Last updated on August 7th, 2023
In this article, I’ll be teaching you what lead qualification is, why you need it, and how to qualify leads on autopilot for your sales team.
To put it simply:
Marketing and sales isn’t easy, especially when it comes to taking your leads and converting them into buying customers.
A team with loads of leads? It’s a fantastic feeling. But it’s not enough to make a profit.
You don’t make money from leads; you make a profit from customers.
How many of those leads will translate into conversions and sales?
Well, a good way to know which leads will make a purchase decision is by qualifying them.
- What is lead qualification?
- The lead qualification process
- Lead qualification criteria
- How to qualify leads — traditional methods
- Automating your lead qualification
- The first step to start qualifying leads with automation
Meet the #1 Ranked CRM By Value on Capterra
VipeCloud’s Communication CRM is the essential sidekick for you to build awareness and be the hero to your customers.
With email, texting, social, & sign-up forms fully built-in, we provide you with maximum value for your business growth needs.
15 Day Free Trial – Get started risk free. No CC needed.
What is Lead Qualification?
Qualifying is the process that allows you to figure out whether a lead is indeed a prospect or a waste of your sales team’s resources.
A prospect is someone with the potential to become a customer, which means that all leads are potential prospects.
Failing to qualify a lead may cause you to waste time following up with people who weren’t ever going to be viable prospects in the first place.
So qualifying a lead is about gathering insights that are necessary to make a sound judgment on whether any given lead is likely to buy.
To put it into the most simple terms:
It’s called lead qualification because you’re trying to see if the lead is qualified to be your ideal client. Then simultaneously, you’re determining whether your product or service qualifies to solve their problems and pain point.
How the Lead Qualification Process Works
Lead qualification is the process that marketing and sales teams use to determine how likely a sales prospect is to make any purchases in the future.
Lead qualification is generally an ongoing process that lasts through each stage of the sales journey. As long as the lead is showing interest and potential in a future sale, they’ll continue to move through the funnel.
But if it ever seems that they’re a “dead end” with no purchase potential, you can take them out of the funnel and focus on more relevant prospects.
The first step of lead qualification occurs during the marketing stage (whether that is through inbound or outbound lead generation is up to you).
This step qualifies the prospect to move on to the next step, a discovery call from your company’s sales representative.
The sales rep then leads a conversation that reveals the prospect’s needs, project timeline, purchasing authority, and budgetary constraints.
The information gathered during the discovery call further determines the prospect’s viability, whether it is worth the time you could take to craft a proposal, or if your company is better off seeking after somebody else’s business.
If the latter is the best path forward, it’s often a great idea to be as helpful as possible and to give the lead a recommendation as to which company might be a better fit.
Leaving even your “dead end” interactions off on a positive, helpful note could very well result in future business from this lead, or they might refer even more qualified leads to your business instead.
How To Qualify A Sales Lead
Some leads are easier to qualify than others.
And to eliminate challenges that come through the lead qualification process, you need to have a data-driven, result-oriented lead qualification framework in place.
Here are some of the most common lead qualification frameworks that can help you convert a cold lead into a qualified lead.
BANT – Budget, Authority, Need, Timeline.
These are the characteristics BANT focuses on. Let’s explain each BANT point in detail:
- Budget – Does your product or service fit the prospect’s purchasing budget?
- Authority – Is the prospect authorized for decision making?
- Needs – Does the prospect really need your product or service? Or are they just exploring and shopping around?
- Timeline – How ready is the prospect to buy your product or service?
If your products or services are expensive, then BANT is a good option to consider. BANT would also be a good fit if you have a B2B brand where persons involved in the decision process and influencers are important parts of the sales funnel.
Want to read up more on BANT? Check out our blog article on the subject: How To Use BANT Sales To Close More Qualified Clients.
CHAMP – Challenges, Authority, Money, Prioritization.
These are the characteristics CHAMP focuses on.
CHAMP is an alternative framework to BANT, prioritizing a lead’s challenges and ensuring that their product or service resolves a prospects’ pain points. Once a prospect feels that their pain point can be easily solved with whatever you have to offer, it gets easier to lead them to buying decision making.
The CHAMP framework is a great fit for situations where some of the leads don’t understand what you’re offering. Identifying prospects’ challenges will help you attain a qualified lead that will eventually make a purchase.
MEDDIC is highly complex, but effective lead qualification technique focusing on a range of factors, such as:
- Metrics – What quantifiable results do potential customers expect to get from your brand? For instance, maybe they want to increase their revenue by a certain percentage annually?
- Economic buyer – Who’s the buying decision-maker? Who has the authority to make a purchase?
- Decision criteria – Based on what criteria does the economic buyer make a decision?
- Decision process – What process do potential leads follow in the process of determining the worth of products or services.
- Pain point identification – What pain points are your potential customers seeking to solve?
- Champion – Is there someone among potential customers who’s already happy with your product and can serve as a “champion” for it?
To successfully apply a MEDDIC framework, it requires you to collect detailed information about your potential customers. This strategy works especially well for businesses with relatively low volume of high-ticket sales (e.g. software vendors).
On the other hand, MEDDIC doesn’t make much sense for businesses that sell low-cost items at high volumes (e.g. most online retailers).
Is Qualifying Leads Necessary?
First, I’ll give it to you short:
But I know that’s not too satisfying of an answer, so let me illustrate the difference between a sales funnel that utilizes qualification and one that doesn’t.
Let’s take a look at Company A.
Company A’s sales system doesn’t include qualification as part of its sales cycle. Every lead the sales team gets is sent straight through.
Sales Rep John gets a lead and begins the process of nurturing them into a customer. And for Company A, the whole sales funnel, from cold traffic to final sale, usually takes around 5 weeks.
So Sales Rep John spends those 5 weeks “warming” this new lead-up when he finally gets to the end and goes for the close. Then when the time comes, it turns out that the lead’s business is entirely incompatible with John’s product.
Sure, he may get a referral further down the line, but that’s a big maybe.
All the effort John spent during those 5 weeks is virtually gone. And every time this happens to Company A, the profit decreases drastically.
If he had spent the time to qualify the lead initially, all of this could’ve been avoided.
Now, let’s take a look at Company B.
Company B does qualify its leads before moving them on to the sales funnel.
So when Sales Rep Sarah comes into contact with the same lead, she’s able to save Company B all of the effort and resources that they would’ve wasted nurturing a “dead-end lead,” unlike Company A.
Where Does It Fit in the Sales Process Exactly?
Now, with that out of the way — you might be wondering:
Where does qualification fit precisely in the sales process then?
Sales qualification should come into play before moving any leads onto the sales cycle right between the periods where they’re considered cold traffic and where they become full-fledged prospects.
This process makes it so important to have a structured plan for your sales funnel. Without knowing the path that customers tend to take towards the purchase, it’ll make it much harder to fit qualification into the customer journey.
For more tips on how to structure a sales system, check out our guide on value ladders here.
Lead Qualification Criteria
Let’s take a look at the characteristics that help qualify a lead — according to their level of readiness and willingness to buy.
Through this qualification, you can distinguish between the leads with the most potential and the ones with the least.
Your lead qualification criteria will be determined by your business and its goals. But for the most part, you can qualify leads by learning about a lead’s goals, pain points, buying authority, and budget.
There are two broad qualification stages any business has to worry about: You’ve got marketing, and you’ve got sales.
Sales qualification confirms information from a sales perspective.
Marketing qualification is undertaken by a team responsible for all the marketing activities. (If this is unclear, I’ll explain it more in-depth next section.)
Ideally, the number of marketing qualified leads (MQLs) and sales qualified leads (SQLs) should coincide.
If the sales department rejects too many leads, you likely need to correct the marketing qualification criteria or add new conditions altogether.
This could be accomplished by:
- Using a marketing CRM and requiring a higher contact score (a.k.a. lead score) before determining an MQL is ready to make a purchasing decision.
- Asking decision-makers for some more information in your sign-up form.
Using a drip campaign to help nurture engagement from the most qualified leads.
What’s The Difference Between Marketing & Sales Qualified Leads?
Marketing and sales are two very interlinked processes for any company trying to turn a profit.
But they are not the same processes.
And this is where many (especially newer) companies trip up.
While sales and marketing might be very similar, they’re different parts of the customer journey. So if you want to perfect your sales funnel, you’ve got to understand the difference.
Let me explain exactly what that difference is now. That way, you can understand the difference between Marketing Qualified Leads and Sales Qualified Leads (MQLs vs. SQLs).
Marketing is the process of finding people who may be interested in your product in the hopes of an eventual sale.
Sales is the process of turning those people into prospects and then into (hopefully loyal) customers.
So, when we refer to marketing qualified leads, it means people who’ve shown interest in the product and might be worthwhile moving down the funnel.
And sales qualified leads are those who haven’t just shown interest but are likely to buy your product if nurtured and moved down the funnel.
How to Qualify Leads — The Traditional Methods
Up until semi-recently, qualifying leads was something that sales teams would have to do manually.
Manual qualification involves asking questions to get a feel for each lead at various touch points — a lot of carefully calibrated questions, that is. The questions themselves depend on the product each sales team is selling.
After all, it’s useless to try and single out worthwhile prospects if you don’t even know the ideal customers for your product in the first place.
For instance, if you’re selling a SaaS platform to streamline processes for large enterprise-level companies, and you find that one of your leads is running a 3-person operation, you may want to disqualify them from moving further up the ladder. (Since they don’t fall into your ideal customer profile.)
And generally, this used to be largely done through calls between sales reps and the leads, or in some cases, in direct face-to-face meetings.
And this is precisely where the traditional method can start to falter.
But just to be clear, discovery sales meetings and sales calls still have their place — especially in B2B sales.
Limitations of the Traditional Method
The problem with the traditional method is one of scale, as is the case with many “traditional” sales methods.
Ideally, the amount of leads your sales reps work with increases as your company grows.
But each new lead means more time spent qualifying each of those leads. And unfortunately, we all have limited time in our days.
So at a certain point, the number of leads each rep can handle caps out.
This means one of two things:
You can either hire more reps…
Or you can invest in a “productivity multiplier” to extend each rep’s capabilities.
That’s right. The solution to this problem doesn’t have to be a bigger team; you can do great work with a small group if you have the right tools.
And that’s precisely why automation is so key to scaling companies in today’s world.
It allows you to stretch a small team’s capabilities without overwhelming everyone on it.
Automation can come into play for much of the customer journey, and the qualification process is no exception.
Qualifying a Lead through Marketing Automation
Marketing automation involves using software to automate many of the marketing and lead generation tasks that you currently manage.
Using software to automate the entire marketing activities — from the initial opt-in to follow-up sequences and behavioral emails — can go a long way in streamlining your customer acquisition process.
This means that every time a potential consumer chooses to receive your email updates, your system then sends them a series of email messages that’s designed to qualify their interest in your product.
For example, if the consumer submits a sign-up form, the marketing automation software automatically adds them to a contact list. Then your software sends them content designed to encourage them to make larger purchases — or you could set it for any other objective your team may have.
One example is Nissan’s reminder emails. Many car companies generate much of their profits from maintenance.
One service that’s highly dependent on consumers is the service schedule of their vehicle and coming to the dealership at the right time.
Because Nissan has a record of the purchase dates of every car sold in their customer database, they can follow up automatically using an email marketing automation system to remind their customers that their vehicles are due for maintenance.
This generates leads for their network service stations.
In essence, automating your marketing efforts allows you to respond to consumer behavior just as a real person would. You simply automate more of your marketing efforts while retaining your marketing’s relevance as much as possible for every prospect.
Commonly Used Techniques in Marketing Automation for Qualifying Sales Leads
Lead quality has been a point of contention between sales and marketing for a long time. Market automation is one of the ways of turning contention into contentment.
Market automation has incredible lead qualification capabilities. Contact scoring is one of the commonly used techniques of lead qualification with automation.
Contact or lead scoring model involves scoring leads automatically with a numerical value that indicates their level of interest in your product or service. With contact scoring, you assign points to the actions you consider the most valuable.
For example, how important is it that a prospect visits your website pricing page? What numerical value would you assign a prospect who requests a demo?
Using these values, you can create a score for your leads, information that shows you how active they are, and their level of interest too.
Marketers use these scores to automate the lead assignment activity.
A prospect only moves up the ladder once they hit a certain threshold (which is determined by the actions that the team deems most important) each time they perform a “trigger” action, they move a bit closer to the next threshold.
Once they hit it, the sales system automatically moves them up — without reps having to press a single button.
Automation Unifies the Lead Generation Process
By design, automation provides a system that allows you to take charge of lead generation with more efficiency. Because when the marketing is on point, the leads getting handed off to sales teams are more qualified.
It converts visitors into leads and nurtures them to raise their sales qualification until the point at which they are ready to purchase.
The process is all about nurturing leads on autopilot until they’re close to the point of sale.
Anyone who has potential continues to move up the ladder, while those who don’t have that potential get filtered out to save time and resources.
Automation Increases Sales Team Effectiveness
Designing a lead generation flow for your business is a potent tactic.
It allows businesses of all sizes to streamline the top of their sales funnel, where the leads are unqualified, and communication doesn’t need to be as personalized.
This frees up resources to be spent on closing deals with your top prospects instead of wasted on dead ends.
Sales teams can benefit from automation during various stages as well.
Follow-up automation can be used in the early stages of handling a lead, such as when they’ve had their first conversation with sales and are first evaluating the product/service.
This sort of automation could involve a couple of informational emails to help pace how much information they’re given at any one time.
Then, after a set duration, the automation instructs the sales rep to follow up with a phone call.
Automation isn’t really great at handling complex tasks, or ones involving emotions and intuition, though. So that’s where your reps can shine the most.
Generally speaking, automation is best used for helping reduce how many simple, repetitive tasks your sales and marketing teams have to do.
Lead Generation Marketing Components
Automation can help combine many of the mechanisms we’ve gone over and then streamline the lead generation and qualification processes.
Some of the ways it gets this done are with the following tools:
Conversion forms and landing pages are places where visitors to your website initially convert and become leads.
Through the process of nurturing, the lead shares more information with you through form fields that populate your marketing automation and CRM software databases. (More on these later.)
The information that your leads provide can then be used to segment leads for further email campaigns and provide powerful sales insights that can be used in future campaigns.
Email Autoresponder Campaigns
Autoresponder campaigns allow you to follow up on interactions with any given campaign audience in a way that’s personalized to your prospects’ contact information.
Autoresponders and email series have remained a mainstay for many sales teams’ sales processes, and for a good reason — they work well.
Programs To Help Automate The Qualification Process
Now, we’ve talked enough about automation itself and the various tools that teams use; it’s time to talk about how to automate the lead qualification process.
And for this, you’ve got a few options.
The two main ones that come to mind are CRMs and — you guessed it — contact scoring software packages. We’ll go over the latter first.
Contact or lead scoring software does what the name entails — it scores each of your leads and gives you a rough idea of their value as a prospect.
The various apps out there each have their own scoring methods, but it all generally involves adding up a series of events and giving you the cumulative result.
The great thing about these is that they give you great info at a glance, and they can even predict how valuable a prospect might be right away.
For many of these apps, you don’t get exact insights into exactly how the score works.
And on top of that, contact scoring is their focus, so for anything else, you’ll either still have to do it manually, or you’ll need another product to fill the other gaps.
Then you have CRM software.
CRM, or Customer Relationship Management, software generally comes with a whole slew of features to aid in the sales and marketing processes. One of the mainstays for many CRMs is a lead scoring system.
The great thing about these is that you can often set the parameters up yourself.
Want to add 5 to a lead’s score if they visit a specific landing page? You’ve got the power to do it.
Want to add one point for every blog post they view? Again, the power is yours.
And since CRMs are usually all-inclusive when it comes to features, they tie in exceptionally well with the rest of your sales cycle too.
Tips For Ensuring Your Automated Lead Qualification is Successful
A problem we touched briefly on before was a misbalance between the MQLs and SQLs your teams are handling.
To elaborate on this, if your sales team isn’t getting enough leads while your marketing team is disqualifying a significant amount, it means one of two things:
Either your qualification process is too strict, or you’re getting leads from the wrong places.
And if your sales team is getting too many leads, specifically “dead end” prospects, then that means your qualification framework isn’t strict enough.
Qualification is all about striking a balance.
You don’t want criteria so tight that none of the leads are getting through, but if you’re too laxed, then your sales team is going to waste a lot of time on dead ends.
Is It Always Necessary to Qualify Leads?
This section shouldn’t be too long:
The only time you shouldn’t qualify a lead is on the off chance that they’re already ready to buy by the time you would’ve gone through with qualifying them anyway.
In which case, they’ve effectively done the qualification for you.
In any other circumstances, moving leads down the pipeline prematurely just means you’ll likely be wasting significant amounts of your team’s time, effort, and resources.
Do you need to qualify? Technically not.
Will you be hurting your margins by having unqualified leads? Absolutely.
Does Automated Lead Qualification Have Any Downsides?
Now, while qualifying leads doesn’t have any downsides (or if it does, they’re largely outweighed by the risks of not doing so), automated lead qualification does come with a few.
It all comes down to the saying:
Too much of any good thing can be a bad thing.
Just because automation is an excellent tool for your organization doesn’t mean that you should solely rely on it.
Selling a product is a very personal process, and that means it needs people to add that critical human touch.
Contact scoring can offer tremendous insight into your prospects’ minds, but things like discovery calls should never be thrown away altogether; they’ve stuck around for so long for good reasons.
The First Step to Using Automation to Streamline & Perfect Your Qualification Process
Automating marketing efforts, especially when it comes to qualifying leads, allows your team to save tons of valuable time to spend on the highest-value prospects out there.
And luckily for you, VipeCloud is a perfect way to get that automation in place. Our team can even help you get the system in place within days – not weeks.
Learn more about VipeCloud’s marketing automation capabilities by requesting a Free demo today!