How to Qualify a Sales Prospect

In the world of sales, there are prospects, and there are “suspects.” Prospects are real, live potential clients who have a need for your services or products, are able and willing to pay for them and have the authority to make the buy decision. On the other hand, suspects will devour your time asking for more and more information, without ever actually committing to a deal. Suspects will leave you hanging, and any salesperson knows that “hanging” is not where they want to be.

The way you separate the suspects from the prospects is by qualifying them. Before you can sell anything, three conditions have to exist: Customers must be in need of your products or services, they must have the means and the desire to purchase whatever it is that you’re selling, and third, they must have the authority or ability to make the decision to buy. These are the three essentials that you’re looking for when you qualify someone.

A surprising number of sales professionals do little or no qualifying of potential customers. Maybe they don’t know how to do it; maybe they don’t feel comfortable taking control of the sales process right from the beginning (which is a necessary part of qualifying). Or perhaps they are reluctant to qualify customers because they don’t really want to find out that this prospect isn’t going to pan out and they need to move on. Optimism is in the genetic code of every good salesperson, and too many hold on for too long to the idea that the prospect can be convinced to buy. They don’t want to hear no. But successful salespeople “go for the no” since it’s better to hear that word sooner than later.

The cost of not qualifying prospects is high: The time and energy (and sometimes financial resources) you devoted to selling to an unqualified potential buyer is wasted. Somewhere out there is a real customer that you didn’t have time to sell to because you were busy with a dead-end suspect. On top of that, if you’re wasting time on the wrong prospects, you’re probably nursing the false expectation of new business. For many sales organizations, a low conversion rate — the number of prospects that actually turn into customers — is really a problem of not properly qualifying your prospects. Other signs that you or your salespeople aren’t properly qualifying customers include painfully long selling cycles, overly optimistic sales forecasts, price discounting, eroding profit margins and the kind of over-promising that can breed intense customer dissatisfaction.

Before your first meeting with the prospect, it’s important to find out whether it’s worth spending any time to meet with them. This is an early qualification round that requires checking on your meeting time (“We are scheduled to meet tomorrow for 45 minutes, do you still have that time to meet with me?”), getting permission to ask questions (“I need to ask you some questions to see if we’re a good fit, is it OK to do that?”), and authorizing the party to say no (“Most people are hesitant to say no, but if you feel this doesn’t work, would you feel comfortable telling me?”). It also requires the salesperson to establish a strong next step if there is a good fit with the prospect. (An example would be telling the prospect that if both parties agree that there’s a possibility of doing business, the two of you should set up your next meeting before you leave that day.) If a prospect isn’t willing to go along with these basic requests, you need to think long and hard as to whether he or she should be disqualified right then and there.

In order to qualify someone’s need for your produce or service, you need to uncover the prospect’s “pain,” or their emotionally compelling reason to change or act. People don’t buy the features and benefits of your product or service, they buy solutions to their problems. If they feel no emotional reason to change, you won’t make a sale. There are many layers to pain, including surface, business and personal pain. Say, for example, you’re selling copiers. You might ask a prospect why they’re interested. At first they may just tell you that their current office copier breaks down frequently. But by digging further (asking how long it’s been a problem, what else they’ve tried to do to solve the problem, and what has been the cost to their business in time or money, for example) you may find out that they were late getting a report out, or that their staff is falling behind schedule.

That’s the business pain. There’s even a deeper level — perhaps the broken copier means they’re getting home late at night, or the boss is yelling at them. By probing for the personal pain you can find the prospect’s reason for buying. When they give up their personal reasons for change (after all, you are selling change), you can qualify them for whether they have a need for your products or services. If someone can’t express an emotional need for your product, you may have to disqualify him, although there are some instances when there doesn’t need to be “pain” per se. These are the times when someone has already convinced himself of his need.

To qualify someone for financial ability (and willingness) to pay, get all money issues out on the table early. Otherwise, you could spend hours of your time making a detailed sales presentation to a nondecision maker who also lacks sufficient funds to make a purchase.

Begin qualifying a prospect’s financial status by inquiring about a budget. Consider asking them to discuss investments they have made in the past for similar projects. Many prospects won’t give you a budget, so try offering them solutions using price brackets.