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Qualifying Prospects

Qualifying Prospects

Today we're going to talk all about how to qualify your prospects.

There are a number of different areas to think about when it comes to more effectively qualifying your prospects:

  • Buyer personas
  • Product/market fit
  • Lead qualification criteria -- one of the most important areas of this podcast episode
  • Sales productivity tools and marketing tools -- so they support your lead qualification
  • The intersection of fit and interest
  • Thought leadership resources and educational content -- so you can have more meaningful conversations with prospects
  • Who else should attend?

Buyer Personas

First up, when it comes to qualifying prospects, think clearly about who the most important economic buyers are that you want to be having conversations with.

I often talk about the idea of developing a buyer persona. Just to make sure that you and I are on the same page: a buyer persona is based on actual research and some educated speculation.

Your buyer persona is a framework for talking about one of your ideal clients, one at a time.

So if you have two different kinds of Ideal clients that your company wants to be engaging with, if there are two different kinds of prospects you want to be having these really meaningful conversations with, you need to develop a buyer persona for each of them.

Sometimes buyer personas align with job roles or job titles. Sometimes they align with different kinds of Industries or vertical markets.

But again, a buyer persona is a semi-fictional representation of an ideal client based on actual research and some educated speculation.

It can't all be based on speculation or guesswork.

You need to do actual research:

  • Face-to-face conversations -- The best, most thorough way to do this research is face-to-face conversations at your clients’ offices, in their own environment.
  • Video conferences or phone interviews -- Second choice, if an in-person interview isn’t practical, interview by video conference or phone.  Sometimes you can’t get access to clients, or the clients don’t yet exist.
  • Surveys -- As a last resort, or if you need input from a very large number of clients or stakeholders, send out a survey.
  • Lead intelligence -- Look at the lead intelligence that clients or other stakeholders generate in your marketing software.
  • Social media -- Study their LinkedIn profiles.
  • Media interviews and conference sessions -- Read or watch what they say when they're interviewed by media: in print or online media, or when recordings of their interviews, speeches, or sessions surface on YouTube or SoundCloud.

All of these research techniques for buyer personas can help you get their words about

  • What it is that is most important to them?
  • What are their highest priorities?
  • Their goals, plans, challenges, and struggles
  • What’s keeping them up at 2 o’clock in the morning?
  • What do they value most?
  • Who do they report to? Who reports to them?
  • Where do they hang out online? Where do they hang out offline?
  • And what do they crave most from a company like yours?

All of this research should get folded into your buyer personas, so you can figure out who's a good fit prospect and who’s a bad fit prospect.

With any luck, your findings will be very cut and dry. You’ll know exactly who is a good fit and who is a bad fit. But sometimes there are gray areas, and you need to iterate over time.

If you’re brand new to developing buyer personas, prioritize and only develop two buyer personas right out of the gate:

  1. Your primary buyer persona -- Who's the most important economic buyer? Who’s the most important kind of prospect to your company?
  2. Your secondary buyer persona -- Who's the second most important kind of prospect?

You can always come back and build a third, fourth, or fifth buyer persona later on.

The only other thing, right out of the gate that I recommend:

Identifying your negative buyer personas. Who's always going to be a bad fit? And is there a way that you can identify what that looks like as early as possible? So you don’t waste your time and resources engaging badly qualified prospects, with prospects that just aren't qualified.

So that's how buyer personas fit into all of this.

Product/Market Fit

The next thing to think about is product/market fit. If your company has the luxury of having somebody that's in a product management role or product marketing role, chances are a lot of these challenges get discussed very frequently.

If your company is not big enough to have a full-time product manager or product marketer,  sometimes an engineer, technical co-founder, or chief technology officer (CTO) takes on these responsibilities.  But either way, somebody is making the decision about your product strategy -- which products and services your company offers.

Product/market fit refers to is the degree to which your company can satisfy strong demand to scale the business.

When your company has achieved product/market fit, you will know

  • Who your ideal clients are
  • Which products and services they purchase
  • The price points that your ideal clients purchase those products and services at
  • How often, how frequently, they come back to purchase more
  • The duration of a purchase or recurring revenue

If your company has answers to most or all of these questions, your company is said to have achieved product/market fit.

When you achieved that, it becomes a lot easier to know who are the best prospects that you should be spending your time engaging with.

Without product/market fit, it's kind of a shot in the dark, and you're going to be doing a lot of iteration.

Along the same lines, I’m often asked by people who are scaling up their business who the ideal kind of salesperson or sales manager is to hire right out of the gate. And my usual answer with a small company, startup, or a company just starting to scale up is to be very careful.

You may be really blown away by the resume experience of somebody that worked for the Fortune 1000 competitor that you're going after.

The reality though: if somebody was a sales rep in a Fortune 1000 company, by the time that person got there, the sales playbook had already been through lots and lots of trial and error, and iterations.

That person would’ve likely had a tremendous amount of support and resources that were already fully built out for them: sales manager, sales training, sales coaching, and sales mentoring -- all that good stuff.

But when somebody like that is thrust into more of an entrepreneurial situation, that person is in a very different environment.

So the ideal first hire, many times for a startup, is somebody that's had that experience working in a startup. Because that first hire needs to be really resourceful. That new sales hire is going to need to work with the CTO, the head engineer, or the technical co-founder.

Because there's going to be a lot of iteration on products and services.

“Okay, you know we could have closed this deal if our product or service only had this feature or these two features.”

Or, “I hear this request a lot. Is there any way we could build this functionality into a premium version or an add-on version to make it easier to close this kind of sale?”

These are the kinds of things that come up in product/market fit conversations that are really critical to make sure that you're talking to the right kinds of prospects.

Lead Qualification Criteria

So besides buyer personas and product/market fit, what does lead qualification criteria look like for your company?

The answer is going to vary tremendously depending on

  • Your business model
  • Where you're located
  • Who your ideal clients are -- again that's why we're talking about buyer personas and product/market fit before you get too far along
  1. Geographic location -- One of the biggest things that companies -- small- and medium-sized companies and enterprise companies -- usually contend with is the geographic area that a lead or prospect should be in to be a good fit for your company. If your company’s geographic scope is just a metropolitan area, if somebody is located outside your metro area, that person is probably not a good fit. If you sell statewide, but somebody's located out of state, that person may not be a good fit either. So first and foremost, look at geography as the first cut for whether a prospect is qualified or not.
  2. Company size --  Another big thing that most companies recognize, after they’ve figured out product/market fit or on their way of figuring that out, is what’s the right size company that’s just right. Think like Goldilocks; not too big, not too small. If the prospect’s company is too big, maybe it's too long of a sales cycle. Maybe it's too political. Maybe the enterprise-sized company needs advanced features that your company can’t provide just yet. If the prospect’s company is too small, maybe it can't afford your product or service. Or maybe they don't value it properly. So this is all about finding that right sweet spot of size. There are two ways to play size. Size can be based on the number of employees. And size can sometimes be by their annual revenue. But either way, there's typically a size indicator that most companies use to determine whether a prospect is in fact qualified.
  3. Business model -- The nature of their business can also be hugely impactful on whether someone is a good fit prospect for your company. Let's say that your business provides financial services or something insurance-related. And there are three or four different categories of businesses that your company knows exceptionally well: accounting practices, architecture firms, engineering firms, and law firms. If somebody comes along that isn’t in one of those four categories, is that prospect a good fit for your company?  Maybe, maybe not. But for many companies, their qualification criteria isn't just about location or size. It includes the nature of that particular prospect’s business and whether your company really has the expertise to serve them.
  4. Department and Role --  Many times qualifying a prospect comes down to understanding their role within a particular company. For example, is that person in sales? Marketing? Finance? Operations? Support? Engineering? This can many times make a big difference for whether a prospect is qualified. This kind of criteria also depends on whether your company is focused on B2B or B2C. I can also depend on whether your products and services are intended for potentially everyone across a company or just specific departments and roles. But definitely that department, role, and job title make a big difference.
  5. Existing alternatives/current investments --  Look at some of the existing alternatives to your products and services that a prospect might already be using. Or some of the existing current investments that they have that may be particularly good predictors or particularly bad predictors of whether the company is a qualified prospect for you.
  6. Their challenge with your value proposition -- When qualifying someone either in person, by phone, or by website form, ask what that person’s biggest challenge with X is (your product or service category). What's the problem that you solve? And does their stated challenge, in their own words, line up with your value proposition? Let's say for example that own a property and casualty insurance agency in South Florida. You could ask the question for example, “What's your biggest insurance challenge?” Or “what's the biggest question that you have about better insuring your company?” Or “what's the biggest struggle that you have with your insurance?” That open-ended question that’s answered in their own words -- what that person sees as their biggest roadblock -- can be hugely helpful in deciding whether this prospect is qualified or not.

Sales Productivity Tools and Marketing Tools

So once you have this lead qualification down and you have answers to these six different factors, the next question you may be asking yourself is how your productivity tools can support this as part of your sales process.

Can your productivity tools support this? Can your tools efficiently collect and manage this data for you?

If you’re using a customer relationship management (CRM) system, there are more than likely some contact properties or fields that are there by default, that are installed out of the box. With those default fields, can you customize certain contact properties to be able to capture this information consistently? If needed, can you add additional contact properties or custom fields to be able to capture this information with proper drop-down list, checkboxes, or radio buttons.

The key thing: the more you can structure this data, so that it is captured consistently, the easier it's going to be for you to be able to use that data in the future -- either for segmenting your leads, personalization, or reporting.

How many leads do you have in certain segments? Make sure that your tools support this.

Way too many sales professionals are still using spreadsheets -- or worse -- to organize their leads and prospects -- which is not really an efficient way to do things anymore. That said, make sure that you're not spending burdensome amounts of time in your CRM. Make sure that you locate sales productivity tools that help you as opposed to slowing you down. Look for the ability to:

  • Automatically log emails
  • Automatically log phone calls
  • Provide basic background information about a company
  • Transcribe conversations
  • Set up task templates
  • Manage email templates
  • Manage document templates

Be sure that you have a full suite of sales productivity tools that help you work faster, not slow you down.

But again, in terms of collecting data for qualifying prospects, make sure that your tools can capture data in a structured way with form properties, the right fields, and the right segmentation strategy for lead nurturing and sales cycle acceleration -- and down the road potentially for scoring your leads, to help you separate between the leads that are worth spending a lot of time on and those that are just marginal.

The Intersection of Fit and Interest

So aside from your criteria and tools, there two different variables to think about with regards to the degree to which a particular prospect is qualified, unqualified, or somewhere in between -- there’s a continuum.

Think about what their level of interest is in your products and services.

You could have a prospect that seems like a superbly great fit for your company:

  • The right location
  • The right company size
  • Their business model is one of the three or four business models you deal with all of the time
  • Your contact that you’re about to be introduced to is in the perfect role: CEO, COO, or CFO -- or whoever you deal with most often
  • Their challenge matches up perfectly with your value proposition

This prospect is a perfect fit here, except for one major problem:

No one at this company wants your help.

The CEO is so uninterested in your company and value proposition that even a warm email introduction from her brother-in-law can’t get you a meeting. You place multiple phone calls and send multiple emails. All attempts fall completely flat.

So what good is the “perfect” fit if that prospect is not interested?

Conversely, you can have someone that's intensely interested in your products and services, but this person works for a Fortune 1000 company. And your products and services are just not sophisticated enough for those kinds of needs.

Or maybe your prospect is the founder of a startup that wants and needs your company’s help, but has no budget.

So what we're really looking for:

Qualified prospects with strong fit and strong interest

Think about four quadrants:

  • Fit on the x-axis
  • Interest on the y-axis

And think about four boxes.

Qualified prospects with strong fit and strong interest

What you ideally want is the upper right quadrant, where fit is high and interest is high.

In the bottom left quadrant, you have low fit and low interest. When you find prospects that have low fit and low interest, you’ll likely want to (gently) kick disqualified prospects to the curb relatively quickly so you don't waste a lot of resources on them.

Then you have borderline cases; where there’s some fit and some interest -- where you have to evaluate on a case-by-case basis.

In terms of prioritizing your efforts:

  • Strong fit and strong interest first (top priority)
  • Weak fit and weak interest last (no/minimal priority)
  • Time permitting, work on prospects in the other two quadrants where there’s some fit or interest, but not both (marginal priority)

Thought Leadership Resources and Educational Content

Another big thing to think about, when qualifying your prospects: are they coachable?

Is this prospect open to your advice and able to be educated? Will this prospect be interested in the educational resources you've built up that are a perfect fit for that kind of buyer persona?

The way I usually approach this: If someone cold comes to us and says, “Hey I was referred to you by Bob” or “I found your website.”

But when I look at that person’s lead intelligence, before filling out a Contact Us page, and see this person didn't do much looking around on our website. This person engaged is what we call “funnel jumping.”

This person jumped down to the bottom of the sales funnel and said, “I’m sales ready.” But it doesn’t look like this person has allowed us to educate or indoctrinate him yet about what matters most in the buyer’s journey for our best-fit clients.

So the challenge: this person thinks that he has all the information that he needs to make an informed purchase decision. But he may not. This is what happens when someone is jumping to the bottom of the funnel but isn’t qualified to be there quite yet.

Here’s the usual push back on our part:

“To help you get the most value out of our meeting, here's what I recommend that you read over or watch before we meet. Now it's going to take you 15 to 20 minutes. But I promise you that if you're serious about that challenge that you mentioned, this is really important information to help you make the right decision. You do want to make the right decision? So can you take the time to review this resource at least one business day before we meet?”

Most people will say “Yes, of course.”  (Or “Yes, but can you give me another day or two to give this the time it needs? Can we meet next week instead?”

Every once in a while, when I get pushback: “I don’t have time for this. I just need to know what it’s going to cost.”

My response: “Why don't you give me a call when you have more time, and I’ll be happy to set up a time for us to meet. Based on what you mentioned, this particular resource is going to be a complete game-changer for you. It’s going to give you a real solid overview of all the things you should be thinking about to make sure that you make the right decision for your company.”

What you're doing at this stage: qualifying your prospects and testing their commitment to see if they're really serious about working with you and your company. Or if this person is just shopping prices. Or if it's just a casual interest.

In the modern buyer’s journey, where people are doing 70% to 80% of their research before they get to you, you may not have intercepted this person early enough. And this particular person may not be sincere about working with your company.

His boss may have just told him to get three quotes or five bids. And you're just bid number four or five.

There's no way in heck that you can convince him and his boss that you have helpful advice they ought to be listening to because you’re too late. They’ve already made up their mind -- unless you are the cheapest option and we know that's a very slippery slope to be competing on price.

So that's another strategy for qualifying prospects when you have some highly-relevant thought leadership resources that are perfectly targeted and incredibly valuable for a particular buyer persona just like theirs, to better qualify their level of interest -- especially if their interest looks marginal.

Who Else Should Attend?

To qualify interest, another big area to look at is how many stakeholders are typically involved in a purchase decision like this.

This brings your prospect qualification back full circle to understanding your primary and secondary buyer personas -- and the degree to which your company has achieved product/market fit.

This brings us to another big consideration:  Account-based marketing (ABM).

Based on what you know about this buyer person and their buyer’s journey, will the decision to purchase your product or service be made by committee?

Account-based marketing is a sales strategy where you target a particular company, rather than an individual prospect within that company, with the idea that multiple people from different teams will be involved in the decision-making process.

In other words, you could get to the CEO of a company with 5,000 employees. And it still may not be enough because that CEO is going to push the decision back to their team.

So if you know that, because you deal with companies just like this all the time, and you’ve identified the two or three people that need to be involved in this conversion through your insightful lead research on Google and LinkedIn, there’s another prospect qualification tactic to work.

When your contact person asks you to come in and meet with him, sometimes you want to push back and say, “Hey look. For companies like yours, typically the biggest challenge is getting the right level of buy-in from this department or that department. This team or that team. So the question for you: to help your company make the best decision, who else should we invite to this meeting? Who else needs to provide input?”

And see how he answers. Because this can also make an enormous difference for sizing up whether this company is a good fit and sizing up their level of interest to be qualified to work with your company.

The Bottom Line on Qualifying Prospects

In this episode, we've been talking all about how to better qualify your prospects.

We looked at

  • The importance of buyer personas
  • Product/market fit
  • Lead qualification criteria -- six different areas that are usually pretty important to small- and medium-sized businesses in South Florida
  • Sales productivity tools and marketing tools --making sure that your tools support collecting data in a structured way, so you can use it down the road to be better organized and more productive
  • The intersection of fit and interest -- and how ideally we want a lot of both fit and interest, as opposed to very little of each (sometimes we have to take a little bit of fit and little fit of interest and evaluate where you’re at)
  • Thought leadership resources and educational content -- build up trust and consensus even before you get to that initial meeting
  • Who else should attend? -- underscoring importance of getting the right people around the table to have these kinds of conversations

And all of this will help you better qualify your prospects as you look to grow your leads, sales opportunities, your customer base, and your revenue for your company in South Florida.

 

I'm so glad to have had you with us for this episode of the South Florida CEO Podcast.

I'm Joshua Feinberg, and we look forward to seeing you back again next time.

 

If you learned something valuable from this episode, please subscribe to the South Florida CEO Podcast on iTunes and leave us a review.

To get notified about upcoming episodes, be sure to visit www.sphomerun.com/ceo

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