Quality Over Quantity: A Complete Guide to Lead Qualification For Freelancers, Entrepreneurs, and Founders
Before you have a client, you have a prospect. And before you have a prospect, you have a lead. Most businesses aim to get someone from a lead to a client. A crucial part of getting that transformation to take place is lead qualification. Lead qualification will help you determine who is primed for a sale among your prospects. Without lead qualification, you're guessing if your offer is correct and probably having some pretty awkward sales conversations. In this article, we will walk you through the difference between leads and prospects, what lead qualification is, why you need it, and how to do it effectively using Prequal's lead qualification methodology to get more clients.
Sales Leads vs Prospects
Leads and prospects often get lumped together when considering lead qualification, and while the intention between the two groups may feel the same, the way you approach them as a potential client should be different.
Who Is a Sales Lead
Leads are plenty if you're lucky. A lead can be anyone interested in your company, offerings, resources, or free content. Leads have taken a step beyond being a passive observer of your content. They have indicated that they want to know more. A lead can also follow you on social media or subscribe to your newsletter. Their activity may be primarily passive, but they know who you are and have somehow taken a step to get into your world.
Who Is a Prospect
A prospect is someone further down the sales funnel. They have indicated an interest in one of your offerings. That activity could include visiting your sales page, downloading a lead magnet, an inbound email inquiring about your services, or a referral someone has made. It's any person you believe is primed for your offering or has shown an interest in your paid work.
Leads are great, but prospects are better. Your goal with a lead is to get them to indicate they are interested in an offering. Your goal with a prospect is to qualify them for a sale.
What You Need to Qualify Your Prospects
Lead qualification is the process used to determine if the prospect is a good fit for your offering. Lead qualification is one of the most beneficial activities that you can do as a seller of your services. You see, without lead qualification, you waste time. You end up pitching your services sooner than you should. You make guesses on what your prospects need. You try to sell an offer to someone who will never buy, and you waste your prospects' time (and possibly goodwill) by trying to sell them something that will never be a good fit. That's why any good sales plan needs to include lead qualification.
Not using lead qualification with your prospects is like going to a store and grabbing an armful of jeans, hoping that one will be correct. With this process, you'll likely try a bunch of pairs that would never work. You'll have some that are out of your price range, some that are lower quality than you'd like, and some that are the wrong cut and style.
Now imagine instead if you worked with a clerk at the store. That clerk knows which questions to ask to help you find the proper selection. She's not picking out a pair of black jeans if you're only looking for a light wash. If you want something that will show off a pair of shoes you love, she won't give you a pair that hovers just above the floor. Her job is to help you find the pair that fits your needs.
Lead qualification works much the same way. Your prospects don't want to know about every offer you have. They don't want to hear about your group coaching offer if they want a one-to-one service. Lead qualification gives you the key considerations you need to know before you pitch your solution. Without them, you're handing them a pile of jeans and asking them to see which works for them.
Remove the Ick Factor from Selling Through Lead Qualification
Selling gets a bad rap often because lead qualification gets overlooked or underscored in the sales process. Without proper lead qualification, we often ask for the sale before we've earned the right to do so. You can't sell to someone who doesn't want what you're selling, which happens when a lead hasn't been properly qualified. You should only pitch your offering as a solution once you've qualified your lead.
Qualification is a series of questions that you ask to determine if a prospect is ready for a sale. Once you've asked and they've answered these questions, you know if a prospect is qualified and ready to buy. Without these qualifications, you're guessing or making assumptions.
Qualifying a lead can happen during a conversation or several interactions. Depending on the opportunity with a given prospect, you may need to build a relationship while you qualify. Sometimes, especially if you're talking to an inbound lead inquiring about your services, you can qualify them on the spot. If your business has a discovery call built into its business model, using a lead qualification system is a great way to conduct those conversations.
How To Qualify A Sales Lead
There are several ways you can qualify a sales lead. At Prequal, we use a 6-factor lead qualification test. We've used this methodology to guide our sales conversations for years. It's also the same qualification process we teach our sales training and coaching clients.
The six key factors of lead qualification are:
Needs and Wants: Does the prospect have an identifiable problem?
Offerings: Do you have a solution to this problem?
Timing: Is finding a solution to the problem a priority for the prospect?
Decision Makers: Who has the authority to make decisions regarding sales?
Value: What are the expected outcomes and goals?
Budget: Does the prospect have the resources (money, personnel, etc.) to invest in the sale?
You must explore and inquire about each factor to properly qualify a lead. If your prospect doesn't have a budget for your offering, you should know that before you make a pitch. If your prospect has the budget but can't implement your solution for another year, then pitching your services now is no use. You need your prospect aligned with each qualifier to know if your offering is the right fit for them. That's why selling needs to be intentional and about the customers' needs every step of the way.
If you're out there trying to strong-arm anyone who'll listen to your pitch, you're doing a disservice to your prospects and your business. Only some prospects need, want, or have the budget for what you're selling right now. It's far better to know that information before you enter into a sales conversation. If you don't, you increase the likelihood of that conversation going downhill quickly.
But our six-factor test isn't the only framework that exists. Other common sales qualification methodologies include:
BANT, developed by IBM's sales team: Budget, Authority, Needs, and Timeline
CHAMP: Challenges, Authority, Money, Prioritization
MEDDIC: Metrics, Economic Buyer, Decision criteria, Decision process, Identify pain, and Champion
GPCTBA/C&I developed by Hubspot: Goals, Plans, Challenges, Timeline, Budget, Authority, and Consequences and Implications
You can apply these frameworks to better understand your prospects and their needs. Assuming you know the answers is not an option. That's why asking sales-qualifying questions should be essential to your sales process.
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Asking the Right Lead Qualification Questions
As we mentioned, Prequal uses a six-factor test to access lead qualification. Our test determines if the prospect's budget, timing, needs, and values are aligned. It lets us know who the decision makers are and what immediate problem they're looking to solve.
To determine each factor, consider asking the following question to your prospects:
Needs and Wants: What would make you stand out from your competitors?
Offerings: What do you think is an optimal solution for this problem?
Timing: What competitive advantage might you gain if you are willing to implement a new solution quickly?
Decision Makers: Who else in your group /department needs to consider new solutions or offerings for this problem?
Value: Please describe your expectations for how much this will cost, how much time it will take, etc.
Budget: Is this a $5,000 problem or a $50,000 problem?
Your goal with asking any lead qualification question is to avoid badgering your prospect with a laundry list of things you need to know. It's to ask a few thoughtful and valuable questions to uncover your prospect's needs. The beauty of lead qualification is that when done right, your prospect will give you the answers to the test. All you need to do is propose the solution they're looking for. And if you can't offer a solution, make a helpful recommendation or thank them for their time. You're demonstrating that you're not just in this to make money. As an added benefit, your prospect will be more likely to recommend your services to someone else or give you a call if your services do become a good fit.
If you've qualified your prospect, offering the right solution, and they still have hesitation, you might need to ask a few more questions to overcome your prospect's objections. A yes is still possible, so don't write off your prospect.
Use Lead Qualification for Better Sales Conversations
In conclusion, lead qualification must be integral to any sales plan and client journey. It's the best way to determine if your solution fits and your prospect is ready to buy. Qualify all your prospects with a lead qualification system before pitching your services. If you're using Prequal's, you must identify needs, values, budgeting, timing, decision-makers, and the right offering. When you do, you'll find not only that you make better pitches but also that you have better win ratios.