For some time I’ve been meaning to post about the topic of qualification. The traditional way of qualifying prospects requires evaluation based on budget, timing, need, and decision process. Often, these elements are even used to judge whether marketing has delivered a viable lead.
Fundamentally, I don’t agree with that approach.
A Modern Approach to Qualifying Prospects
While need, budget, and decision-making elements are critical to closing the deal, they are largely influenced by timing and vary throughout the sales process. When organizations limit qualification to whether or not a prospect is ready to buy now or in the near term; they relegate themselves to Demand Response selling.
Why Is This A Problem?
In 1975, Frank Watts first coined the term ‘Solution Selling’ while working at Wang Laboratories (betcha don’t remember them). Thirty years ago, Michael T. Bosworth branded a one-day workshop for Xerox Corporation (more familiar right?). The first print version (that’s code for a “book”) came out in 1994. Solution Selling is predicated on the belief that, in order to compete, companies must focus on discovering a prospect’s true pain and align their solution to those specific needs.
In his seminal piece, still in print and worth a read, Michael T. Bosworth was one of the first to talk about the differences between Latent Need and Acknowledged Need (I prefer the term Existing Need). Existing Need (Acknowledged Need) refers to a situation where the buyer has defined their need, timing, and budget, and represents less than 5% of all the qualifying prospects you will encounter. Every other prospect falls into the category of Latent Need, which presents itself in three distinct ways:
- A problem exists but has not been identified or acknowledged by the prospect.
- The problem has been acknowledged by the prospect but they are not currently pursuing a solution.
- The problem is acknowledged, solutions have been pursued in the past, but the prospect does not believe a solution exists.
If these scenarios make sense, you quickly realize that the majority of qualifying prospects we encounter are dealing with Latent Need scenarios. This represents an incredible opportunity for talented salespeople who know how to discover need (pain/gain) rather than simply probe for it.
The good news about Existing Need is that the prospect typically calls you, visits your website, or at least tends to be receptive to your call. I refer to this as the ‘it’s your lucky day’ scenario. The bad news about Existing Need is that the prospect is likely having the exact same conversation with your competitors, and your deal will be won or lost based on features and price.
In contrast, Latent Need selling represents an opportunity to be present at the inception of need. This is the period of time where requirements, budget, and decision process are formed. This gives you tremendous influence in the sales process.
Latent Need selling situations typically present little or no real competition. Even when it does, you compete based on the degree to which you have formed the problem in their mind and have a solution that exactly meets their set of needs and requirements instead of price.
There is an emerging school of thought referred to ‘Insight Selling’ or ‘Anticipatory Selling’ that suggests that engaging a prospect that has already identified and acknowledged their problem means you are too late. In the words of one buyer, ‘I want vendors who come in here and offer insight and solutions to a problem I didn’t even know I had.’ This is fascinating stuff, but far to esoteric (even for me) and get’s out too far in front of the headlights when most sales organizations still have so much to gain from simply understanding and embracing Solution Selling.
When Selling Into Latent Need, How Should We Approach Qualification?
First, it is important to stop thinking about qualification as an exercise, a set of questions, or even as a moment in time. Rather, consider qualification a phase of the relationship between you and the prospect wherein you seek to determine if there is sufficient alignment between who they are and who you serve, regardless of whether or not they are ready, willing, or able to engage with you now.
Latent Need Qualification requires that you focus on assessing objective factors aligned to (and constructed from) your image of an Ideal Target Prospect.
When I use the term “Ideal Target”, I am not referring to prospects who are ready to purchase now. Instead, I am referring to qualifying prospects that, because of who they are and because of who you serve, represent a fit whether or not they’ve identified a specific problem, established a budget, or quantified the benefit of addressing the issue. Qualification based on what can be referred to as ‘Buyer Personas’ is a binary decision. A prospect is either a match or they or not. The sales process and transaction that may follow are merely functions of timing.
A Personal Example
‘My Ideal Target is a CEO, Founder, or Principal of a company with $2 – $20 million in revenue who believes the potential exists to grow revenue by increasing the effectiveness of their selling organization. I work with individuals frustrated with symptomatic issues in their CRM, their demand creation efforts, as well as their opportunity management and forecasting process.’
When I say my Ideal Target is the CEO, this means I don’t engage with a VP of Sales even when they claim to have a fistful of dollars ready to spend next week. Don’t get me wrong, VP’s of Sales are great to work with and often have budget for training and programs. However, the Founder or CEO is the only person who I believe can fully align with my goal of working with companies that possess the desire, motivation, and capacity to invest to drive significant revenue growth.
One of the challenges for salespeople and organizations making the shift to Ideal Target-oriented Qualification Criteria is that it requires they say no (pronounced: walk away) from what might appear to be an attractive prospect. Additionally, ‘I serve companies where the opportunity exists to double their revenue within two years.’ However, a company may be unable to double revenue in two years for a variety of reasons: lack of will, insufficient capital, weak leadership, or external (industry and economic) factors, to name a few. They may also be better served by solutions I don’t have in my toolbox. Keep in mind, ‘doubling revenue’ is not a pitch or even a claim on my part. It simply represents one of several criteria used to determine if this is a client I want to try and engage with.
Even when a prospect strongly desires growth, this does not automatically mean the timing is right for us. Regardless of how attractive the fit or desirous the outcome, timing matters and is not something I worry about during the qualification process. My intent is only to test for fit and then nurture the relationship until such time they are ready, willing, and able to engage.
When you approach qualification seeking your Ideal Target instead of looking for budget or an initiative, you tend to get very open and honest dialogue. When a prospect aligns to your ideal target profile, there should be no doubt you will work with them some day. If they don’t align with your criteria, why would you continue to invest your energy to try to acquire them? Salespeople waste time chasing deals that will never close when they focus on timing, budget, urgency, and decision-making criteria. Worse, they often win business with customers they can never satisfy. When presented with a prospect talking about their project, its budget, and how quickly they are to get going, sales organizations get excited and emotionally involved in the deal. This works against the goal of objectively assessing the value to both parties.
As you shift focus to qualification criteria aligned on your Ideal Target profile; you will attract and retain clients that represent a much better fit, and, more importantly, deliver higher quality work, better outcomes, and generate more referrals as a result.
For more on Sales Prospecting Methods, you can check out: How NOT to Ask for Referrals.
By Townsend Wardlaw