Qualifying a prospect involves determining whether a person who has shown interest in your product or service would make a good fit as a customer. If the individual qualifies, then it is worth spending your time, effort, and resources to turn them into a customer. Qualified prospects have a higher return on investment and higher close rate, which is important because startups have limited resources and a significant need to generate revenue quickly.
Let’s dive into learning how to qualify a prospect for your startup.
Quick takeaways:
- Qualify prospects at three general levels
- Do your research to find out as much about the prospect as possible before reaching out
- Use the right questions to determine whether the prospect has the need, budget, authority, and timing to make a deal
Qualify at Three Levels
Qualify prospects at three general levels:
- Organization level: Determine whether the company fits your parameters (e.g., industry, size) and the prospect fits your buyer persona
- Opportunity level: Determine whether the prospect has a need or problem that you can solve and whether the prospect can use your product or service.
- Stakeholder level: Determine whether the prospect has the budget and authority to make a purchasing decision
Do Your Research
Before reaching out, do as much research about the prospect as possible. Use what you learn from your research to qualify the prospect before making contact. Use the information you’ve accumulated to formulate questions for the qualification conversation.
Social media is an excellent resource for researching a prospect. For example, you can use LinkedIn to:
- Identify their role within their organization
- Get information on their background, experiences, and interests
- Read their published posts and articles
- Determine what groups they spend their time in
If your research indicates that the prospect is not a good fit as a customer, then you can move on to the next prospect. You’ve just saved yourself time and money by not spending unnecessary effort on trying to qualify the wrong person.
Qualification Questions
After doing your research, prepare questions for the qualifying conversation. Target the following key areas.
Need
As the vendor, it’s important to target the prospect’s needs. Focus your questions on the following topics:
- What are their current challenges?
- What is causing the problem and why is it worth purchasing a solution?
- What will solve this problem?
- Does your product or service fit the prospect’s needs?
- Does the prospect need you to solve their problem?
Budget
It will be difficult to make a sale if the prospect does not have the money to purchase your product or service. Focus your questions on the following topics:
- Is there a price fit with the prospect?
- Does the prospect have the budget to purchase your product or service? What is that budget?
- Is the situation important enough to spend their budget?
- How does seasonality affect their budget?
Authority
When qualifying a prospect, determine whether they have the authority to make purchasing decisions. Focus your questions on the following topics:
- Is the prospect the relevant decision-maker in their organization?
- Whose budget will be paying for the purchase?
- Does the prospect have the authority to approve an offer, make a deal or choose a solution?
- How have they made past purchasing decisions in similar situations?
- Does someone else need to be involved in the decision-making?
Timing
All other factors might be in your favor, but the timing could be off, which could sink the deal before it moves another step forward.
- When does the prospect need to choose a solution?
- What other priorities do they have?
- When will the prospect be ready to implement a solution?
- What is their time frame? Do they have an immediate need or is it a long-term goal?
- Are they ready to buy if they find the right product or service?
- Do they have the capacity to implement your solution now?
Guiding the Conversation
Of course, you want the prospect to fit the characteristics of your ideal customer, as well as have the need, budget, authority, and timing to purchase your product or service. However, it’s important to focus on how you can help the prospect to solve their problem.
Target the conversation toward the prospect’s situation. Your goal is to qualify the prospect, not to make an immediate sale or boast about your product’s features and benefits. Your conversation and questions should focus on where they are now and where they want to go.
- Ask open-ended questions - do not ask questions where the prospect can simply say “Yes” or “No”
- Listen to the prospect’s answers and ask follow-up questions to get more clarity
- Let the prospect do the majority of the talking - pause after every answer to let them fill in the empty space with more information
- Ask how they plan to find a solution and what a solution looks like to them
Take the Right Steps to Qualify Prospects
Qualifying a prospect for your startup begins with doing the research to understand everything you can about the prospect and their company. If the prospect is still a potential fit as a customer, move forward with determining if they meet your specific criteria and allow the prospect’s situation to guide your conversation.
Ready to build a powerful lead qualification process to help your startup grow? Let’s talk!