The Startup
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The Startup

3 Effective Ways to Qualify a Lead

Qualify your leads, or see them dry up in a wink

An image depicing qualifying a sale.
Image: Pixabay

Say you came up with a simple solution for a complex problem and you start your new venture. You have a fair idea of whom to serve but in the whole wide world, how do you call out to your ideal prospects?

They may be in your neighborhood and also at the far end of the world. You need a way to reach out to them and say — “Hey, here is the solution for your BIG problem.”

Going online is the way forward for new businesses, however small. If you're not online, you're near to invisible. And on the web also are where you will find your customers through leads.

What is Qualifying the Lead?

Go back to your dating times or if you're still in that phase, good. When you go looking for a prospective date, you would have certain expectations on how your date should be.

Once you find a prospective date, you have a couple of meetings to see if you get along and then decide to hook up or give up.

Same with sales. You have a bunch of interested prospects come and see you. You then filter the prospects with a meshed strainer and serve up your products or solutions to those who come down into your cup through the fine strainer.

The interested prospects are leads and the prospects whom you filtered down into your cup are your qualified leads. They are the ones who you were born to serve, or rather your products were born to serve.

What Happens If You Don't Qualify Leads?

Here's why it's so important for businesses to qualify the leads.

  • Imagine wasting your time, effort, and resources (money, manpower, freebie, free trial, etc) on random browsers who care nothing about your product because it's not a good fit for them.
  • You lose an opportunity to identify your ideal customers' deeper problems and come up with continual solutions due to a lack of clarity about your leads.
    Remember — Those who try to please all serve none.
  • Your competitors may be targeting your right prospects right under your nose. Even though your product/service is a notch better than theirs, a sale can elude you because you won't know how to target and re-target your prospects.

Benefits of Qualifying Leads

  • Qualifying a lead helps close more deals instead of shooting for the stars blindfolded.
  • When you serve qualified leads, you have a much-focused audience to target and can serve them well.
  • Your product can evolve by delving deeper into the challenges of your ideal prospects. Otherwise, it hampers product growth.

Segmentation of Leads

Then there is the segmentation of leads. Some leads may be interested and the right fit for your product/service. Not yet, but down the line, they might qualify. So you can strategize accordingly to maintain them.

Businesses choose to have those fence-sitters on their list, warm them often through newsletters, testimonials, and tempt them with a flash sale or a surprise offer, which is sure to routinely entice some of them to join the party.

This brings way more ROI than hunting for new clients.

3 Frameworks of Qualifying the Leads

Qualifying a lead doesn't have to be a headache or heartache. You can rely on simple yet proven frameworks to qualify or disqualify a lead. Here goes…

BANT

It stands for Budget, Authority, Need, and Timeframe. This framework was first developed by IBM back in the 1960s to determine their prospects' solution needs.
Quite self-explanatory, but for the sake of completeness, let me spell their meanings out.
Budget: Asking your prospects (in a nice way of course) to— show you the money! Do they have the moolah to afford your product/service?

Authority: Is he/she the captain of the ship who can maneuver through tough meetings and call the shots? Or can the lead direct you to someone who has that authority to sign off the deal?

Need: Are they just chilling out and window shopping your product or do they have a ”hair on fire” situation and need your product desperately to rescue them?

Time frame: They need you alright. But when? now, tomorrow or next year? Because clients may have certain processes involved to allot budget and discuss with stakeholders before they can onboard your product.

SPIN

SPIN (Situation, Problem, Implication and Need Payoff) was developed by Neil Rackham, back in 1988 in his book SPIN Selling. He had devised the solution based on research metrics of 35000 sales calls. The top sales forces in the world still reference this book.

Situation: How is the client doing with their business today? what do their spending, their revenue, and profits look like?

Problem: Say, One task of a client like an audit is forcing teams to work on it wasting weeks on the problem.

Implication: What would happen to the client's situation if the problem is left unresolved. For example — hours lost, other jobs that add up in the backlog, wasted productivity, and so on.

Need-payoff: Enlighten the prospect with numbers and stats on how your product is going to save them time, effort, and money. And highlight improvements in productivity and efficiency too.

The advantage of using SPIN over BANT is that SPIN is more user-focussed though it benefits both parties. BANT appears to be more of a yes/no checklist.

MEDDIC

MEDDIC (Metrics, Economic Buyer, Decision Criteria, Decision Process, Identify Pain, Champion) is a far more advanced framework used by SAAS and enterprise businesses to identify crucial below the surface pain points, then address them and take control of them.

Dick Dunkel created the MEDDIC framework inside of PTC in 1996. He had been working on improving the effectiveness of the sales teams and noticed there were six commonalities in all of the reasons PTC were winning deals, losing deals, or letting deals slip through the cracks.

Metrics: They refer to quantifiable aspects that your product can enhance like the speed of an app, hours saved per day by automation, increase in productivity by 30% due to a structured workflow, and so on.

If your business can provide an improved metric backed by previous case studies, you are one step closer to closing the deal.

Economic Buyer: is akin to Authority in other frameworks. Right from having product knowledge to signing off a deal, everything is controlled by the economic buyer.

80–85% of leads don't move toward to a sale due to no direct contact with the economic buyer. And the converse is also true; 80–85% of deals go through when there is direct communication with the economic buyer.

Decision criteria: This circles around three sub-areas.

  1. Technical fit: Does your product entirely or at least satisfactorily solve your lead's problems?
  2. Economic fit: Is it affordable to the lead? And is it valuable enough to give a good ROI?
  3. Relationship fit: Do your attitudes match. Things like getting along are crucial if the deal has to come through.

Decision Process: It so often happens in businesses where an OK given can go astray or turn into No because of the business processes involved.

Sometimes the stakeholders come into the picture, or the legal department would have a say. A business when implementing a major change would follow a process and it generally takes longer than expectations.

Implicate Pain: By talking about the client's pain points using annual reports, current ROI, and bringing out an urgency is necessary.

People do anything to avoid pain, so paint that emotional transformational picture and say clearly what can happen if not acted upon in time.

Champion: Champions are the insiders with power, influence, and experience. They can talk their way in the company.

Competition: Being aware of competition is a no-brainer in business but exercise caution to not speak negatively about the competitors. Speak if you should, about the key differences between the products that would even out competition.

BANT, SPIN, and MEDDIC are the three basic frameworks though new ones are made to order every now and then, the premise remains the same — Qualifying the Lead.

All the above checkpoints can be discussed during a client discovery call. Keep a lead qualification checklist handy.
The possible questions could be:
1. Have you (or your company) allocated a budget for this new product? It’ll cost you about $x/year. If yes,

2. Who is signing the deal with us? You or a board of directors? Will other stakeholders need to approve it?

3. Showcase why and how your product is going to save them $100k per year or cut down 15% of the employee workforce (or any deep benefit) due to your automized solution.

4. When is the implementation possible in their environment? Ask if there is a pending upgrade in the next quarter, to give a go-ahead? Or some other unavoidable reason that the prospect cannot go ahead immediately.

5. If you've served similar businesses earlier or their competition, show the improved metrics concealing the confidential information.

By asking such questions, you can come up with alternate best solutions to easily convert them into customers.

Other factors to consider during the initial discovery call

  • If it’s a budgetary constraint, try offering the product at an installment or a monthly subscription-based solution.
  • Is there something of value you can buy from them in exchange for your product/services?
  • What are the stakes for the prospect if they don’t buy your product immediately?
  • How can you remove any barriers from your side to ready the road for a sale?
  • If the prospect wants to buy time due to non-urgency, they can be moved to the nurture zone and taken off the hot-prospect zone giving both of you the needed space and freedom.
    The customer can be lured back later without you acting like you are nagging the prospect for a sale. Lest they run away for good.

Other similar frameworks still in use are:

ANUM (Authority, Need, Urgency, Money) is similar to BANT but with a slightly different order.

CHAMP (CHallenges, Authority, Money, Prioritization) is yet another similar framework that depends on the 4 pillars that can form a YES.

Without a framework to qualify the lead, most of the leads dry out quickly and waste the dollars and hours spent on capturing leads. With a solid framework, leads can be qualified and sent down the sales funnel to nurture and convert into meaningful, long-time customers.

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