Qualifying inbound leads is the most critical early step in the sales process. You can be sure that your sales team is focusing their efforts on leads with the highest potential for conversion. Every client-related action has a potential zero return, and this is made considerably more likely by poor qualification at initial or early engagement.
Qualified leads. Image Credit: Shutterstock.com/dizain
Effective lead qualification serves the sales team's sense of purpose, allowing them to focus their efforts on leads most likely to convert. It's a live process of continuous improvement that requires monitoring and adjustment to meet changing market conditions.
This article will discuss how to qualify inbound leads, what they are, and the lead qualification methods you can use.
What Is an Inbound Lead?
An inbound lead is a prospective customer or business opportunity that initiates contact with a company or organization, through any of the various marketing and communication channels that the company has established. Inbound leads are typically considered warmer and more receptive to engagement than outbound leads, as they found YOU, rather than you hunting THEM. They have already expressed interest in the company's products, services, or content and made first contact that was not instigated by you.
Inbound leads can be generated through various channels, including: website traffic, content marketing, social media, email marketing, and SEO (search engine optimization, and referrals). Inbound leads represent a pool of potential customers who have already shown interest in your passive or active presence and made an active response to it. Successful conversion of these results from lead nurturing and qualification processes that handle inbound leads systematically and thoroughly. This includes: identifying the verifiable needs, presenting attractive and relevant information, and guiding the contact through their purchasing journey.
What Is the Lead Qualification Process?
An effective and rigorous inbound lead qualification process involves thoroughly (and repeatedly) assessing the quality and potential of leads. This process facilitates sales and marketing teams to prioritize their efforts and resources toward leads that have systematically been assessed to have a higher probability of conversion. The lead qualification process is discussed below:
- Inbound leads are initially captured or attracted through the range of channels listed above. These leads must be quickly assessed and actioned for follow-up (if deemed high value).
- Collate all available information about the lead, including their contact details and any data they provide during the initial interaction.
- Assign a score to each lead based on predefined criteria such as: demographics, engagement level, and behavior. Your lead-scoring system/approach is a dynamically refined tool that you can adjust in A/B testing. Leads with higher scores are considered more qualified, but leads with lower scores may be able to teach you about sharpening your process.
- Segment leads into your systematized categories or personas, based on their presentation of characteristics and interests. Tailoring marketing and sales approaches can be a key to advancing contacts through the process by better serving your understanding of their needs.
- Implement automated email nurturing campaigns to provide increasingly targeted content and information to the leads, based on their segmentation.
- Engage with leads through increasingly personalized (though still potentially automated) communication. This helps discern qualifying information that assesses their needs, budget, timeline, and buying intent.
- Monitor lead interaction with your content, emails, and website. Tracking engagement metrics like open rates, click-through rates, and page visits can empower your follow-on lead scoring and precise segmentation adjustments.
- When a lead meets the predetermined criteria for hand-over qualification, transfer them to your sales processing team for ongoing engagement and conversion efforts.
- Regularly and thoughtfully review and refine the lead qualification process, based on systematic and meta-data analysis, to improve its accuracy and effectiveness. Use these tools to measure the success of your lead qualification practices. Assess, among other data particular to your sector norms, conversion rates, customer acquisition costs, and ROI.
- Maintain bi-directional communication and collaboration between marketing and sales teams, to ensure alignment on lead qualification criteria and processes.
The simple outcome of an effective inbound lead qualification process is to identify and prioritize leads that can be converted to customers and measure the success to inform dynamic adjustment of the process to improve sales efficiency and ROI.
Lead Qualification Methods and Techniques
Lead qualification techniques are among the most critical tools in sales and marketing. They serve to identify and prioritize potential customers, ranking them by the likelihood of converting them into paying clients. Listed below are some lead qualification methods and techniques:
BANT is an acronym used for lead qualification that helps sales and marketing teams assess the readiness and potential of leads to become customers. This method is described below:
- Budget: Determine if the lead has the financial resources and budget to make a purchase. Questions may include inquiries: about their budget constraints, funding availability, or willingness to purchase. Removing the “interested but not executing” inquiries quickly is critically important in effective resource allocation.
- Authority: Identify the decision-making authority within the lead's organization. Understand whether the lead is empowered to make purchasing decisions, or if they are an influencer or gatekeeper.
- Need: Explore the lead's specific needs, challenges, and pain points. A clear understanding of what problems they are trying to solve or goals they want to achieve with your product or service can inform the process rapidly, by allowing you to target materials that resonate.
- Timeline: Determine the lead's timeline for deciding to purchase or implement a solution. Assess whether they have an immediate need, are planning for the future, or are in the groundwork stages with their inquiry.
The BANT framework helps your personnel focus their efforts on leads that meet the high-priority lead criteria, increasing the probability and rate of successful conversions. It encourages productive conversations with leads, focusing on addressing their specific and mutually understood needs and timelines.
MEDDIC is another acronym used for lead qualification, particularly in B2B sales. It aims for a comprehensive framework to drive sales professionals' assessments of the potential of leads and prioritization of their efforts. This method is implemented using the following:
- Metrics: Understand the lead's key performance indicators (KPIs) and metrics.
- Economic Buyer: Identify the key decision-makers, influencers, and gatekeepers who hold the various authorities in purchasing decisions. This person has the power to allocate budget and resources for your solution.
- Decision Criteria: Determine the exact criteria the lead uses to assess potential solutions. Identify and acknowledge the factors that are most important to them in making a decision. These insights help to create a tailored pitch to address their precise needs.
- Decision Process: Clarify and quantify the lead's decision-making process. You will need to know who is involved in the decision, and what steps need to be taken before a purchase is made.
- Identify Pain: Explore and understand the lead's pain points, challenges, and problems that your product or service can solve. This will allow you to position your offering as a solution to their real problems, as you've identified them.
- Champion: Identify the internal advocate or champion within the lead's organization. This person supports your solution and helps navigate the internal dynamics and decision-making process, acting as your advocate and enabler in the sales process.
MEDDIC is a more comprehensive lead qualification framework that focuses efforts on the most convertible leads. It encourages a deeper understanding within your team of the lead's needs, challenges, and decision-making process. This will lead to more effective sales strategies and higher conversion rates in more complex B2B sales scenarios.
GPCTBA/C&I is another invaluable inbound lead qualification framework used in marketing and sales to assess the quality and potential of leads. It applies to more complex sales scenarios. The GPCTBA/C&I method is as follows:
- Goals: Internalize the lead's goals and objectives in your process, to be the catalyst for a solution. A deeper understanding of their goals aligns your proposals and offerings with their quantified needs.
- Plans: Discern the lead's plans—those aimed at achieving their goals. Understand the strategies or plans they do have in place.
- Challenges: Identify and prioritize the challenges or obstacles the lead is facing in executing these goals. Assess how your product or service addresses these challenges effectively.
- Timeline: Try to determine the potential purchase timeline for making a decision, purchasing, or implementing a solution.
- Budget: Understand the lead's budget constraints and financial resources.
- Authority: Identify the key decision-making authority within the organization. You should know who has the power to make purchasing decisions and if you are engaged with the optimal person in the target organization.
- Consequences: Explore and emphasize the potential consequences or risks of not addressing their challenges or achieving their goals. Do this without appearing manipulative, using FOMO (fear of missing out) carefully.
- Implication: Assess the implications of the influence of your solution on the lead's operation. Assess and demonstrate your understanding of how your product or service positively impacts their operations, productivity, or profitability.
The GPCTBA/C&I framework drives sales and marketing teams to qualify leads based on their quantified needs, goals, and readiness to pay. This helps you to tailor your approach and your messaging to resonate with the lead's unique circumstances.
CHAMP is a further acronym for an inbound lead qualification in B2B sales and marketing. It emphasizes the identification of key individuals and factors that influence the decision-making process. The CHAMP methodology follows this process:
- Challenges: Understand the challenges the customer is facing and how are you positioned to help ease and remove these.
- Authority: Determine the decision-maker(s) who can approve or veto the purchase. This improves the targeting of your activities and reduces time spent on engaging those who cannot influence the outcome.
- Money: Check if the client has the necessary funds to invest in your product or service. Effort spent on a deal that cannot be funded must be avoided.
- Priority: Assess the contact organization's sense of urgency and priority in addressing the needs.
CHAMP is particularly valuable in more nuanced and complex B2B sales scenarios, in which multiple stakeholders and decision-makers are involved. By addressing each criterion, you gain a more thorough understanding of the customer organization and their readiness to engage. This facilitates you in tailoring your efforts more effectively.
ANUM drives the assessment of the quality and potential of leads by focusing on primary criteria. It follows the below methodology:
- Authority: Determine whether the lead has the authority to make purchasing decisions. Understanding the decision-maker's role and level of influence is crucial if the conversion is to be smooth and requires relatively low resourcing from you.
- Need: Identify, explore, and agree on the specific needs and pain points with the contact. Learn what challenges or problems they are trying to solve with your product or service. This approach helps you to tailor your solution to fit better and be harder to decline.
- Urgency: Measuring the lead's sense of urgency and their realism in assessing this can be very empowering. Understanding how quickly they need a solution can enable a smoother engagement. Questions around their understanding of the consequences of delay and clarifying (to yourself and potentially to them) their urgency or lack of it can be invaluable.
- Money: Check if the contact organization has the necessary funds to proceed with the purchase of the product or service. Need without resources will not lead to a sale, in most cases, so clarifying this gently and early will serve you well.
ANUM is a simplified lead qualification framework that focuses only on the fundamental criteria. In this way, you can prioritize your efforts and resources toward those with a higher likelihood of conversion.
Measuring the Success of Lead Qualification Efforts
Measuring the success of lead qualification efforts enables you to assess the productivity of your sales and marketing strategies, facilitating data-driven improvements. Several KPIs and metrics can help you gauge the success of your lead qualification efforts. These KPIs are listed below:
- Conversion Rate: Understand the percentage of qualified leads that progress through each stage of the sales funnel. Look back at the failures to try to understand what early indicator data might be added to the prior stage, that would prevent wasted effort on future contacts.
- Lead Quality: Analyzing their fit with your ideal customer profile, industry relevance, and likelihood to convert will empower your lead quality assessment procedures.
- Cost Per Qualified Lead (CPL); Calculate the cost incurred to qualify a lead to quantify the efficiency of your lead qualification processes.
- Lead Velocity: Measure the rate at which new leads are qualified to assess the effects of lead generation and qualification efforts and process adjustments.
- Sales Velocity: Assess the speed at which qualified leads move through the sales pipeline and convert into customers.
- Win Rate: Determine the percentage of qualified leads that ultimately become paying customers.
- Return on Investment: Calculate the ROI from your lead qualification by carefully comparing the revenue generated from qualified leads to the actual cost of acquiring and qualifying them. Take care in cost assignment to avoid distorting your analysis by overloading some clients, to the apparent internal cost benefit of other parts of the process.
- Customer Lifetime Value (CLV): Analyze the CLV of customers acquired through qualified leads. This allows you to backward-evaluate the success of qualification efforts.
- Lead Source Analysis: Identify the sources or channels that yield the highest-quality and most convertible leads. This can drive your strategy towards the most successful routes and trigger better analysis of the less productive channels, leading to their improvement or abandonment.
- Feedback and Communication: Maintain open communication and feedback loops between sales and marketing teams. Continuous improvement of your lead qualification processes can only be achieved by a common understanding of real-world results.
Qualified Leads vs Unqualified Leads
The effective and thorough assessment of the qualification of leads will always drive greater sales outcome productivity than allowing effort to be focused on unqualified leads. The differences between the two are listed below:
- Conversion Rate: Qualified leads always show a higher conversion rate than unqualified leads. They measurably meet your specific channel criteria and have demonstrated (to some degree) an interest in becoming paying customers.
- Resource Efficiency: Qualifying leads consume time and resources, but return handsomely in conversions. Unqualified leads consume resources while yielding significantly lower hit rates and returns. Qualification significantly shifts sales team productivity, as they primarily (only) address real and able customers).
- Customer Retention: Qualification of leads tends to result in improved customer satisfaction and retention rates, as they are evaluated to be a better fit for your product or service and therefore will remain customers for longer. Unqualified leads regularly lead to dissatisfied customers with no repeat business, as they are not the right fit, where conversion is even possible.
- Marketing Spend: Allocating marketing resources to attract and nurture qualified leads is hugely more efficient than targeting a broad audience of mixed qualifications, maximizing the return on marketing investment.
- Time-to-close: Qualified leads close faster (and at higher rates) than unqualified leads.
The value of the qualification of leads significantly outweighs the alternative random approach. Higher conversion rates, better resource allocation, improved sales team productivity, and increased customer satisfaction will always result.
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