Dec 13, 2023

What Lead Qualification Is and Why It Matters

What Lead Qualification Is and Why It Matters

While lead generation is an important part of any marketing strategy, it’s not enough. Not all leads are equal, and generating a large number of leads doesn’t guarantee conversions if they aren’t the right fit for your product or service.

Lead qualification is a necessary step that ensures you get high-quality leads, which results in higher conversion rates.

Imagine you’re an angler who wants to catch the most desirable fish (qualified leads) in a vast lake (market). But you only have a limited amount of bait (resources) and time to spend fishing.

In the beginning, you cast a wide net to attract various fish (leads). To make the most out of your resources, you start classifying them based on criteria, whether it’s color, size, or species.

Then, you focus your attention on the prize catch (prioritizing leads), and use the right bait (marketing strategies) to attract and hook the fish! Hopefully, you get the idea. 😉

In this article, you will learn how lead qualification works and the process of doing it.

What Is Lead Qualification in Marketing?

Lead qualification is the process of evaluating and categorizing potential customers based on certain criteria to determine their readiness to make a purchase.

The main goal is to identify leads that are most likely to convert into paying customers. This way, you can streamline your sales and marketing efforts, so that your resources are focused on people with the highest potential for conversion.

Here’s a quick lead qualification example:

A small business owner (the potential lead in this scenario) visits a digital marketing agency’s website to fill out a contact form expressing interest in their social media management services. The agency then reaches out by asking for a quick phone call to discuss the business owner’s needs.

During the call, the agency representative asks key questions about the business owner’s needs, challenges, and budget. The agency considers the lead to be qualified if they have needs that can be solved using the digital marketing agency’s service, and can afford their services.

💡What is a lead qualification form? It is a digital form designed to ask for contact information, company details, budget, and other information that can help assess a lead’s suitability for a product or service.

The Difference Between Qualified Leads vs Unqualified Leads

Qualified leads are potential customers who are deemed more likely to make a purchase based on specific criteria. They have the right demographics, express their interest in the product, or closely match your ideal customer profile.  

Unqualified leads, on the other hand, do not fit your target demographic. They can also include potential customers who do not meet the criteria for being considered “ready or likely” to make a purchase yet. While they match your audience profile, they may not have the budget.

It’s also possible for unqualified leads to become qualified leads through a process known as lead nurturing. This involves building relationships over time, providing them with information, and solving their problems.

📚Suggested reading: Improve Your Lead Conversion Using These Strategies

Why Should You Qualify Your Leads?

Some business owners and marketers may think that lead qualification is unnecessary. But it is well worth it for the following reasons:

To ensure precise audience targeting

Targeting a specific audience allows you to allocate your budget, time, and efforts properly. Moreover, it allows you to tailor your marketing messages so they better resonate with the audience, which increases your chances of turning these prospects into customers.

Lead qualification involves defining criteria to determine whether a lead is a good fit for your product or service. This can help you create more detailed buyer personas or ideal customer profiles.

To reduce friction in the decision-making process

The decision-making process for potential customers involves several stages. It begins when people recognize that they have a need or a problem that needs to be solved. Then, they actively search for information and compare options before deciding to purchase.

Lead qualification allows you to guide customers toward the products or services that suit them best. Once you know that they’re interested in your product or service, you can provide more personalized content, which will guide them toward a buying decision.

To create positive experiences and avoid unwanted solicitation

Unwanted solicitation refers to any unwelcome attempts to sell a product, service, or idea to those who have not expressed interest or consented to such communication.

It can feel intrusive, annoying, or frustrating to be on the receiving end of such attempts, which can make the business soliciting look bad. 🙅🏻

Since lead qualification involves gathering information about leads, it allows your business to refine the following to prevent overwhelm:

  • Their message
  • Communication channels
  • How often to communicate (frequency)

Lead Qualification Steps

If you want to experience all the lead qualification benefits mentioned above, here are the steps you can take:

Learn about your prospects (audience research)

Audience research is the first step to lead qualification because it can help you identify the characteristics, behavior, pain points, and preferences of your target audience. This enables you to create effective lead qualification criteria.

There are a few ways to do this:

  • You can start analyzing data from your existing customer base to identify common traits and behaviors.
  • Use analytics tools to gather data about your website visitors, social media engagement, and other online interactions.
  • Another option is to conduct a survey to get direct feedback from your audience.

A smart way to conduct market research is through a contest or giveaway. Besides collecting leads, you can use it as an opportunity to survey participants.

Since you’re giving away a prize that attracts them to the contest, they are more willing to take a little bit of time to answer your survey. Incentivize them by providing contest points that increase their chances of winning.

💎Pro Tip: UpViral has a special feature called Custom Actions, in which you can incentivize your audience with huge points when they complete your desired actions. It could be following your social media pages or answering a survey. If you have a “priority” action, make sure to assign it the most points.

Do lead scoring

Lead scoring is a method used by a business to rank and prioritize leads based on their likelihood of becoming customers. How it works is that you identify criteria that show someone is interested in your business. This could be how they interact with your website, whether they open your emails or their demographic information.

Next, you assign points to each person based on your criteria. For example, if someone visits your website a lot, it means they get more points. If they show a lack of interest, such as unsubscribing from your email, you subtract points.

Based on their total points, you put people into groups: hot, warm, or cold. Hot leads are people who have plenty of points, which means they are more likely to convert. On the other hand, those with fewer points might be “warm” or cold.”

Here are examples of lead scoring models:

  • Demographic lead scoring. This model emphasizes demographic details such as age, gender, location, income level, and occupation. The main goal is to identify leads who share characteristics with the business’s ideal customer profile.
  • Behavioral lead scoring. This lead scoring method is used to assign scores based on observed behaviors and interactions. This includes website interactions, content engagement, email interactions, and the like.
  • Fit and intent model. This approach combines two key aspects — fit and intent — to evaluate leads. This is commonly used in B2B (business-to-business) contexts to assess how well a lead aligns with the ideal customer profile (fit) and gauge their intent to make a purchase (intent).

Choose the most appropriate lead qualification framework

A lead qualification framework is used by businesses to evaluate and categorize leads based on specific criteria, determining their readiness to move through the sales process.

Here are some existing frameworks that you may want to use:

  1. BANT. BANT is often used in B2B (business-to-business) sales to assess the readiness of a lead to make a purchase.
  2. Budget: Does the lead have the financial resources to make a purchase?
  3. Authority: Are they the decision maker or have a significant influence on the decision-making process?
  4. Needs: Does the lead have a real need for the product or service?
  5. Timeline: What is the time frame for making a purchase?
  6. MEDDIC. MEDDIC is focused on understanding the key aspects of a potential sale, ensuring the sales teams can understand the customer’s needs and decision-making criteria. It is also often used in B2B sales environments.
  • Metrics: What are the measurable objectives the customer wants to achieve?
  • Economic buyer: Who is the decision-maker with the authority and budget for the purchase?
  • Decision criteria: What factors do the customer consider essential to make a decision?
  • Decision process: What steps will the customer go through to make a decision?
  • Identify pain: What challenges is the customer experiencing?
  • Champion: Is there an internal advocate that supports your product or service within their organization?

Align your chosen framework with your business goals.

For instance, if your emphasis is on quick sales, a simpler framework like BANT might be appropriate. For more strategic, long-term partnerships, a comprehensive framework like MEDDIC might be more helpful.

Nurture and move your leads through your sales funnel

Nurturing leads through the sales funnel is an important aspect of the sales and marketing process. It involves building relationships with potential customers and guiding them through the stages of the buying journey.

Based on the information you gathered during lead qualification, you can personalize your marketing efforts to nurture your leads.

This involves developing content — such as webinars, tutorials, and guides — that addresses their challenges and interests or using email marketing to deliver targeted and timely messages.

Additionally, it is helpful to engage with leads on social media platforms by sharing relevant content and participating in discussions.

These are just some of the things you can do to nurture your leads and guide them through the sales funnel.

📚Suggested reading: 10 Tools to Create and Visualize Your Sales Funnels

Identify Prospects Who Are a Good Fit for Your Business Using UpViral

You can quickly identify potential customers who are a good fit for your business by using UpViral’s referral marketing platform. When someone refers your business to their network, it shows that you’ve earned their trust.

When using UpViral, don’t forget to include a survey and integrate lead qualification questions, which can help you identify and attract potential customers in less time. For more UpViral features, you can click here!