A Simple Strategy That Will Automatically Improve Your Close Rate
Would you sit up and pay attention if I said to you I could increase your close rate by a significant margin by focusing on doing one thing really well?
If you read that question and thought, ‘ya right, there’s never just one thing…’ you get extra points, but there is something that your sales organization can do that does contribute to better and more predictable pipeline—and it has to do with lead qualification.
HINT: It has to do with lead qualification.
Before we go too far down the road of qualification, let’s talk about the two kinds of leads you encounter in sales: MQLs and SQLs. MQLs (Marketing Qualified Leads) are leads that come in at the very top of the funnel, and they’re indicative of user interest in your content, but not necessarily predictive in terms of intent to buy. An MQL is created when a visitor provides their content information on a webform or indicates they want to learn more about something on your website.
The SQL (Sales Qualified Lead), or Sales Accepted Lead (SAL) is a lead that marketing has passed on to sales, and one that the sales team has vetted (vetting criteria will vary based on a company’s sales process), turning a general interest lead into a prospect lead, or simply prospect. Depending on your sales team’s level of sophistication, a business development rep or a sales associate may vet the lead.
The one thing you can do to improve your sales effectiveness is to brutally vet each and every lead that enters your pipeline.
The one thing you can do to improve your sales effectiveness is to brutally vet each and every lead that enters your pipeline. Sounds simple, right? In practice, it’s much harder to implement. Why? Because when someone shows interest in your product your sales team gets excited, and unless your team is methodically following sound qualification procedures you will find that your pipeline gets polluted with poor-quality leads.
You have a target market for a reason, so make sure your sales team is using the definition of an ideal customer—not just any customer—as the pass/fail bar in lead-vetting. Approach qualifying a customer with the same dedication that you put into qualifying a candidate employee. Better to part ways early than wait until the lead has progressed all the way down your sales pipeline, when you’ve spent countless hours working the deal, before cutting them loose.
This is probably the easiest way you can improve the effectiveness of your sales activity. When a poorly qualified lead gets turned into an opportunity, and somewhere down the line, the deal falls through—everyone involved will feel the pain of wasted time and resources. It’s frustrating, so try to minimize the number of times that happens.
Sales reps should expect that most leads will not be an ideal customer fit. They should look for reasons to disqualify them.
Finding customers that are a good fit for your product or service is critical, especially as you launch your business. Your early customers will become advocates for your brand. They are your partners. They will provide you with references and leads—so make sure you are finding the right kind of customer.
Sales reps should expect that most leads will not be an ideal customer fit. They should look for reasons to disqualify them. In my sales experience, telling a customer that I didn’t think they were ready to buy my product or suggesting that maybe they needed another solution actually helped me hit my quota. Why? Because I was able to focus my time on working qualified deals where the customer’s interest was aligned with the product I was selling.
When you’re upfront with a customer, and remove them from the funnel you are doing them a service. You are not selling them something they don’t need, and more importantly, you are removing a lead out of your pipeline that would have been 100% non-contributive.
Ultimately, lead qualification says volumes about your sales process.
What’s better, disqualifying a customer today doesn’t mean they’ll never become a customer. There’s a reason why that customer initially reached out. They may be genuinely interested in your product, but they may not be ready to buy today. It sounds counter-intuitive to turn away business, especially for a startup, but being radically transparent with a customer actually earns you their trust.
Ultimately, lead qualification comes down to your sales process. If your sales team relies on inbound leads to build pipeline, then you have to invest in a qualification process that ensures you have alignment with marketing leads, your product, and your sales process. Otherwise, you are wasting time and money.
I can’t stress the importance of lead qualification enough. If you are startup, lead qualification is table stakes. If your startup is on a growth trajectory then you need to effectively and efficiently drive revenue from every customer interaction you have. With the impact a sales team has on your company’s burn rate, you literally cannot waste time or money on bad leads—because you will go broke before earned revenue can offset the cost of your salesforce.