Do you truly know when a prospect is what we call a sales qualified lead — someone who has shown a genuine interest in your product or service and is ready to become a paying customer?
All too often, businesses fail to define what a sales qualified lead is, skipping a crucial step in the sales and marketing process.
In fact, many companies don’t think about qualifying or quantifying leads until it’s time to deploy automation or a CRM system, or to decide how many leads marketing will deliver to the sales team.
Why establish sales qualified lead criteria?
Setting some guidelines for deciding which leads to pursue is vital to:
- Making the best use of your time and resources
- Engaging with the prospects who are the best fit for what you offer
- Closing sales instead of playing the “wait and hope” game
- Getting the best return on your sales and marketing investments
- Formalizing best practices for training new sales staff
While the criteria for identifying a sales qualified lead are unique to every business, there are some tried and true ways to arrive at a definition that will work for your business.
What are some common challenges?
When we talk with clients about how they determine if a prospect is a good fit for their business, we often find some common barriers — things that stand in the way of defining what a sales qualified lead is.
Lack of integration between sales and marketing
When the sales and marketing teams are not integrated, the two often have very different ideas of what a “qualified lead” is. The end results can be conflicting goals, misplaced focus, and wasted effort.
For example, marketing might be driving website visitors to request a quote at the wrong point in the customer journey — before they are ready to talk to a salesperson.
Or, the sales team might be treating every lead as qualified, spending a lot of time creating complex proposals for prospects who (it turns out) have zero intention of buying — or who simply are not the right fit for the business or its solution.
But by working together to define the characteristics of a qualified lead, the two teams can create both a better customer experience and a more efficient, effective, and unified sales and marketing process.
To learn more, read our blog “Why do you need sales and marketing alignment?”
Reliance on “I know a good lead when I see it”
It’s true that the best salespeople often have a built-in sense of what a good lead is. They seem to have some mysterious internal process for knowing when a prospect is a good fit and ready to buy.
Realistically, however, not every salesperson has the exact same gift. So, why not improve the odds and help all salespeople succeed with a process for establishing what a sales qualified lead is?
Because, let’s face it: Even top sales pros will benefit from having solid leads delivered to their desk.
The any-lead-is-a good-lead philosophy
There may be reluctance to give up on any prospects, whether or not they fit the criteria for what a “good lead” is. As a result, salespeople can end up talking to everyone who shows any interest, rather than focusing on the best prospects — wasting valuable time and cutting into profitability.
In addition, sales might not be able to envision how marketing can help them nurture possible leads into solid leads. But the fact is, marketing can play an active role in helping to engage prospects and keep them moving through the sales cycle.
How do you begin to define what a sales qualified lead is?
It’s not enough to ask, “Does the prospect need what we do? Do we do what the prospect needs?” Instead, sales and marketing need to work together to create a set of questions to help define the characteristics of a “best fit customer.”
This process allows you to gather demographic data — sometimes called “firmographics” when the prospect is a business — and uncover the pain point or problem that a prospect is trying to solve.
If you already have some standard information your business asks for when interacting with prospects, you probably have a good starting point for defining a sales qualified lead. For instance, maybe you’ve established that you target prospects that meet certain criteria for:
- Job title or area of responsibility
- Industry or business type
- Number of employees
- Geographic location
So, for example, you might already know your goal is to talk to the office managers in professional services firms with 50-100 employees located in your metropolitan area.
Ask questions such as GPCT and BANT.
In addition, you can use the standard GPCT and BANT qualifying lead questions to probe for additional details that will help you decide whether to continue the conversation with a prospect.
GPCT (Goals, Plans, Challenges, Timing)
- What are the prospect’s goals? Here, you want to uncover broad and measurable business objectives. They might be to grow revenue, improve productivity, increase profits, build market share, increase customer satisfaction, or reduce employee turnover.
- What are the plans for meeting those goals? Determine what tactics the prospect wants to use. For instance, the business might want to enhance its website to give customers more self-service options and free-up employees to handle other tasks.
- What challenges does the prospect face? For example, the prospect may know that while many customers want more self-service capabilities, the business needs to be able to offer employee-assisted service for those customers who prefer it.
- What is the timing? When do those goals need to be met? Is there a firm deadline? Or is the goal part of a long-term or more elusive strategy?
BANT (Budget, Authority, Need, Timeline)
- What is the budget? You want to know how much the prospect is willing and able to spend, and whether that budget is realistic for what you offer.
- Who has the authority to make a decision? How much input do end users have in the decision? Does the finance person or C-level have the ultimate say? You want to be sure you are talking to the right person or people so that your efforts are not wasted.
- Does the prospect have a need that your product/service can solve? How long has that need been an issue? What solutions has the prospect already tried? What happens if the need is not addressed?
- What is the timeline? Is there some urgency? How long has the prospect been looking for a solution? Where is this decision on the prospect’s list of priorities? And is it also a priority for the business?
Along with characteristics such as the contact person’s role and the company type, size, and location, GPCT and BANT questions can help you determine whether a prospect is a good fit for your business.
But there is more to a sales qualified lead than “fitness.” There is also intent.
Bring the criteria together in a prospect fit matrix.
This is where you want to also consider your prospects’ behavior — how they’ve engaged with you so far — to determine their intent, or the likelihood that they are ready to buy. For instance, has the prospect:
- Dropped off a business card at your trade show booth?
- Downloaded a technical white paper or other gated content from your website?
- Signed up for one of your webinars?
- Visited the pricing page on your website?
- Requested a demo, quote, or consultation?
Here at HELLO Marketing, we typically build a prospect fit matrix to help our clients score and qualify leads. This involves:
- Identifying sets of questions to determine (1) whether a prospect is a good fit, (2) how good a fit, and (3) what actions the prospect has taken that show intent
- Formulating and ranking the answers to each question
- Assigning values to the answers so they can be sorted and scored
The prospect fit matrix turns anecdotal information into a concrete, measurable definition of a sales qualified lead — helping sales teams focus the conversation on key characteristics and identify high scoring (that is, qualified) leads. In addition, the matrix can serve as a data tool for use in automated lead generation.
Make sense of all the information at your disposal.
By putting a little work into establishing the criteria for a sales qualified lead, your business can create a unique, flexible, and easy-to-use lead-scoring system that takes into account:
- Who your ideal customer is
- The demographic/firmographic traits of prospects
- How well they fit with what your business does
- The challenges prospects face that your business can address
- Behavior that demonstrates their intent to engage and buy
HELLO Marketing can help you makes sense of all this information, and more. For a free 20-minute consultation to help you start defining “sales qualified lead” for your business, contact Lauren at 973.214.5942 or [email protected].