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How to Clearly Define a Sales-Qualified Lead

4 min readAugust 5, 2014

Not all of your prospects are meant to be your customers! No matter what it is you’re selling, and how good you are at selling it, there are bound to be some prospects that just aren’t suitable to be customers. You might have the greatest product since sliced bread, but I guarantee that it’s not going to be right for everyone. Heck, not even everyone buys sliced bread (as rows of gluten-free food products can attest to).

That’s why it’s so vital to remember that sales is really a matchmaking process. You only want your account executives selling to qualified prospects. That’s why it’s so important to clearly define what a sales-qualified lead (SQL) is for your company.

Who Should Qualify Leads?

When your account executives have to qualify leads themselves, it radically diminishes their closing power. Instead, leave lead qualification to less senior sales reps. Some of the most successful companies have experienced powerful results by separating their sales teams into clearly defined roles. These roles include:

Sales development reps (SDRs)-reps that prospect for new leads

Lead response reps– reps that qualify inbound leads from marketing campaigns

Account executives (AEs)- who close deals with sales-qualified opportunities.

Your SDRs and lead response reps should be solely focused on creating a steady stream of opportunities for your account executives to close.

The BANT System

The exact definition of an SQL will vary based on what you’re selling and who you’re selling to. But there are some common factors that prevent customers from buying. Many companies use the BANT system (pioneered by IBM) when qualifying leads. BANT stands for Budget, Authority, Needs and Timeline.

Here’s a breakdown of how to qualify leads using the BANT system:

Budget: Does a Prospect Have the Budget to Buy?

At the end of the day, it doesn’t matter how much a prospect likes your solution. If they can’t afford it then they aren’t a viable customer. Selling with integrity requires that reps determine whether a prospect can actually afford your solution. If they can, full steam ahead! But if they can’t or if they are unsure, chances are that there are far better customers to find instead.

Authority: Does a Prospect Have the Authority to Buy?

Imagine you’re a real estate agent showing a large house in the hills. A man walks in and checks it out and seems to be enthralled. But does he have the sole authority to make a purchasing decision? Perhaps. But chances are he’ll have to talk to his significant other before coming to a sales decision. He may love the house, but he doesn’t have the sole authority to buy it on the spot.

The same is true in B2B sales. Often deals require buy-in from a team of decision makers before they can close. And even for those deals that do only require one decision maker, reps have to make sure that they’re talking to the proper decision maker.

Need: Does a Prospect Have a Need for Your Solution?

The golden rule is to ask whether or not your solution will offer prospects value. There are lots of reasons why a prospect might not need your solution. As an example, one that we encounter around here often is that our solutions are incompatible with a prospect’s current infrastructure, since Revenue.io is built exclusively for Salesforce users. So therefore, prospects that don’t have Salesforce may have a need for a sales acceleration solution, but not for the specific set of tools Revenue.io currently offers.

Timeline: When is a Prospect Looking to Make a Decision?

Sometimes, for various reasons, it’s just not the right time for deals to close. Maybe a prospective company is waiting to close a funding round. Perhaps they want to hire a bigger team before implementing a specific tool. Reps need to discover what a prospect’s timeline is before handing that prospect over to an account executive.

Sales Management Tip: Compensate SDRs and Lead Response Reps for Deals that Actually Close

SDRs and lead qualification reps sometimes are too quick to qualify leads as opportunities. This is understandable, as their compensation plans are often partially dependent on hitting an opportunity quota. But if your reps don’t do a good enough job of qualifying opportunities,
your sales engine is going to run out of gas.

We recommend that your SDRs and lead response reps’ commissions and compensation structures should partially depend on dealsClosing Power eBook Cover that actually close. It can pay to spend some extra time training new reps on how your organization defines an SQL, so that you can, in real time, gain as accurate a view as possible into your sales pipeline.

Want to learn more secrets to maximizing your sales team’s closing power? Download our new free eBook Closing Power: 10 Key Takeaways for Maximizing Your Sales Win Percentage!