Lead qualification is the process of identifying, organizing, and nurturing incoming leads so you can focus your efforts on prospects best suited for the products your business offers. You need to collect and evaluate leads and move them through your marketing and sales process to produce the highest quality prospects to pursue.
Lead qualification includes scoring leads to determine which ones you should focus on the most. We’ll talk more about lead scoring later, but here’s a free lead scoring template you can download now to get started with scoring each individual prospect.
Why Lead Qualification Works
A lead qualification process helps you quickly assess incoming leads, organize them based on their potential, and automate follow-up designed to nurture leads into qualified customers. Lead qualification involves understanding the traits and characteristics that make an ideal customer and creating a process to evaluate incoming leads from your website, or prospecting to focus your sales resources on the most qualified leads.
Most marketing and sales organizations use specialized tools to help qualify leads. For example, the 2019 State of Marketing Automation Survey Report noted that 75% of organizations use at least one type of marketing automation software.
These tools range from website landing page builders to collect leads, customer relationship management (CRM) software to organize and score leads, and marketing automation tools to nurture leads through the sales process.
Pro tip: One of the most important reasons to create a lead qualification process is to avoid spending time on unqualified leads that use up valuable time and resources that would be wiser to dedicate to higher-quality opportunities. Creating a process that filters out these leads means your sales team will be more efficient and effective in closing sales opportunities.
Customer relationship management (CRM) tools such as Freshsales help you qualify leads quickly so you can spend your time closing more deals instead of chasing dead ends. The software offers a free-forever plan that includes lead scoring, making it an excellent choice for teams looking to better organize their leads and prospects.
The Difference Between Marketing & Sales Qualified Leads
Lead qualification happens at two distinct points in the new customer journey, and understanding the difference is essential for making your marketing-to-sales funnel work effectively. The two main types of qualified leads are marketing qualified and sales qualified leads. Each represents significant milestones in the overall sales process.
Here are the differences between marketing and sales qualified leads:
Marketing Qualified Leads (MQL)
Marketing qualified leads are a fit with your target audience, even if you don’t know whether they are interested in making a purchase or have the resources to do so. Since marketing qualified leads are often nurtured through automated email campaigns, they require less human effort and fewer resources to develop a sales relationship.
Ultimately, the goal of nurturing marketing qualified leads is to determine if they should move forward in your sales process. At that point, they are considered sales qualified leads and are pursued by your sales team.
Sales Qualified Leads (SQL)
Sales qualified leads have been through a lead nurturing campaign to determine that they are likely to become customers, able to make a purchasing decision, and are worth having a sales rep spend time conducting outreach. Typically, sales qualified leads not only fit the profile of your target customer, but have also expressed interest in making a purchase, are planning to do so soon, and have the authority to make such a decision.
Since salespeople have a limited amount of time, allowing them to only focus on sales qualified leads makes your team more efficient and profitable. Instead of wasting time on dead ends, salespeople can dedicate time to building relationships with leads who are more likely to convert to satisfied customers.
How to Qualify Leads
The process of qualifying leads is often referred to as the lead funnel. The goal is to generate many leads at the top of the sales funnel and filter them through your lead qualification process, leaving only the leads most likely to become customers. That saves your sales team time and effort by not pursuing every lead, but only those that meet certain criteria.
Five key steps that help you qualify leads include:
1. Capture Incoming Leads
Before you can start to qualify leads, you have to collect and organize them. Many businesses use a combination of incoming leads (website, email, social media, or phone inquiries) and outbound prospecting. Regardless of which you use, capturing them in an organized manner helps make sure none of them fall through the cracks.
Pro tip: When you are dealing with a large number of leads coming in from different channels, such as social media, your website, and customer referrals, it can be difficult to keep track of them manually. Using a CRM helps you manage where leads came from, store conversations, and set follow-up reminders.
Using a CRM like Freshsales enables you to track leads and organize them based on factors such as territory, lead score, or industry. You can capture leads through forms on your website or use their Gmail plugin to directly import leads from email contacts. Their mobile app also makes it easy to add leads as you encounter new prospects on the go, since you can add them without being at a computer with your phone.
2. Evaluate Leads Based on Qualification Criteria
While the criteria vary depending on whether you’re trying to evaluate marketing qualified leads vs sales qualified leads, you usually try to answer a few questions that let you know if it’s worth moving forward. One way to evaluate the value of a specific lead, and whether or not it is qualified, is to conduct a BANT analysis.
BANT stands for Budget, Authority, Need, and Timeline, characteristics needed for a lead to be considered ready for a salesperson’s efforts. You don’t want salespeople to spend time on leads who will never become customers because they don’t have the budget, or even worse, the need for your product. That’s an expensive mistake that is easily avoidable by asking a few questions early on.
For example, a few of the questions to ask during the lead qualification phase include:
- Is the lead in an industry that utilizes the product or service we offer?
- Is the lead located in our current service area?
- Does the lead have the authority to make decisions about purchases related to our product?
- Does the lead intend to make a purchase in the foreseeable future?
- Is the lead currently experiencing a pain point our business can solve?
- Does the lead have the budget and other resources necessary to make a purchase?
- Does the lead have the authority to make a purchasing decision?
3. Move Leads Through the Lead Nurturing Process
As you answer lead qualification questions, you’ll filter out leads who don’t meet your criteria. This makes it easier to see which leads justify being moved through your lead nurturing process. This is the process of relationship-building by communicating with, listening to, and providing content that helps move qualified leads closer to a buying decision.
Lead nurturing, whether done through an automated campaign or individual follow-up with leads, allows you to educate prospects and create awareness of how you can solve their specific problems before exerting energy and resources on each lead, such as assigning a lead to a specific sales rep or engaging them in an email campaign. For instance, sending qualified leads a series of information and calls to action using automated email drip campaigns can help you move qualified leads closer to a buying decision.
For example, imagine you run a marketing agency and a potential client sent an email inquiry about your services because they saw an ad you promoted on social media. First, they are sent an introductory email with questions to help you better understand their needs.
Depending on their answers, they might receive a series of emails that nurture their interest and engage them further with resources such as a free downloadable social media guide, a video series about business-to-business (B2B) marketing, or a whitepaper. If they engage with the resources, you know they are interested and can follow up with an offer to conduct a free social media analysis.
4. Send Sales Qualified Leads to Your Sales Team
Leads nurtured to the point that they justify a salesperson’s involvement are considered “sales qualified” and are assigned personal contact by the appropriate team member. It is critical to have a process and system to facilitate the transfer of these leads from the qualification process into a salesperson’s active prospect list.
Using a CRM that includes marketing automation ensures your sales and marketing teams are on the same page by managing lead and contact information in one place. Many CRMs even allow you to automatically assign qualified leads to the sales reps best suited to build a customer relationship.
5. Move SQLs Through Your Sales Pipeline
The final step in lead qualification is to move qualified leads through your sales pipeline. The better qualified the leads are, the more likely they will continue to move through your pipeline and become customers.
Strategies for Managing Your Lead Qualification Process
Lead qualification depends on various components designed to move leads through the sales process. Each of these components is a key aspect of capturing, evaluating, and determining whether a lead is a good fit for your product or service.
Here are a few ways to manage your lead qualification process:
Landing pages are commonly used to gather leads on a website. A landing page could be any page on your company website with a contact form, or it could be a targeted page visitors encounter when they click on a digital ad. Often, landing pages present visitors with an offer related to your product, such as:
- Free trials
- Promotional deals
- Educational content, such as whitepapers and case studies
- Interactive presentations
- A sign-up form for more information
Discover excellent examples in our article that includes 17 examples of effective landing pages.
A lead funnel is the set of stages you use to filter leads so you can identify those most likely to become customers. The stages of the lead funnel also show you where each lead is in the buying process so you can tailor marketing and sales efforts to move them to the next stage.
Lead Scoring Model
A lead scoring model assigns a point value to incoming leads based on a variety of characteristics and activities. This allows you to quickly assess which leads should be followed up with immediately, and which are worth nurturing. Lead scoring might assign points based on proximity to a location, type of business, whether the lead has responded to your emails, the specific pages a lead has visited on your website, or any number of other factors specific to your business or industry.
Freshsales, for example, can score your leads automatically based on criteria you specify and flag highly qualified leads that should be at the top of your list for follow-up. Additionally, the platform allows you to automatically assign leads that meet a certain score to sales reps.
Lead Qualification Costs
Most of the costs associated with qualifying leads fall into one of two categories: human efforts and software tools. While there are many tools available, it’s essential to choose the right tools for your specific business needs. To learn more about valuable lead qualification tools for small businesses, read our article about the best sales automation software.
Some of the common costs to qualify leads include:
- CRM software: According to SuperOffice, 91% of businesses with over 11 employees and 50% of companies with 10 or fewer staff members use a CRM to help qualify leads since it allows you to collect, score, organize, and communicate with leads. Costs range from free to as much as several hundred dollars per user, per month.
- Marketing automation software: This software lets you create automated processes to evaluate and nurture leads, usually through email drip campaigns. Marketing automation is often included in CRM plans, or can be purchased separately.
- Buying business leads: Verified databases like UpLead allow you to search for contacts by criteria like industry, company, title, or location, and download contact information directly into your CRM. Subscriptions range from $99 to $399 per month.
- Sales support: In addition to software, it’s not uncommon to have sales support team members whose job is to help assess and qualify inbound leads. According to Glassdoor, a full-time sales support representative makes about $39,852 per year.
Lead Qualification Tools
Fortunately, there is no shortage of software and tools to help you qualify leads quickly and accurately. In addition to CRMs, lead nurturing tools make it easy to create email drip campaigns and then score leads based on their activity, such as clicking on a link or downloading a piece of content. Purchasing verified leads from high-quality databases allows you to confirm leads may be a good fit before you even begin the qualification process.
Here are a few software tools that can help you better qualify more leads:
What it costs: Free to $69 per user, per month, billed annually
What it does: Makes it easy to collect, organize, score, and convert leads
Freshsales offers a free-forever plan that allows you to add unlimited users and unlimited contacts. It includes the ability to manage leads, customers, accounts, and sales opportunities. The software also allows you to customize your sales pipeline and includes basic lead scoring, which helps users identify the most qualified leads based on whether or not the lead is a decision-maker and their overall engagement with your email campaigns.
What it costs: $99 to $399 per month, billed monthly
What it does: Allows users to search its database for verified contact information based on company, industry, geographic location, or role, and download them directly to your CRM
UpLead describes itself as a “real-time verified B2B database that helps you find new customers and accelerate growth.” It helps your sales team by providing lists of verified email addresses in a searchable database. UpLead verifies these contacts upon export, ensuring users won’t end up with large lists of bounced emails or take a hit to their sender reputation due to incorrect email addresses.
Explore other places to purchase lead lists in our article about the best places to buy business leads.
What it costs: Free to $800 or more per month (depending on plan and number of contacts)
What it does: Offers complete lead generation and nurturing tools that help small businesses qualify incoming leads
HubSpot is a popular lead generation, marketing automation, and lead nurturing platform used to create landing pages, lead generation forms, lead nurturing email campaigns, and for lead scoring. It’s ideal for businesses looking to generate leads on their website with content marketing and robust lead management. HubSpot also offers content management software (CMS) that lets you publish landing pages, blog posts, and contact forms to capture new lead information.
Learn more about its features and pricing in our HubSpot CRM review article.
Benefits of Lead Qualification
The primary benefit of lead qualification is that it allows you to focus your sales efforts and resources on leads with the highest potential to become customers. As a result, lead qualification saves time, money, and creates a higher degree of customer satisfaction because it helps you determine which leads are most likely to benefit from partnering with your business.
A few specific benefits of qualifying leads include:
- A more efficient sales team: Your sales team can focus its efforts on the most qualified leads.
- More profitable sales: The needs of your customers are more closely aligned with your products and services and require less sales effort to convert.
- Increased business revenue: Your sales process moves the right type of customers into your sales funnel, so you end up winning a higher percentage of deals.
- Satisfied customers: Leads who become customers are likely to have a higher rate of satisfaction since they are the best fit for your business.
To gain high-quality customers who are a good fit for your products and services, you have to start with the right leads. Learning to qualify leads effectively means you can focus your efforts on those most likely to become customers, saving your sales team time, energy, and resources. That leads to more profitable revenue, which is a win for your entire business.