By Neil Smith
Opportunity qualification is the standard second stage in the sales cycle and sales funnel. Post lead generation all our fellow inside sales reps are busy slogging making calls to all of these prospective opportunities/ raw leads freshly churned out of the market research mill, and trying to make them qualified leads/ qualified opportunities. Now, the question arises, what is the credibility of these leads, what is the probable conversion ratio for them, how many of these opportunities are going to go beyond the preliminary meeting round and finally how many them will be our clients & how many of them will be engaged customers. In short what is the lead quality?
Defining Quality Leads
Coming back to our point, what defines a qualified lead to be a good one? Unfortunately there is no set and frozen answer to this. The collective expertise opinion sums up saying ‘it depends’. Our take in a single line for precisely defining a good sales opportunity is – a workable lead, with a defined requirement/pain point, a clear budget guideline, and open to evaluate a solution, all ending with a set timeline of taking a decision. Having a common definition of opportunity qualification is essential to effective lead to opportunity conversions in the closure funnel. It’s just not enough to pass on a lead for the next level only if he is willing to speak further and is open to chat on for an appointment setting scenario.
Actual Quality of B2B Leads
Research shows 90% of the time a lead will be not be an opportunity. 50% of qualified leads are not yet ready to buy (Source: Gleanster Research). Only 25% of leads are legitimate and should advance to sales (Source: Gleanster Research). 61% of B2B marketers send all leads directly to Sales; however, only 27% of those leads will be qualified (Source: MarketingSherpa).
Opportunity Qualification Questions & Process
An effective lead generation process gives us a good understanding of the prospect and his requirements. The need for an effective opportunity qualification program cannot be undermined. Without such a process in place the lead quality cannot be defined. Also it gives a sense of direction and forecasting of standing ability of the leads charted before the SDRs to get on a call with the prospects. It is something close to the age old BANT (Budget Authority Need Time) scale which is the yard stick for any efficient opportunity qualification criteria. It works around factors like:
- Current technology/service in use by the organization.
- A clear understanding of the prospects pain/needs and what they would like to change with current technology
- Time frame on which they are looking to make a change (3-6 months, 6-12 months etc)
- Decision making process- Who is involved- From C-Level to junior reps
- Budgetary process, expansions and also constrains
- Set a specific meeting time with the outside rep!
Lead Qualification Criterion beyond BANT
Revolution takes place with time, what works well in the present scenario is at times contrary to BANT. Whereas in the era of BANT the prospect was asked about the need essentials and his budget, present days are about determining paying capabilities and then creating the need. Once you have checked on authority and need, you can easily build urgency and help them figure out how they are going to fund it. In the same context there also are some new marketing automation tools catching buzz for inbound leads as Eloqua, Marketo, and Pardot etc.
There is a continuing debate in the sales world as to the advantages of more or less opportunity qualifications. Basic type of leads, which are as limited as a name and an email address, will cost very less, but conversion rates will be very low and potentially even non-existent (which are doubtful of reaching the appointment setting level). Additionally, greater investments will be required in order to convert each lead to a sale. With a good qualified opportunity, a better conversion rate is assured. The higher the cost, the better the rate required to generate a good ROI. Ultimately, it is a question of testing, the solutions will vary for different products, but in general, a greater level of qualification has proven to deliver cent per cent results.
Most of the organizations already have a lead segmentation and lead qualification criteria cum process in place, the only need is to make it a little structured and funneled which will help us to target the best qualified opportunity on time and make it a sale on time. Here, is a check and pointer list to customize your lead set which will help you identify the correct opportunity