The Hidden Sales Bottleneck You Might Have Missed

In a business, we often focus exclusively on sales numbers, and prospective ongoing clients. We want the best for our business, so we meet more clients, make more calls, go for more meetings, and generally create a buzz of activity that makes us feel good. But we might actually be hurting our business.

Activity feels good, but it doesn’t produce leads efficiently

Activities like meeting prospective clients, networking events and the like make us feel like we are doing work, and it makes it feel like there is progress, which is why they are so seductive.

By creating the illusion of productivity and progress, sales activity spam numbs us to the real problem that many of these activities do not produce the results that we want.

Sales is not just a numbers game

Further, the commonly accepted wisdom that sales is a ‘numbers game’ misleads many of us (myself included) into thinking that all you have to do is blast away at prospecting activities and follow-ups in order to build a sustainable sales funnel or service business.

Sales activity numbers can be built up, but result in little to no measurable effect on your final sales closing numbers. Why? Because leads have not been qualified properly or are being qualified using the wrong processes. This costs businesses precious man-hours and resources that they can ill afford.

Proper lead qualification is the #1 thing that is overlooked by businesses in building a sustainable sales funnel

What is lead qualification? It is discovering whether or not the client is the right match for you. It is you interviewing the client and deciding if you want to invest more resources in this relationship.

If leads are not sorted or qualified properly, up to 80% of your time spent chasing clients could be wasted. Wasted chasing clients who don’t have the budget, or the authority to approve your offering. Dozens of hours wasted meeting clients three, five, eight times, simply because they have no urgency or can’t buy from you.

How can I qualify my leads? With the BANT method

The basic BANT methodology (Budget, Authority, Need, Timeframe) serves most people well enough for qualifying leads. If the business prospect or lead fulfills the following four criterion, they are a hot lead:

B udget — Is their budget close to your target range?

A uthority — How much decision making power / influence do they have?

N eed — What are the consequences of them not buying?

T imeframe — How specific is their timeframe?

You can usually score this on a 20-point scale (5 points each). As a rule of thumb, any lead above 15 points is warm and should be followed up with as a matter of priority.

Eg.

B — 3/5

A — 4/5

N — 5/5

T — 4/5

BANT score = 3+4+5+4 = 16

Curious to learn more about the BANT methodology and how it can help?

P.S. Thunderquote helps you score your leads with BANT even before you pick them. ;)

Why don’t most businesses pursue only qualified leads?

Many businesses actually do practice some basic forms of lead qualification. For example, business owners or salespeople often ask what the budget range is of the client as one of the early questions in the sales process. This is correct, although proxy questions could be used better to extract the real value, and asking about budget range too early could damage your chances of making a larger sale.

But budget numbers aside, many people just dive straight into the presentation or explanation of their service without really sorting out whether or not the person in front of them is the right person to be presenting to.

In an extreme example, imagine if you ended up presenting to a front-line receptionist. Even if she really liked your service, it wouldn’t help you much. You need to present directly to the influencers and decision makers (Learn more about decision makers and the Buying Centre).

Lastly, even if people manage to filter and score the leads, many business owners end up pursuing sub par leads after they complete the warm leads, because it feels like a waste not to, and maybe they have spare capacity or sales time. This is a serious mistake.

Pursuing sub-par leads due to spare sales capacity is an error that will cost you good sales and good clients

It seems to make sense to pursue every somewhat warm lead if you have spare time, but the real response to having spare sales capacity should not be moving down the lead list to the weaker leads, it should be adding more leads to the front of funnel.

Why? Because sub-par leads by nature are slower, and have lower conversion percentages. Meaning that they gum up the works in your sales funnel for months to come. And once you have started following up with a sub-par lead, the sunk-cost bias will kick in, and the salesperson or business owner will be inclined to follow it all the way through, wherever it might lead. And where it might lead would be three to nine months of fruitless follow-ups.

Following up with sub-par leads is permanently reducing your sales capacity, akin to putting tar in your car’s petrol tank simply because you have space in it.

By adding more leads to the front of funnel, you can filter the leads by quality and follow up with only the best quality leads, filling up 100% of your sales capacity with high-quality leads, instead of low quality ‘tar’.

This means that your overall sales will increase, your sales team morale (and your own) will increase, and you get to deal with much better, higher budget clients.

In summary:

Make sure to remember to qualify and filter leads, and when the pipeline needs filling, add more leads in the front of the funnel and filter them, until the pipeline is full of high-quality lead goodness. Most importantly, don’t fill your petrol tank with ‘tar’!

Kevin Ng is Managing Director of Thunderquote.com , ASEAN’s one-stop e-sourcing & procurement marketplace for businesses, with automated buyer guidance for project scoping and market rate data. Thus, ThunderQuote generates genuine, high-intent and qualified leads for business owners and salespeople.