July 25, 2016

Effective Deal Qualification

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Like an English football team, “qualification through the rounds” of a deal is critical to success.

One of the most important conversations salespeople have with their prospects is the discovery meeting.  Here lies the proverbial fork in the road for you and your prospect. Either they’re a good fit for your product or service and you can move forward with the relationship, or it’s time to part ways.

But it’s not always immediately obvious which path to take. That’s where sales qualification comes in. By asking the right questions, you’ll be able to determine whether the relationship should continue, and if so, what next steps are appropriate.  Or disqualification of the prospect ASAP and movement on to the next.

Qualifying at Every Level

A discovery meeting is where you might do the bulk of your qualification, but it certainly isn’t where qualification starts or ends.  At every step of the sales process, you’ll continuously evaluate prospects for more and more specific characteristics.

There are three main areas to qualify in any sales engagement..

  1. The Prospect Itself

This is the most basic level of qualification, and doesn’t tell you much other than whether you should do more research. If your company has a “perfect prospect”, take this into account when qualifying a prospect. Does the buyer match the demographics of a historically good prospect?

Questions you should ask at this stage include:

  • Can we support this prospect in the specific region?
  • Do companies in this industry typically buy our products?
  • Is the company creditworthy?
  • Does the prospect look like a “good prospect”?
  1. The Solution Qualification – The Business Case

The business case is where you determine whether your prospect has a specific need or challenge you can satisfy and whether it’s feasible for them to implement your particular product or service. The other half of a good prospect, the business case qualification will give insight into whether a prospect could benefit from your offering.

  1. Decision/Decision Maker Qualification

Let’s say you’ve determined that your prospect’s company is a good match for your solution and fits the shape of a good prospect. It’s time to get into the nitty-gritty — can your point of contact actually make the purchase decision?

To determine this, ask the following:

  • What budget will this acquisition come from: capex or opex?
  • Who else is involved in the decision?
  • What is the decision-making criteria? What is the most import element? And is there a compelling event to justify a purchase now?
In or Out?
In or Out?

When to Disqualify 

These three levels are listed in the order you should use them to disqualify.

For instance, if your prospect is a complete departure from a typical shape of a customer, cash buyer, covenant driven businesses, etc. it’s safe to disqualify them right then and there on a complete level. Maybe one day you’ll serve their type of prospect, but right now you don’t — so don’t waste time trying to shoehorn your offering into their business.

Similarly, you could be speaking with the CFO of a business with complete budget authority who passes decision maker qualification with flying colours. But if there’s no problem, there’s no need for your solution. Qualify for business pain first.

Also keep in mind that unless a prospect can be qualified on all three levels, (prospect itself, business case and decision makers) you shouldn’t advance them in the sales process. For example, if you ask your prospect about the company’s strategic financial goals and they’re unable to answer, it’s a good sign they’re not close enough to the decision process and lack influence.

You should disqualify this contact at the stakeholder level, even though they pass at the opportunity level.

Why Disqualifying Isn’t a Bad Thing

Many salespeople are loath to disqualify prospects and shrink their pipelines.

Their natural instinct is trying to work as many leads as possible, but this isn’t always the best approach. The quality of your leads can be as important as the quantity.

As a salesperson, your most precious asset is your time, and it’s far better to spend it on a handful of your best prospects than spreading yourself thin across dozens of leads. Trying to close every deal that comes along is only going to result in dead ends with poor fit prospects, while you neglect prospects that are a better fit and more likely to commit.

What to Listen For When Qualifying – Conversational Tip-Offs to Listen For

Stop me if you’ve heard this one: “It’s not what you said, it’s how you said it.”

This phrase is the root of countless arguments, but it’s as good as gold when it comes to sales qualification. Your prospect will provide you as much information via their tone of voice and delivery as the words they actually speak.

Here are some tip-offs (both good and bad) to listen for when qualifying a prospect that can help you determine whether to advance the sales process or disqualify ASAP.

Good Signs

Details

Prospects who can give detailed answers to questions such as “What are your goals?” and “When do you need to see results?” have thought carefully about their problem. Listen for sequential plans, thought-out explanations, and statistics. Details also indicate that your prospect feels real pain. After all, people without real problems don’t spend time thinking about why they exist and how to address them.

Of course, the caveat is that details must be accompanied by reality. A prospect who says, “I want you to squeeze the $m of solution into my small budget of $250K,” is using specifics to demonstrate that they don’t have strong business acumen.

Knowledge

Detail’s partner is knowledge. A knowledge check is your best bet for qualifying at the stakeholder level. True decision makers will have intimate knowledge of company goals, challenges, and needs. A contact who doesn’t have access to this information likely isn’t going to be valuable in the sales process.

Warning Signs

Inconsistency

A prospect whose answers contradict each other is likely one who wants to be helpful, but can’t because they don’t possess adequate knowledge. However, this isn’t a deal breaker — prod them to tell you who does know the answers, and continue qualifying the opportunity with another contact.

targetShort answers

True business pain permeates a business — executives lose sleep over it and employees have to deal with it on a day-to-day basis. If you give the impression that you can help alleviate the pain, prospects will want to talk to you.

A prospect who’s giving you one-word answers isn’t someone who feels there’s basis for a conversation. It could be that the problem is a non-issue, or the contact isn’t clued in enough to feel its severity. Depending on what you think is going on, disqualify or try reaching out to another member of the organization.

Sales success rests on effective qualification. Your ability to find good fit prospects will make or break your business. Prospects who turn into happy customers mean not only revenue, but increased word-of-mouth, referrals, and the possibility of cross- or upselling. So it’s imperative that you get it right.

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