The complete guide to lead qualification
By: Aya Gharbawi | 9/2/2021
A quick introduction to lead qualification: How it is vital for boosting sales conversion
Did you know that lead generation is only half the battle? All too often, we see businesses of all types and sizes think you need to get as many leads as possible, and then hand them over to your sales team to convert.
It would be simple if that was the case, but there is more to it. Remember, leads are simply possibilities. Some leads are easy to convert, while others are near impossible, or the completely wrong fit for your company. The only way to find out which leads are valuable to your organization is through lead qualification.
If you have a mountain of leads and your sales team is calling them without rhyme or reason, you are hurting your chances of successful lead conversion.
Why? Here are a few illuminating business development stats:
- For converting a lead, relevant and consistent content is essential – 72% of tech buyers are more likely to consider an IT vendor who educates them through each stage of the decision process – Foundry SDS
- 96% of visitors to your website aren’t ready to buy – Marketo
- 50% of leads in any system aren’t ready to buy – Marketo
This shows that attempts to convert any lead that pops into the system, regardless of how they got there, is going to be a huge challenge for your sales team.
Instead, by utilizing a lead qualifying strategy, you can focus on the leads that matter, and also continuously develop relationships and foster trust with leads, progressing them through the sales funnel.
In this guide, we’re going to show you how to implement a winning lead qualification strategy, so you can focus on the leads that matter.
Keep in mind that lead qualification is the first step towards more conversions. The second step is to implement a lead nurturing strategy, which goes hand in hand with lead qualification. Both are key to business development, both complement each other and both can be implemented through a marketing automation system or outsourced.
So, once you’ve mastered this guide on lead qualification, be sure to check out our guide to lead nurturing, and you will have everything you need for a winning lead conversion strategy.
Lead qualification: Allowing sales to focus on high-quality leads
61% of B2B marketers send all leads directly to sales; however, only 27% of those leads will be qualified, according to MarketingSherpa.
Those are significant numbers, especially when we consider that 67% of lost sales are because of sales teams not qualifying their leads before jumping to the sales process.
So what exactly is lead qualification? Lead qualification is scoring leads to determine the likelihood of them becoming a customer, and also a long-term customer.
If a lead matches your ideal buyer profile, they become a qualified lead. And the great thing about a lead qualification system is that it will rank your most valuable qualified leads for you.
This is vital because qualifying leads allows you to pursue ones that are likely to convert. Your lead qualification platform will segment leads based on their suitability for your products and services, how much they align with your ideal buyer persona, and how ready they are to move onto the sales process.
By targeting qualified leads, sales will increase their sales closing ratio, while saving time and energy not having to deal with leads that have a low chance of converting.
Key benefits of lead qualification
- Saves time and simplifies the lead generation process
Instead of wasting time on unsuitable leads, through lead qualification sales teams can home in on the ones that are most valuable to the organization. Lead qualification reveals important information such as if the lead has the budget and authority to make a purchasing decision, what their pain points are, and if they need your product or service.
- It tidies your sales funnel and enables lead segmentation
A good lead qualification system scores leads based on behavioral and demographic characteristics, offering sales a clear and detailed picture of a lead’s business needs. This important information will allow sales teams to understand how your company can solve a customer’s challenge sets, which is vital when potential buyers are making a purchasing decision.
- Puts the spotlight on valuable prospects for sales to target
When sales fail to differentiate between high-quality and low-quality leads, their sales pipeline stalls. By qualifying leads, sales can make unique and personalized pitches to leads – while also ditching the stress that comes from prospecting a mountain of low-quality leads.
- It opens the doors to lead nurturing
40-70%+ of qualified leads still aren’t ready to buy, according to Databox. Lead qualification often reveals if your organization can provide value over competitors or the prospect’s current vendor. To get the most out of lead qualification, you need to nurture those high-value leads with content and a message that speaks to them. You can only do this if you have qualified leads.
Want to find out how to create a lead nurturing strategy for more conversions? Check out our complete guide here.
Signs that your business needs lead qualifying right now
- Sign 1: Your sales funnel has slowed to a crawl
If your sales funnel has slowed to a crawl, and your sales team often finds out that a lead has no use for your company’s products and services, you likely need to implement lead qualification strategies.
- Sign 2: Sales and marketing disagree on what makes a good lead
Both parties should clearly understand what leads offer the most value for your organization. If there are frequent disagreements, and if sales are rejecting leads, a unified lead qualification strategy needs to be put in place.
- Sign 3: Sales spend more time organizing their leads rather than making calls
A busy sales team is not always a good thing. If they are spending valuable time on administrative tasks and organizing leads, that is wasted time that should be spent on closing deals and engaging quality leads.
How to create a successful lead qualification strategy and framework
A solid lead qualification framework is a vital part of your business development plan. The end goal of lead qualification is to assign a score value to your leads, and if a lead has a high enough score against your ideal buyer persona, it is ready to be engaged by sales.
Step 1: Segment leads and define your buyer personas
Lead qualification will help you determine between two kinds of leads that are hugely important to increasing prospect conversions.
- Marketing Qualified Lead (MQL)
An MQL is a lead that engages with your business, whether that is through your website, social media, webinars, or ads. While these are good indications that they are interested in your products and services, it doesn’t mean that they are ready to buy or be contacted by sales. An MQL becomes an SQL when they are ready to talk to the sales team and are making a purchasing decision.
- Sales Qualified Lead (SQL)
An SQL is a lead that displays the strongest purchasing intent. This kind of lead visits multiple pages on your website, views product pages, has downloaded brochures, watched your webinars, has spoken to your chatbots, signed up to your newsletter, and possibly more.
Sales qualified leads are the ones your sales team should focus on, as they have shown the most intent in purchasing your product or service. The below steps will help you determine what leads you should contact.
First of all, gather the leads that have been generated by your marketing and sales activity.
Next, you need to segment them into a set of lists based on categories that show purchasing intent. What should these categories be? This is unique to every organization, but common high-level segments include leads that can be grouped into the following categories.
For example Country, region, state, and city.
For example Gender, education, and age.
For example Interests and product preferences.
For example Desktop, mobile, applications, hardware/software.
For example Product or service usage, history with competitors.
For example Product values and concerns.
For example Financial values and concerns.
The key when planning your segments is to start broad. Ask yourself questions such as “does this prospect fit my industry and demographics?” and create segments around that. Then, think more granularly, and ask yourself questions related to company type, company size, industry job title, and purchase history.
Remember, you can only get this information if leads give it to you. Keep that in mind when you are creating landing pages and gated content that asks leads to fill out a form. Besides the regular fields you expect from, such as name, address, industry, and email address, think about including a couple of extra fields that are pertinent to your lead qualification strategy. For example, “Have you used XX industry products before?” Or “What is your area of responsibility in your organization?”
Ultimately, this will enable you to target your leads based on how they perceive the value of your products and services. When you score your leads, you will have an easier time gaining actionable feedback on what makes a good lead and what makes a bad lead, when they are in easy-to-understand segments.
This will allow you to analyze your marketing strategies and fine-tune your messaging as you learn more about each segment.
Buyer personas and characteristics
The next step is to use the data points from your segments to create buyer personas.
This is the customer that you believe will be the most likely to convert into a buyer – the prospect that scores highly on your lead scoring system. You are likely to have multiple buyer personas depending on how many products and services you have, and what kind of lead qualification platform you are using.
To create a buyer persona, analyze your segments and identify attributes which can be used as key data points for scoring leads. By establishing obvious characteristics of your ideal buyer, you can easily determine which attributes correlate with a high conversion rate.
While buyer personas can change and will develop over time, a good starting point is to judge your ideal customer against implicit criteria and explicit criteria.
Implicit criteria: Based on marketing engagement and observable behavior. For example, if the lead attended a webinar, downloaded a report, or visited a product page. Implicit lead scoring is important because it shows intent of purchasing, and is great for monitoring interest in your product.
Implicit scoring is typically set up to review all the actions that a prospect can take on the buyer’s journey. For example, actions such as downloading a report may be worth 10 points, while requisitioning a demo is worth 20 points. Meanwhile, failing to open a marketing email in a month may remove 10 points.
Explicit criteria: This scores prospects against your buyer persons and by grouping demographic data that you get from leads, normally through online forms.
Explicit lead criteria are less open to interpretation. For example, criteria such as name, email, job title, and company name are explicit criteria and can be easily segmented.
Step 2: Score your leads
Lead scoring is assigning values as numerical “points,” to each of the criteria mentioned in the previous sections.
Don’t think of it as scoring leads in terms of how much revenue they will generate for your business, but which are most likely to make a purchase.
Many lead scores are based on a point range of 0 to 100, but every lead scoring model you create should home in on a particular set of attributes based on your ideal buyer persona.
Unfortunately, there is no one size fits all method for scoring your leads. And it can be a tricky job, especially if you are scoring tens of different variables. The key to making this work is ensuring the lead qualification platform you use has a scoring system that is consistent with the characteristics of the ideal buyer persona you have created, as well as your lead segmentation efforts.
For example, if you find that webinar attendees have high conversion rates, you may reward 20 points to leads that have watched a particular webinar.
Conversely, for a different organization, webinar engagement may not correlate to strong buyer intention, so the lead scoring system will only reward 5 points. With many touchpoints to allocate scores to, it may sound challenging, that’s why it is a good idea to start with the data points that provide the highest score and work your way down in increments, say of 5 or 10. That way, your scoring will be consistent and predictable.
Step 3: Ask lead qualification questions
The next step is for sales to validate the previous steps in a sales call.
Through lead scoring, sales teams should have a solid understanding of whether the prospect has any actual need or desire for your company’s products. By asking lead qualification questions, sales can determine how much they know about your products and services, and if they are looking to buy.
A key tip is to ask questions that encourage the lead to share what their key pain points and challenges are. If these challenges can be solved through your products and services, you potentially have a buyer on your hands.
Ask SPIN questions: SPIN stands for questions that determine: Situation, problem, implication of inaction, and need. These questions will help you determine if a lead intends to solve their issues through immediate action, as opposed to being merely interested in solving their pain points. Here are some examples of questions your sales team can ask:
- What business challenges are you hoping to fix with our service?
Why it’s a good question: Nobody wants to admit that their company has a problem. If your lead is openly talking about their pain points and the issues they have on a day to-day-basis, they are highly likely to be motivated to fix the problem.
- How did you hear about us?
Why it’s a good question: The usefulness of this question depends on your marketing and content. For example, a lead who arrived at your doorstep from a product-centric webinar is more likely to have intentions of buying compared to a lead who arrived from a social media ad. Regardless, this question will give you a good baseline of how much they know about your products and services.
- Can you ignore the problem?
Why it’s a good question: This is another question that will show how serious the buyer is about solving their business issue. If ignoring the problem is a viable strategy for the lead, they may not have any intention of buying.
- Why are you trying to fix the problem now?
Why it’s a good question: This question can reveal an array of potential signs that the prospect is interested in buying, particularly regarding immediacy. For example, perhaps there has been a major shakeup in the organization and the buyer is being pressured into solving their issue. Or perhaps they have been trying to solve the problem with a different supplier and they are unsatisfied.
- When do you want to see results?
Why it’s a good question: This question gives an indication of the prospect’s timeline, and if it realistically aligns with yours. If they don’t have a strict timeline and aren’t showing signs of immediacy, they are likely not ready to make a purchase.
- Has your company used a product like this before?
Why it’s a good question: If the prospect already has experience with the product and is looking to switch vendors, they are looking to buy. You can dig for more information by finding out what is driving that change.
- Which decision-makers would be involved in the purchase of this product?
Why it’s a good question: This question can reveal information about other decision-makers that need to be convinced. If you are speaking to a delegated assistant, you can moderate your conversation accordingly and deliver the most impact to push to speak with a decision-maker.
- Do you have a budget for fixing this problem?
Why it’s a good question: Not only will this reveal if the prospect’s budget and the price of your product are in the same region, but it also reveals underlying information. For example, a large budget for fixing the issue relative to the size of the company might show how serious they are about solving their pain points.
Top lead qualification frameworks
If you are having trouble deciding on how to evaluate your leads, especially if you have too many variables, you can use one of many lead qualification frameworks. We’ve outlined the three most popular ones below. These are all tried and tested methods for qualifying leads and may provide a good foundation for you to become more granular with your scoring and data down the line.
What it stands for:
- Budget: How much money can the lead spend
- Authority: Is the lead the decision-maker
- Need: What pain points or challenges is the prospect looking to solve
- Timeframe: How long will sales take?
Why it’s a good framework: BANT is typically the go-to lead qualification framework, and a testament to its popularity and versatility is that it was created in the 1960s and is still as relevant and useful as ever. Simply put, BANT is straightforward. Because of the seller-side concerns, you can find out what the major criteria are of what makes a good lead quickly.
What it stands for:
- Metrics: What is the economic impact of your solution
- Economic buyer: Who has profit-and-loss possibility
- Decision criteria: What are the technical, financial, and vendor criteria
- Decision process: What is the validation and approval process
- Identify pain: What are the primary business objectives
- Champion: Who will sell on your behalf
- Competition: Who are you competing against
Why it’s a good framework: MEDDIC is noted for emphasizing thorough buyer qualification. It is great for complex B2B enterprises because it focuses on the allocation of company resources, as well as the importance of the prospect on your organization.
What it stands for:
- CHallenges: What challenges is the prospect facing
- Authorization: Is this person the decision-maker
- Money: Does the prospect have the budget?
- Prioritization: When are they hoping to solve the issue
Why it’s a good framework: CHAMP is another great, straightforward framework. Like BANT, it is also customer-centric but focuses more on the customers’ needs and concerns as opposed to budget. This framework will reveal opportunities for countering their pain points with your own solutions.
What about leads that aren’t sales qualified? Nurture them until they are
According to Marketo, companies that excel at lead nurturing generate 50% more sales-ready leads at a 33% lower cost.
If you have a lot of leads that aren’t sales qualified, don’t worry. You can incorporate them into a lead nurturing program, which is improving relationships with prospects at every stage of the sales funnel.
You can learn more about lead nurturing here.
Quite a lot to take in? Consider outsourcing sales development and lead qualification
In a Foundry survey, we found that 61% of companies struggle to manage costs when running an in-house sales development team.
In-house sales development has always been tough for technology firms. More often than not, companies invest to onboard new staff that will help them crack new markets and deepen relationships with customers and prospects, but are all too often disappointed with the return they see.
This is because implementing a sales development strategy requires the output of a dedicated team. The responsibility of implementing new technologies, training sales and marketing teams on using them, ensuring your marketing and sales teams are aligned, and analyzing and trialing new strategies – are all time-consuming and resource-intensive activities.
Handing this much work over to your sales and marketing teams who already have their own responsibilities will probably not yield the best value.
Depending on the size of your company and how granular you want your campaigns, you might need an entire team dedicated to sales development that sits in between marketing and sales.
But adding a new team or division can be too much of a burden on your existing staff. And the smaller the team, the more sales development there is to fall upon the shoulders of fewer people. In fact, in our survey, 55% of companies responded that hiring and keeping talented people is a core challenge.
By outsourcing sales development, you remove the burden from sales and marketing, while also benefiting from the expertise of a dedicated sales development team, enabling your lead qualification and lead nurturing campaigns to be more effective.
It is important to remember that lead scoring and lead nurturing isn’t a one-size-fits-all strategy, which is why having experts look at your organization with fresh eyes is hugely beneficial.
If you outsource sales development, you don’t have to consider the costs of things such as;
Outsourcing sales development will take care of all of those costs into a single package. And you gain the expertise and speed of the company you are worth with that specialise in sales development.
This shows in our survey as well. We asked companies what their biggest reason for outsourcing sales development (single choice), and the results were:
- Gain access to better technology than we have in house (16%)
- For transparency into activity and results (14%)
- Scale the Sales Development team (13%)
As we have covered throughout this guide, lead generation is only half the battle. Lead qualification is key for converting leads and not letting valuable leads slip through your fingers.
By scoring leads against your ideal buyer persona, your organization saves time, energy, and ultimately your bottom line. A handful of sales-qualified leads will always be more valuable to your company than a mountain of unqualified leads that have no chance of becoming buyers.
Whether you decide to bring sales development in-house or work with an outsourced partner, or a mix of both, you are taking a step in the right direction towards higher quality leads and more conversions
What’s next? A complete guide to lead nurturing.