Sales is a meticulous matchmaking process. You can’t just take all the leads and shove your product or service in their faces. Some prospects are a good match, while others are better off with some other company. Knowing which prospect is the right match for you is paramount. That’s why it’s important to know which leads are sales-qualified and are ready for the next stage in your sales process.
So what is a qualified lead?
I can give you two answers, one short and one long.
A qualified lead is a prospective customer with need, budget, and buying authority, and with a buying timeline that is in accordance with that of your company’s own projections.
You can stop after this sentence. If you want the long version, stay a while. A good match, after all, is worth spending a little more time with.
The long answer:
A sales-qualified lead is not just a name and a contact number. He or she is a prospective customer that has been researched and evaluated and is deemed ready for the next stage in the sales process. He or she has gone past the engagement stage, and by showing intent to buy a company’s products, is now ready to be pursued for conversion into a full-fledged customer.
Related: The 4Ws & 1H of a Qualified Lead
A qualified lead is determined by the company’s lead qualification process. This process analyzes which actions a prospect takes that show intention to purchase. A lead scoring process is employed to categorize prospects from the least likely to buy to the more serious ones. Ideally, sales, marketing, and quality assurance teams collaborate to determine which qualities a prospect must have and the actions he should take in order to move on to the next stage of the sales process.
While the exact definition of a sales-qualified lead may vary according to a company’s criteria in determining what a qualified lead is and what is not, as well as what it is selling and who you’re selling to, the BANT criteria is generally used. BANT is an acronym for Budget, Authority, Need, and Timeframe/Timeline/Time.
The BANT System
Does the prospect have the budget to buy the product/service?
After all is said and done, it still boils down to money. No, it’s not love that makes the world go round. It’s cash. It doesn’t matter how much interest a prospect has shown in your product/service. If he doesn’t have the money, strike him off the list. And don’t feel guilty for missing out on him. There are others who can afford what you’re selling. Simple as that.
Does this person have the authority to make a buying decision? Is he capable of getting an approval to buy your product?
Picture this: You’re a real estate broker. In an open-house, a thirty-ish man who says he just got married asks for a tour of a nice Mediterranean-inspired two-story overlooking the Pacific. His jaw doesn’t close throughout the 10-minute tour. He says he can’t wait to move in. You smell a fat commission.
Yes, you have a potential sale. But that’s all that is: potential. He may actually have the resources to acquire the property, but there’s a good chance he won’t be making the decisions alone. Clue: just got married.
In business-to-business sales, sometimes the person you talk to may lead you to believe in a possible sale. But consider the fact that, except for a few companies with unorthodox processes or eccentric bosses or both, corporate acquisitions almost always have to be approved by a panel or a committee or at the very least, a decision-maker other than the one you “theoretically” sold the product to.
So don’t call home to tell the kids to pack for a 3-day mini-vacay yet.
Does the prospect need what you are selling? Or, does the prospect have a need that your product can fulfill? What are the conditions that have to be satisfied before your product or service would be valuable to a potential customer?
It must be clear that we are talking about “need” here, which is a full upgrade from “want”. The rule of thumb is to ask whether or not your solution will offer prospects value. There are lots of reasons why a prospect might not need what you are offering.
For example, if you are selling software and it’s not compatible with your prospect’s system, there’s no point in pushing for a sale. Once you’ve established that there’s a certain NEED that needs to be fulfilled, one foot is in.
- Time frame
When is the prospect looking to make a decision (to buy)?
Like in most activities, time is of the essence in sales. In this case, it is important that your prospect’s time frame in buying the product coincides with your own, whether it is a deadline set by your boss or a certain schedule you need to have a sale in order to get that elusive commission.
There are also seasons in sales, and different seasons have different demands from salespeople. And because of this, sometimes it’s not just the right time for some deals to close.
Yes, time and timing matter!
Getting positive answers to the BANT questions isn’t the only deciding factor in classifying a lead as “sales-qualified”, but it is a critical indicator. Armed with this information, the sales rep can then focus on the prospects that are most likely to be converted to customers.