Every small-business owner wants more customers, but not every customer is right for every business. Qualifying prospects may be as important as generating leads or even closing sales. Selling to the wrong customer may lead to reworks, refunds and reputation damage, among other costs.
“It’s a waste of time if you don’t [have] quality sales prospects,” says Jayna Cooke, CEO of EVENTup, a Chicago online marketplace for event and meeting spaces. When EVENTup’s sales reps spend too much time calling prospects who aren’t likely to buy, it cuts into the company’s profits, she says.
Inadequately qualified prospects can also lead to customer dissatisfaction and raise customer churn rates, Cooke adds. “If we’re not providing them value, they’re not going to stick around,” she says.
When a sales pitch targets a well-qualified prospect, it may not only avoid those negatives, it has the potential to reduce the time required to sell and increase profits. Atlanta-based marketing coach Melissa Galt claims one of her best moves in her previous career as an interior designer was to start strictly qualifying prospects before taking them on. “My workload dropped in half and my income doubled over the course of nine months,” Galt says.
Pinpointing the right prospect is fairly straightforward: The prospect has to have the authority, budget and need for the sales offering. Qualifying may also address the timing of the need, whether the offering will address a need or a want for the prospect and whether the potential customer is likely to buy.
Finding the Right Customer
To set up a qualifying process, start by understanding what you want when it comes to prospects. You might do this by identifying your most profitable customers and isolating several key characteristics, such as sales revenues or industry, that differentiate them from less profitable customers. Then look for prospects that fit this profile.
Many sales organizations use the phone for the initial qualifying step. Sales reps are given or asked to develop a list of questions designed to find out whether the recipient of the call has the authority, budget and need for the offering. If the prospect passes phone qualification, the salesperson may attempt to schedule a face-to-face meeting.
However, because phoning takes time, it’s often vital to prioritize prospects before dialing and approach the most likely candidates first. To do this initial screen, many salespeople turn to databases. “Spending time to hunt a little is more effective and cost effective in the end,” she says.
Social media may be another good source for qualifying information. Searching feeds for keywords relating to your offering may identify prospects with an interest in what you have to sell.
Galt asks all prospects to fill out a detailed one-page assessment. This helps filter out people who aren’t committed enough to do the assessment and provides her with the detailed information she needs to determine whether a given individual is a good fit.
A Balancing Act
Qualifying may be overdone, if it consumes too much of a sales rep’s time, for example, or if standards are so strict that they steer reps away from prospects who would be likely to buy. So it’s always a balancing act, Cooke points out. “A big hang-up people get is spending too much time qualifying,” she says. “You need to limit it to two or three basic high level things and then get on the phone.”
That being said, the qualifying process often gets easier as it becomes possible to gather additional background about prospects. “As life shifts more online, there will be more information available, more ways to qualify and more sources to help you target what you’re looking for and spend less time digging around,” Cooke says.
The bottom line on qualifying is that it may improve the efficiency of selling activities, without actually replacing them. “Nothing can replace that phone call,” Cooke says.
But don’t underestimate the effect that quality qualifying can have on your sales and your business, the experts caution. “There’s no point in a potential customer wasting their time with a resource that isn’t a fit for them,” Galt says. “It’s really a win-win when it’s done well.”
Read more articles on customer engagement.
This article was originally published on February 6, 2015.