Wow, I live on a prayer
Take my hand, we will do this, I swear
(Living on a prayer, Bon Jovi)
"Give me growth," yells the CEO. "Close those deals double," yells the CSO. "Fill the funnel," yells the CMO. And off we go again.
Sales teams want to close more deals and close them fast. They buy Phone Number List turn to marketing to generate leads. Marketing fires up its creative engine, lays out a grand lead generation strategy, and everyone gets excited. Attractive (and expensive) campaigns are launched, scrappy contact information from hundreds of leads is collected, and passed on to sales.
In turn, sales teams spend all day trying to contact these contacts stored in their database, and nothing happens. Nada . Not a word from any of the prospects who were supposed to just wait for registration. Unfortunately, this story is repeated over and over again in companies of all sizes.
Seth Godin, in his short post titled “The Sales You Don’t Make,” writes:
It's incredibly difficult to understand why people are walking out of your store, throwing away your brochure, leaving your website... but it's actually fertile ground for a sales boost. You won't find what's broken unless you look.
What is broken is "lead qualification". Blindly scoring leads based on heuristics is lead qualification. The selection criteria in your CRM based on past averages is lead qualification. A faceless contact signing up for a free trial is lead qualification.
Marketing and sales teams often fall into the trap of having independent qualification criteria based on their understanding or, worse, assumptions that do not reflect the customer journey. Qualification is not a one-time activity; it is a process. Buyers do not actually follow a linear path, ticking off actions that entitle them to squeeze through smaller and smaller gates until they buy from a vendor. This is just wishful thinking, but it is the basic approach most sales teams take.
It's surprising that a book about life gives the best summary of what salesmanship actually entails.
Seek first to understand, then to be understood
~ Stephen Covey (7 Habits of Highly Effective People)
To qualify leads, marketing and sales teams must first have an effective mechanism for understanding what each person they interact with needs. Unfortunately, the traditional sales approach, which is focused on closing as many leads as quickly as possible, often treats qualification as a linear gating system.
The expectation is that leaders will only move in one direction, and if they win, qualification is over. In fact, most qualification frameworks still operate on this basic assumption. This approach is deeply flawed, especially in SaaS, where recurring revenue is the primary model.
In SaaS, revenue is typically based on subscriptions, and the customer can cancel the subscription at any time, even after the transaction has been completed. Pricing is usually designed to reduce upfront commitments for customers. In fact, this is one of the main attributes that gives SaaS an advantage over on-premise enterprise software with perpetual licensing. This pricing approach means that the service provider only makes a profit after 9-12 months of the relationship.
These are new clues. These are the main characters of Glengarry.
And for you they are gold. And you don’t understand them.
Why? Because giving them to you would just be throwing them away.
(Blake's character in Glengarry Glen Ross)
In a study conducted with renowned consulting firm Bersin and Associates, Marketing Sherpa found that nearly 73% of B2B leads are not sales-ready. Imagine a situation where an unqualified sales team is chasing down every lead. Not only will you be dealing with a low conversion rate, but you’ll also be dealing with a high churn rate. This was a bad enough situation in the world of one-time perpetual license sales, where the impact was mostly limited to the top line with low CSAT and NPS. But in SaaS, mis-selling hurts not only the bottom line, but the bottom line, as the buyer can leave at any time without generating any revenue, let alone growth.
So why is leader qualification so important and how do you know if the qualification process is effective?
Why is lead qualification important?
The simple answer is limited resources and time.
The infinite monkey theorem states that a monkey pressing keys randomly on a typewriter keyboard for an infinite amount of time will almost certainly type any given text, such as the complete works of William Shakespeare.(1)
Let's say your company has an infinite (or very large) sales force that incurs almost zero costs in compensation, commissions, and sales expenses. It might make sense to forgo the leadership qualification and pursue every one of your capabilities. This may be a fascinating thought experiment, but the reality of business requires us to filter out prospects who are ready to engage with you. significantly at the moment .
Note the emphasis on “meaningfully” and “current moment.” I believe there are no good or bad leads. If someone has bothered to check out your website, read a blog post, or clicked on an email you sent, they are a lead. They may not have any long-term intention of buying from you, but they are still a lead, and you should nurture them—be (very) long-term greedy. However, you should not waste time and resources trying to sell them a product in the moment.
How do you know if your qualification works?
At Vtiger, we say that if your employee satisfaction scores (ESAT), customer satisfaction scores (CSAT), and Net Promoter Score (NPS) are high, you know your lead qualification processes are working. There are business metrics like forecast accuracy and close rates that are also good signals, but measuring both employee and customer satisfaction gives you a clear picture of how good your process is.
Let's break this down a bit.
Proper lead qualification allows you to achieve the following:
Increases Team Morale and Engagement: This is the most important outcome of lead qualification. If you had to justify the business case for investing in lead qualification, this should be at the top of the list. When a sales rep gets rejected after rejected, frustration and disengagement are inevitable. Siloed teams cannot be highly productive.
Don't waste time and resources: A qualified sales manager ensures that your sales team spends their time and resources actively engaging with those who have communicated their need and intent to talk. You don't waste your company's time, budget, and resources.
Reduces the chances of missing opportunities: When your team stops chasing every lead and focuses on the ones that matter, you reduce the risk of missing real opportunities in your pipeline. Without a proper qualification process, your team ends up chasing every lead in your database out of fear of missing out.