Trying to sell to customers that don’t need, don’t want or can’t afford your product or service is pointless. In this lesson, you’ll learn about lead qualification, including what it is and the process by which it is done. A short quiz follows the lesson.
What Is Lead Qualification?
Lead qualification is the process of determining whether a potential customer is a suitable candidate to purchase the product or service the salesperson is selling.
Qualifying a prospect includes determining the following:
- Does the product or service fulfill the prospect’s needs or wants?
- Can the prospect afford to purchase the product or service?
- Is the prospect eligible to buy? Not everyone can buy an automatic firearm, for example.
- Does the prospect have the authority to buy? Does the employee have the authority to make a purchase for the company, for instance?
Some have proposed a three-step qualification process:
1. Initial Screening
At this step, you’re just trying to identify leads that are the most promising. This can be accomplished through outbound communications, such as public relations, banner ads, emails, advertising, trade shows, direct mail and telemarketing. For example, you may send out direct mail pieces that have postage-free reply cards asking for more information or telemarketing based upon key demographic data used to set-up appointments. Sometimes you will use inbound communications, in which the customer contacts you directly through a phone call or web registration, for example.
Sometimes promotional gifts, like an investment newsletter or a coffee mug, are offered as an inducement to seek more information. Again, the idea is to reduce your leads down to the most promising before spending time with each for qualification purposes.
Once you have gathered your leads, you must qualify them. Once again, you want to determine whether you can meet a prospect’s needs, whether the prospect can afford it, whether the prospect can buy it and whether the prospect has the authority to make the purchase if representing an organization. This is usually done through a set of open-ended and closed-ended questions.
An open-ended question is a structured question that doesn’t require a specific response, such as ‘what are your current business needs?’ A closed-ended question requires a specific response. Examples of a closed-ended question include the typical yes-no question or ‘how old are you?’
3. Sales Opportunity
If the prospect meets all the qualification criteria, then you have a sales opportunity.
Let’s look at a quick example to illustrate the process. Imagine that you are an insurance salesperson. You decide to buy a list of sales leads from a vendor that demographically matches your target market.
You send out a sales letter along with a postage-free reply card offering a free financial analysis. A small percent of your leads send back the reply cards and you contact each over the phone. You spend some time introducing yourself and casually ask some qualifying questions. You attempt to set up a sales presentation for each lead that meets the qualification criteria.
Lead qualification is a process in which a salesperson determines whether or not a potential customer is a suitable candidate to purchase the good or service the salesperson is selling. Qualification criteria includes whether the prospect has a need or want that the salesperson can meet, whether the prospect can afford the product or service, whether the prospect is eligible to buy the product and whether the prospect is authorized to make a purchase. A simple qualification process includes lead generation, qualification and determining whether there is a sales opportunity.
Who Wants to Buy?
As a salesperson, it is important to know who your customers are. To narrow down the market, sales professionals use a process called lead qualification. This means deciding if the client is a suitable prospect before attempting a sale. Some use a three-step lead qualification process:
- Initial Screening: Identify and gather potential customers or clients
- Qualify Leads: Ask open- and closed-ended questions to determine customer/client fit and ability to purchase
- Sales Opportunity: For leads that qualify, set up a sales presentation
After reviewing this lesson, you should be able to:
- Define lead qualification and list qualification criteria
- Describe the process of lead qualification leading to a sales opportunity