Prospecting: How to Qualify Leads and Prospects

Prospecting: How to Qualify Leads and Prospects“What telltale signs should a rep look for to help qualify a prospect?”

This sales question is a curious one to me because it makes me think that the salesperson doesn’t understand the definition of “qualify” a prospect. If they did, this would not be a question.

What I think the salesperson means to ask is, what are the signs that would qualify a lead as a “suspect.”

There is a vital distinction between “qualifying a prospect” and determining if a lead is qualified to be a “suspect.”

So let’s break down the difference between the two, and then I can answer the question.

Qualifying a Prospect

A prospect needs to have three (3) things to be “qualified.” They are:

  1. A problem you can solve.
  2. Authority to say YES (or at least part of the decision-making team)
  3. Ability to afford your solution should they decide to move forward.

You will not be able to accurately or adequately qualify a prospect until you have a conversation with them, and ask the right questions.

Qualifying a Lead

Because the original question was “What are the telltale signs…” I’m thinking the salesperson is asking what to look for in a lead that would determine if the lead can be considered a suspect and thus contacted to be qualified.

And if that is the case, the answer will vary from company to company but not hard to identify for each person reading this article.

You need to look at your company’s history of past deals and put them all into three categories:

  1. A-List: Deals that are the big whale accounts (typically fewer deals and longer sales cycles)
  2. Bread & Butter List: Deals that happen at a higher volume and shorter sales cycle
  3. Dead-end List: Low probability and even when they do sign up, the profits are low

When you make your list for each of these categories, look for the following:

  1. LOCATION
  2. EMPLOYEE SIZE
  3. INDUSTRY
  4. ANNUAL REVENUE

These are the four primary KPI’s (key prospecting indicators) that most companies use to determine if a lead is qualified to be considered a “suspect.”

When you analyze your whale accounts, you should start to see a particular pattern.

An example might be:

Location: USA
Employee Size: 1K – 10K
Industry: Computer Software
Annual Revenue: $500M – 1B

Compare that to your “Bread and Butter” top accounts that might look like this:

Location: USA
Employee Size: 100 – 250
Industry: Computer Software
Annual Revenue: $1 – 10M

And then you may notice your “Dead-end” list looks like this:

Location: New Zealand
Employee Size: 0 – 25
Industry: Computer Software
Annual Revenue: $0 – 1M

(If you want a fast (but not “free”) solution that does a great job of building your KPI prospect profile and then analyzing your database for leads that will match them up according to your profile, give Datanyze a look)

Don’t confuse PROSPECTING with QUALIFYING.

Prospecting is building your lead list with suspects that match your KPI’s (key prospect indicators)

Qualifying is determining if an opportunity exists.

– Michael Pedone

Michael Pedone teaches inside sales teams how to pick up the phone and close business. He is the CEO/FOUNDER of SalesBuzz.com – An online sales training company.

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