Get to Know Lead Qualification
Learning Objectives
After completing this unit, you’ll be able to:
- Explain the importance of lead qualification for a business.
- Explain the difference between MQLs and SQLs.
- Identify common lead qualification models.
Lead Qualification
Often, when pursuing new business opportunities, a sales team devotes a lot of time and resources to determine if a prospect or lead is ready to purchase. This can be frustrating, especially if sales reps receive a lot of unqualified prospects that end up going nowhere.
When you have a sales team with a quota and limited time to meet it, there’s little room for prospects that don’t meet your company’s sales-ready criteria. You need a lead qualification model to ensure you nurture quality prospects that eventually move on to your sales team.
This video explains lead qualification and demonstrates the relationship between lead scoring and grading to help establish a lead qualification model.
Qualifying Leads
Why is lead qualification important to your business? It really boils down to two things: time and resources. If a salesperson is pursuing prospects that aren’t interested, they’re wasting time. But by qualifying leads, before they even get to sales reps, you can save your company a lot of time and money in the long run.
Before you start lead qualification, you need to distinguish between two important terms.
- Marketing Qualified Leads (MQLs) are prospects or leads that are a good fit for your product or service but just aren’t ready to buy yet.
- Sales Qualified Leads (SQLs) are prospects or leads that are both a good fit for your product or service and are ready to buy. Note: An SQL is a former MQL prospect that has been nurtured over time and is ready to move farther along in the sales cycle.
Time and money aren’t the only reasons lead qualification is important. An improved customer experience, higher close rates, better use of marketing resources, and potentially improved data quality are examples of other benefits to your company. While this is by no means an exhaustive list, it does give you an idea of why lead qualification is so important.
Common Lead Qualification Models
Lead qualification is essentially looking at leads and assessing how likely they are to purchase your goods or services. Depending on your industry, business, or product, usually this assessment is based on a customer’s need, budget, timing, and decision-makers. Using scoring and grading to simplify and automate this qualification process is essential to your model.
There are several lead qualification models out there because it’s not a one-size-fits-all type of effort. What works for some, may not work for others. Choosing which model to use depends on factors like the type of business you’re in, and who your target audience is. Each factor can have an impact on which model you choose.
Some common lead qualification models include BANT, CHAMP, and MEDDIC.
BANT: Budget, Authority, Need, and Timeline
Questions asked:
- How much is the prospect willing or able to spend?
- Is the prospect the decision-maker for the deal?
- Will your product or service help solve their problem or achieve a goal?
- Will the prospect implement your product or service soon?
Advantages:
- Sales can quickly qualify or disqualify a prospect.
Disadvantages:
- It may be overly simple.
- It doesn’t account for all factors that can influence a prospect’s decision-making process.
- Some prospects may not have answers to all the BANT questions.
CHAMP: Challenges, Authority, Money, and Prioritization
Questions asked:
- What problems is the lead facing and how does your product or service solve it?
- Does the lead have buying power for their company?
- How much is the lead willing or able to pay for your product or service?
- What is the lead's priority level around the problem your company’s service or product solves?
Advantages:
- It emphasizes the importance of identifying challenges faced by your prospect.
- It emphasizes the prospect's priorities.
Disadvantages:
- It may be too prescriptive.
- Sales reps spend too much time on low-quality prospects.
- It doesn’t account for new prospects that enter after the initial lead qualification process.
MEDDIC: Metrics, Economic Buyer, Decision Criteria, Decision Process, Identify Pain, and Champion
Questions asked:
- How much money will the lead’s company make using your product or service? Will it save the company money?
- Who’s the decision-maker?
- What factors would affect whether the lead purchases your product or service?
- What’s the approval process like for the lead?
- What are the primary business objectives?
- Who will champion your company to the rest of their company after purchase?
Advantages:
- It’s a comprehensive framework.
- It accounts for most factors that could influence a prospect’s decision-making process.
- It’s flexible.
- It’s adaptable to a product line or service.
Disadvantages:
- It may be too complex.
- It can be time-consuming to implement.
- It doesn’t account for market size or the prospect’s willingness to pay.
- It’s not ideal for smaller accounts.
As you can see, each of these established models has advantages and disadvantages. You might try one and find it doesn’t work for you, so you try another. You may even find that combining two models works well for you. Regardless of the model you choose, the important thing is that you have a system in place to qualify leads for your sales team.
Once you decide on your lead qualification model, you can then automate your efforts with Account Engagement’s automation tools. Applying those automations across your database makes it simple to send only the most qualified leads to sales. To learn how scoring and grading can be automated and customized to help you qualify leads at your company, see Account Engagement for Targeted Audiences.