Tuesday
Oct302012

How to Qualify a Prospect in 5 Easy Steps

In my previous article, I described the difference between suspects and prospects. Let's say that your marketing campaign went well and several of your suspects have identified themselves as prospects. A precarious step in the selling process, and one that's a common mistake for sales professionals, business owners and their staff, is treating all the incoming prospects as if they were all the same. The truth is that just because a prospect responded to a mailer or gave up their contact information in exchange for a freebie, doesn't necessarily mean that they want, need or can afford your product or service.

That's where qualifying your prospect comes into play. Qualifying your prospect simply means that you're exploring how likely that prospect is to becoming a buying customer before you put the time and effort in to guiding their decision to buy from you. Qualifying your prospect isn't  a complicated process, in fact, it's as simple as a five-step process which I've outlined below. By walking each prospect through the five-step qualification process, you can boost your sales and your efficiency and make more money for your business.

Step #1: Do They Have a Budget?

It doesn't matter how much a person actually wants or needs your product or service if they don't have the money to pay for it, right? I'm sure that there's a ton of people who would love to own an exotic Italian sports car, but the majority of people simply can't afford the $350,000 price tag for one. So a sales professional who wants to sell that exotic Italian sports car needs to reserve their time to only the select number of people who can actually afford to purchase one, rather than spinning their wheels talking to people who love the car, but will never be able to afford one.

That's why qualifying the prospect's budget is the first step in the five-step qualification process for a new prospect because if they simply can't afford what you're offering, then there's no point in moving forward with the sales process. You can get a good feel of whether or not they can afford your product or service by simply asking them what their budget is. You can also explain the price range of your product or service and ask them if that's within their budget. There's many different ways to qualify your prospect's budget, so find an approach that's comfortable for you and use it every time you're qualifying a new prospect.

Step #2: Do They Have Authority?

When I was in college, I worked as a front desk paper-pusher. Despite the sign on the front door of the office that read "No soliciting," several B-to-B sales reps would walk in daily hawking their wares. Quite a number of these sales reps spent a great deal of time making a sales presentation to me in an attempt to convince me to buy. The only problem was that at the time I was about as low on the corporate totem pole as a person could be, so making a sales pitch to me was as useful to them as trying to sell a house to a baby.

Making your sales pitch to someone who isn't in the position or doesn't have the authority to write you a check is pointless. And in sales, time management is essential, so focusing your communication only on those key individuals that have the authority to write you a check is the key.

But often it's not as simple as that. Sometimes, the front-end "gatekeepers" (customer service, secretaries, call-takers, etc.) have been given explicit instructions from upper management to do what they must to get rid of any solicitors. In other circumstances, a middle manager may take your sales meeting because he or she is the head of their department, but they may not have any real power to cut you that check. You can save yourself a ton of wasted time by simply asking the question, "Who is responsible for making a purchase decision?" And then deal only with that person.

When asking this question, be careful of answers involving multiple decision-makers such as, "Well, I run the department, but I have to run it by my partner, boss, accounting, etc.") In my experience, that generally means the person is either a middle manager who doesn't want to admit that they don't have the power to make a purchasing decision, or they're simply fielding your solicitation for their boss. You don't want to deal with middle managers. You want to deal directly with the decision-maker themselves.

I personally don't like dealing with committees because they rarely ever agree with each other and they take far too long to come to a decision so I choose to focus in on opportunities that don't involve a handful of people. But in some cases, you might have to face a committee because that's how their buying process works. It's often like this in the corporate environment where a buying decision can mean a sale of up to several million dollars. In those cases, I would try to arrange meetings where all the key decision makers are present so everyone gets the same presentation and everyone gets their own questions answered. Follow up is important in committee buying situations because they usually have so much going on that it's fairly easy for your deal to get pushed on the back burner. You'll want to gently coax your deal back on the front burner until a decision has been made.

Step #3: Do they Have a Need?

Every introductory sales course will tell you that it's pointless sell ice to an Eskimo, but that's exactly what I see novice sales professionals and business owners do on a daily basis. There's another name for that - SPAM! And even though it might not be email SPAM, soliciting someone who has no immediate need, desire or interest for what you're offering is just a waste of their time and yours.

Let's explore the psychology behind when a prospect says, "I'm interested." Behind every desire to buy, there's a need to solve a problem and people buy your products or services to solve that problem. When I buy a hammer, it's not because I want a hammer; it's because I have nails that I need to drive into wood 2 x 4's to ultimately repair my garage. In this particular example, there are two expressed needs: 1) an intermediate need to drive nails into wood and 2) an ultimate need to repair his garage. Where it gets tricky is that usually that underlying need is hidden and you'll have to probe a bit using carefully directly questions to uncover their needs. Once you've identified their needs, you'll be able to position your product or service in a way that best illustrates its ability to solve their problems and fill their needs. 

Often you'll find that a prospect has a need that they themselves might not be aware of. This is where education plays a part in the buying process to qualify a prospect. A seasoned sales professional will have the ability to educate their prospect and identify genuine needs that they have that they weren't aware of before. For example, all business owners have a need to save money, but they might not be aware of all the options to do that. If you educate that business owner on, let's say, your green recycle services that not only saves the environment, but also puts some money back in the pocket of the business owner, well then you've just created a need where there was none before. In my copywriting business, many business owners don't know that they need the services of a copywriter, but when I explain to them that I'm able to craft marketing pieces that can generally outperform their control and bring in more leads and sales; they get interested because all businesses have a need to bring in more leads and make more sales.

Step #4: Do They Have a Time Frame?

You'll want to identify how soon your prospect wants to purchase your product or service. The sooner their time frame is, the quicker and easier the sale will be. However, if their time frame is long or unsure, then you might be spinning your wheels for months without any results, simply because you failed to qualify their time frame. By asking them what the time frame for their buying decision is; you can tailor your sales process and your efforts accordingly.

In the case where your prospect doesn't have any particular time frame in making a buying decision, I would recommend creating an artificial deadline for them and incentivize taking action on that deadline with some sort of value-added perk. For example, if I were selling an "at-home" informational diet program, I could throw in a 30-day meal plan, a book or a series of success case studies (or all three of them together) if they make a purchase by the end of the week.  Often creating a deadline for your prospects is enough to polarize them into making a decision to buy from you.

Step #5: Do They Have Compatibility?

The final step in the qualification process is simply whether or not you feel that your prospect would make a good customer for your business. Are they compatible with your philosophy, business practices, communication style and/or ethics? Some sales professionals leave this one out which is fine, but I recommend that you keep step #5 if you're selling professional services, high ticket products or continuity products. Most of us have at one point in our careers dealt with "problem child" customers and they are a big drain on resources. This drain on resources might outweigh the value of having them as a customer in the first place, so step #5 helps you weed out those prospects who you feel are not compatible to your business practices. 

By this point in the selling process you would have had several meetings with your prospect and you should know them fairly well. So ask yourself, "Is this a person that I would enjoy doing business with in the future?" Let your gut instinct tell you "yes" or "no" on this one.

Conclusion

When you engage a new prospect, always keep this five-step process in your mind and you'll end up making more money, saving more time and having happier clients.

About the Author

Tristan Loo is a Copywriter and Marketing Strategist based out of San Diego, California. His passion is helping businesses of all shapes and sizes generate more sales through better written communication. To contact Tristan, click here.

 

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