You don’t need me to tell you that there’s never been a better time to be an entrepreneur than right now.
Compared to even just a few years ago, it’s now easier than ever for companies to do business with pretty much anyone on the planet – provided they have an internet connection.
With the ability to cast such an incredibly wide net – and to do so with much less effort than it would have taken a few years ago, you might assume that approaching lead generation as a “numbers game” would be an effective way of doing business.
The problem, though, is that the vast majority of people you reach aren’t going to have a need for the products or services you provide.
And even if they would benefit from using whatever it is you offer, there are a variety of factors that could end up getting in the way of them actually making a purchase.
Not everyone that comes to your door (or website) is going to be a good fit for your company.
Or, if they do end up making a purchase despite not being a good fit, they probably won’t end up returning anytime soon. We’ll talk more about this in a bit.
The point here is that you absolutely need to qualify the leads that engage with your brand from the very first moment you come into contact with them.
In doing so, you’ll be able to focus your energy on providing value to those who have a high probability of converting, rather than wasting resources on those who don’t.
What, Exactly, Is a Qualified Lead?
As we alluded to in the intro, a qualified lead is essentially a consumer who fits the description of a specific company’s ideal customer.
(As we’ll get to in a bit, most individuals don’t fit this ideal description perfectly; rather, qualified leads are typically considered those who are as close to ideal as possible.)
That being said, to begin qualifying leads, you’ll need to have defined what your target customer looks like in the first place.
Now, it’s not merely enough for an individual to meet these “on-paper” descriptors for a company to consider them a qualified lead. In addition to exhibiting these qualities, qualified leads also:
- Are aware of their need to solve a problem in their life, and are aware that your company can help them do so
- Are active participants in their own buyer’s journey
- Are prepared to spend money on a solution to their problem
In contrast, unqualified leads typically:
- Either don’t know they have a problem, or don’t understand how your offering can solve their problem
- Are not actively engaged in finding a solution to their problem at all
- Don’t have the ability to purchase your product or service (or simply don’t want to spend money on a solution to their problem)
Of the two scenarios, it should be pretty obvious which individual has a higher probability of converting into a paying customer.
However, even if an individual does meet these standards, there’s still no guarantee they’ll end up making a purchase.
Which is where your marketing and sales teams come in.
Marketing Qualified Leads
A marketing qualified lead (MQL) is a lead that has engaged with your company to the point of showing some level of commitment to actively begin solving a problem in their life.
To illustrate the difference between a plain ol’ lead and a marketing qualified lead, let’s run through an example scenario:
An individual discovers your fitness company’s website after Googling “How to lose weight quickly.” He checks out a couple blog posts related to dieting and exercise, then navigates away from your site.
At this point, the individual could be considered a lead. He knows he has a problem, and has begun searching for more information regarding how to solve it. Additionally, he’s now become aware that your company might be able to help him.
Days later, he navigates back to your website, and downloads your free ebook titled “Healthy Habits: A Beginner’s Guide to Living Well.” In exchange for the ebook, he provides you with his name and email address, and agrees to receive your weekly newsletter.
Once the individual takes this step, you’d likely be justified in considering them an MQL.
Still, though, you’ll want to take some time to nurture them a bit more before passing them over to sales – and do a bit of reconnaissance in the process.
The reason for this is two-fold. For one, if you start hitting them with sales pitches the moment they show even the slightest interest in your company’s offering, you’ll almost certainly scare them away. Secondly, by taking the time to learn more about their needs, you’ll be better able to provide exactly what they’re looking for in terms of a paid offering soon enough.
Some of the most common MQL nurturing tactics include:
- Email drip campaigns
- Personalized and/or dynamic content
- Surveys and questionnaires regarding individual needs and circumstances
Depending on both the quantity and quality of the individual’s engagement with such content, you’ll soon be able to tell whether the individual is ready to be passed along to sales – or if they need to be nurtured a bit more by the marketing team.
Sales Qualified Leads
A sales qualified lead (SQL) is an individual who has been identified by both the company’s marketing and sales teams as having a high probability of converting.
To clarify, this means that the marketing team has done its due diligence with regard to a specific lead, and the sales team has essentially seconded the decision to move the individual further along the sales funnel.
In addition to the criteria mentioned above regarding “regular” leads and marketing qualified leads, sales qualified leads show a heightened interest in becoming a paying customer – and a definitive ability to do so.
Actions an individual might take that are indicative of their being an SQL include:
- Visiting your product pages or pricing pages multiple times over a certain span of time
- Responding to CTAs within your drip campaigns (as opposed to simply opening the emails)
- Taking specific actions that, according to your current customer data, many other first-time customers had taken prior to their initial purchase
Once an individual is considered a sales qualified lead, the sales and marketing teams will work together to determine the offer that will provide the most value to the prospective customer and optimize their chances of converting.
While it will be the sales team’s job to seal the deal, the team will use all of the information the company has gathered on the individual in order to make this happen. That said, the marketing team should never consider an SQL to no longer be their responsibility; not only will both teams need to work together to help convert the individual, but they’ll also need to continue working together to keep the customer on board moving forward, as well.
While we’ve alluded to the importance of qualifying leads a few times throughout this article, we’re going to dive a bit deeper in the next section in order to really hammer home the benefits of doing so.
The Importance of Qualifying Leads
Perhaps the best way to explain the importance of lead qualification is to illustrate what happens when an organization doesn’t have such a process in place.
As we spoke about at the beginning of this article, the vast majority of people who walk through your doors, or visit your website, will simply never become paying customers. Maybe they were initially intrigued by an ad they saw on Facebook – but quickly realized they have no real need for your products; or perhaps your services are way out of their price range; or maybe they quite literally clicked over to your site on accident.
Whatever the case may be, focusing on these individuals is a waste of time, money, and energy. In addition to losing a ton of time, money, and energy chasing after these dead-end leads, you’ll also lose out on the potential gains you could have experienced had you invested these resources in chasing after high-quality leads, instead.
While somewhat of an obvious, self-fulfilling prophecy, it’s also worth mentioning that your marketing and sales team simply aren’t equipped to effectively engage with low-quality leads. Simply put: the less an individual needs your product or service, the harder it’s going to be to sell to them.
And, again, on the off chance that you actually do close a deal with a low-quality lead, the chances of them sticking around and becoming long-term customers is incredibly low. In fact, since these individuals likely won’t find much value in your offering, not only will they probably churn, but there’s a huge chance they’ll also tell others about their poor experience with your brand.
Okay…that’s enough negative talk. Let’s switch gears and discuss all the good things that can come to your organization once you begin systematically qualifying your leads.
According to data collected by Hubspot:
- Nurtured leads make 47% larger purchases than non-nurtured leads
- Companies that excel at lead nurturing generate 50% more sales-ready leads at about one-third the cost
- Companies with mature lead-generation and management processes have an average 9.3% higher sales quota achievement rate
Oddly enough, this same report shows that most B2B companies aren’t exactly up to snuff, so to speak, in terms of implementing an effective lead-qualification process:
- 61% of B2B marketers send all leads directly to sales – despite the fact that only 27% of these leads are considered qualified
- 65% of B2B marketers have not established a system for lead nurturing
- 79% of B2B marketers have not established a system for lead scoring
Taking all of this into consideration, a proper lead-qualification system not only benefits your company from an internal perspective, but – since most other organizations have yet to adapt such a process – it can also help you become a driving force in your industry.
(NOTE: One of the best ways to get more high-quality leads is to have prospects qualify themselves using a lead quiz. You can create a lead quiz with Fieldboom in under 10 minutes.)
So, now the question is this – how, exactly, do you begin qualifying leads?
Setting Parameters for Qualifying Sales Leads
We’ve already provided a basic overview of how to determine whether or not an individual should be considered a qualified lead.
In this section, we’re going to get a bit more specific by discussing some of the most popular sales qualification frameworks used today.
Perhaps the most popular qualification framework around, BANT is a simple way to qualify leads based on four criteria:
- Budget: Is the lead able to afford – and willing to spend money on – your product or service?
- Authority: Is the individual you’re in contact with a decision-maker within their organization?
- Need: Does the organization need to solve the problem that your product or service solves?
- Timeline: Does the organization need a solution immediately?
While BANT has been a mainstay in the B2B world for quite some time, some have argued that it’s obsolete at worst, outdated at best.
That said, let’s take a look at a couple alternatives that may better suit your specific organization.
CHAMP is similar to BANT, but prompts you to think about the aforementioned factors in a different order of priority:
- Challenge: What challenges is the lead currently facing? How can your product or service help them overcome said challenges?
- Authority: More than asking the above-mentioned “yes” or “no” question, here you’ll be probing for more information about who (or who else) is involved in purchasing decision within your contact’s organization. This will enable you to get in touch with said individual(s) and approach them from an informed position.
- Money: This goes back to determining whether a lead has allocated a portion of their budget to purchasing a solution to their problem. Moreover, the sales team might ask probing questions regarding the lead’s processes for approving investments and other budgetary decisions.
- Prioritization: Similarly to “Timeline” within BANT, here organizations focus on determining how imperative it is that a lead solve the problem at hand. Sales teams might ask questions such as “When will you be prepared to make a decision?” or “When do you hope to have this problem solved?”
Aside from the shift in priority, the main difference between BANT and CHAMP is that, while BANT focuses on helping sales teams qualify or disqualify leads, CHAMP is more focused on determining the best way to approach leads of different qualities (while still screening out definitively low-quality leads, as well).
While it doesn’t rattle off the tongue in the same way BANT or CHAMP does, GPCTBA/C&I can be incredibly helpful in terms of learning about a specific lead’s needs, as well as how good a fit they are for your organization.
GPCTBA/C&I stands for:
- Goals: Here, you’ll ask probing questions regarding your lead’s goals – both for using your product or service and overall as a company. This will provide you an opportunity to explain and/or clarify exactly how your organization can help the lead achieve their goals.
- Plan: You’ll then want to learn about how your lead has attempted to solve their problem in the past – and how they fared in these attempts. Again, this provides yet another opportunity to showcase how your solution may work out better for the lead.
- Challenges: At this point, you’ll want to shift the discussion toward the actual challenges and/or obstacles the lead has faced that have prevented them from reaching their goals. You’ll revisit this topic of discussion a bit further down the line.
- Timeline: As with Timeline within BANT, you’ll want to know if the lead is prepared to get started right away, or if they’ll need time before making a purchasing decision. This will ultimately determine whether to keep in close contact with them – or to perhaps put them on the backburner for the time being.
- Budget: More than simply asking about the lead’s ability to purchase your product or service, you’ll want to shift the discussion toward the potential returns they should expect to experience once they take you up on your offer as compared to the investment they’ll need to receive said returns.
- Authority: As with Authority in CHAMP, here you’ll want to learn about the decision-makers within your target company, so you understand how best to approach them with an offer.
- (Negative) Consequences and (Positive) Implications: As alluded to when we discussed Challenges, here you’ll be bringing to your lead’s attention everything they stand to gain by solving their problem – and everything they have to lose by not doing so. Additionally, you’ll want to also bring them to understand everything else they’ll be able to accomplish once they solve the issue at hand. Of course, this also provides you yet another opportunity to explain why your solution is most beneficial.
As you can tell, this framework is a bit more involved than BANT, and even CHAMP – but it definitely provides numerous opportunities not only for you to vet potential leads, but also to engage with them in order to learn how you can best fulfill their needs.
Depending on what information you’re looking to get from a lead at the present moment, you have a variety of options at your disposal:
- Contact forms and lead capture pages allow you to capture basic information about your potential customers.
- Determining where and how a lead discovered your brand can potentially provide preliminary insight into the issues they’re facing, and the type of solution they’re looking for.
- Surveys allow you to dig a bit deeper into the specific issues a lead is currently facing.
- The quality and quantity of a lead’s engagements with your company can help you determine how serious they are about solving their problem using your product or service.
Along with all of this, you’ll also want to take note of any negative actions a lead takes (or doesn’t take) that could be a sign that they aren’t worth chasing after, such as:
- Unopened emails, or lack of click-throughs within opened emails
- Inactivity after an initial engagement (or a sudden drop in engagement after a specific event)
- An active request to unsubscribe, a statement of dissatisfaction, etc.
Now, none of these factors alone definitively mean a lead is or isn’t worth following up with (perhaps with the exception of their making an active request to cease communication). Rather, each of these factors – and more – need to be considered within the context of the situation at hand.
Which is where lead scoring comes in.
An Introduction to Lead Scoring
As we just mentioned, each piece of information you gather about a lead factors into your decision to define them as “qualified” or “unqualified.”
Of course, some pieces of information matter more toward your overall decision to qualify or disqualify a potential lead.
As we discussed earlier when talking about the different lead qualification frameworks, a company may see a lead’s budget as more important than their timeline, or vice-versa, in terms of whether or not to continue focusing on said lead moving forward.
So, it’s important that you create a system that enables you to score your leads and categorize them with regard to their propensity to convert into paying customers.
Now, it’s important to note that there’s no “one way” to score leads; it’s up to your marketing and sales teams to work together to create a system that works best for your organization. In the above image, for example, we see that this hypothetical company works on a scale with a maximum score of 40 (for both persona-related and engagement-related factors).
No matter what system you use, you’ll eventually end up classifying your leads as “hot,” “warm,” or “cold.” “Hot” leads are those that score high both in terms of persona-related and action-related factors; “warm” leads score high for either category – but not both; “cold” leads score low for both.
Backing up a bit, scoring your leads requires you to assign a certain weight to each piece of information you have on them. While there are many advanced ways to do so, here are some basic instructions to get you started:
- Calculate your lead-to-conversion rate for all leads by dividing the number of paying customers you’ve acquired over a given period of time by the number of leads you’ve generated in that same time period.
- Compare the attributes shared by your current customers who you considered to be high-quality leads before they converted.
- Calculate the close rates for each of these attributes for all leads that share this attribute. For example, you might choose to look at leads that employ 50 or more workers, and determine how many of these companies ended up becoming paying customers.
- Compare the close rate of leads that share this attribute with your overall close rate. Determine how much higher, percentage-wise, this close rate is than your overall close rate (e.g., if your close rate for companies with 50+ employees is 5%, and your overall close rate is 1%, then the close rate for companies with 50+ employees is 500% that of your overall).
This final step is how you determine the weight of each attribute in terms of your overall lead score. Using the above example, you’d award five points to a lead if the organization employs more than 50 employees. You’d then repeat this process for each attribute you deem essential in terms of defining a lead as qualified.
The “points” you assign will seem arbitrary at first – since they’re not “out of” a finite number yet. Once you determine all of the important attributes to focus on, you’ll know the maximum amount of points a lead could possibly score – and be better able to define your “hot,” “warm,” and “cold” scores accordingly.
A final point to note is that instead of scoring leads yourself, you can have prospects essentially score themselves as sales-ready or not by creating a lead quiz with Fieldboom.
If you don’t have a system in place for qualifying leads, you’ve almost certainly wasted a decent amount of time, money, and energy chasing after lost causes – and lost a ton of potential business in the process.
On the other hand, by developing a lead-scoring and qualification system to be used whenever a new client lands on your radar, you’ll be able to immediately determine exactly what you’ll need to do to get them on board (or if you should even bother trying to do so). In turn, you can be all but certain that your marketing and sales efforts will pay off in dividends.