Lead qualification is the process of evaluating potential customers based on their financial ability and willingness to purchase from you. It includes assessing a lead's necessity to buy a product, finding out whether this person is authorized to make the purchase, and how much money they can spend.
In this video, Neil Patel describes the process of lead qualification and its peculiarities.
Why is lead qualification important?
To effectively embody long-term sales opportunities, a company needs a sufficient number of leads who are eager to buy its products. Yet, identifying and evaluating leads is by no means an easy task, and the only working method of getting leads who are ready to convert into customers is by qualifying them.
Qualification is necessary to determine which of the collected leads are interested in your products and can afford to buy them. Determining the potential of buyers allows you to communicate more precisely with users, reducing the time from becoming acquainted with the product to purchase. Moreover, segmenting your leads allows you to build more personalized communication in the future.
Lead qualification helps you make your promotion more personalized, connect directly with people who are ready to purchase, and improves your revenue.
Qualified Leads vs Unqualified Leads
Based on leads’ placement in the marketing funnel, they can be divided into two main groups. So let’s review in detail each group.
- Unqualified leads. These leads haven’t been nurtured enough to buy yet. There are several reasons that leads can be marked as unqualified: they are unsure about your offers, find your prices too high, or they simply don’t know what they’re looking for.
- Qualified leads. They are aware of the benefits your product can bring. A marketing team collects leads and qualifies them via email campaigns, blog posts, webinars, instructions, videos, white papers, e-books, podcasts, quizzes, courses, etc. You should offer products based on your leads’ needs. There are three types of marketing leads: information qualified leads (IQL), marketing qualified leads (MQL), and sales qualified leads (SQL). An IQL, also called a “cold” lead, is a person in the first stage of the buyer’s journey. Here, you should provide your leads with the useful information they are searching for in exchange for their contact data. The second type, MQL, also called a “warm” lead, is the one that is in the middle of the sales funnel. These are the prospects who have shown interest in your brand and continue to engage with it. They submit contact data, visit your site often, download your materials, opt in to a program, etc. The third type, SQL, also called a “hot” lead, is a person who is already at the bottom of the funnel and is ready to buy from you.
Now that you know the difference between these two main groups of leads, let’s find out how lead qualification works.
How Lead Qualification Works
The best way to find appropriate leads is to qualify them. The process involves assessing incoming leads, dividing them according to their potential, and automating follow-up emails to convert leads into customers. To obtain the most qualified leads, businesses should know the traits of their ideal customers. Understanding these characteristics allows the company’s sales and marketing departments to create a system of evaluating incoming leads and focus your sales resources on leads who have all the necessary traits.
Nowadays, businesses use various tools to qualify leads. Landing pages help collect leads, CRM software allows you to organize and score them, and marketing automation tools help with nurturing leads.
Now it’s time to move forward and figure out how to do it.
How to Qualify Leads
- Adjust to a lead scoring model
- Conduct in-depth research
- Select the appropriate framework
- Use SPIN
- Ensure you have complete data profiles
Let’s walk you through the main steps you should consider when qualifying your leads.
1. Adjust to a lead scoring model
Lead scoring is the process of assigning values to each prospective customer you generate for your company. You can gather important information about your leads without directly asking them. Start by analyzing the contact data they’ve already submitted. This includes demographic details (age, gender, location), things related to the lead's business, prospect’s behavior, and level of engagement. The process enables businesses to prioritize leads and communicate with them to increase conversions. Also, it helps you understand the pain points and needs of your prospects.
If you send email campaigns with SendPulse, you can score your leads by rating and activity. Our service automatically assigns subscribers a score from 1 to 5 based on your leads’ engagement over the last 60 days. The score is influenced by the total number of campaigns sent to a certain lead, the open rate, and the click-through rate for the given user.
2. Conduct in-depth research
To understand the prospects you’re addressing, search for information about them. Track your leads for analytics purposes by using Google Analytics. It helps you receive information about their activity on your site, like:
- the pages they prefer to view;
- interests and preferences;
- information about devices.
You can also use social media to collect data or social analysis sites to gather more demographic and psychographic information on your prospects. Besides, Facebook Audience Insights can help you understand the needs of your leads.
For B2B, studying your lead’s LinkedIn profile allows you to find some necessary information about your potential client, like their: position, goals, interests, and concerns. You can also look through your potential customer’s business website to understand their goals, values, products, and gather some contact information.
3. Select the appropriate framework
There are plenty of frameworks that can help you qualify your leads. You’ve probably heard about:
- BANT (budget, authority, needs, time);
- MEDDIC (metrics, economic buyer, decision criteria, decision process, identify pain, champion);
- CHAMP (challenges, authority, money, prioritization);
- GPCTBA/C&I (goals, plans, challenges, timeline, budget, authority, negative consequences, positive implications);
- ANUM (authority, need, urgency, money).
We'll explore these frameworks in more detail later in this article. They differ based on their major priorities.
You can start with BANT as it is one of the most popular frameworks. Knowing the budget of your prospect, their authority, needs, and time allows you to find out whether you have a chance of winning the sale. Of course, you can’t ask questions directly, but you can create smart questions that will help you receive the answers and move this lead closer to a sale.
4. Use SPIN
Neil Rackham established the SPIN acronym for the first time in 1988 in his sales book. The methodology was created to navigate through sales situations. It stands for situation (lead’s current situation), problem (your prospect’s problem that you can help resolve), implication (the negative impact of this problem on the prospect), and need-payoff (the importance of your solution). A salesperson should ask questions about these four things in this particular order. It helps you explore the current situation and the problem your lead is facing that can be solved with your product. Besides, your sales reps should find the causes of the problem and finally show your leads why your product is worth buying.
With SendPulse, you don’t need to bother your leads with calls asking SPIN questions. Once you’ve gathered a list of leads, you can use SendPulse’s ready-made email templates to design quizzes, surveys, questionnaires and send them to your leads. Before sending emails to contacts on your list, you can segment and personalize them.
5. Ensure you have complete data profiles
Companies have data profiles for their leads to simplify communication. A profile usually includes the lead’s name, address, phone number, email address, preferences, interests, demographic information, observed actions (subscriptions, requests, downloads, calls, etc.), and the level of engagement with your brand. This profile helps you make the most relevant and personalized offers. Besides, qualifying information enables you to understand your leads and find special approaches to reach them.
You can also find information missing in your data profiles and ask for it during your communication with potential customers. Try your best to receive complete information, as it is the key to a successful business that brings in customers and sales.
To qualify leads correctly, you should also select the right qualification framework. Below you can find the most popular frameworks and choose the most appropriate one for your business.
5 Lead Qualification Frameworks
To decide whether a lead is worth spending time and resources on, the sales team should use an appropriate framework. Here you can find the most popular of them.
BANT is a popular framework that was introduced in the 1960s. With this framework, salespeople can filter leads based on their budget, authority to make a purchasing decision, need for the product, and timeline. A lead should fit at least three of the criteria to be qualified. Although this framework was very popular in the 1960s, this is no longer the case today. Sales representatives seek to ask pre-determined questions rather than have a real conversation with leads.
The MEDDIC framework was developed in the 1990s. It stands for metrics, economic buyer, decision criteria, decision process, identifies pain, and champion. This framework helps you figure out what a customer is eager to receive from your product. Once you know the metrics (quantifiable gains) your lead wants to receive, you can indicate the ROI your solution will bring them. Also, you need to find out who is responsible for decision making and the criteria your lead uses to make those decisions.
This framework allows you to pay more attention to the characteristics of your leads, their problems, and plans. Here salespeople should act as advisors and explore beyond the problem your product could solve. Clarifying the priorities of this framework helps you gather valuable insight and act efficiently.
This framework is similar to BANT. However, it has some differences in priorities. The CHAMP framework focuses on challenges first. This enables you to qualify leads accurately and discover unique opportunities to solve their problems with the help of your product. Once your prospects understand how to overcome their problems with your products or services, the budget fades into the background.
Additionally, it is crucial to understand your leads’ priorities and where exactly your solution fits into their workflow. Knowing this will help you and your prospect come up with a realistic plan of action.
This framework is also an alternative for BANT. If you qualify your leads using ANUM, your priority is to define whether the lead you’re speaking to is a decision-maker. The framework focuses primarily on authority. The method requires pre-qualification which includes making sure that prospects fit your ICP (ideal customer profile). After defining the leads who fit, you will have a list of prospects you want to win.
Frameworks provide businesses with a structure to improve the process of qualification. By using one of them you can easily obtain leads who are ready to become your customers. So now let’s take a closer look at things that help you examine your potential customers.
Lead qualification checklist
Creating a checklist for your business moves you one step closer to starting correct communication with your prospective customers. Apply the checklist below to examine your leads and categorize them.
- Pay attention to the leads’ profiles. First of all, you should understand your prospects and whether their traits align with your buyer persona. The main goal here is to analyze your target audience to further divide leads into segments.
- Identify problems and bring solutions. Figure out the pain points of your potential customers and whether your products can bring benefits to your prospects.
- Define decision-makers. Here you need to find the stakeholders who are involved in purchasing decisions. Knowing them will help you find ways to generate buy-in.
- Find out what your leads know about your company. Knowing your position on the market is important for understanding your audience. You need to show interest and ask prospects whether they know about your company. If yes, define what your leads like about your brand. Afterward, you can create messaging that helps your products stand out and improve your communication with potential customers, what they’ve already heard about you.
The right lead qualification process can bring you more closed deals with less effort from your sales representatives. Select an appropriate framework and use SendPulse to automate and simplify your lead qualification.
- The article “The Modern Guide to Lead Qualification” on the Clearbit blog defines the term, explains how lead qualification works, and provides readers with components of a lead score.
- The article “3 Reasons Lead Qualification Is Key to Successful Sales” on the MarketStar blog provides readers with three benefits of lead qualification.
- The article “Lead Qualification 101: How to Identify the Best Sales Leads” on LeadBoxer blog defines the term, explains how to qualify leads.
Last Updated: 18.01.2021