economic Impact is there to help you look more closely at the bigger picture, and not just at whether or not your prospect can afford your solution now. Look at the impact your solution will make, and doors it could open in the future for them.
What it stands for: Funds, Authority, Interest, Need, Timing
‘Funds’ in FAINT focuses more heavily on cash flow, than budget alone. While a prospect may say they want to spend $500 per month on a new solution, if you know their cash flow means they could realistically afford more than that, you won’t throw them out just because your solution is outside of their initial budget.
It assumes that prospects can change their mind, and the decision isn’t only based on defined markers like an initial budget.
What it stands for: Authority, Need, Urgency, Money
The ANUM framework takes ideas from BANT but brings Authority up as a key priority.
As there are always multiple decision-makers (people within a department, head of department, accounting/finance team), this framework focuses on the work you need to do to build credibility with all Authority figures.
It also looks at urgency as a key driver for decisions, rather than the more general Time criteria in BANT.
The reason for that is that as a sales rep, you need to understand what's driving this decision for your prospect, and what the consequences are for them if you don't close the deal.
For example, if the Head of Marketing is tasked with increasing inbound leads by 20% over a quarter, you know they have their own deadlines, and you need to work to solve their problem before their deadline.
What it stands for: Challenges, Authority, Money, Prioritization
People buy things because they’re facing a challenge.
For that reason, Challenges is the number one criteria in CHAMP. It urges sales reps to look closely at how they can help their prospect solve a challenge. The more effectively you can solve it, the more likely someone is to purchase from you.
Each sales qualification framework has its pros and cons.
Some are simple and do get the job done, but may miss key bits of information.
Consider using these frameworks as guidelines, and work on your own framework internally to find something that considers the main details you care about and doesn’t slow down the sales process.
Frameworks are one thing, but always look closely at the accounts you’re engaging with before making a final decision.
Demographic, firmographic, and technographic criteria can help you decide if a lead is worth pursuing.
Firstly, look at the demographic criteria of who you're engaging with.
If an intern or marketing assistant signs up for a webinar, is it likely to be a big opportunity? Chances are, it's probably not worth pursuing.
Even if they're interested in your business, they're unlikely to have much influence over a purchase decision, and your sales team shouldn't qualify them immediately (unless they prove otherwise).
On the other hand, if a Head of Marketing or VP of Sales signs up for a demo, you can instantly qualify them, and your sales team can treat it as a good opportunity.
Someone with influence over the decision-making process is always worth talking to, so focus on leads who you know have a large amount of influence in your target accounts.
If you talk to everyone, your team won't have time to nurture the prospects most likely to purchase.
The next level is to look at firmographics.
Demographics can be useful, but not all CEOs or VPs work at companies that are a fit for your solution.
If you usually sell to companies doing ~$10 million ARR, and a CEO of a small startup signs up for a product demo, are they likely to be qualified?
Probably not. It's unlikely they have the cash or business need that your product or service solves.
Cross-reference your demographic data with firmographic criteria to find the sales opportunities with high potential that you can qualify.
Finally, we have technographics.
Looking at technographic data is a great way to qualify leads as you can learn a huge amount about a company from it.
For example, does a target account already use similar software to yours on their website?
Are they using complementary services that your product integrates with?
Use a tool like Leadiro to check the technographic profile of any company in your pipeline, or even identify opportunities in accounts your team initially didn't prioritize.
An easy way to qualify leads is to ask qualifying questions.
Because these are so direct, they can be the best way to find out if a company is a good fit for your solution or not.
Here are some example questions you can ask, organised by how they relate to a BANT framework:
Lead disqualification is exactly what it sounds like - it's the moment you decide that you're not going to pursue an account because you've evaluated that they aren't a fit for your business.
It may be uncommon to explicitly disqualify a lead, but it's normal to switch your focus away from a particular account if you discover they're not a great fit for you.
If a company isn't a good fit for your solution but you still manage to close them, they'll end up leaving within a few months anyway, and the customer support headache won't have been worth it.
There's no single reason you should disqualify a lead.
In most cases, if a target account doesn't match or at least bear a resemblance to your ideal customer type, then it's probably not worth investing time and energy into closing them.
Of course, you can always set up an automated email campaign that goes to them, as in the future their business may grow, and they may be a good fit for your customer.
Lead qualification is an essential part of any successful sales operation, and it needs to be an integral part of your sales efforts.
Qualification starts with marketing and helps you determine the best channels and messaging to use.
Later on, sales need to make decisions based on available information to determine whether or not a lead is worth pursuing.
Lead qualification frameworks like BANT, FAINT, or GPCT can help, but it's going to be worth the effort to build a unique framework that makes sense for your business and customer type.
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