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A Common Definition of a Qualified Lead is Key to Your Success

By M.H. "Mac" McIntosh, CBC

You may think you know what a qualified sales lead is, but if you asked your fellow marketers, as well as your salespeople and sales executives, would they all have the same definition?
 
Unfortunately, probably not.
 
However, if a business-to-business sales lead generation program is to succeed, everyone in marketing and sales must share a common definition of a qualified sales lead.
 
If you all agree from the start on what a qualified lead is, the marketing team stands a better chance of generating leads that will be valuable to the salespeople. And the company stands a better chance of salespeople following up with those leads and turning them into sales.
 
So it’s important to develop, then confirm, the qualified-lead definition in writing, with all parties. 
 
Characteristics of a Qualified Sales Lead
 
Because the definition is different for each company, you must do some work to define a qualified lead at your company. General questions that need to be answered in order to determine that a lead is qualified include the following:

• Does the prospect have a need or an application for your product or service?
• What is the prospect’s role in the decision-making process?
• What is the prospect’s timing for purchase or implementation?
• What is the status of the prospect’s budget?
• What is the size of the opportunity?

However, additional or more detailed criteria may be needed to define qualified leads at some companies. This starts with a company contact who admits to a business problem, either latently or directly, that could be solved by the product and/or service you are selling. Here are a couple of examples of problems/solutions:
 
Problem: The company’s current disparate computer systems require employees to perform redundant data entry, which wastes their time and reduces efficiency.

Solution: Your software product would enable single data entry.

Problem: The company is spending a fortune on electricity for lighting and air conditioning.

Solution: Your energy-efficient lighting cuts electrical usage by 15-20% and generates less heat, reducing air conditioning costs by 5-10%.
 
From a sales perspective, in addition to having a business problem that your company’s products or services can solve, truly qualified leads must meet other conditions. For example:

• They must have an established project in play. This is apparent if a task force has already been appointed to solve the problem or, for a small company, if the inquirer’s boss asked him or her to find a solution or make a recommendation.

• They already have or believe they can find the money to buy a solution to the problem. Or they are in the process of developing a budget.

• They plan to purchase within a reasonable amount of time.

• They must have the power to get you in front of the appropriate final decision maker(s) when the time is right. 

Use a Lead Scoring Approach
 
As you develop your lead qualification criteria, keep in mind that lead scoring can be an effective method of determining which leads are qualified and ready for sales follow-up. 
 
To score a lead, assign points based on how well the prospect meets each of your lead-qualification criteria. Consider the following example:

• Funding, ready to go:  50 points
• Budget in formulation:  30 points
• No budget for project:  0 points
• Is the decision maker:  50 points
• Is the recommender: 30 points
• Is an influencer:  10 points
• Has a clear need for product:  50 points
• Plans to buy within six months:  50 points
• Plans to buy in one year or later:  10 points
• Plans to buy $50,000 of product:  50 points
• Plans to buy less than $100 of product:  0 points

To score a lead, add up all the points. Then, for example, those with 150 or more points are determined to be qualified leads, ready to be sent to your salespeople, reps, resellers or distributors for follow-up.
 
Where Do You Start?
 
Convene a cross-functional team to develop your company's definition of a qualified lead.  Invite senior managers and key staff people from sales and marketing to participate. 
 
Consider using the lead-qualification criteria and scoring examples mentioned earlier in this article as discussion starters.
 
Next, distill what you learn into a draft definition, then run it by all the participants for further discussion and approval.
 
If there is still disagreement, let your company’s senior sales management make the final decision.
  
Why Bother?
 
With marketing and sales all using the same definition of a qualified sales lead, the debate about lead quality stops and is replaced by constructive discussions about how to create a steady stream of qualified leads that sales will follow up and turn into new business.

M. H. "Mac" McIntosh is described by many as one of America's leading business-to-business sales and marketing consultants and marketing speakers. He is president of Mac McIntosh Incorporated, a sales and marketing consulting firm specializing in helping companies get more high-quality sales leads and turn them into sales. More about Mac...