What Is Qualifying a Lead?

Definition & Examples of Qualifying a Lead

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Qualifying a lead is the process of determining whether a lead meets the requirements to purchase your product or service.

Learn more about how to qualify a lead.

What Is Qualifying a Lead?

Leads are consumers or businesses that might be a good fit for your product or service. Not every lead is worth pursuing, though. For example, if you sell and lease copiers, you might contact a potential lead and find out they just started a contract with a competitor. They're unlikely to make any changes now, so you make a note to contact them a few months before their contract expires and move on to other leads.

Qualifying a lead helps you avoid spending time and money pursuing a lead who isn't in a position to invest in your product or service. To qualify a lead, ask questions to discern whether the customer is a good fit.

How Qualifying a Lead Works

Qualifying starts with asking questions designed to identify the qualities of a customer. Those qualities vary depending on what you're selling. For example, if you're selling educational savings plans, you may want to find out if the lead has any plans to invest in education in the future, whether it's for themselves or for children or grandchildren. If not, they likely aren't a suitable potential customer.

Another detail you should establish early on by qualifying is whether you're speaking with a decision-maker. If you're in business-to-business sales (known as B2B sales), the first person you talk to at a particular company might not have the authority to buy. You'd be wise to qualify that detail early on so that if you're not speaking with the decision-maker, you can find out who the decision-maker is and get in touch with that person promptly.

Establishing a lead's ability to buy is the bare minimum for qualification. Many salespeople like to qualify further before they spend any more time with the prospect. A deeper level of qualifying might determine how interested the prospect is, how much they could spend on a purchase, and whether there are any other impediments like an existing contract. How deeply you qualify prospects will vary depending on your preferences.

Questions for Qualifying a Lead

Qualifying at a basic level typically relies on a few stock questions. If you're selling insurance to consumers, you might ask questions about their age, family composition, and employment status. If you decide to qualify more deeply, you may need to come up with customized questions. This is particularly true if you're selling more than one product and you want to determine which product is the best match for a given lead.

One of the best sources of qualifying questions is your current customer base. Look at your very best accounts and search for commonalities. For example, you might look at your half-dozen best customers and realize that they all own homes. In that case, that's an excellent question to ask when qualifying a lead.

In B2B sales, networking can help you qualify leads. Your network can help you uncover information that may not be obvious through research, like the best person to reach out to for an introduction.

When Does Qualifying a Lead Happen?

Qualifying can take place during an initial cold call, during a sales presentation, or both. Some salespeople like to do basic qualifying during a cold call and then qualify further during a sales appointment, but before they start a presentation. Others prefer to do more qualifying during a cold call, reasoning that they don't want to waste time on an appointment that isn't likely to yield anything.

It's best to do some qualifying during an initial cold call, and few prospects will mind answering two or three simple questions. If you do get a lead who refuses to answer a single question during the cold call, they probably aren't a good fit.

If a lead complains about your questions, explain that you want to make sure your product would be a good fit so you don't end up wasting their time. Another option is to qualify a customer by offering an account review. You can offer your advice to leads as a subject matter expert and sugget reviewing their current setup with another provider.

Key Takeaways

  • Qualifying a lead is the process of determining whether a lead meets the requirements to purchase your product or service.
  • Qualifying a lead helps you avoid spending time and money pursuing a lead who isn't in a position to invest in your product or service. To qualify a lead, ask questions to discern whether the customer is a good fit.
  • Establish whether the customer meets the demographics for your product and whether your lead is a decision-maker. 
  • Qualifying can take place during an initial cold call, during a sales presentation, or both.