In this article smart city lahore will explain the definition of qualification of Leads, what its steps are and what its impacts on the sales process.
Digital Marketing strategies focused on generating qualified Leads for the sales team have been increasingly adopted by companies, gaining, for this reason, visibility in the market. It is a movement that for some years now has been growing at high speed abroad, mainly in the United States, but which in Brazil, although recent, also had its early adopters.
Results Digitais was born based on an Inbound Marketing strategy and has grown since then based on its Lead generation with Digital Marketing. Since then, we have gone through different phases in our growth and, because of that, we have gone through different challenges. One of them is the Lead Qualification process. As our operation grew, new problems and needs arose and we had to look for solutions so that the number of sales kept up with the established goals.
You might be thinking: “but what does a Lead qualification process have to do with sales?” In fact, it seems to be a step that impacts more marketing metrics than sales, but what we see here in RD is that this process is the “joint” that links the two strategic areas of the company and, when it doesn’t work well, some bottleneck may arise, impacting the final result – the number of sales!
In this article I will explain the definition of qualification of Leads, what its steps are and how it impacts the sales process.
Lead Qualification Definition
Basically, Lead qualification is the process in which the company aims to find, among the various Leads generated, those with the greatest sales potential. To define the potential, each company uses its own prerequisites. They generally vary between demographic profile and the Lead’s level of interest in the company, its services or products. To learn more about which requirements to use to qualify your Leads, read the post “How to define Leads qualification criteria and multiply your company’s sales”.
Lead qualification is generally the responsibility of two areas: marketing and sales. And it works like a funnel, from one stage to another, more Leads are disqualified until the rest actually enter the sales process. In marketing, there are usually more automated steps, such as marketing automation and Lead Scoring. In sales, a more human process of analysis is introduced.
Lead Qualification Steps
We did a lot of research here at Resultados Digitais in order to find a defined qualification process in the market that we could use here. But what we found was that each company must create and adapt the qualification process to its reality. In other words, a company that generates more than 15,000 Leads per month to deliver to a sales team of 10 people has different problems and needs than a company that generates 300 Leads for just 2 salespeople!
Because of this, the steps can change from one company to another, both in quantity and in the activities carried out in each one. Below, we’ll cover all of them and what usually happens in each. We will cover nomenclature and responsible areas, in addition to the activities that take place in them.
Qualified Marketing Lead (MQL)
The first three steps pertain to marketing. In them, the strategies to attract the public, engage them and gather information with the objective of accelerating the purchase process take place. When the Lead reaches the minimum prerequisites defined by the company to be transferred to the sales team, it is called Marketing Qualified Lead (MQL). That is, he was qualified only by marketing.
As mentioned above, the marketing steps are quite automated. Because of this, not all information collected and validated is in fact true and only a human eye can identify these details.
In this funnel, the next responsible for qualifying the MQL is the SDR (Sales Development Rep) or pre-sales area. In it, there is a step that can be called “research”, in which the person in charge will validate that the data that the marketing has passed on is not wrong.
Sales Accepted Lead (SAL)
You might be thinking, “Why would the marketing data be wrong?” Some surveys show that nearly 60% of marketing data is unreliable. This is because many people fill in the registration fields wrongly, omit information for fear of security or the reality is no longer consistent with what was filled out.
If the SDR validates that the data is true and corresponds to the service agreement or SLA (Service Level Agreement) between marketing and sales, it accepts this MQL, which is then called SAL (Sales Accepted Lead) or, in Portuguese, “Lead accepted by sales”. At this stage, no contact has yet been made with the Lead, so it is not known whether the data, when they talk to the Lead, will be confirmed and, furthermore, whether the Lead has the potential to become a customer or not.
After prospecting and getting to speak for the first time with the Lead, the SDR will qualify the contact, following some strategies and prerequisites determined by the company. There are several qualification strategies among companies, but I will mention 3 of them that appear quite frequently. They are BANT, ANUM and PACT.
BANT stands for:
- Timing (time)
It is one of the most traditional methods of qualification in the sales process. If the Lead does not have the 4 points, it is not passed on to a seller. It is quite common to use this type of qualification in more mature markets such as CRM. But why mature markets?
Almost all companies know what a CRM is and what it is for, many others already have a CRM and others are planning to hire one. I’ll give a practical example: the SDR calls a company, verifies that it has a spare budget, is talking to the person who decides to buy and has an urgent need to acquire the CRM that it sells. However, SDR discovers that Lead is still locked into a contract with another CRM for another 12 months. If he decides to pass the contact on to the seller, in less than a month of conversation, the Lead will approve the purchase, but it will only actually happen in 12 months. Now the question is: financially, does it make sense to spend the salesperson’s time so that a sale doesn’t happen until a year later?
But BANT does not work for all markets or companies’ needs, as it is not very flexible and in leaner or less mature markets it can end up preventing several Leads from reaching sellers, thus reducing the company’s revenues. Because of this, ANUM was created.
ANUM stands for:
- Money (money)
It looks the same, but this method works in a more flexible way, like a ruler. That is, depending on the company’s need to supply the sales team with more or less Leads, it adds one or more points in the qualification rule.
The ruler starts from left to right and the fewer points the company puts in at the moment of qualification, the greater the tendency for more Leads to arrive to the sellers. But remember: more Leads is not synonymous with more sales. The fewer qualifications, the more Leads without potential or profile can reach the seller’s hand. This can increase the cost of sales, lower team motivation or make misaligned sales causing future problems.
The first point validates whether the Lead belongs to the company’s ideal customer profile (Ideal Customer Profile, or ICP), has authority or influences the purchase decision, and whether it has minimal interest in knowing more about the product/service. The next qualifying points that can be added are defined need, defined urgency, and finally defined budget.
This qualification methodology is more flexible than BANT, but still may not address all qualification needs, particularly in immature markets. For example, startups that are creating new products, creating demands and, because of that, most of their potential customers do not know about the product/service or that they have a problem that these companies can solve.
Again, to explain, I will use a practical example. Imagine that you love to travel and have been accessing several tourist itineraries on the internet, travel and accommodation tips. Plus, you already have money set aside for your next vacation! And, on a fine day, a person calls you and introduces himself:
[Consultant]: Hi, So-and-so. This is Bruno, I’m a travel consultant at the Universal Tourism Agency. How are you?
[You]: All great and you?
[Consultant]: All great too. I’ve noticed that you’ve been downloading a number of our travel materials and I imagine you’re planning to do some soon! (Isn’t that right?!). So-and-so, I’m calling because I have an unamicable promotion for you!
[You]: How nice, I’m planning my vacation here! What do you have to offer?
[Consultant]: I have an unamicable trip to Mars for only three thousand reads! And I would like to know if you have this money set aside to make this trip?
[You]: Wow, for Mars I never separated money.
[Consultant]: Oh, too bad. I appreciate your attention and when you have a budget to take a trip to Mars, we’ll get back to talking. Hugs!
See what happened, I put the last point on the ruler to qualify the Lead and it didn’t work. And even if I put less points, still, practically no Lead would be passed to the seller of this agency. For example, were you planning to travel but had an urge to travel to Mars? Did he need his trip to other planets? Were you interested in learning more about interplanetary travel? I believe the answer is no to almost everyone.
For us at RD this situation is very similar. Our marketing automation software, RD Station, is still quite new for many companies in Brazil and few really know how it can generate concrete results for them. That’s why we have a much more consultative commercial approach. And we have identified in PACT a qualification method that is closer to our needs.
PACT stands for:
- Consequence (consequence)
- Target Profile (ideal customer profile).
In this strategy, the person responsible for qualification will direct efforts to find out if the Lead has a problem that your company can solve and raise the consequences of this problem for him. This point is extremely important to start making the Lead interested in knowing more about the subject, as it may be the first time that they are reflecting on the impacts of this issue on your company. At this point, the person who is qualifying starts to generate value for the Lead. The conversation beyond these two points will verify whether he has decision-making power or purchasing influence and whether the company has the profile to be a customer.
This qualification allows more Leads to pass to the sales process and the key point is the definition of the Target Profile. Having well designed who the ideal customer profile is helps the qualification process to bar those who do not have purchasing power, will not enjoy the benefits, will not understand how the process works, etc. The marketing’s Lead generation strategy will be directed precisely to further increase the amount of Leads belonging to the ideal profile to supply the sales team with a sufficient number to guarantee the goals.
Sales Qualified Lead (SQL)
Going through these qualification steps, the Lead leaves the name of Sales Accepted Lead and becomes a Sales Qualified Lead (SQL) or “Lead Qualified by Sales”. That is, it has all the minimum prerequisites needed to enter the sales process. At that moment, when the company works with a pre-sales team, a conversation with a salesperson will be scheduled.
Often the qualification process has subjective perceptions about the points to be discovered, and perhaps the seller may disagree with the pre-sales judgment. Thus, in the first call with the Lead, the sales team will validate that the person responsible for the qualification extracted all the points correctly and if he accepts these points and decides to continue with them, the Lead will be called “Opportunity”.
In order to avoid a very large break in this passage between areas and ensure the highest number of acceptances for sales of the generated SQLs, the SLA on what a Qualified Lead for sales is must be very clear and with as little subjectivity as possible. For example, putting “having money” as a criterion point opens up for various interpretations, such as the Lead having a budget to buy your service/product, being able to reallocate the budget if it makes sense, it has a good average ticket and high volume of sales or the Lead just answers “yes” when asked about having money.
As we can see, depending on the way it was written, this can be more of a hindrance than a help. To avoid this type of problem, put points that are measurable and that both pre-sales and sellers can find, such as “having up to X thousand reais allocated for investments to solve problem Y”.
When the Lead finally becomes an Opportunity, the sales process actually begins. At this point, the seller understands that the time he will invest to work with the Lead will have great chances of being paid with a bill generated at the end. So that your company’s customer acquisition cost does not increase, your average ticket does not decrease and so that your sales cycle does not increase, it is very important to take care of the entire qualification process and ensure that your sales team is in fact investing efforts on the right Leads!
As you can see, there are several qualification steps, but your company doesn’t necessarily need to have them all, nor does it need to qualify using the same methods we mentioned. A model was presented in which a company has a marketing team generating Leads, a qualifying pre-sales team and a sales team, obviously, selling.
Summarizing what was past:
- We have the Marketing Qualified Lead (MQL) , which is the Lead that marketing, following some prerequisites (Lead Scoring) , defines as qualified for the sales team;
- This Lead, if accepted by the pre-sales team, is renamed Sales Accepted Lead (SAL). At this point, through some qualification methodologies, other points that marketing cannot catch will be extracted. Generally these points will ensure if the Lead fits the profile of the company’s customers and if it has the potential to become one;
- If it’s in that profile, pre-sales will pass it to salespeople as a Qualified Sales Lead (SQL). Finally, the seller will assess whether the entire qualification process has been done correctly and will decide whether to work with him or not. If the answer is yes, the seller will have an Opportunity to make a sale!
I have presented here a qualification model and its nomenclatures, but the important thing is to set up a process that actually meets your needs and that will ensure that your salespeople receive a sufficient number of quality Leads to meet the stipulated goals!
The qualification process is not static, it must change as the company grows, but it must also change according to feedback from those responsible for each step. Rest assured that the first few models will be full of bugs, but make sure there is an open channel for suggestions for improvements and flexibility to adapt quickly!