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Episode 5: What is Lead Qualification

We’d all like to believe that everyone’s a good fit for what we’re selling. But that type of thinking will only end up wasting countless hours and angering countless more prospects.

You need to qualify which leads are a good fit and which ones are a poor fit. This episode, we walkthrough how you can align marketing and sales in pipeline creation and create an ideal customer profile.

 

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Episode Transcription

BOOKBINDER: What's qualified. I ask everybody in the world, "What's qualified?"

Remember that guy? It’s my good friend Steve Bookbinder, CEO and Lead trainer at DM Training.

BOOKBINDER: They go, "Oh, qualified. Well, that's, you know, they have a potential need and they have a potential money." "Oh, I see. Do you ever call anybody that's not qualified. Isn't every single person you call potentially have a need? Potentially you have the money. Isn't that also the case?" That is absolutely the case.

Hi, it's Jorie again from HubSpot, and this is Skill Up -- the show where you’ll learn how to take your sales, marketing, and service skills to the next level. 

An important part of sales enablement is getting marketing involved in generating leads. But for the marketing team to generate leads that your sales team will love, both teams need to have a shared understanding of what a qualified lead is.

You hear that music too? Thank god I’m not going crazy. Bring on the next segment!

Lead qualification is determining if someone has demonstrated that they are a good fit for your product offering.

And typically, there are two forms of lead qualification -- The first is a marketing qualified lead (or better known as an MQL) and the second is a sales qualified lead (known as an SQL).

MQLs are when marketing brings in leads from the content they produce. That lead then gets sent over to sales.

SQLs are the part of the sales process where salespeople determine whether or not the prospect, or lead, sent over from marketing is actually a good fit for the product or service the team is selling.

I know what you might be thinking: Everyone’s a good fit for what I’m selling. If you are thinking that, [deep breath], what an episode you have ahead of you. Strap on in. It’s gonna get wild.

Generally speaking, sales reps will have an ideal customer profile. You know, the best case scenario of who’s most likely to buy your product or service. Reps then compare the prospect’s characteristics to that profile.

If they're a good fit, then they'll continue to build a relationship with that person. And if they’re not a good fit, the salesperson won't try to sell to the prospect.

Dan McDade built his 20 year career on qualifying leads for companies. And he tells a cautionary tale about a company who’s marketing team was a bit too proud of the fact that they could generate leads for the low, low cost of $23 and 15 cents per lead. Sounds great, right? But the sales team refused to contact them. Why? Well, sales said the leads were no good.

McDADE: So I said, why don't you let us take some of them and we'll just call and find out, you know, if what you're saying is right. And um, so we did. And, and as it turns out, only 1.8% of those so-called leads were actually even with the qualified company, much less a lead. So 1.8% which means that the actual cost per qualified lead was $2,660 not $23 and 15 cents for 2,660 hours. 

Now, the punchline to the story is, is that I went to my SVP of sales friend. He said, no, I'm not all surprised. I went to the marketing department and they said, "Well, that's still too important as source of leads for us. We just can't afford to have you qualify them, so we're going to send them directly to sales." And that happens over and over again, and it's a crime because it's, you know, salespeople are getting dumped on.

Don't let this crime happen at your company. 

As exciting-a-metric as cost per lead is, the main thing a marketing team should be concerned about is generating leads that their sales team can close into customers.

Here's Tracy Eye-ler. CMO at Inside View and coauthor of Aligned to Achieve. 

EILER: Focus on pipeline, I think is really critical. I think us marketers grew up obsessing over top of funnel and you know how many new net new leads we were coming in and how they were converting and so on. But it's like, okay, once sales accepts them, then that's their problem.

What they do with that and whether it turns into pipeline or not. Marketers need to obsess about pipeline just as much as the sellers do. And when you do. You know, when you do have stuff on that you end up so much more aligned. We just said, you know what, we're not going to fight about credit. We are just going to understand how much pipeline is required.

And then we are going to work towards that goal full stop. And, uh, and honestly that just took so much tension out when marketing said, look, we're just going to sign up for meeting the pipeline goal period. Right? And we're in it together and it worked really well.]

If you can get marketing and sales to be unified in their focus on pipeline creation, you'll be well on your way to sales enablement success. 

But in order for that to happen, marketing and sales have to be operating under a shared definition of what lead qualification is.

Two segments? For me?

In order to define a qualified lead, you need to bring marketing and sales together and have them jointly answer two key questions. 

One, what makes someone a good fit for your offering?

And two which actions demonstrate that someone is sales ready? 

Let's take a hard look at each of these. First, what makes someone a good fit for your offering?

One way to answer this question is to create an ideal customer profile. An ideal customer profile is a checklist of the most basic attributes someone needs to have in order to be successful as your customer. 

For example, if you sell condos in Seattle, your leads need to meet these four requirements -- wants to live in Seattle, has an annual income of at least $90,000, has a credit score of at least 700, and can pass a background check.

These are clear requirements. A person either meets them or they don't. If someone meets all four of them, they're a great fit for your condos. Otherwise they’re really not gonna work out.

Janet Cominos.. is the CEO of a company called Spotted Media. Spotted's technology analyzes thousands of celebrity photos everyday to determine the brands that celebrities choose to wear and use in everyday life.

Then, Spotted uses these photos to produce social ads for their clients. This is the third time Janet has helped an early stage companies scale up by selling into big consumer brands, and she started by creating an ideal customer profile. 

COMINOS: What we did was we mapped out, I think five or six different, um, kind of qualifiers that, you know, if we were able to check all, all those six boxes, that meant that that was a customer who we could target.

Um, and you know, very quickly after the first handful of conversations with brands, we realized that, you know, these were very large, typically pretty large consumer facing brands. Um, who, uh, where you can actually, you know, you can see the brand in a photo. So it's, you know, the brand has to be discernible, so, you know, footwear or jewelry or, uh, you know, an automotive vehicle.

Um, and the brand has to be investing heavily in media, which most consumer brands are. And ideally, you know, paid social advertising because all of the outputs of our platform are, you know, Facebook and Instagram ads, um, and it's also very helpful if the brand could have executed their media in house.

So, didn't, you know, push all their media through an outside agency. And the brand generally had to have, you know, roughly a thousand LinkedIn employees or greater. 

So, you know, we start with that set of criteria and, uh, we were very discernible about which brands we spent our time targeting.

And so that our first set of customers, where the right types of customers.

So in order to be Spotted Media's customer, you have to one, be a consumer brand, that two produces a product that's discernible in a photo. And you have to, three, be investing heavily in media, and four executing that media in house. 

And you have to be big, that's number five, which spotted defines as having more than a thousand employees on LinkedIn. If you check those five boxes, you're a good fit for Spotted Services. Otherwise you aren't. 

For your own company, you should be able to create a similar list. What are the key traits a person or organization has to have in order to be a good fit for your offering?

List them out and turn them into a checklist. That’s how you’ll answer the question of whether someone would be a good fit as your customer. 

As much as possible, it's best to keep this part of lead qualification binary. Someone is either a good fit or they're a poor fit. 

That’s not to say that anyone who isn't a perfect fit for your offering is automatically disqualified from talking to your team. It simply means that the people who are a great fit should be your top priority.—-

Next episode, we’ll tackle how exactly to determine the fit and sales readiness of prospects. Hey, I’ll see you there.