Most marketers will agree that the work doesn’t stop after you’ve captured leads, but rather, you need to take the next important step of filtering through thousands of them in the funnel. Since not all leads have the same quality, you have to find the best of the bunch who will become customers of your business.
This is where the lead qualification process comes in, which aims to help you target high-quality leads.
What Is Lead Qualification?
Lead qualification is an integral part of the marketing and sales process. It involves identifying which of the prospects in your contact list meet your criteria of being sales-ready. This means they are more likely to buy products or services from you.
Why Do You Need to Qualify Leads?
Having an effective lead qualification process can make a difference in your bottom line. Here’s a rundown of the advantages you get from lead qualification.
- You’re able to streamline your marketing and sales activities as you use your time wisely on leads that you’re positive will convert into customers.
- Your team can manage potential leads with higher levels of efficiency by isolating warm leads from cold leads who may need more nurturing.
- You can drive better engagement in targeting prospects as you deliver customized content or offers that match their needs or interests.
- You’re able to maximize the resources you have by getting the best results possible in both conversion and sales.
A Guide to the Lead Qualification Process
To help you figure out which of your prospects are ready to buy your products or services, you need to familiarize yourself with lead scoring and lead qualification frameworks. These two main components of qualifying sales leads will tell you how qualified a lead is based on a variety of factors, which you’ll learn in more detail in the following infographic.
Lead scoring refers to the process of assigning points to marketing qualified leads (MQLs) and sales accepted leads (SALs). These leads are now at or near the beginning of the sales pipeline and a few steps away from being contacted once the team determines that they’re sales qualified.
Calculating a lead score requires a series of steps:
Step 1: Gather data about your prospects. People who engage with your business leave a digital footprint that may reveal important information about the identity of your prospects and their fit to the solutions that your business offers.
These are the data you need to help you assess a lead’s interest or readiness to buy:
- Demographic information — The person’s age, location, and job function should match that of your target audience.
- Company information — This may refer to company size, type, or industry. Just like your ideal buyer profile, you want to make sure that your target company fits your niche, so they’ll have a real need for your product or service.
- Online behavior — You can track for pages visited, frequency of visit, or length of visit. These data points can tell you the level of interest that someone has about your business.
- Email engagement — High open rates and click-through rates (CTRs) may indicate a genuine interest in your product or service.
- Social media engagement — If your posts get a lot of likes, shares, comments, or click-throughs, it’s a good indication that your prospect is engaged and should, therefore, receive a high lead score.
Step 2: Set your lead-to-customer conversion rate or close rate benchmark. To come up with your close rate benchmark, simply divide the number of new customers you’ve acquired by the number of leads you’ve generated. You’ll use this benchmark to compare for when you’re trying to rate the attributes of your leads, which is the last step in the lead scoring process.
Step 3: Pick the most important attributes of your high-quality leads. Attributes refer to actions or qualities that were exhibited by your most promising leads. These may include customers who have signed up for a free trial or those who come from your target industry.
Step 4: Calculate the close rates of each attribute. The close rate of each attribute is the value that you get when you count the number of leads who have exhibited the characteristics that you’re looking for in an ideal customer.
Step 5: Use the close rates to compare and assign points. Once you get the individual close rates for each attribute, you can now assign higher point values to leads with attributes that outperformed your benchmark or overall close rate. Thus, if your overall close rate is 5, but the close rate for leads who have requested a free trial is 25, you should give a score of 25 points to leads with free-trial-request attributes.
Lead Qualification Frameworks
Lead qualification frameworks are commonly known as a set of questions that sales reps ask when they start calling prospective customers. The goal is to use those questions to determine if the person on the other line has a real need, interest, or desire for the product or service you’re selling, which helps enhance your lead generation services.
Here are some of the most commonly used frameworks or questions in lead qualification:
1. BANT—Budget, Authority, Need, Timeline
BANT was first used by IBM in the 1960s, which makes it the very first method for qualifying sales leads.
Under BANT, you’ll be looking at things like availability of cash, the purchasing power of your prospect, an urgent need for your product or service, and the shortest time that your prospect can make a decision. Someone who meets each of these criteria may be considered a qualified lead.
2. CHAMP—Challenges, Authority, Money, Prioritization
This framework is considered buyer-friendly since it first takes into account the most important thing for customers—the problem or challenge they’re currently facing.
Then, the lesser important questions get tackled, like who has the authority to make purchase decisions, how much the company is willing to spend, or how solving the problem stacks up in the organization’s list of priorities. From a sales perspective, this framework also ticks the box of telling whether someone is out to buy stuff because they actually need it.
3. MEDDIC—Metrics, Economic Buyer, Decision Criteria, Decision Process, Identify Pain, Champion
The MEDDIC framework is suitable if you’re prospecting companies that have a clear idea of how to measure the success of a project or how much value you can bring to their business.
Along with these metrics, your sales reps will need to identify who’s in charge of the budget, the company’s criteria and process for reaching a decision, main business objectives, and who can help sell a product or service on your behalf.
Altogether, these MEDDIC components can help your sales team figure out how likely a company will be interested in your proposal.
4. SPIN—Situation, Problem, Implication, Need/Payoff
SPIN is a selling strategy that was created by Neil Rackham to help sales teams become better at asking questions that matter most to people. Rackham believes that by building relationships with customers, they’ll trust and engage with you more.
Asking SPIN questions during the lead qualification process can help you gain the information you need to move your lead further into the funnel, and at the same time, demonstrate how valuable your product or service is for your future customer.
5. ANUM—Authority, Need, Urgency, Money
This framework supports the very reason why you’re doing lead qualification, which is to make sure that you’re talking to the right person when you make the sales call. The “need,” “urgency,” and “money” factors come next, which means that you should focus on seeking an audience with the decision-maker who knows or controls things related to buying.
Your Best Lead Qualification Guide
Lead qualification involves lead scoring and using lead qualification frameworks to establish the worthiness of prospects for sales and allows you to plan how to meet their needs.
The question is: Do you have enough qualified leads in your pipeline? Without a healthy number of sales-ready leads, you may not be able to move forward with your business goals.