Pitching blindly is a habit that separates novice salespeople from top sales performers. An inexperienced salesperson would often pitch to a prospect without making an effort to understand them first, which leads to a loss of time and energy. By properly qualifying and categorizing your sales leads, you can identify which ones are more likely to become customers and result in closed deals.
So how can you best qualify and categorize your sales leads? By determining what your lead’s Budget, Authority, Need, and Timeline (BANT) are, you can decide which leads to prioritize. In this article we discuss everything you need to know about BANT, qualifying and categorizing leads, and more.
How to Qualify a Lead: BANT and More
Should you pursue this lead or drop it? Will this lead result in a valuable deal? What can we do to close this deal?
If you want to answer these questions, you will need to learn how to qualify a sales lead. It takes more than efficient lead generation to find good leads. Qualifying a lead requires gathering enough insights necessary to make a good decision. It is a process that requires you to ask your lead questions that will help you determine if they match your criteria of an ideal prospect.
BANT stands for Budget, Authority, Need and Timeline. It is a qualification framework used by salespeople to see whether or not they should pursue a sales lead, and if they can convert a prospect into a customer. Additionally, BANT can be used to determine which sales leads to prioritize.
While each customer and every sale is different, qualification frameworks distill common characteristics into traits a sales representative can look for. BANT is the most commonly used framework in sales and marketing across industries. Although it cannot address every situation, BANT paints broad strokes that can uncover the most basic information in almost every case.
Budget
Main Question: Is this prospect capable of buying?
Determining a lead’s budget is essential, because there is no point in continuing the sales process if they cannot afford to purchase what you are offering. Sometimes, they do have a need you can fulfill, but is the need a priority enough for them to allocate funds for it?
Aside from being able to afford your offering, you must also check if they have other initiatives they are spending their money on. The season may also affect how their funding works.
Authority
Main Question: Does this contact have the authority to make a decision?
In a study done by CEB Marketing, they found that it takes an average of 5.4 people to make buying decisions for a business. If you’re talking to a sales lead who will not be involved in the final decision, they will not have the power to make the sale happen. To get the feel of it, you may ask if your sales lead has ever made a purchasing decision for similar products.
If it turns out that they don’t have as much authority, it’s not a lost cause. You can ask who else is involved with the buying process, and how to handle objections that may possibly arise.
Needs
Main Question: Does the prospect have a pain point you can solve?
A sales representative must determine what challenges a sales lead is facing, and how urgently they need to address it. It’s important for sales and marketing teams to find the source of pain for a lead, and why a sales lead would feel it is worth spending resources on.
It is a sign of a poor fit if what you are offering is not a solution to their problem. Sometimes, their need is really more of an inconvenience, so they aren’t pressed to find a solution immediately. What a sales representative can do is to define what the sales lead has already tried, then reinforce that this did not address the challenge they are facing.
Timeline
Main Question: When is a prospect planning to buy?
Your most important asset is time. Time determines what the priority for your sales lead is, and how quickly they need to solve their problem. Some leads may not have the capacity to implement your product right now. For example, if you’re trying to sell to a company with a 5-month purchasing process, but you need to close your deal in 3 months, how would that work for you? You can move a lead down the priority list if they fit the other criteria, but are just not planning to buy right now.
In qualifying your lead, you must also take other factors into consideration:
- Competition: Is your lead evaluating other products or services?
- Customer Profile: Does this lead match your ideal customer?
- Goals: What is the top priority for your lead?
- Plans: What are they doing to achieve their goals?
Spotting Red Flags: Disqualifying Leads
An ordinary sales team would want as many leads possible in a pipeline, so they never want to disqualify anyone. However, they would learn that this only clogs a pipeline. Trying to close every deal spread you out too thinly and usually results in dead ends or poor prospects. Keeping every lead would also waste time you could have spent on highly quality leads and prospects who are more likely to buy.
There are some red flags you should look for to know when you have to drop a lead, including:
- Lack of pain points: You may be able to speak to a CEO of an organization who has complete authority over their budget, but you won’t be able to convince them if their business has no problem your company’s product or service can solve. The same goes for an individual: if you don’t have anything they need, they are unlikely to mature into a prospect, so it may be best to let go for now.
- Lack of authority: If you meet with a lead who doesn’t have the authority to purchase nor have enough influence on a primary decision maker, then that may be a lead you have to let go of.
- Lack of enthusiasm: A lead may tell you they are excited by what you offer, but are they really? Maybe their voice and their mannerisms tell you otherwise, or maybe they don’t know enough about what you’re talking about to actively participate in the conversation. Either way, consider dropping a particular lead if they are hesitant to engage with you.
- Lack of consistency: Some leads may be interested and want to be helpful, but their answers seem to contradict each other. They may not have sufficient knowledge or are in no position to make a decision.
How to Organize Your Leads
Now that you have narrowed down a list of sales qualified leads, the next step you should take is to organize them. Organizing and categorizing each sales qualified lead enables you to decide on who you should prioritize first. This will save you time and energy as you proceed to the next sales stage.
For small businesses, you can do this manually by creating a file for every lead you meet. Record information and details such as their name, contact numbers, email address, and other observations. This may include the date when you first contacted them, what their initial reaction to your offering was like, and under which BANT criteria do they fit in. These files should be updated after every contact made with the lead.
You can then organize your sales qualified leads in a way that is most logical for your business. For example, an insurance sales team could sort them based on which insurance plan a prospect is interested in: life insurance, home insurance, auto insurance, and so on. Real estate agents may do it geographically instead, and sort their leads based on who are looking to purchase in a certain zip code or neighborhood.
Once you’ve organized your leads, you can rate them and rank them based on how likely they are to make a purchase immediately.
Categorizing Leads: Hot, Warm, Cold
One simple way to classify your leads and order them based on priority is to identify which ones fit closely with your criteria of a potential customer. You can rank each sales qualified lead as hot, warm, or cold.
Hot Lead: Hot leads meet all the BANT criteria. These are the leads closest to the buying stage, who are looking specifically for a product or service like yours. One example of a hot qualified lead is someone browsing the Internet for something your business offers.
Warm Lead: Warm leads may miss 1-2 criterias of BANT, usually budget or time. However, these are the leads that have expressed interest already. A warm marketing qualified lead may have followed your company on social media, signed up for an email newsletter, or have been referred by a friend. These are the leads you can nurture so that when they are ready, they will approach you first.
Cold Lead: There are unqualified cold leads and qualified cold leads. An unqualified cold lead is someone who has never shown interest in your products or services. A cold marketing qualified lead is more preferable. They have 2-3 disqualifiers in BANT, but they are willing to compare between their existing set-up and the one you are proposing. With enough lead nurturing, you may be able to convince qualified leads into buying.
Save Time By Maximizing Your CRM
Instead of creating a filing system for your leads, why not invest in a cloud CRM that can create and sort a lead database for you?
Commence CRM’s software has a Lead Management feature that handles lead generation for you. Aside from lead generation, this feature captures and qualifies leads using a lead rating and scoring system. Commence CRM also allows you to manage the activity from sales qualified leads, so you can ease them down the pipeline. You can also use Commence CRM for marketing automation, which can save you time in implementing your campaigns.
Experience the ease in lead generation, lead management, and marketing automation that only Commence CRM can provide. Book your free trial now.
