How to Qualify Prospects
Qualifying prospects is a critical sales activity because it helps you prioritize prospects and increase sales efficiency.
Qualifying prospects is the first step in the sales process. If you don't properly qualify prospects, your sales reps will waste time working with prospects who will be almost impossible to close. Even if they close, they will likely churn in the short term.
In this post, we'll cover why you need to qualify prospects and how you can qualify prospects with different frameworks.
What is a prospect?
A prospect is a potential customer who meets specific criteria that indicates they may buy your product. This could mean they signed up for the free trial, left their information in the form, or booked a demo meeting. Different teams have different qualification criteria for their prospects. In general, a prospect is looking for a product that solves their problem.
The most essential part of qualifying prospects is developing Ideal Customer Profile (ICP). It's a list of the characteristics of your product's ideal customer, such as the number of employees, annual revenues, industry, and type of business.
Importance of qualification
Because not every prospect has an immediate sales opportunity, qualifying the prospects and prioritizing your sales team’s resources is important. If you don't do it properly, it will cost both your sales team and prospects’ time. Also, it will damage the entire sales pipeline.
For example, spending an hour or more demoing a product and meeting with a prospect who isn't ready to buy or isn't a good fit for your product has opportunity costs. Your sales team could spend the same hours with other prospects that have a higher chance of closing.
That's why you need to qualify your prospect before you put too much effort.
3 Frameworks qualify prospects
You can design your qualification process or use one of the existing proven framework, such as BANT and MEDDIC.
Both frameworks help sales reps identify customers' problems, budgets, decision-making processes, and timelines. The frameworks also help sales reps prioritize prospects with immediate sales opportunities among many potential customers.
Using BANT framework
BANT helps sales reps identify the four key pieces of information from prospects.
Budget: Does this prospect have the funds to buy our product?
Authority: Does this prospect have the power to make a purchasing decision without needing approval from other stakeholders?
Need: What is this prospect's need? Is it a problem that our product can solve?
Timeframe: Is it appropriate to adopt now?
Learn more about BANT:
Julia Seo
Using MEDDIC framework
MEDDIC is a good framework for understanding your prospects more specifically than BANT.
Metrics: By what numbers or criteria do buyers and customers measure success?
Economic Buyer: Who makes the final adoption decision?
Decision Criteria: What are the criteria for the adoption decision?
Decision Process: How is the adoption decision made?
Identify Pain: What are the buyer and customer pain points?
Champion: Who will champion our product (within the customer)?
Learn more about MEDDIC:
Suyoung Lee
Framework for early-stage startups
For early-stage startups, using a framework like BANT or MEDDIC may not be appropriate, especially if your product has a relatively low selling price and a short sales cycle. Also, if your team is still establishing product-market fit, you might want to use a simpler framework.
Needs / Problems: What are the customer's problems, how are they trying to solve them, and why aren’t they satisfied with the current solution?
Demo Feedback: What is the customer's reaction to the product demo? What is required, what more do they need, and what problems are we still not solving?
Next Steps: What are the next steps and action items to convert?
It's especially important for early-stage startups to quickly develop and improve early versions of their product based on customer feedback. To do that successfully, the sales team should share customer feedback with the product team.
Closing the next step based on the information you’ve gained through qualification
Ultimately, the whole point of utilizing a framework to qualify prospects is ensuring that every sales rep has the necessary information about potential customers to move to the next step in the sales process. Also, it is to decide whether the sales reps should move the prospects to the next step.
If you properly qualify prospects, your sales team has the key information about potential customers. The information is the most important asset for your sales team.
It can continue eroding sales effectiveness if you don’t have the necessary information or poorly manage it. For example:
- If a rep changes, there's no continuity of sales activity because there's no information left behind, and you have to start from scratch.
- Similarly, if you've had a meeting in the past and it didn't result in a conversion, you don't have the information you need to convert again.
- You can't tailor your sales efforts to each team's needs and circumstances.
- Because customer feedback is not organized, early teams rely on sales reps' memories and gut feelings for product improvements.
To avoid the above problems, you must collect key information during the qualification process and every interaction thereafter and keep it well documented in your CRM.
Along with meeting notes, we just launched a feature called Prospect – which lets you keep all of your prospects in one place and track their qualification statuses. If you're interested in trying Relate, just shoot us a note at we [at] relate.so.