The Ultimate Guide To Lead Qualification in Sales

What is Lead Qualification? It is as easy as it seems. In simple terms, Lead qualification refers to assessing whether the lead is a good match for your product or not. Let’s connect with this consumer perspective.

In lead qualification, salespeople first collect some basic information about their potential customers. Then, they analyze the information to know the prospect’s fit for their product or services. When they find an ideal lead, they continue the sales process by scheduling a call.

In short, sales representatives collect the information and analyze it. If they find that the prospect is an ideal fit for their products, they introduce the products and services to them in detail. This is an overview of Lead Qualification.

To get into the sales industry, you must understand what lead qualification is. And there is a lot more to learn about lead qualification in sales.

We have created a detailed and informative guide on Lead Qualification. This guide will give a detailed look at lead qualification in sales. As always, we have tried to cover each aspect of lead qualification. By the end of this guide, you will understand different aspects of lead qualification, such as its process, how to conduct it, and much more.

Read this guide until the end to learn about Lead Qualification in Sales.

What Is Lead Qualification in Sales?

Lead qualification is a sales technique that salespeople use to check whether the prospect is the right for their products or services. It helps them to decide whether the potential customer is likely to act or not. In short, it is finding whether they will buy the product or not.

Lead qualification is an integral part of a sales process. It assists businesses and salespersons in using the resources effectively and efficiently. Investing the same amount of time and money in all leads without assessing their quality will waste plenty of time and money. Hence, businesses will lose a lot of resources needed to perform day-to-day operations.

The qualification process usually occurs during sales calls and for a business to determine which customers may stick for the long-term with them. The lead qualification process consists of many steps.

In order to qualify a lead, a sales representative asks several questions to the prospects with the motive of gathering basic information. If they find that the prospect is ideal for their products, they schedule a virtual call or physical meeting with the prospect.

During the sales call, sales representatives ask questions about their needs, challenges, budget, responsibility, and buying timeline. They also ask various questions to understand their needs better and introduce their products or services.

So, this is a basic overview of lead qualification. Read the next step to understand the importance of lead qualification.

Why Is Lead Qualification Important?

According to research by Harvard Business Review, 50% out of 100% of your leads will never buy your product as you think. Out of the remaining 50%, 30% of leads will always be ready to choose your products or services. Things don’t always go as we usually think. This is why it is important to qualify leads before reaching them.

A business gets tons of leads, but only some of them are always keen to take action. For a business, it is necessary to check whether the prospect is a good fit according to their target audience or not. As we discussed above, reaching out to all leads doesn’t make sense. Investing the same amount of time and money in all leads without assessing their qualification will waste plenty of time and money.

This is why lead qualification is important in sales. It helps you make your promotion more personalized. This is because you already know about them and their chances of getting converted. You can easily connect with leads interested in purchasing your products or services and improving your revenue.

Read the next section to learn about the lead qualification rate.

What Is a Lead Qualification Rate?

In sales, the lead qualification rate refers to the percentage of leads qualified from the total number of leads the marketing team got. Lead qualification rate helps the marketing team to understand how many people are actually interested in buying their offerings. We always get the lead qualification rate in percentage.

There is a basic formula for calculating the lead qualification rate:

(#) of SQLs / (#) of MQL = (%) Qualification Rate

Here SQL refers to Sales Qualified Leads (SQLs), and MQL refers to Marketing Qualified Leads. We will learn about them in the coming sections.

How Is Lead to Sales Ratio Calculated?

Lead to Sales ratio means the percentage of a total number of leads or prospects converted into actual paying customers. There is a basic formula for calculating Lead to Sales Ratio:

(Number of leads / Total number of visitors) x 100%

For instance, a website gets thousands visitors per month. Out of those thousand visitors, 200 visitors fill the lead capture form. Here (1000) is the Total Number of Visitors, and (200) is the Number of Leads.

So, here is the calculation: 200/1000*100=20%

This is how we calculate Lead to Sales Ratio. Continue to read the next section to learn about qualified leads in sales.

What is a Qualified Lead?

As the name suggests, a qualified lead is a prospect who has successfully gone through the lead qualification process. And, now they are ready to go through the sales pipeline. The sales team will directly communicate with the lead to continue the sales process.

Salespeople evaluate prospects at three different levels: Organizational Level, Opportunity Level, and Stakeholder Level.

  1. Organizational Level Prospect Qualification: Organizational Level Prospect Qualification tells you whether you should do more research about the prospect or not. At this stage, salespeople already have some basic information about the prospect. This level helps them determine whether more research is required or this is enough.
  2. Opportunity Level Prospect Qualification: Opportunity Level Prospect Qualification tells you whether your product would be helpful to solve prospects’ needs and problems.
  3. Stakeholder Level Prospect Qualification: Stakeholder Level Prospect Qualification insists you ask questions that trigger their purchasing decision. For instance, asking questions about their budget, decision-making authority, etc.

Continue reading ahead to learn about types of qualified leads in sales.

What Are the Types of Qualified Leads In Sales?

Here are the types of leads in sales.

1. Sales-Qualified Leads (SQLs)

A Sales-Qualified Lead is a prospect who has already completed the process of moving through the sales pipeline from a marketing-qualified lead. In addition, they have earlier shown interest in your offerings during the call or meeting. Now, they are ready to talk to the sales team for further process. The sales team will now speak to these potential leads to convert them into potential buyers.

2. Product-Qualified Leads (PQLs)

A Product-Qualified Lead is a prospect that finds value using a free trial or freemium model of your product or service. We can also say that Product Qualified Leads are just one step away from becoming your paying customers. One of the most significant advantages of PQLs is they are much easier to convert than other lead types.

3. Marketing Qualified Leads (MQ Ls)

A Marketing-Qualified Lead is a prospect that indicates interest in a brand’s offering as a result of marketing efforts or who is otherwise more likely to convert into a customer. MQLs intentionally take actions with your brand marketing, such as downloading a free trial, submitting contact information, etc.

These are the three types of Leads. Continue to read the next section to know a significant difference between qualified leads vs. unqualified leads.

What Is the Difference Between Qualified Leads vs. Unqualified Leads?

There is a clear difference between qualified leads and unqualified leads. A qualified lead will have a problem that can be easily solved with your products and services. They will also have full control over their budget and the authority to decide. Whereas unqualified leads are entirely opposite of qualified leads.

Unqualified leads are the prospects with needs or problems, but your offerings can’t solve them. It means they aren’t a good fit for your business. They also don’t come with the decision-making authority and control over the budget. That’s why they are termed unqualified leads.

This is the main difference between qualified leads and unqualified leads. Read the next section to learn about generating qualified leads in marketing.

How To Generate Qualified Leads in Marketing?

There are many ways to generate potential leads for your business. You can go with traditional methods, such as billboards, posters, etc. Or you can use online promotional methods. It entirely depends on your budget, effort, and time you can invest. Yet, we always prefer online promotional strategies to generate qualified leads at an effective cost.

Here are the four best ways to generate qualified leads in marketing. Check them below.

  1. Content Marketing;
  2. SEO;
  3. Paid Search;
  4. Social Media;

1. Content Marketing

Content Marketing is a marketing strategy that focuses on creating and providing valuable, relevant content to attract and retain your target audience. It helps you nurture more leads, which ultimately increases the revenue of your business. Content Marketing is a traditional marketing strategy to general more qualified leads for all types of enterprises.

2. Search Engine Optimization (SEO)

SEO, better known as Search Engine Optimization, is a great way to generate more potential leads for a business online. Search Engine Optimization refers to improving your website’s or blog’s visibility on the search engine’s results. When someone searches for a query on a search engine related to your niche, your website should rank in the highest SERPs. This way, you will generate more traffic and more leads eventually.

3. Paid Search

Paid Search is another excellent way yet most costly to generate potential customers. In this method, you need to bid on the keywords to rank higher. The highest amount of a bid on the keyword always wins the top position on SERPs. It is best to gain higher rankings on SERPs in less time. However, you have to spend a lot of money to rank on your target keyword (it depends on the competition too). Simply put, you are paying search engines to rank higher.

4. Social Media

Social Media is an excellent way to reach your target audience and convert them into leads. Many businesses use social media to interact with their audience and get more leads simultaneously. The best part about Social Media is that it is cost-effective unless you aren’t running social media advertisements. You need to create engaging, informative, and attractive content to reach your target audience and nurture them as leads.

These are the four best ways to nurture more leads for your business. Check the next section to know when to disqualify prospects.

When to Disqualify Prospects

There could be different situations when you would want to disqualify prospects. And those situations may vary from company to company. Here are some of the situations when you should definitely disqualify prospects.

1. Ask For More In Less: If your prospect is asking for premium service in the lowest price quote, it’s time to say goodbye to them. You should take them off your qualified prospects list. If they can’t respect your services for the money they are paying, you should remove them from your buyers’ list.

2. No Urgency: If you observe that a prospect needs your product but doesn’t want it right now, you can disqualify them without even thinking. If they don’t want your product right now, they might not need this in the future also. So, you can disqualify them easily because there is no guarantee of getting an order from them.

3. Unable to Get On A Meeting With the Decision Maker: Cold calling doesn’t always go right. Sometimes we reach out to another person instead of the decision-maker. We try a lot to get in touch with the decision-maker, but you always get bad luck. In this case, you should stop wasting your time and energy. In the end, you will get a sale from the decision-maker only. No one else is going to decide for you. So, disqualify them.

4. Not Call Back and Responses to Email: If the decision-maker isn’t picking up your calls, not even calling you back, you should probably remove the prospect from your list. It simply means they aren’t interested in your offerings, and you should now stop contacting them. So, disqualify them and invest your time and energy in potential customers.

These are some of the circumstances when you should disqualify the leads. Read the guide ahead to know how to qualify a lead with lead qualification frameworks.

How to Qualify a Lead with Lead Qualification Frameworks?

Until now, we have understood the importance of lead qualification in sales. Now, there are several methods to check whether a lead qualifies or not. Here are some lead qualification frameworks to check whether a prospect is qualified to become a successful customer.

  1. BANT (Budget, Authority, Need, Timeline)
  2. CHAMP (Challenges, Authority, Money, and Prioritization)
  3. MEDDIC (Metrics, Economic Buyer, Decision Criteria, Decision Process, Identify Pain, Champion)
  4. ANUM (Authority, Need, Urgency, Money)
  5. FAINT (Funds, Authority, Interest, Need, Timing)

1. BANT

BANT is one of the oldest and most effective lead qualification frameworks. This framework consists of four important elements: Budget, Authority, Need, and Timeline. While checking the quality of lead, always ask yourself questions about Budget, Authority, Need, and Timeline. Like this:

  1. Budget: Is the prospect capable of buying?
  2. Authority: Does your contact have adequate authority to sign off on a purchase?
  3. Need: Does the prospect have a business pain you can solve?
  4. Timeline: When is the prospect planning to buy?

Salespeople use this basic framework to know whether the prospect qualifies. This framework relies on customers’ budgets, authority, needs, and timelines. In order to know the lead quality, salespeople ask questions related to their budget, decision-making authority, needs, and buying timeline. After getting responses from the prospect, you need to analyze their answers and determine whether they qualify.

2. CHAMP

CHAMP Lead Qualification Framework consists of four elements: Challenges, Authority, Money, and Prioritization. Here ‘Authority’ also refers to ‘Call-to-Action.’ Sales representatives following this framework ask leads about their challenges, decision-making authority, budget, and priorities. This helps them figure out whether the lead matches their requirements.

3. MEDDIC

MEDDIC is another lead qualification framework used by sales and marketing teams in companies. In order to work on this framework, sales representatives should properly understand the target company’s buying process. MEDDIC is the most useful technique for companies dealing with companies. It helps them determine whether the company would be the perfect match for their business. It discusses different Metrics, Economic buyers, Decision Criteria, Decision processes, Identify Pain, and Champion.

4. ANUM

ANUM is similar to the CHAMP Lead Qualification Framework, also an alternative to BANT Lead Qualification Framework. It focuses on four different factors: Authority, Need, Urgency, and Money. Salespeople using this framework ask questions related to their decision-making authority, needs, purchase timeline, and budget. If they get satisfied answers from the lead, they qualify.

5. FAINT

FAINT Lead Qualification Framework discusses Funds, Authority, Interest, needs, and Timing. Salespeople ask questions about the lead’s funds, authority, interest, needs, and timing. If a sales representative gets satisfying responses that match their requirements, they mark the lead qualified.

These are the lead qualification frameworks. Read the following section to learn how to qualify sales leads using lead scoring.

How to Qualify a Sales Leads Using Lead Scoring?

Lead scoring is a model that allows you to assign a score or value to each lead based on various information, such as company information, demographic information, and more. It helps the marketing and sales team to prioritize leads accordingly. It shows what the chances of converting a particular lead are. There are two types of Lead Scoring: Implicit and Explicit.

  • Implicit Lead Scoring: This lead scoring works on user behaviors, such as websites they visit, recent actions, interests, etc.
  • Explicit Lead Scoring: Explicit Lead Scoring is those leads that match your Ideal Customer Profile, such as the demographic data, interests, etc.

Lead scoring method helps you find answers to two different questions: If a lead qualifies and when to reach out to them.

Image Credit: Crunchbase.com

In order to qualify a lead using the lead scoring method, you need to develop an Ideal Customer Profile (ICP). Ideal Customer Profile will tell what your ideal customer should look like. For instance, what should be their interests, behavioral attributes, etc. If a customer matches your ICP, you can move on to find some information about them.

Usually, marketers and sales teams find this information about their ideal customers:

  1. Job Title
  2. Location
  3. Industry
  4. Firm Size
  5. Revenue
  6. Page Visits
  7. Visit duration
  8. Video views, button clicks, custom events, etc.

These attributes will help you determine the quality of leads and how close you are to closing the deal. Continue reading the next section to know the good signs and red flags in sales qualifying.

Sales Qualifying: Good Signs and Red Flags

We can’t stress the importance of lead qualification in the sales process. You will find many good signs and red flags during the lead qualification process. And it is necessary to address those signs to know the quality of your lead. Here are the good signs and red flags.

Good Sings to Observe In the Sales Qualifying Process

1. Excuses

We know what you are thinking right now. How can excuses be a good sign? Let us tell you how. If you find that the prospect is making excuses during the conversation, then it’s always a good sign. Usually, prospects make excuses when they are guilty about not doing something before. And, most of the time, those excuses will be genuine. And it also confirms that they have real pain, and your offerings could help relieve it.

2. Specificity

We all know What Specificity Means in the Lead Qualification Process. It means receiving specific or straightforward answers from the prospects. If your prospect is giving clear answers, it simply means they have a real problem and looking for a solution too. In addition, they have observed a lot and know the exact problem they are facing. That’s why they can give clear answers.

Red Flags to Observe In the Sales Qualifying Process

1. Inconsistency

If a prospect can’t tell about their problem in detail, it means they don’t have enough knowledge about the problem. They haven’t perfectly analyzed the problem. In this situation, each answer will contradict every other solution.

2. Short Or One-Word Answers

As a sales representative, it’s your job to understand their needs, challenges, and everything in detail. But some prospects reply to the question with short answers and less information. With this amount of data, it is nearly impossible to determine the quality of the lead. So, this is again a most common red flag in the sales qualifying process.

Lead Qualification Checklist

In the previous sections of our guide, we looked at different frameworks and methods to see the qualification of a prospect. It’s great if you can individually evaluate your leads through each framework or approach. But, to make your work a bit easier, we have created a Lead Qualification Checklist.

The Lead qualification checklist consists of different types of questions that will help you determine if the lead qualifies. It includes questions that will help you understand their needs, interests, problems, goals, etc. This is the only checklist you need to know whether the lead qualifies. You can check the checklist below:

  • What are your main concerns?
  • What are your short-term and long-term goals?
  • What solutions or resources have you previously tried?
  • What do your competitors have that you would like to have?
  • What are you looking for in a brand?
  • What do you like about our brand?
  • Is there anything we can do to assist you in making your decision?
  • What is your budget?
  • Are you the only decision-maker, or anyone else is also involved in the decision-making process?
  • When do you want to implement the solution?

Got a lead? Simply ask these mentioned ten questions to determine whether they qualify. This will help shorten the lead qualification process.

What Is a Qualifying Question?

A qualifying question helps sales representatives determine the customer’s match for their products and services requirements. It helps them find whether the lead qualifies according to their requirements or not. Qualifying questions could be related to needs, budget, authorities, buying timeline, etc.

For salespeople, it is essential to ask questions intelligently to learn more about their prospects. Based on the given data, salespeople analyze whether the lead qualifies or not. They see different things while checking the qualification, such as their interests, budget, etc. We already discussed these in the previous sections of our guide.

We have created a list of good qualifying questions for our readers. You can check them below.

What Are Good Qualifying Questions?

In order to learn more about the prospects, you will need to ask some good questions. These questions should be drafted strategically to know everything that resides in their heads, such as their challenges, problems, budget, etc. So, it is important to ask some good questions to your prospects.

Here are ten useful and relevant qualifying questions that will help you introspect your prospects deeply:

  1. What business challenge can this product help you solve?
  2. What has prevented you from trying to solve the problem until now?
  3. What does your budget look like for this project?
  4. Are you using any solutions to solve this problem? If so, why are you switching?
  5. What is your principal priority in terms of solving this problem? Which functionality would be most important?
  6. What does success look like for your company after using this product?
  7. Would you be a daily user of the product? Who in your team would use this product on a daily basis?
  8. What are some friction points in your day-to-day that you feel this product can help you streamline?
  9. Which decision-makers would be involved in the purchase of this product?
  10. Would it be all right if I followed up on mm/dd/yyyy?

These are the top ten questions you can ask your leads to better understand their needs, challenges, and problems.

Bottom Line

Lead qualification is a powerful tool for businesses to grow and save time and resources concurrently. Enterprises use it to determine whether prospects fit into their target audience. With the help of this guide, we learned the importance of lead qualification in sales.

This is all about Lead Qualification. We discussed lead qualification in detail in this guide. We looked at each aspect of Lead Qualification thoroughly, such as its process, qualification frameworks, and much more. In the guide, we also shared the go-to lead qualification checklist to help you make the qualification process easier. So, this is it. We hope you learned more about lead qualifications from this guide.

That’s all for this guide. Keep following for more such guides.

About Author

Lito James is the founder of Massivepeak.com. He is an entrepreneur and marketing specialist who helps businesses to get more leads, subscribers and customers. Massive Peak has been featured on Thriveglobal, Cloudways, sujanpatel, surveysparrow, renderforest and many more. Follow on LinkedIn

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