What is Lead Qualification?
Lead qualification refers to the process of bucketing prospects into the appropriate level in your funnel ultimately to best ensure that will likely become customers. It is the sales process of filtering many opportunities to find those that best fit your company’s ideal customer profile (ICP) and buying cycle.
In a nutshell, lead qualification is gathering relevant data that gives clear insights into whether to focus on building a relationship with a prospect around your products and services or discard the lead. Done correctly, lead qualification can help marketing teams prioritize their activities regarding customers who show higher signs of becoming long-term clients.
Why is Qualifying a Lead Important to Your Channel?
Lead qualification is indispensable if you want to save time, effort, and of course, a good relationship with your sales partners. Therefore, it is important to initiate the lead qualification process early during your marketing. For best results, lead qualification (and scoring) should occur before providing the lead to your partner and having them contact prospects. Ideally using an automated software solution.
Specifically, lead qualification is important because:
- It helps you to focus your partner’s energy on activities that have a direct positive impact on your and their bottom line.
- It gives you more insights into your ideal customer’s needs and challenges so that you can create better products and services.
Lead qualification helps you streamline and concentrate on a smaller and more specific market segments, to drive the most qualified lead to your channel enabling you to deliver a more personalized solution instead of wasting valuable resources on a large non-specific segment of prospects who may not convert. Most importantly, it also helps you quickly bucket the prospect into the appropriate level of your funnel and determine when it should ideally go to your partner to perform their sales pursuit activities.
Qualifying a lead that should be nurtured doesn’t meet your ICP might seem like a harsh decision, but it is one of the best things you can do for your marketing and your channel team. It saves you a lot of energy that would have been wasted on trying to convert prospects that may not be ready to buy, who require nurturing rather than a sales pursuit.
How Do You Qualify an Incoming Lead?
Qualifying a lead starts with asking the right questions to help you figure out if a prospect is a good fit for your product or service. The questions should identify if the prospect possesses the qualities that your company wants.
To qualify a lead, you need to use a combination of enriching the prospect information with publicly available data and ask open-ended qualifying questions, such as:
- What additional information is available on the prospect’s company?
- Can we determine their solution predisposition?
- What specific business problems keep you up at night?
- What solutions do you currently use for this problem, and why are you considering an alternative?
- What type of budget do you have for this project?
- What functionality is most important to you for solving this specific business problem?
- Who is the primary decision-maker for buying this product?
Keep in mind that open-ended questions elicit more revealing and honest responses while publicly available data is important to help categorize the opportunity. Close-ended questions tend to put prospects in a tight corner, and their answers won’t be a true reflection of the reality on the ground.
What are the Requirements for a Lead to be Considered a Qualified Prospect?
A prospect needs to fulfill the following requirements to be considered a qualified lead:
- A need for your product or service
A prospect is potentially highly qualified if they need what you have to offer. Your marketing team will be barking up the wrong tree if they spend time focusing on leads with little to no interest in your products and services.
- A sense of urgency
A prospect that needs your product or service now or shortly is a more qualified lead than one who has no immediate need for what you have to offer, even if they trust your brand or company. For example, if you sell products with a five-year lifespan, someone who bought the product four years ago is a more qualified lead than a prospect that only purchased the product a year ago.
- Sufficient budget
Someone or a company with enough money to buy your product or services is a qualified prospect. You will be wasting valuable time chasing after a prospect that cannot afford what you sell or a company that has maxed out its yearly budget.
- Authority to buy
Qualified leads have the authority to make a commitment or act. Regardless of a prospect’s needs, sense of urgency, and funds, they might not qualify if they do not have the authority to make buying decisions. Also, prospects with a simpler buying decision-making process have a higher chance to convert.
Determining Lead Qualification Criteria
The lead scoring system will help you properly determine lead qualification. Here are the three major criteria for determining lead qualification:
Behavioral
Behavior refers to actions that clearly show interest or disinterest in your product or service. For example, the actions of your site visitors can tell your marketing team a lot about their level of interest and whether to reach out to them immediately or not.
Demographic
This has to do with your ICP criteria. Prospects who meet these criteria have a higher lead score, even if they exhibit the same behavior as others who don’t meet your ICP criteria.
Sales Engagement
From the behavior and demographics, marketing teams will ultimately reach out to qualified prospects through meetings, conversations, emails, etc. With each successful contact, the lead score should increase to reflect the interest of the prospect.
As an example of a use case, to equip their sales team with the best chance of closing sales successfully, Northbridge Insurance implemented an effective lead qualification system.
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