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Wednesday, 22 July 2009

Dont We Qualify Prospects Anymore?

I’ve been struck over the past few weeks how few people recognise the importance of properly qualifying sales prospects. The current vogue for focusing on closing has almost completely ignored the critical role qualification plays in managing the sales process and improving your chances of closing sales and more importantly stops you wasting your time with those companies that have no real intention of purchasing from you. I recall a specific example of a London based business that was struggling for sales going to Manchester to bid for a in a market that they never before won a deal. Surprise, surprise, they didn’t win the deal, when I asked them why they went their answer was well with the shortage of prospects we have to chase down everything.

How much did it cost you to go? I asked “well only about £300 in travel,”

"and the amount of preparation? “About a day each” was the response

“Did you spend much time in finding out what they wanted and how much they’d be prepared to pay?” They said “well we knew we were more expensive but we thought we might swing it.”

I then asked “wouldn’t you have been better spending the time and effort uncovering and nurturing prospects in an area where you could win rather than chasing prospects in an area you can’t.” Their response was a mixture of resignation and embarrassment.

In times of recession prospects are harder to uncover and you need more of them as with increased competition your win ratio declines. Under these circumstances a salesperson will have to choose from a wider pool of prospects to find the deal they can win. Also this has to take place in an environment of greater internal pressure on the sales force and greater external competition. In order to be able to survive in this climate a salesperson must qualify rigorously to separate time wasters from real buyers. It requires a real strength of character to ask difficult questions in this environment but in order to succeed you must ask them.

So what sort of qualification questions do we need to ask? The most important group of questions in this environment is about money, especially in a B2B sale if the money isn’t allocated then you can’t make the sale. The larger the organisation the more rigid the budgeting process is likely to be so the more critical it becomes to understand not only if the money is budgeted but what the budget includes when can it be released and what is the process for doing so. Next you need understand how important the purchase is to the business, again because of the recession the ROI has to be very strong if it’s not again it’s unlikely that the purchase will be made.

The two groups of questions above address the question will the prospect buy. Next you have to identify the likelihood of prospect buying from you.

Your questions now need to centre around the solution the prospect seeks and to get an understanding if their requirements put your product or solution at an advantage or disadvantage. Clearly the questioning needs to try to draw out circumstances where the prospect has issues but where you consider that your prospect or service has a competitive advantage. The more of these you can identify and more importantly get the prospect to accept as important them more likely they will buy from you. You should also get an understanding of the competitive landscape, what your seeking to identify is if there is a bias towards one particular supplier, the stronger that bias (assuming its toward another company) the more you should consider if it worth continuing with the sale.

Poor qualification is at the route of many a lost sale, and it comes from two areas firstly, from not asking qualifying questions systematically when meeting prospects and secondly; commonly weekly qualifying a prospect by avoiding asking those tough questions which might result in you qualifying out a sale.

I would recommend companies to be even more aggressive in their qualification process so they stop wasting time on business they can't win so that they can concentrate on business they should win.

ExigentConsulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business.

We help Business Owners improve the profit performance of their business

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