Qualifying Sales Leads: Increase Close Ratios by 500%

When it comes to qualifying sales leads, more doesn't always mean better. Notably, if the sales leads are not qualified. You could spend hours each day and still only manage to close a measly 1-3 leads out of a hundred.

So, how does a B2B lead qualification process work? What systems can you employ to increase the effectiveness of your qualification process? And, most importantly, how is the perfect qualifying process different from the one you currently use?

The important thing is knowing that the sales lead qualification process is all about knowing which questions to ask and whom to ask them.

What Does Qualifying A Sales Lead Mean?

Qualifying sales leads means the same thing in every context: determining if the subject meets predetermined criteria or ‘qualifies' for it. For example, to qualify a lead is to determine how likely the lead will develop into a sale.

The whole point of sales lead qualification is to reduce the time a sales representative spends talking to potential customers who will not turn into buyers. Otherwise known as ‘chasing leads.'

Sales qualification helps weed out the tire kickers by using a framework that allows the sales rep to process a lead and determine its sales potential. Narrowing down what B2B sales lead qualification frameworks you want to leverage each day when qualifying prospects is the biggest hurdle to success here.

For example, if you are selling insurance products, a qualified lead would be someone who owns the item you're selling insurance for. You'd be surprised to learn about the amount of time sales reps spend chasing leads that are not even related to the products or services they are selling.

Success in sales often comes down to spending more time with buyers who are a good fit and ready to buy.

The ratio of the number of sales a rep closes from all the leads they have is called the close ratio. So when you are looking at improving the number of sales you make from your leads, you have to improve your close ratio.

This is different from the conversion ratio, which measures how many leads you secure from the number of people exposed to your marketing efforts.

Why Would You Want To Qualify Your Leads?

The most straightforward answer is to save yourself time and effort. Less time spent on disqualified leads means more time spent on qualified ones. That means more conversions or sales. Successful sales people spent more time with decision makers, who use lead scoring and have a defined sales process.

Sales Lead Qualification 101: The Basics

The success of your attempts at qualifying sales leads depends on how effectively you can measure your leads' responses against your qualification criteria. We will discuss different qualification frameworks later but let's look at what they all share.

Qualifying Questions

All lead qualification systems use carefully designed qualifying questions to understand how well a lead matches your qualification criteria. Common qualifying questions include:

• Q1. What kind of budget do you have to solve this problem?
• Q2. Which feature are you most interested in?
• Q3. What kind of timeline do you have to get this implemented?
• Q4. What is the primary business problem you hope to solve with this product?
• Q5. What measures have you taken in the past to attempt to solve this issue? How effective were they at eliminating the problem?

I have highlighted the most critical part of each question. Your qualifying questions have to sound as natural as possible to elicit helpful information from the lead. After all, why would anyone share their business problems if the questions like you're trying to manipulate them?

Main Types of Sales Leads

Depending on where the sales lead is within the funnel, the leads are given different names.

A. Marketing Qualified Lead

When your marketing department grabs an email address or phone number, they call them Marketing Qualified Lead or an MQL. An MQL has been exposed to your marketing initiatives and has shown interest in either purchasing your product or service or acquiring more information about it. An MQL is generally someone who has only make initial contact with your business and so often they are not quality leads at this point.

B. Sales Qualified Lead

Next, when sales teams speak to a MQL and ask them qualifying questions, they are then relabeled as Sales Qualified Leads or an SQL. These leads are likely to become customers because they have met your desired lead qualification criteria and they've had their long term pain points identified.

C. Disqualified Lead

The last type of sales lead is called a Disqualified Lead which is equally important as the previous two. Disqualified sales leads are the one type of lead that you want to eliminate from your sales pipeline. A disqualified sales lead is different from an Unqualified Lead. An unqualified lead is a prospect that has not shown enough interest at the marketing stage to be sent to the sales team.

Another thing all prospecting frameworks share is the concept that leads qualification is not an event but an ongoing process. The discovery call might not provide ample time or rapport needed to ask all the questions for sales lead qualification. More often than not, several calls and engagements are required to qualify a lead properly. The process goes through different levels of lead qualification.

Let's take a look at the different levels of potential qualification within a buyer's organization.

1. Organization Level Sales Lead Qualification

When you start to qualify across an entire organization, you'll begin to consider things like company size, industry, customer base, and region.

For example, if your business sells hydraulic lifts, you will want to know if they are in a region your engineers can visit and install them.

Example organizational level qualification questions include:

• Q1. What are your products or services?
• Q2. What kind of customer flow do you see each quarter?
• Q3. How many employees does your company have?
• Q4. Where are your customers based?

2. Opportunity Level Sales Lead Qualification

Moving on, you would want to know whether the prospect wants your product or service. If they want it, can they afford it? And finally, when are they most likely to make a purchase? Opportunity level lead qualification is all about identifying a lead's pain point. We call it a pain point because they are more likely to want a product that removes that pain.

If you are selling Search Engine Marketing services, you must speak to somebody interested in their business's online presence. Their pain point might be that their turnover has dramatically dropped after a Google Search update. This identification of a specific pain point is the information you need to qualify this prospect.

Opportunity level sales qualification questions include:

• Q1. What else have you done to try and solve this problem?
• Q2. What kind of budget are you working with?
• Q3. When do you think we can start solving this issue?

3. Stakeholder Level Sales Lead Qualification

Stakeholder sales qualification questions are all about making sure you talk to the right person within the company. Your prospect must have influence over the decision-making process of their organization to the extent where it can help you close the sale.

You don't want to spend time going through organization and opportunity level qualifications only to find out that the person will pass on the information for someone else to get back to you.

Although, this isn't precisely a dead-end scenario either. If you can ask the right questions, you can create a map of your lead's organization, ultimately leading you to the decision-maker.

It's pretty straightforward if your ideal customers are individuals or owner-managed businesses, as you will be speaking to the decision-maker from the start. But if it's a more prominent company, you will need to ask questions like:

• Q1. Who is typically involved in your decision-making process?
• Q2. Is someone else or their team going to use the product or service?
• Q3. Is there a procurement team involved with purchases over a certain dollar amount?

Using Sales Lead Qualification Frameworks for Lead Qualification

The three levels of qualification that we have discussed so far are all you need when developing questions for your qualification framework. However, as there are many variables here, a pre-built Qualification Framework could make your qualification process more efficient.

Your industry, the type of leads you talk to, and the service or product you sell will determine the qualification framework and sales process you will ultimately use.

The three most widely used lead qualification frameworks are BANT, CHAMP and MEDDIC.

BANT

Bant has four elements of qualification and is a slight twist on the classic “budget authority need” method of lead scoring:

• Budget being the financial capacity to make the purchase.
• Authority being the ability to decide on the purchase.
• Need being the explicit requirement for your product or service.
• Time relating to their urgency to require your product or service.

CHAMP

Although they aren't related, CHAMP is similar to the BANT framework in the way it incorporates Money, Authority, and Need, but it builds on the Time section of BANT by taking into account where your product or service lies in the list of priorities of your lead.

• CHallenges are the immediate problems of the company your product or service can solve for a prospect. The CHAMP framework begins by asking questions about challenges to qualify leads.
• Authority in the CHAMP framework is similar to authority in the BANT framework. You want to speak to people who make buying decisions.
• Money is what makes your sale whole. You have to identify whether the prospect's organization can afford what you are selling.
• Prioritization is about ascertaining the importance of your product or service in the current or plans. The CHAMP framework differs from BANT in this regard by not equating urgency with priority.

MEDDIC

The MEDDIC framework is similar to the revised MEDDPICC qualification framework. It takes a different approach to lead qualification by thoroughly looking at the decision-making process and separating it into Decision Criteria and Decision Process. The framework goes a step further in its thoroughness by looking for influence in non-decision making but influential individuals it calls Champions.

• Metrics is where your questions start. The MEDDIC framework places a greater emphasis on quantifying your lead's goals or plans. A number instantly hands you a figure you can use to signify the economic advantages of your product or service.
• Economic buyer is somebody whose signature is the last one on the check. You have to know who this is to understand how they think, directly impacting whether the organization becomes your next customer.
• Decision criteria help you understand how decisions are made in the target organization. The objective is to determine if it's a single person (the economic buyer), an executive board, or an interdepartmental committee.
• Decision process is the identification and understanding of how the decision-making body reaches a decision. Knowing this helps prevent confusion at later stages due to complex internal approval processes, for example.
• Identifying pain is the part of this process designed to understand how urgently the lead needs the solution you are providing.
• Champions are individuals you look for in the prospect's organization that may not be part of the decision-making process but could influence it. They may do this by their seniority, proximity to the problem being solved, or an interest in your solution.

Signs to Look Out for when Qualifying Sales Leads

Years of experience from various sales experts and successful sales reps have blessed us with enough insights to identify the red and green flags that can appear when qualifying sales leads.

The following positive signs of sales qualification and red flags are easy to spot when you know them:

Positive Signs

• If the lead is interested in talking about their projects, plans, or challenges, whether past, present, or future, it means they want to be heard. It also means that they want you to possibly provide a solution.
• If the potential buyer starts asking specific questions about your product or service during the discovery call and after organization level qualification, you're onto a winner. There is no better indicator of qualification than genuine interest.

Red Flags

• A prospect giving inconsistent or incomplete answers is either unaware of their problems or they're not interested in fixing them.
• Very short or One-Word answers are the biggest no-no. Someone giving answers in this manner is waiting for you to end the call. So disqualify them and stop delaying the inevitable?

Is Sales Leads Qualification Difficult?

The sales lead qualification process revolves around asking your leads questions. These questions are designed to help a sales rep determine if the lead has any potency for a sale.

Seems pretty simple, right? Most salespeople fall into issues when qualifying their customer when their prospects get uneasy with answering questions all of their rapid fire questions.

Potential customers can feel uneasy because they:

• Are more interested in understand your product than being sold to.
• Are not comfortable sharing their organization's goals or plans.
• Are fed up with talking to sales reps since you are the tenth person that has called.
• Are not interested in what you are pitching.

If your prospect isn't interested in what you're pitching then, congratulations! You can confidently disqualify that lead.

Remember your sales leads are people, and people want to be heard. So make the qualification process easy for them so they get comfortable with divulging crucial information about their business. You need this information to either qualify or disqualify the buyer.

Is Disqualifying a Sales Lead Common?

Absolutely! Think of the sales lead qualification process as a feasibility study of your leads. The purpose is to determine how feasible pursuing a lead is so those leads that do not meet set criteria do not consume resources that can otherwise be spent on leads that do. Therefore, disqualifying leads is as important as qualifying them.

The top salespeople in the world are proactive about disqualifying poor or even average sales leads and so you should be too.

Conclusion

Qualifying sales leads is easy, just ask the right questions at the right time to the right people. The other half of the sales qualification formula is analyzing your prospect's answers and knowing what to ask next.