Effectively qualifying business is one of the keys to sales effectiveness. Qualifying in this context refers to identifying how qualified a sales opportunity is in terms of the probability it will be converted into a sale or transaction.
A truly qualified opportunity requires more than just interest from the prospect. For example, most men would love to have a Ferrari. We would probably even take time out of our busy schedules to go test drive one just to see what it was like. We are very interested prospects, but are we qualified opportunities? The answer is that we are not and it could be due to three key areas: authority to purchase, ability to purchase, and need to purchase.
If we look at each of those independently, we can easily see what we need to have in order to be effectively qualifying business and to ensure sales effectiveness.
Authority to Purchase
When you are dealing with a prospect, do they have the authority to purchase? In the example of the Ferrari, even if you take the price out of the equation, the person test driving the car and talking to the car salesman might not have the authority to purchase. It could be the scenario where the spouse that is not there is the one who decides what is and what is not purchased. In this case, regardless of how good a job the salesman does, the sales opportunity is not qualified until the person with the authority to purchase is involved in the process.
In corporate sales, many times it is the lower level staff that interacts with vendors to discuss projects and sales opportunities. These individuals will likely not have the authority to purchase and sign off on transactions. You must get the people in the organization that do have this level of power and authority involved in some way in order to be qualifying business and sales opportunities.
Ability to Purchase
The next thing you need to identify is if the prospect has the ability to purchase. I have the authority to purchase a Ferrari but I do not have the ability to purchase so I am not a qualified sales opportunity. To determine ability to purchase, you want to understand how the purchase will be funded and approved. Not only identify if there is the money available, but you will want to identify what other projects are going to compete for those funds and what process will the prospect have to go through to get funds approved and allocated.
Need to Buy
When trying to fight day in and day out to sell your products, it can be so refreshing to find a prospect that expresses interest in what you have to offer. But do they want your products or do they need them? This can be the difference when qualifying business. It can help to identify what will happen if the prospect does not purchase from you and if they do nothing. If the result of not doing anything is not that significant, the sales opportunity might not be qualified.
You may come across a scenario where the prospect has the authority to purchase, has funding approved and the ability purchase, and they are very interested in what you are selling. But their interest is more of a want than a need. You may say, “this is a done deal and this is a qualified sales opportunity.” The truth is that this is a good scenario but the opportunity is not completely qualified because you could invest a tremendous amount of time and at one of the final approval stages a senior manager kills the project because they do not really need it.