As the first step in the sales process, prospecting can make or break your entire funnel.
That’s why it’s critical you know how to qualify a prospect (the right way).
Unfortunately, with the vast number of options and resources available today, some salespeople have adopted a “spray-and-pray” approach, trying to sell to anyone with a pulse.
With over 15 years of experience in sales, I’ve closed deals with big names like McDonald’s, Dell, and Manchester City Football Club — but those deals were only possible because the prospects had been properly qualified to start with.
The process of qualifying a prospect is changing, though, so it’s important to keep up-to-date. By properly qualifying your prospects today, you can stay ahead of the curve, avoid the common mistakes others make, and close more deals.
Here’s what you need to know about how to qualify a prospect:
- The classic qualification process
- Additional qualifiers to consider
- Changes to the process
- 6 common mistakes in qualifying prospects
The Classic Qualification Process
The traditional prospect qualification process for B2B sales is simple but effective.
As a vendor, you should always think about the prospect’s needs. Does your product fit the buyer? Do they have a requirement for this product?
You can find out in several ways, the most common being to ask them directly or to research the organization and their specific circumstances.
Is there a price fit? Do they have the budget to take on your solution? When evaluating budget, it’s important to consider the perceived value of your solution.
The prime example of this is Gucci’s flagship store in Moscow. It was opened shortly after the fall of communism, when people were suddenly a lot richer than they used to be. But for months Gucci’s sales hardly moved.
Gucci’s leadership couldn’t understand why and eventually brought in a consultancy firm to help. What they discovered is that the prices were 35% too low for the perceived value of luxury goods.
Once they raised their prices, they started selling.
To find out what kind of budget your prospect has, you can again either ask them directly or do your own research. This time you’ll look for their previous purchasing decisions — do they usually go for the high-end, mid-market, or lower budget solutions?
Are we talking to the relevant decision-maker(s) in the organization?
There’s no use trying to sell a new CRM system to a junior analyst. It’s a waste of time and resources. You want to be certain you’re talking to people who have an influence on the decision-making process in the target organization.
These are the three traditional criteria for a qualified prospect. Now, I’d like to add a fourth.
The timing of the requirement
I’ve seen organizations that believe they need your solution — they may even already have a budget set aside — but the requirement isn’t immediate.
You might be ready to close the deal but, in their minds, this is part of a ten-year plan. In this case, you need to discuss the timeline directly with a decision-maker in the organization.
Keep in mind, even if the need isn’t immediate, though, you can continue working with the prospect. By having that initial conversation, you bring yourself to their attention as a vendor for that potential requirement, planting a seed in their minds for the future.
Even if the actual purchase may be years away, you can still nurture your prospects (but more on that later).
Additional Qualifiers to Consider
Once you’ve considered the four main criteria for how to qualify a prospect, you can further qualify prospects with generic qualifiers and generic indicators. These help you go into more detail to identify whether a prospect is ready to buy.
And you’ll quickly develop your own unique custom indicators.
For example, when we’re looking for companies that might be ready to do business, one of our custom indicators is whether the organization is undergoing change.
That might mean they’re experiencing high growth and are making lots of new hires, or on the flip side, shedding employees. They might also be relocating their operations.
In each of these cases, they might need sales acceleration, which is where we come in. As a lead generation agency that carries out targeted research, outreach, and appointment scheduling, we can help them make this transition.
Another custom indicator I personally look at is the tenure of the decision-maker. In my case, that’s usually the Head of Sales.
Suppose they recently joined the company (say, six months ago), but the company has been around for 20 years. It’s likely he has a budget. It’s likely he’s looking to increase and accelerate sales in the company by any means necessary. He’s going to be a softer target.
On the other hand, someone who’s been managing his own sales team in the same organization for several years is more likely to be stuck in their ways. I’m not saying they would never use our services, but they’ll likely need more education to show them the value of outsourcing that specific function.
Remember, you can’t just go and copy someone else’s custom indicators. Consider what unique factors will make someone a better prospect for your specific product.
Changes to the Process
Even if you’ve been in sales for a long time, it’s important to stay current on best practices. The process for qualifying prospects definitely has changed, definitely is still changing, and definitely will continue to change.
One of the biggest changes I see taking place is in how companies are making purchasing decisions.
Traditionally, companies would have this archaic model where there was just one primary decision-maker. Now we’re moving into what’s known as consensus-based decision making.
With consensus-based decision making, the company seeks to have full agreement between the stakeholders on any particular decision.
So, if a company is trying to finalize a vendor, they’ll want to involve as many stakeholders as possible in the decision.
They’ll look at the impact of that decision, not just on the specific department that will be using the solution, but also for other departments in the company. They’ll also look at the financial impact and any legal implications. This means the decision ends up being made by a very large team.
The consensus-based model started out being used exclusively by larger organizations, but now we’re seeing this spread to small and mid-sized companies, who are adopting similar methods for themselves.
Of course, this has an effect on how you qualify prospects.
Specifically, you need to be able to target as many stakeholders (people who could influence the decision-making process) in the organization as possible. It could be the budget holder, it could be the business analyst, it could be people who are advising the ultimate decision-makers and end-users.
Your job is to, first of all, identify them in the organizational hierarchy of the company, and then to do targeted outreach.
A lot of times, a bespoke message to that particular function will dramatically increase the likelihood of getting your foot in the door.
To do this we use account-based marketing, a methodology in sales specifically for targeting large organizations. Once you’ve identified the decision-makers in an organization, you need to reach out and look at the organization as a holistic unit, but also look at tailoring your message to a specific account.
For example, imagine you were trying to sell to a large company, such as Coca-Cola. You might make a unique website, almost identical to your normal website, but with slight changes specifically for visitors from the Coca-Cola domain.
What kind of changes?
It might be something as small as adding relevant industry qualifications, or changing the copy to focus on their specific requirements from a vendor.
It might be a completely different website, built from scratch, or it might be a single landing page that replaces the home page.
Big or small, those changes would be designed to increase the likelihood of selling to Coca-Cola.
Classic account-based marketing is about changing your message and offer, and tailoring them to the specific client you’re targeting, rather than just having a generic message for everyone.
Common Mistakes In Qualifying Prospects
Qualifying your prospects doesn’t have to be complicated. However, I still see salespeople making the same mistakes, over and over. If you’re troubleshooting your process, here are some mistakes to look out for:
Not nurturing your relationships
When a decision-maker says they’re not interested in buying right now, lots of salespeople immediately give up and forget all about the prospect. If you’ve been told flat out that a purchasing decision wouldn’t be made for the next year, the best thing you can do is put them on a soft nurture program.
This involves sending them timely information about your product, as well as helpful relevant information, even if it’s not directly related to your product.
You want to keep that relationship alive, rather than just placing a reminder in your CRM for 12 months down the line and forgetting about them until then.
Failing to understand budgets
Budgets aren’t always as simple as you first think. Just because a client has a glossy website and seems to be doing well, that doesn’t mean they have a large budget for your particular solution. Internal budgeting constraints are different for every organization.
Even when you’ve been able to accurately establish the budget, there’s more to consider. Organizations are always looking for a balance of quality and price, looking to get the most bang for their buck, so it’s important your perceived value is high.
Additionally, decision-makers are often rewarded for not using all of their allocated budget. Their end-of-year bonus may be larger if they don’t burn up the entire budget for their department, so don’t take it for granted they’ll choose your solution just because it’s within their budget.
Investing too much too soon
Investing too much in the sale early on, before having fully qualified the prospect, is a mistake. Remember the three classic key qualifying criteria: need, budget, and authority.
If you have a budget for entertaining prospects and you’re shelling out for fancy business lunches or tickets to the ball game before you’ve qualified those criteria… well, you and the prospect might have a good time, but it’s a waste of budget.
Relying on one internal champion
Just because you’ve qualified a prospect, it’s not good to have all your eggs in one decision maker’s basket.
Even if they’re genuinely interested and are pushing your product internally, relying on a single champion ignores the fact there are other decision-makers involved.
Rather, reach out to all the decision-makers in parallel. The more touchpoints you have in an organization, the better.
Failing to understand trends
When you’re in sales, you need to understand any shifts and changes in the market, as well as the sales process. Obviously, this means keeping up-to-date with the latest resources (such as SalesHacker), but that’s just the start.
Your competition is reading the same articles and has access to the same sales intelligence and resources. To win, you must always be adapting to change and trying to outsmart the competition.
Bonus tip: If you’re selling to larger organizations, you can learn a lot just by observing their processes and understanding how they work. Many times, they’re happy to share information about their own process with you, so you can learn more and optimize your own process.
Not having dedicated sales resources
Broadly speaking, the outgoing sales process covers four distinct stages:
Ideally, those should be four distinct functions within a sales team. There would be a dedicated researcher, responsible solely for generating a database of companies that match your ideal customer profile.
Then you’d have someone focused on outreach, working on the best way to contact those customers. Are you going to email them? Connect with them on LinkedIn? Send them a postcard? They’ll work out the best method and carry out an outreach campaign.
Once you start receiving responses back from your campaign, it’s now time to engage. How can you further qualify the opportunity? This is where you start getting into the nitty-gritty of the sale itself.
And finally, you’ll need to close the sale and get the prospect to sign on the dotted line.
Organizations should understand it’s important to make that distinction between the stages of a sale, and assign adequate resources to each stage. In most cases, it’s best to have salespeople solely dedicated to each stage.
Hiring a couple of salespeople and calling it a day is not enough.
If you don’t have the internal resources to support a sales team, seek out a quality agency that specializes in outsourcing top-of-the-funnel sales activities, and that can scale up the scope and focus of your outreach program according to your organizational needs.
Qualifying a prospect is vital to the sales process, but it doesn’t have to be complicated:
- Consider Need, Budget, Authority, and Timing of Need.
- In addition to general qualifiers, establish custom qualifiers that are specific to your company.
- Use account-based marketing to take into account the trend for consensus decision making.
- Finally, avoid common mistakes, such as failing to nurture your prospects or not dedicating adequate resources to your sales process.
By following these steps, you can be sure you’re qualifying the right leads, making the best use of your resources, and closing more business.