Lead qualification helps you focus your resources in the best way, so that you generate the most business for your business.
Wake any sales leader in the middle of the night and ask them "What do you need?" — 99% would say "More leads".
The truth is, though, that most do not really need more, they need better leads. Even more accurately, they need a way to know who they need to focus on and who they don’t need to trouble themselves with.
Most sales and marketing teams already know this is the real challenge for them and are taking steps to do something about it.
And this is where the topic of lead qualification comes in.
What is lead qualification?
Lead qualification is a process in which companies develop criteria to score the leads who enter their pipeline.
This is usually based on a) how lucrative they are for the company (i.e. how much revenue they can generate) and b) how likely they are to become customers.
Why is lead qualification important?
Most businesses that utilize a sales motion often see a common challenge: the sales team would try to work and close every lead that comes their way.
However, doing sales is an expensive endeavor. You need a system to make sure that they have enough high-value leads. You also need to make sure you are working only those deals that have the potential to repay the resources (time, money, etc.) put into them.
In addition, if your sales team is working and closing lower-value deals, it is also hurting your self-service funnel.
As a result, things suddenly start looking all over the place — sales are closing deals, but your revenue metrics (ARPA, LTV:CAV ratio, etc.) don't look great. And your self-service funnel looks sluggish.
Qualifying your leads allows you to alleviate many of those problems and optimize how you're using the limited resources of your team.