Lead Qualification: A Complete Guide To Finding Your Best Sales Leads

“Alexa, how many sales calls do I have scheduled today and when are they scheduled?”

Alexa: You have 3 calls scheduled for the day. The first is at 11:00 AM, the next is at 2:00 PM, and the last one is at 7:00 PM.

"Okay... Alexa, can you tell me with whom my call at 2:00 PM? "

Alexa: It is with Mr. Jones Watson from SilverOaks Inc.

“Hmmm... Alexa, will Mr. Jones be interested in our product? How likely is he to make a purchase?"

Alexa: Mr. Jones has recently joined SilverOaks as VP Sales and he has expanded his team by hiring two new outbound sales reps. Our product can help his team improve its productivity and generate more revenue and will be a great fit. He will most likely make a purchase.

Okay, now Alexa does not tell that…

But wouldn’t it be awesome if Alexa actually did that?

You can save so much time and resources if you know who are the leads that will turn into your customers. You can focus only on them and keep closing deal after deal.

But sadly, until this part of the sales process is completely taken over by machines, is not possible!

For now, you have to rely on Lead Qualification.

And this post can help you understand what lead qualification is, why it is important and what is the most effective lead qualification process that will help you identify the leads who will be a good fit for your business.

What Is Lead Qualification?

Lead Qualification is the process of filtering your leads to identify the ones who are most likely to become your customers.

You achieve this by learning about your leads and the key aspects of their company - like their goals, challenges, needs, etc. based on which you will be able to qualify if they will be a good fit for your business.

Why Is Lead Qualification Important?

Here's why Lead Qualification is so important for your sales process.

1. Helps To Identify and Focus on the Best Leads

Not everyone who signed up for your product or requested a demo or wanted more information on your product is going to turn into a paying customer.

Maybe they were just curious to try your product and soon realized they don’t have a real need for it or maybe they were just intrigued by one of your ad campaigns or maybe they simply stumbled upon your site and submitted a form without any real intent to purchase.

The bottom line: a portion of your leads will never become your customers and you simply cannot waste your time and resources on them.

Lead qualification will help you identify the portion of your leads who are likely to purchase your product/purchase and prioritize them accordingly.

Qualify your leads and try to place them in one of these three buckets.

• Hot Leads - who are ready to implement your solution immediately
• Warm Leads - who can be closed after nurturing for a period of time
• Low-quality leads - who should be taken out of your pipeline

By segmenting your qualified leads into these buckets, you can identify which of them are ready for a close, who are not yet there, and who can simply be ignored.

2. Gives a Better Understanding About Your Leads

Lead qualification helps you learn about your leads - by asking the right questions, you can gain insights about their business which you couldn’t have gotten from elsewhere.

This information is very useful, particularly at the latter stages of the sales process, where you can tailor your sales pitches specific to them - by focusing on how your product can help them overcome their key challenges, achieve specific milestones etc. and driving them to purchase your product.

3. Provides a Better Forecast of Your Sales Targets

Not all leads are equal. Different leads bring different value to your business.

Lead qualification can help you identify key aspects of a deal such as, how long it will take to close the deal and what is the size of the deal etc. which will help you to forecast your sales targets more accurately.

How To Qualify Your Leads Effectively?

Lead Qualification is all about sifting through your list of leads and identifying those who are most likely to become your paying customers.

To do that, you need to understand your leads on three different levels of hierarchy.

1. Organizational Level - where you evaluate if their company is the right fit.
2. Opportunity Level - where you establish if there is an opportunity for a deal.
3. Stakeholder Level - where you identify the key decision-making personnel within the organization.

You start off at the ‘ organization-level’ and if the lead meets your defined criteria, you move on to the subsequent levels, ‘Opportunity level’ qualification and ‘Stakeholder level’ qualification.

Only when you have an understanding of your leads on all these 3 levels, you can say that you have effectively qualified them.

1. Organizational-Level Qualification

Objective: To identify if the company fits in your Ideal Customer Profile.

Things to learn at this stage:

• What industry does the company operate in?
• What services do they offer?
• Who are their customers?
• What are the demographics of their company? (Company size, Number of employees, stage of maturity etc.)

It is the first stage of your qualification process, where you evaluate if the lead's company is the right fit for your business.

A great way to approach organizational-level qualification is, to create an Ideal Customer Profile and use that as a lead qualification checklist to identify if their company fits the ICP.

By doing this, you ensure that companies that are a bad fit are chucked right out of the gate and do not get into your sales funnel.

Lead Qualification Questions That Will Help You Understand if the Prospect Fits Your Icp

1. How long have they been operating?
2. What is the size of their organization?
3. What is the use case they are looking for?
4. Where are they located?
5. How did the prospect come to know about the product?
6. How much funding have they raised?
7. What is their market value?
8. What has been their growth rate?
9. Who are their competitors?
10. How many customers do they have?

2. Opportunity-Level Qualification

Objective: To identify if there is an opportunity for a deal in the near future.

Things to learn at this stage:

• Can you solve their pain point?
• Have they shown an interest in your product?
• Do they have enough budget to spend on your product?
• When are they likely to make a purchase?

Once you have identified that the company fits your Ideal Customer Profile, you go a level deeper in your lead qualification process to determine if there is an opportunity for you to make a sale.

It is important to ensure that your leads are ‘qualified’ at this level.

Because say, you have identified a particular lead, whose company fits your ICP and that means they are qualified on an organizational level; but it turns out that they just purchased your competitor’s product and are unlikely to try out another similar product in the near future, even if they will benefit from your product.

That is why, at this stage, you try to learn about the key details which will determine if they will purchase your product.

How do you do that?

By asking relevant questions that bring out their needs, the challenges they face, etc. which will help you see if you can strike a deal.

Key Aspects in the Opportunity-Level

A. Need

One of the most important factors for any purchase is a fundamental need for the product.

It is simple math, really:

Need + other factors = Deal

No Need = No Deal

When you are qualifying a lead, identifying if they have a need for your product should be your first priority.

Your lead will find a need for your product if it does at least one of the following:

• Solving a Pain Point:

Nothing drives a potential customer to look for a solution more than a nagging pain point.

It is what is standing between them and their goals and is what they hope to solve by implementing your solution.

In this stage, ask them relevant questions that discover the challenges that your leads are facing and the measures they have taken to solve them.

• Provide Them With Benefits:

It is not always necessary to solve a pain point to sell a product; while a product that solves a pain point can be considered a pain-killer, alternatively, your product could prove to be a vitamin that improves their business.

By asking relevant questions about their business, you find out if there is a scope for improvement in their business, which can be achieved by implementing your solution.

Lead Qualification Questions To Identify if There Is a Need for the Product

1. Are they aware of the issue that is holding them back from achieving their target?
2. Do they think that this issue will affect them in the upcoming quarter?
3. If there was a solution, would they be keen to implement it?
4. Do they see the need to fix the issue as a priority?
5. What is their biggest challenge?
6. What objectives are they looking to achieve by overcoming this challenge?
7. What is their understanding of the problem that they are facing?
8. What is the one aspect of their business that they are keen to improve?
9. If they get an opportunity to improve their business by {value proposition}, will they find it appealing?
10. What are the results they want to achieve this quarter?
11. What are the metrics that they will see to measure the success of the product?
12. Have they implemented a similar solution to solve this issue?
13. Are they looking to improve {the aspect of the business} this year?
14. What is a must-have feature according to them?
15. What are some nice-to-have features that they would like?

B. Budget

A key component of any potential deal that needs to be acknowledged at the opportunity level. Because, no matter how interested the lead is, a deal can go through only if there is enough budget.

That is why it is important to address the cost of implementing your potential solution. This way you eliminate the risk of, your product cost springing as a last-minute surprise and resulting in them pulling out.

Also, this is an opportunity for you to educate the prospect about your product’s Return on Investment (ROI) and help them in making a faster decision.

Lead Qualification Questions To Identify if Your Leads Have the Budget

1. What is their budget on a solution like this?
2. Have they set aside any sum to purchase a solution for the issue they are facing?
3. Do they have a policy of implementing the right solution, even if it goes beyond their budget?
4. Did they consider the cost of a potential solution when framing the budget?
5. Do they consider the ROI when investing for a solution like yours?
6. Have they spent on a tool like this before? Is that in the same range as your product?
7. Do they set aside a certain portion of funds solely for investing in new products?
8. What is their typical budget allocation process when it comes to investments like these?
9. When do they plan to finalize budget allocation for this investment?
10. Would they be willing to spend above the budget for your product, if it meant a significant ROI?

C. Timeline

When it comes to a purchase decision on a new product, each company may operate in its own timeline; some of them will make a purchase right away and some may earmark it for the future.

It depends on factors like their priority, decision-making process, etc.

Having a clear idea of when a lead is most likely to make a purchase, helps you decide how to approach the deal:

• Are they looking to purchase right away? Double down and close the deal.
• Have they put off the deal for later? Keep nurturing until they are ready to purchase.

Ask questions that will help you get an idea of the decision-making process within their organization and accordingly decide how you should approach the deal.

Lead Qualification Questions To Identify When Can the Deal Be Closed

1. Is solving the pain point a priority for them?
2. What are the other priorities for the quarter?
3. How long do they think they can go without solving this problem?
4. If you reach an agreement, how long does it typically take, to sign the deal?
5. What is the usual purchase process timeline in their organization?
6. When do they need to solve this issue?
7. Are they looking for a solution right away or for the future?
8. Do they have a deadline to solve the issue?
9. What is the process involved when implementing a new solution?
10. When do they want to schedule the next meeting?

3. Stakeholder-Level Qualification

Objective: To identify the key decision-making personnel who will sign off on the deal.

Lead Qualification Checklist - Stakeholder Level

• Is your lead a decision-making authority?
• Who else is involved in the purchase decision?
• Which team will benefit from your product?

This is the final stage of your lead qualification process. At this stage, you have established your lead's company to be a good fit and also have established that there is a good opportunity to take the deal forward.

Now the question is, where do they stand in the decision-making process?

Are you talking to a person who has a say in the final decision? If not, you might be finding yourself explaining everything about the product only for them to say that they will have to ask someone else, before they can get back to you.

That is why it is important that you engage with a person who has an influence in the final decision-making process.

When reaching out to leads you have identified, chances are that they are not the ultimate decision-making authority to sign off on a deal; especially when you are reaching out to a big company.

In that case, you have to make sure that they have some sort of influence on the decision, at least.

If not, use the opportunity to ask them to help you connect with the key decision-maker(s).

By asking the right questions, you will be able to map the decision-making structure within the company and thus reach out to the key decision maker.

In this scenario, identifying your ‘Champion’ is a great way to help you make the deal go through.

Who is a champion?

A Champion is a person within the company, who loves your product and will do their part to make sure that the sale goes through. Typically, they are the ones most affected by the pain points and therefore the ones who benefit the most by implementing a solution.

Having a Champion is like having an extra player in your team who knows all about the turf you are set to play in - that is why it is crucial for you to identify the right person, who is well respected within the company and whose opinion matters when making the ultimate decision.

Lead Qualification Questions To Identify the Key Decision-Making Personnel

1. What is their role in the decision-making process?
2. Who else has the final say when making a purchase decision?
3. What concerns are they likely to have?
4. Who will be responsible for overseeing the product?
5. Should you consider including more people in the meeting?
6. Are they looking to implement a solution for their team?
7. Who will be using the product?
8. How does their company usually make a purchase decision?
9. Which are the departments involved in the decision?
10. Based on what they’ve seen, would they be willing to recommend this product to their team?

Lead Qualification Techniques

Here are the 4 most popular lead qualification frameworks to achieve that:

• BANT
• CHAMP
• MEDDIC
• ANUM

BANT

Before the development of Lead Qualification, sales reps pursued every lead in their sales pipeline, resulting in a lot of time being wasted.

To tackle this, IBM came up with BANT qualification framework in the 1960s, which ensured that salespeople spend their time working with only those who are most likely to become customers.

WIth BANT framework, a sales rep asks a series of questions to the leads, focusing on their Budget, Authority, Need and Time.

A lead is considered viable if it meets at least 3 of the 4 BANT criteria.

Components of BANT:

• Budget: Can they afford your product?
• Authority: Do they have the Authority to sign-off on your product?
• Need: Does your product solve any pain point for the business?
• Time: When will they make the purchase?

Note: While BANT was successful in the past, implementing it the same way may not be effective today. You have to implement it in such a way that it complements your modern day sales process.

Here is a guide on successfully implementing BANT for the modern day sales

CHAMP

CHAMP qualification framework is a restrung version of BANT that places less importance on the budget, instead focusing on the challenges and their organizational structure.

The first step of qualifying here is, figuring out the CHallenges faced by your lead is facing and aligning your product as the solution.

The next step is identifying the Authority by mapping out the organizational structure in their company.

The third criteria is Money, which is the BANT’s equivalent of Budget, where you determine if your lead has necessary funds to make a purchase.

Lastly, you have Prioritization which allows you to find where your product lies in their list of priorities.

Components of CHAMP:

• Challenges: What are the Challenges faced by your lead?
• Authority: Who has the Authority within the company?
• Money: Do they have Money to implement your solution?
• Prioritization: Where does your product feature in their list of Priorities?

MEDDIC

MEDDIC is a comprehensive Lead Qualification framework developed by Dick Dunkel and Jack Napoli in the 1990s; especially for companies focusing on enterprise accounts.

Since the cost of implementing an enterprise solution is high, the sales cycle tend to be long, involving lots of discussions before your leads agree to a purchase. So it is imperative that they are highly qualified and are likely to implement your solution.

MEDDIC aims to identify these highly qualified leads by gaining insights on 6 key components - Metrics, Economic Buyer. Decision Criteria, Decision Process, Identifying Pain and Champion.

Components of MEDDIC:

• Metrics: How does your solution impact their company?
• Economic Buyer: Who is going to fund the solution?
• Decision Criteria: What are their decision-making criteria?
• Decision Process: What are the steps involved in the decision-making process?
• Identifying Pain: What pain point does your product solve?
• Champion: Is there an advocate for your product within the company?

ANUM

ANUM is a Lead Qualification framework that can be used in place of BANT.

When using ANUM, the first step is, whether you are talking to the decision maker.

Once you have identified the decision maker, the next step is asking the right questions and determining if their Needs align with your product.

The “Time” component of BANT is replaced with Urgency in the ANUM framework and gives an idea of when the lead is likely to implement your solution.

Lastly, you have to identify if they have the Money; the necessary funds to implement your solution.

Components of ANUM:

• Authority: Who is the Decision-maker?
• Need: Is your product a good fit?
• Urgency: By when do they want a solution?
• Money: Do they have the funds to make the purchase?

Conclusion

Lead qualification allows you to identify who among your target list is likely to become your customers, so you can spend your time and resources on only a handful of leads rather than spreading your focus around each and every one of the leads in your list.

While traditionally, lead qualification involved lots of questions asked, the modern technology allows you to easily qualify a lead if you know what exactly you need to learn about them. The three levels of qualification stages discussed in this article should help you understand about your leads and qualify them effectively.