Qualifying a Sales Opportunity Like a Pro
As a salesperson, you are the main ambassador for your company when facing customers. All of the teams that make up your company are reliant on you bringing home profitable revenue. The key word in this statement is “profitable”, as the point-man for your company, it is your duty to close opportunities that generate enough profit for the company to fund heads, improve services and customer satisfaction, but critically, generate enough profit to cover additional costs should something go awry. This guide discusses basic processes to validate if a prospect falls into your sweet spot, and thus more likely to yield a good profit.
Managing your time effectively also falls under the umbrella of “profitable”. So as you’ll (hopefully) have leads pouring out of your ears, a simple and effective Qualification Process is a core skill to adopt and hone, to ensure you focus your limited time on generating the company the most profit.
We have seen many reseller salespeople close huge revenue deals at razor thin margins, e.g. <5%, where any slight change in currency rate, delivery issue, or design problem obliterates the profitability. Remember, for $1,000 profit, you can either close a $20,000 deal at 5% margin, or close a $2,000 deal at 50% margin. “But the market is competitive, we are too expensive” we hear you cry, read our blog about “Adding Value” and banish this common excuse.
Pre-Qualifying
Prior to picking up the phone to call your prospect, focusing on a target market is vital. Understand your target market, not only by prospective company, but also by role or job title.
Qualifying Companies
1. What vertical (or industry) is best suited to your products and services? For example, a Bank would be interested in Security services, but less likely to focus on Streaming or Content Delivery services. Ideally, this should be an area where you have direct references, and should be well-defined by your Product Marketing team.
2. What company turnover ranges (or annual revenue) are likely to purchase your product? E.g. a $1bn+ company might be interested in enterprise and global based services, whereas a $10m company might look for small business services. This may sound eye-bleedingly obvious, but remember, a small company IT Manager may like to spend time talking about Enterprise solutions, but is unlikely to buy them! (This person would referred to as a ‘tyre-kicker’).
Once you have these clearly defined, a quick google search is the fast and free way to find a list of companies, e.g. “top 50 law firms in Europe”, links to many websites that list the law firms based on turnover or ‘fee-earners’. You can then select those that fall into your desired revenue range.
In an ideal world, you will have access to a database of companies to target, some companies have this, but due to data privacy laws, it does get harder to keep this up to date. Our recommendation is doing this yourself will take about 30 minutes to build a list of 20–50 targets that you can then compare with your corporate CRM.
Qualifying Contacts
1. What job titles are relevant technical decision makers for your product? If selling Networking equipment, a Network Manager or Chief Architect would be ideal, you are after someone who approves and validates the technical viability of your product.
2. Who are the commercial decision makers? Common misconception is to solely focus on the CFO, but who else has a vote in the commercial process? Who else controls budget? This could be Chief Procurement Officers, Heads of Department, CIOs?
Once you define the roles you are after, if you have access to a database, CRM or Biz Dev Team, ask them to find contacts at the companies you defined, with the job roles you selected. Chances are that you don’t have this luxury! So, the most effective way to do this is to use Linkedin, and if you are serious about saving time, buy/expense a Sales Navigator licence. There are hundreds of guides and videos about using Linkedin Search and Sales Navigator, so we won’t go into it here.
We will now assume you have a new shiny list of target companies, sorted by revenue, with a selection of contacts to targeted by business development teams or marketing campaigns. Remember, these targets should be prospects that you would gladly get out of bed to talk to, and thus should be a limited number around 20 companies, but definitely not more than 50 at a time. Once all have either been qualified in or out, repeat the process if you need more pipeline.
Researching the Target
At this stage, we’ll assume that an initial cold call, email or marketing campaign has led to an intro conversation being scheduled with you.
Intro Conversation Research
Your first conversation is all about building rapport, (see our Rapport Guide), credibility, and finding a hook. To do this, you MUST research your contact and their company. The old adage is that first impressions count, and they absolutely do, so spend 30 minutes researching as the opportunity could make your company thousands in return. As you pre-qualified the company, you should have some awareness of them, if not, you should prepare and know the following:
Research the Company
- What are their core revenue generating activities — this will be on their website. How do your products and services help grow those revenues? E.g. if selling Cloud Hosting services, your product helps them scale cost effectively, and reach wider audiences. Or if Security, you safeguard customer data enabling them to win new clients through helping them meet compliance or regulatory standards.
- What awards or accreditations do they have, or have won recently (that are relevant to your business)? For example, if you are positioning a Security solution, does the customer have ISO27001 on their website?
- Where are their global locations? Where is their HQ? (if a remote meeting, where is the contact you are about to talk to located — how far is this from you or other customers you can name drop?).
- Have they had any major positive news? Acquisition? New product release? Worth mentioning this, e.g. “I saw the new shiny widget release, looks interesting, has it been successful”?
- Have they had any major negative news? Redundancies? Loss of jobs? Worth being aware, but not mentioning.
- If this target would make a significant customer, spend additional time reading their annual reports. If they are publicly traded, or in certain countries, you can get their annual report easily, they will have an “investors” section on their website. Look out for our “Understanding Annual Reports for Sales” guide for how to read these like a pro.
Research the Contact
- How long has your contact worked here? If less than a year, where else has he worked that could be similar or referenceable? This will be on Linkedin.
- Who do you know that may be connected with them? This is on Linkedin.
- Are they listed on the “about us” or “leadership” pages on the website? If not, who could they report into? Be aware of the name, and reference if applicable, e.g. “will this project be signed off at the top, perhaps at Mr CIO level?”
- Do they have any hobbies or interested referenced that could be useful to link together? E.g., “I was researching on linkedin, and noticed that you also are a fan of birding, where do you normally bird”? Obviously, only do this if you are genuinely interested in the thing you are referencing, otherwise you’ll come across as insincere. (For the UK Audience, Birding is Bird-watching of the avian variety).
Top tip, save yourself time and do this in the last 30 minutes before the call, the information will be fresh in your mind, and you won’t be wasting time should the meeting be rescheduled or cancelled, had you done this days in advance.
Qualifying the Opportunity
To avoid insulting the reader’s intelligence, we won’t teach how to introduce yourself or the company at this stage, but will now go through questions and areas to cover during your intro conversation.
At this stage, experienced salespeople or those in larger organisations will have a plethora of sales processes or frameworks thrown around such as SPIN, SNAP, BANT, SMART, MEDDIC, CHAMP, etc. they are all effective, but only if actually applied effectively. For reduced stress and internal political friction, we always recommend utilising the process that links into your company’s CRM system, or if there isn’t one already, leverage our 2-tier model.
We recommend that you write down each sub-heading in your notes ready to fill-in the blanks as you conduct the conversation.
Tier 1
Champion and Pain. These are the two critical points you must thoroughly understand for any opportunity to have legs. At the absolute minimum, you need to understand these before progressing the opportunity; as without a champion, no-one will be interested in solving the problem, and without a pain, there is no problem to solve.
Champion — Commercial & Technical
- Who is sponsoring the Commercial element? I.e. who signs the order? What is the purchasing process?
- Do you need to be part of a framework to sell to them?
- Do they have a “Preferred Suppliers List” (PSL)? How long does it take to get on this?
- Would the product you are proposing require a particular level of sign off?
- Would they want a trial period or PoC?
- Who is the Technical authority? I.e. whose neck is on the line if it doesn’t work?
- Why are they interested in talking with you? What piques their interest?
- Who else influences the technical decision?
- What incumbent or competitor product do they have currently?
Side point, NEVER EVER criticise a competitor, remember, the customer chose that technology, so if you criticise that competitor, you are really criticising the customer’s own judgement.
- What training or implementation period might there be to bring them up to speed? i.e. are they familiar with your product?
Pain
Is this a Tactical or Strategic Pain? I.e. how big a problem is this?
- Tactical — Solve a short term pain, e.g. they need more hardware for a new office.
- Strategic — Improve overall revenue generation, e.g. migration into the cloud
- Are senior executives shouting about this problem? Has it been going on a long-time?
- What is the impact if the problem is solved? How long can they survive with the pain?
- Is this a compliance issue? If so, would they receive a penalty if not-compliant? Would their own sales be limited if they are not-compliant?
Tier 2
It will be important to cover these topics throughout the initial conversation or 2nd meeting, or weave into the Tier 1 questioning.
Budget
- Is the budget allocated or will this need approval to proceed?
- Would this be funded by an emergency budget?
- Would this be a CapEx or OpEx spend? What does the customer prefer?
- How do they expect to pay, e.g. PO & Invoice? Credit Card? Subscription?
Timescales
- What is the go-live deadline?
- What happens if the project is delayed? E.g. Will they lose revenue every day this is not implemented?
- Will this be implemented in phases? If so, what are they?
- Is there a PoC stage?
Viability
Can our company deliver the solution technically?
- E.g. can we deliver the solution in the countries/regions that they require?
- Do we/they have the technical resource to implement the project?
- Do we/they have the resource to operationally support once live?
Can our company meet their commercial requirements?
- E.g. can we meet their budget constraints?
- Can we meet their timescales?
- Is this profitable for us?
- What can we do to improve the viability?
- Can we offer training?
- PoC? Try-and-buy schemes?
It would be great to have an answer to every question, however that would make the intro conversation feel like an interrogation rather than building rapport. The critical two points of confirming the Champion and the Pain will suffice to confirm there is an opportunity. At this stage, typically you would schedule a Technical overview and/or product demonstration.
The answers you have to the above that reflect a good versus great opportunity will depend on your company’s own go-to-market strategy.
For more info on how to implement these strategies head over to dealregplease.com
Happy selling!