What is lead qualification?
Lead qualification is a process used by marketing and sales teams to determine if a prospective customer will make purchases from your business. This process enables your sales teams to focus on only the most viable prospects, saving you time and money.
How does lead qualification work?
Lead qualification involves asking prospective customers pre-determined questions about their business needs, budgets, time lines, and purchasing authority. A prospect’s answers help sales development representatives build a profile for each prospect and determine if it matches your business’s ideal customer profile (ICP).
If a prospect’s needs, budget, and authority indicate a high chance of a sale, the sales process moves forward. If a prospect’s profile does not meet the required criteria, the prospect is disqualified, allowing your sales team to prioritize more promising customers and take them through the full sales process.
Creating an ideal customer profile
Building an ICP requires having a clearly defined target persona that your marketing and sales teams are familiar with. This enables both teams to identify the qualities their ideal customer needs to have to move through the sales process.
An ideal customer profile should identify a customer who is experiencing problems you can solve with your product or service. An ideal customer is also aware of the problem that needs solving and is actively looking for a solution—which will lead that customer to your business.
Most importantly, an ideal customer needs to be ready, willing, and able to buy your product or service. This means your price is within the customer’s budget. It also means the customer is able and willing to purchase your product or service in the near future. Finally, your ideal customer should have the authority to buy from your company.
In a business-to-consumer (B2C) scenario, your ideal customer can be anyone in your target demographic with enough disposable income. These consumers generally have the authority to make buying decisions. In a business-to-business (B2B) scenario, your ideal customer will need to have sufficient clout in their business, which is why your ICP may favor VPs over sales reps.
To learn if your prospect fits your ICP, your marketing and sales teams will need to agree on the type of framework they’ll use to determine lead qualification.
Frameworks for lead qualification
Multiple lead-qualification frameworks are used to determine the types of questions sales reps will ask prospects. These include:
- BANT (Budget, Authority, Needs, Timing). Developed by IBM, BANT offers prospects basic questions. Prospects need to indicate if they have the budget necessary to purchase your product or service, if they have the authority to make a buying decision, and if buying is a priority at this time. BANT questions also determine the top challenges, needs, and problems a prospect faces to build a better profile of the potential customer.
- GPCTBA/C&I (Goals, Plans, Challenges, Timeline, Budget, Authority, Negative Consequences, and Positive Implications). This framework, developed by HubSpot, asks prospects more detailed questions about customer needs, such as the concerns a company’s decision makers will raise about buying your product or service. It’s useful, but may be too complex for a small sales team.
- CHAMP (Challenges, Authority, Money, Prioritization). Created by InsightSquared, CHAMP focuses on the prospect’s problems to get a better idea of how your product or service can solve these issues. By emphasizing how your business can help solve your prospect’s problem, budget issues may become less of an issue when they’re brought up.
While the lead-qualification process originally required sales reps to reach out to prospects and ask them questions, today, information for lead qualification is collected from a prospect’s online behavior and demographics, as well as interactions with sales reps. This information can be gathered from landing pages on your website where prospects enter their lead information.
Once this information is collected, it all goes into calculating a prospect’s lead score.
How lead scoring works
A lead score is a grade used to evaluate a prospect’s potential to be an ideal customer. It is calculated by analyzing different attributes of your prospects, including:
1. Behavioral attributes
Analyzing how your prospects interact with your online marketing tools helps reveal their level of interest in your products. You should concentrate on your prospects’:
- Business website behavior. How long each visitor spends on your site, the pages they visit, the blog articles they read, and the fields they fill out on your landing pages all indicate their interest or lack of interest in your business. Each of these actions earns a prospect a number of points that go toward their lead score.
- Social media behavior. Did your prospect visit any of your social media pages and share or retweet certain posts? Their level of engagement can be calculated and factored into their lead score.
- Email marketing campaign behavior. Signing up for your email list may indicate interest, but it’s also important to know if your prospect opened your emails and engaged with your content. This can be tracked with email marketing software and used to enhance a lead score.
Your ideal customer profile may favor prospects from large companies over smaller startups. You may also prefer dealing with a CEO who has more purchasing authority than a sales rep. Make sure your website landing pages enable your visitors to provide this information, so you can use it to weigh a lead score in favor of customers who match your target demographic.
3. Sales interactions
Once your prospects’ online behavior enables you to calculate a basic lead score, your sales team will contact the more promising leads. Based on how successful email, phone, or in-person interactions are, additional points should be added to a prospect’s lead score. By combining your behavioral attributes, demographic, and sales interaction scores, you will arrive at a lead score that indicates how well your prospect matches your ICP.
When calculating a lead score, your sales and marketing teams need to use a standardized scoring system to evaluate how each prospect’s behavior makes them a qualified lead or an unqualified lead. By agreeing on what behaviors need to be observed and what the point values for each desirable behavior or attribute should be, your teams will be able to calculate more accurate lead scores and follow up with their most ideal leads.
Automating the lead-qualification process
To make calculating the lead score more efficient, you should automate the lead-qualification process. Make sure your entire end-to-end lead-qualification system is mapped out in your customer relationship management (CRM). From there, you can use different lead-scoring tools to help with automation.
The importance of lead qualification
As lead qualification reveals, not all leads are equal. Certain prospective customers may not be ready to buy your product or service. Others may not have the budget to buy your product or the ability to authorize a purchase. Knowing this in advance helps your sales team devote its time to more promising leads—yet sales statistics show only 5% of salespeople said the leads they received from marketing were very high quality.
Lead qualification helps your business determine which of your prospects are worth devoting a lot of time to, which ones require more work, and which ones you should let go.
By developing an efficient and accurate lead-qualification process, both your marketing and sales teams will save time and money in the sales process. They’ll help your business gain more lucrative sales—and they’ll establish better relationships with prospects who will ideally become loyal, long-term customers for your business.
Evaluating your process for qualifying leads
To make lead qualification work for your business, it’s important to evaluate your current process for qualifying leads. Even if your process has worked well in the past, it’s important to regularly re-evaluate how you qualify prospective customers. Ask yourself:
- Is the strength of your leads based on solid criteria or guesswork? Your marketing and sales teams should use a standard scoring system to evaluate qualified leads.
- What framework do you use? Even if you enjoy using BANT, as your business grows, it may be useful to switch to a more detailed style of questioning like GPCTBA/C&I.
- Has your marketplace changed? If your target customer base has changed due to new products or demands, your lead-qualification process should change to target new demographics that may become qualified leads.
- Are there aspects of your process that can be automated? New technologies enable you to automate more of your process and make your business run more efficiently.
Once you’ve determined the best lead-qualification process for your business, it’s important to manage your leads and move them through the sales process efficiently. CallRail’s Lead Center offers a unified business communications solution that places all your incoming, active, and recent calls,texts, live chats, and form submissions into one inbox. Lead Center also provides a timeline of all customer interactions, making it easier to qualify each lead.