Sales Qualification and its Importance

Qualification is a key sales discipline and missing it or making assumptions while working on deals makes forecasting tricky. A sales cycle that has weak or undisciplined qualification will show some or all the following symptoms:

• Deals constantly missing committed close dates, no matter how much you “review” them

• The deal size changes drastically throughout its lifecycle

• The deal “story” changes every other review

• There are many unknown basics about a deal: why the customer is moving forward with it, what their alternatives are, what the key decision criteria are

• Deals are committed based on responding to an unsolicited RFP/RFQ

  
  

Predictable cash flow is key for any organization, and accurate sales forecasts are the backbone of cash flow, and a strong qualification culture would ensure that. Now the question is: what is qualification exactly?

Qualification is the process that assesses the certainty of a deal closing at a certain time with a certain value. A strictly-enforced, clearly-documented, widely-communicated sales qualification process improves the predictability of a sales funnel. There are many qualification methodologies available in the market, each claiming they’re the best for xyz, and while they have their nuances, they all try to answer the following five questions for a company selling to a customer:

1. Is there value that the company can deliver to this customer? Does the customer have a quantifiable problem that the company can fix? Value is unique per customer and depends on their challenges

2. Does the customer have any sense of urgency to address their problem? What’s happened recently that is driving this deal from the customer’s side?

3. Is the company dealing with the correct person from the customer? Does that person own/influence/oversee the procurement process? Can they open doors internally, and guide the company down the best path? Are they giving the company a fair chance?

4. Does the customer have a budget set, or can they secure the budget, for procuring the solution?

5. Does the company understand the customer’s buying process? What’s the sequence of steps needed to get to the order: documents needed, demos, response to RFP, signatories, etc., and the time this process typically needs?

   
   

If the answer to any of these questions is a no, the deal is not well-qualified. In the next post I’ll talk a bit more about how to get answers to these questions. An important note about qualification: no outlook is 100% certain, even a well-qualified deal might still slip or change in value. The aim of qualification is not to guarantee all deals, but to improve the close rate and predictability on average.

Qualification is near and dear to my heart, and at kyadah I spend a lot of time to understand a company’s business and help them adopt or build their own qualification process.

A final point to to stress: qualification is not a box-ticking exercise, it’s an effort by the sales team to move a deal from partially or weakly qualified to fully qualified. A less than full qualification only means that the deal might not close at a specific time and value; it doesn’t necessarily mean it should be dropped without considering improving the qualification, as follows:

1. If there is no immediate problem to fix, no value to address, is there a way to go deeper with the customer? Talk to other stakeholders? Uncover challenges the customer didn’t know about?

2. If there is no apparent sense of urgency, can it be uncovered? Sharing use cases that stress the risk/reward balance? Highlighting competitive threats? Stressing upcoming regulatory changes?

3. If the current champion isn’t the correct person, can the sales team ask for internal referrals? Can they help this champion to become an internal champion by acting as value creator for other users? Can other stakeholders be accessed?

4. If there is no budget, can the sales team help build the business case? Can the commercial offer better align with the budget cycle? Can other financial models be presented?

5. If the buying process isn’t clear, it can be clarified. Persistently asking the right questions will build a more robust understanding of the process and how long things will take

   
   

In short, an unqualified deal doesn’t mean an instant drop. At kyadah we consider qualification the roadmap to ensure that a deal (a) will close (b) at a specific time (c) at a specific value. A sales team’s efforts should be focused on improving all the points above: more value, more urgency, a wider network in the account, more financial impact, and tighter control of the buying process. Only when the efforts to improve the above fail should the deal be qualified out.