Your SaaS business depends not only on leads coming through the door, but also that these are of high quality. While it isn’t an easy task, strategies for lead generation and lead nurturing are both commonly understood parts of the sales and marketing equation. Lead qualification, however, is a lesser known but equally important step that enables you to identify which lead should be nurtured. In this post, we’ll talk about what lead qualification is and how best to use it.
What is a qualified lead?
Not everyone who enters your sales cycle is going to make it all the way through to completing a purchase. In many instances, this will be entirely predictable. Some people are just browsing around. Some are looking for a solution to a problem that your product doesn’t quite line up with. Some simply might not be able to afford your prices. Qualifying leads is a way of ensuring that the person in question has a reasonable chance of going on to become a customer of yours — chasing every single lead is a sure-fire way to waste time, resources, and money.
There are various types of leads, starting with the ones who are not at all likely to buy and ending with those who have already made a purchase. Understanding these types of leads will build the foundations of a successful SaaS sales funnel and help you to get a general feel for what qualified leads are and how lead qualification works before we go further in-depth on the topic.
Useful lead qualification definitions
- Subscriber: Someone who is subscribed to your blog or newsletter, they are new to your CRM.
- Lead: A lead is anyone that has filled in a form to download a piece of content, you will have more than just their email address.
- MQL (Marketing Qualified Lead): An MQL is someone who has filled in a bottom of the funnel form e.g. they have booked a demo or started a free trial. From this, you know they are interested in purchasing.
- SQL (Sales Qualified Lead): Sales have further qualified the lead, and accept that the lead is sales-ready, meaning they fit your personas and would be a good fit for your product.
- Opportunity: This is any SQL that the sales team has spoken with and ascertained that they are a good fit for the business and product. In other words, there is an opportunity to sell to them. When a lead becomes an opportunity, the sales cycle begins. But it’s important to remember that deciding a lead is sales-ready (SQL stage) and determining their ability to buy (part of the sales cycle) are two different things.
- Customer: A customer is any opportunity that you have closed and won their business.
When and why should you be disqualifying leads?
The mere concept of disqualifying leads scares some sales reps. They make the mistake of thinking that the larger the pool of leads, the better chance they have at increasing their conversion rates. While this is true on a superficial level, more leads equals more qualified leads, this can end up in lots of wasted time and resources chasing the leads that aren’t worthwhile.
You should disqualify a lead as soon as it becomes obvious that a sale is most likely not going to happen. This realisation can happen in many different ways. We’ll discuss the questions that you should be asking to qualify leads in a moment. For now, let’s take a look at the major categories of people that should be disqualified so you’ll know what you are looking for.
- Your company’s buyer personas, assuming they were created effectively, represent the various types of people that are likely to purchase your products. If the lead in question doesn’t come close to matching any of those personas then it is a good chance that at some point in the process, the sale is going to fall apart, as your product won’t be able to provide the value they are looking for.
- Not everyone who shows an interest in your product will have the authority to actually make a purchase decision. Some will have no authority to act at all but it’s important to remember that they can act as an influencer to decision-makers, others may have a lengthy chain of command they must follow in order to get authorisation.
- Your product is designed to address certain pain points that potential customers have. Even if your prospect matches one of your buyer personas and has full purchasing authority, it is possible that they do not need a solution to the particular problem that you solve. Don’t waste time chasing a need that simply isn’t there.
By quickly disqualifying poor leads you’ll be ensuring that you spend as much time as possible on high-quality leads that are ready to buy. The more your sales and marketing teams talk, the earlier these poor-fit leads can be identified, freeing up the time of sales teams for more valuable pursuits.
Qualifying questions you should be asking
Lead qualification isn’t just about getting answers to a checklist of questions. In order to accurately qualify a lead, you will need to size them up and see if they are a good fit. Doing this properly can avoid you having to go through whatever checklist of questions that you have created. We’ll discuss the various ways to judge a lead by the way they answer questions in the last section of this post.
Sizing up a lead cannot easily be done with closed questions that have simple one-word answers. You want to get the lead talking so you can gauge their knowledge level, the degree to which your software solves their problem, their authority to make decisions, and how well they fit one of your buyer personas. The best way to do this is through open-ended questions that allow the lead to tell you about themselves in their own words.
Using BANT as a starting point
BANT is the bedrock of any sales lead qualification method, and while there are now alternative models, it provides the foundations that any sales team can implement. The important thing to remember is that BANT is meant to encourage discussion with a client. Do not make the mistake of creating a checklist of questions and running through them like you are reading from a script. If your conversation doesn’t change based on the information the lead is giving you then it signals to them that you aren’t actually paying attention to them or their needs.BANT is based on four simple criteria. The methodology calls for advancing a lead in the sales process if they can pass three or more of the criteria, though you are welcome to experiment with a different scoring system or assign different weights to one of the elements if it makes sense for your business.
The four BANT criteria
- Budget – If your product does not fit into their budget, then the lead cannot become a customer even if they wanted to. Ask questions early on to ensure that you are not talking to someone who cannot afford to pay. The size or reputation of the company itself should give you an initial indication of the type of budget they will have.
- Authority – Quickly determining the lead’s job title and whether or not they have the authority to actually make a purchasing decision will let you know whether you are talking to the right person. If not, it’s important to establish who the person is that can make the final call.
- Need – As quickly as possible, begin asking the lead to tell you about their pain points or asking them specifically about the problems that your product or service solves. If someone doesn’t need what makes you unique, then they probably will not become a customer.
- Time Frame – Sometimes a lead will be shopping for future purposes. If they are just looking for information for later, then dedicating a lot of time towards making a sale right now will not be worth it. Figure out when they need your product and how quickly they will be making a decision. Be careful not to seem overly aggressive or pushy when doing so.
Implementing the right qualification model
The BANT model is a great basis to build your sales qualification process around, but it’s important to remember that every business has different stages within their sales cycle, and as such it needs to be tailored towards yours to enable your sales teams to work effectively. This free sales assessment is a great tool to help ensure your sales and marketing teams are aligned and that your sales funnel is as efficient as it can be.
Tips to use during the qualification process
Now that you have a good idea of the types of questions you should be asking and the ways in which you should be asking them, let’s take a look at some other tips to help you in the process. There are some behaviours that should be considered red flags and some that are positive signs.
Red Flags 🚩
Two things to look out for are prospective leads whose answers are too short or are inconsistent. You are looking for leads that have a problem you can solve and who are in a position to make decisions. Someone who is not giving straight or consistent answers likely does not have a very in-depth knowledge of what they are talking about. To close a sale with that company, you’ll need to be put in touch with a person who can answer the questions accurately.
A lead who knows their company’s pain point is going to talk at length about the problems they are having when you bring them up. Someone who is answering quickly and not going into much detail likely isn’t having a big enough problem in the areas that you address for them to become a customer.
Positive Signs ✅
The positive signs are essentially just the inverse of the red flags. If someone is being very specific about their pain points, then you know it is a problem that this person has thought a lot about. It is something that causes them great worry. As long as your solutions match up with those pain points, this lead is a good fit.
A lead who is knowledgeable and well-informed on all aspects of their business is likely to be a decision-maker or someone close enough to a decision-maker that makes the lead a higher priority compared to other leads.
Lead generation and lead nurturing are two vital aspects of any sales and marketing funnel, but equally important is knowing when to pursue a lead and when to cut them loose. Using the steps outlined above, you can spend more time pursuing the leads that matter and increase the number of leads that convert into sales.