You shall not pass— This famous quote by Gandalf is critical for any successful sales process. A sales process is as successful as the leads it generates. Any prospect that has some interest in buying a company’s product or services is a lead. But when establishing or analyzing a sales process one needs to look at not just the number of leads but also the quality of leads. This is where Gandalf and lead qualification comes in. Lead qualification is the process through which leads are assessed for quality. Prospects who do not meet the selected criteria “should not be passed” to the corporate sales team for follow up. Companies that focus on generating a large volume of unqualified leads can waste the corporate sales team’s valuable time. Therefore, it is important to provide only leads that can potentially result in a sales opportunity.
One of the most widely used criteria for lead qualification is BANT, which stands for Budget, Authority, Need, and Time Frame.
Budget—Budget is one of the most important criteria to use when determining the quality of a lead. For example, a $1,000 watch cannot be sold to someone who only has $200 to spend. Therefore, the first question that the corporate sales team should ask leads is, “What is the available budget for the product or service?” Companies should focus on those prospects whose budgets fall within an acceptable range for the products or services offered.
Authority—The contacted prospect should have the formal authority to sign a deal or should be an influencer in the decision-making process. If not, an attempt should be made to reach an appropriate person in the company who has the authority to make a buying decision.
Needs—One of the critical conditions required to sell a product is a specific need. A lead might be interested in a product, but unless the product can solve a particular customer problem or meet a specific need, a sale is unlikely.
Time Frame—Even if a lead has the required budget, authority, and need for a product, it is important to know the time frame needed to make a purchasing decision. If the time frame is too long, the sales effort can be wasted. If the time frame is too short, the company may be unable to deliver goods or services on time.
Lead qualification is performed at different stages of the sales process, but primarily after leads have been generated by the sales and marketing teams. It is important as working on all prospects is neither feasible nor optimal.
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