Learn how to optimize lead qualification to boost ROI, protect yourself from nightmare clients, and generate better business relationships.
By now, just about everyone has heard Alec Baldwin’s timeless – if cruel – advice: always be closing. In Baldwin’s mind, the job of a sales operation – any sales operation – is to close as many deals as possible because, for him, that’s what generates revenue.
While that iconic scene has its merits, in the modern digital economy, the “ABC” mantra doesn’t always translate. For most businesses operating today, working overtime to close every single lead wouldn’t be worth their time – in fact, only 25 percent of leads are strong enough to merit advancing to the sales team. The global marketplace is more efficient than it was in 1984, and that means companies need to use their time more efficiently, not spending hours attempting to close a deal with a bad lead.
Why Lead Qualification Matters
For most organizations, lead qualification is a critical part of the sales funnel. It’s a quick, easy way to determine which leads are ready to buy and which aren’t worth the time. Lead qualification like this is important because it saves time for the sales team, preventing them from wasting energy on a lead that simply isn’t going to purchase.
Traditional models of lead qualification work on a multi-tiered framework that progressively narrows down leads as they move to the bottom of the sales funnel. While criteria vary from organization to organization, most traditional lead qualification structures evaluate leads on some variant of the BANT system:
- Budget: Does the lead have a high enough budget for the product?
- Authority: Can the contact person make the decision to buy?
- Need: Does the lead need the product?
- Timeframe: Is the lead ready to buy?
The Problem with Traditional Lead Qualification
For a product-based company or a company where the sale is essentially a one-off transaction, this can be a highly effective model. If you stop speaking with most of your customers after making the sale, these criteria are all you really need to worry about. However, for digital agencies, consultancies, or service organizations, the traditional lead qualification model leaves something to be desired.
Take Neon Roots. As a development agency, when we “close a deal” with a client, we aren’t just committing to a one-time sale. For us, “closing the deal” means months and months of close, often daily collaboration and hundreds of thousands of dollars changing hands. When we “make a sale,” it’s more like signing a partnership agreement than selling a product.
For us, the traditional BANT-focused model of lead qualification just isn’t good enough. We needed something more thorough.
Qualifying Beyond BANT
Instead of focusing on traditional attributes like the BANT system, we use a lead qualification system that’s based more on goal alignment and cultural fit. Instead of just asking questions about the budget — and don’t get me wrong, those questions are important — we also need to understand the client’s overall business goals, how we play into those goals and what their organizational culture looks like.
Part of the reason for these qualifications is to understand when we should stop nurturing the lead, helping us save time and energy in our marketing efforts. But, even more importantly, we do this to avoid working with bad clients.
Few things can be as harmful to a digital consultancy as signing an agreement with a client whose organizational culture and norms don’t match with your own. Partnering with a client who’s working philosophy opposes yours can create months of conflict, difficult working conditions and ultimately, a worse product. For a digital agency, closing a deal is like committing to a partnership – and signing up for a mismatched partnership guarantees that you both walk away unhappy.
Adapting Your Own Model
If you currently have a lead qualification system in place, you should pat yourself on the back: lead qualification can provide a 77 percent increase in lead generation ROI. But if you run a digital agency or a business where converting a lead means working with that lead for a long period of time, it’s time to update your lead qualification model.
This doesn’t have to be overly complex. You’ll learn more about what you should look for in a lead for your specific business as you spend more time qualifying leads, and you can start with simple, easy-to-implement strategies:
- Fillable Forms: Creating something simple like a fillable contact form on your website or landing pages can provide a quick, top-level qualification. While it’s important not to get too detailed so as to avoid harming click-through rates, a form can help to rule out some bad apples early on.
- Lead Nurturing: Implementing lead nurturing techniques is a powerful way to both improve conversion rates and learn more about your leads, helping you create a more effective sales funnel overall.
- Phone Interviews: Once a client is closer to engaging with you, phone interviews are incredibly powerful for understanding more about their organizational culture and habits. The key here is to not just ask about the specs of the project, but to incorporate questions that directly or indirectly ask about the client’s organizational culture, overarching business goals and corporate history.
- Roadmapping: The ultimate lead qualification strategy is roadmapping — small, low-risk exploratory engagements with clients. This is powerful because it lets you both get to know each other while still giving the client valuable outputs.
Customization is Key
As with all things, the most important step is to get started. Even if it’s not perfect, implementing some form of lead qualification will help you improve ROI and learn more about your leads and your business. As you continue qualifying leads, you’ll learn more and more about what a good lead looks like for your specific business, helping you hone your lead qualification apparatus. With time and iteration, you can build a lead qualification system that boosts ROI, protects you from nightmare clients, and generates profitable, high-quality working relationships for your organization.
Photo credit: one photo/Shutterstock
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