Successful business owners know how to focus on providing great products and services and finding new customers at the same time. Generating new leads is the first step to driving new business, but it’s important to determine which leads are more likely to pay off.
Qualifying your leads can increase the number you convert to customers. Doing so is no small feat; only 1 in 5 leads ultimately becomes a customer. This means that for every new customer you get, there are four who were not persuaded to use your products or services. That’s a lot of time and money lost but smart lead qualification can minimize this concern.
Lead qualification is the process of predicting the likelihood that a sales prospect will become a customer. To inform this prediction, you’ll need to gather data about your prospects through lead capture forms and other processes conducted in the lead generation process. While lead qualification begins at the top of the sales funnel, it doesn’t end there ― it continues up until your prospect becomes a paying customer.
Qualifying your leads is more complex than predicting how likely one prospect is to become a customer rather than another. It’s also a matter of determining which leads are and aren’t worth pursuing.
You should qualify your leads, comparing them to your target audience or ideal customer. Just because someone has visited your website doesn’t mean they’re automatically a lead. If they lack the qualities of your ideal customer, you’re better off pursuing leads who do match.
Qualifying your leads may involve disqualifying other leads. At first, this may seem risky since smart business is largely about finding new customers wherever you can.
However, when you can predict with a high degree of certainty that a lead is unlikely to convert, your sales team saves money and time not pursuing that lead, so disqualifying poor leads is good for business.
Lead qualification typically occurs within one of four frameworks: BANT (budget, authority, needs and timeline), GPCTBA/C&I (goals, plans, challenges, timeline, budget, authority, consequences and implications), CHAMP (challenges, authority, money and prioritization) and MEDDIC (metrics, economic buyer, decision criteria, decision process, identify pain and champion).
Sales teams commonly use this framework, which tech giant IBM first developed, to answer these questions:
BANT is a popular lead qualification framework, but it’s not the only option available for your lead qualification efforts.
HubSpot developed the GPCTBA/C&I lead qualification framework to address modern changes in buyer behavior. The GPCTBA/C&I framework addresses buyers’ increased knowledge in the digital era, given the wealth of information available on the internet. Its goal is to align your company with the prospect’s goals and resources. Here is the information you want to find out from prospects with each step:
CHAMP is the reverse of BANT in that it focuses on the prospect’s challenges and then the actual purchase. It involves the below questions:
MEDDIC is the work of Jack Napoli of the Sales MEDDIC Group. This qualification process involves becoming intimately familiar with how the purchasing process works at the prospect’s company and finding someone at the prospect’s company who can vouch for your products or services.
The MEDDIC framework can be especially helpful when pursuing leads with complex purchasing processes, namely enterprises. Enterprise sales can be huge revenue drivers. Losing the sale can be devastating and MEDDIC can forecast enterprise purchases more accurately.
The six letters of MEDDIC and their corresponding questions are:
Lead qualification frameworks offer strong foundations from which to begin qualifying your leads. Consider the elements of each and determine which offers the most relevant to your target audience.
Lead scoring is a subcategory of lead qualification ― it happens after a lead is qualified. Whereas qualifying leads involves predicting whether a prospect is likely to become a customer, scoring leads involves comparing all qualified leads against each other and assigning that lead a score, usually on a scale of 0 to 100. You’ll score your leads using demographic and engagement information ― we’ll walk you through the process below.
To qualify leads using lead scoring, take the following steps.
As mentioned earlier, you sometimes need to disqualify leads. A disqualified lead does not fit your ideal buyer profile, sometimes referred to as a buyer persona. You’ll know you need to disqualify someone if their characteristics don’t make them a realistic prospect.
Developing an ideal buyer profile gives you a frame of reference for your potential prospects. In creating your ideal buyer profile, you should determine your target audience and market as well as the pain points and spending abilities that qualify someone as a potential customer. For business-to-business (B2B) sales, you should also factor company size into your ideal buyer profile.
Whether your company is B2B or consumer-facing, your company’s ideal buyer profile should also be based on consumer demographics. Depending on whether you are dealing with a consumer or another business, these may include:
A higher lead score corresponds with greater online engagement by a prospect with your company. Keep the following considerations in mind when using engagement to score your leads:
Once you have ample demographic and engagement data on your leads, you must interpret it to adequately score your leads. To do so, take the following steps:
Alternatively, you can use a top customer relationship management (CRM) software to automate your lead scoring practices. Although you and your team still need to determine the prospect demographics and behaviors you care the most about, your CRM can handle the math involved in lead scoring. Your lead scoring process will thus be far less error-prone, not to mention quicker ― and with less time spent estimating which of your leads is worthwhile, you can free up more time for generating leads in the first place.
Investing in lead qualification can give you a better picture of who your customers are, their motivations and their lifestyles. Knowing this allows you to direct resources to prospects that are most likely to convert and purchase your products and services. Armed with lead qualification data, you can make sure your marketing and advertising dollars are used to target consumers that need your business — generating a bigger return on investment and expanding profit margins in the process.
Jacob Bierer-Nielsen also contributed to this article.