An example of separating the Wheat from the Chaff and Why BANT isn't dead
Lead qualification criteria are characteristics that help to classify a lead by the degree of its willingness and readiness to buy. As a result of this qualification, one can distinguish, in terms of making a purchase, the leads with the most and least potential: hot, warm, and cold.
In lead generation there are usually two stages of qualification: marketing and sales qualification. The first one is done by a team responsible for a marketing activity. The sales qualification is done to confirm the information from a sales perspective.
Ideally, a number of marketing and sales qualified leads must coincide. If a sales department rejects lots of leads, you most likely need to correct your marketing qualification criteria or to add a new criterion. Of course, sometimes it happens that the criteria are correct, but a sales department determines, through reasons of its own, why a client has no potential.
A question about lead qualification is a matter of leads’ quality. According to Global Benchmark Report on Lead Generation Strategy and Tactics for 2015-16, 48% of the respondents have indicated that only half of the leads were of good quality and are taken into sales or lead nurturing. 25% of the respondents said that 3/4 of the leads were of a good quality, which for the most part is taken into sales or lead nurturing. There is so much to improve here to save your sales team time and let them concentrate on qualified leads.
While determining the criteria for your target audience, please be aware of one important thing: there is always a balance between the desired quantity and quality of contacts you want to get. You can use more strict criteria for leads and have fewer of them, which enables you to focus on highly prospective customers. Or you can take broader criteria and thus increase their number, as well as sales work. But perhaps, as a result of your efforts, cold opportunities will warm up faster. Finding a balance between the desired number of leads and their appropriate quality is a matter of testing, correction, and testing again.
Long live the BANT
In lead generation, these following five key criteria that enable an evaluation of a lead’s potential are the most common:
- decision maker’s role.
The last two criteria are mainly relevant for corporate sales and products with high value. For consumer good sales, it is sufficient to identify a need, interest, and money. This model of five criteria is similar to the famous BANT approach invented by IBM. The BANT B2B Sales persons acronym stands for
- Budget (do they have enough money to buy the product?
- Authority (can they make a purchase decision?
- Need (do they have a need that the product or service in question can fulfill?)
- Timescale (do they have a specific time when they wish to make their purchase?)
Lately, there have been lots of critics of the BANT criteria, as the critics see the criteria as too rigid when they are taken literally. “BANT is dead!” they cry. I do not think so. BANT should be adapted to today’s reality, when almost every customer can find information before speaking to a salesperson.
Another feature that should prevent you from taking BANT literally is that today there are so many innovative products that buyers do not always understand what they need best of all. However, many companies still use BANT as the most simple and common way to rate a lead as cold, warm or hot.
The need for a certain product or service is the main criterion of qualification. Roughly speaking, either there is a need for a product or not. In one case, a person knows exactly what he or she wants, how many and its specifications. In another case, a need exists but is rather vague. It is interesting that clients may not be aware they have a need. For example, a girl comes to buy her first car and she does not know which additional options she needs.
The interest of a buyer is another important criterion for determining purchase potential. For consumer sales, this factor may play a crucial role, especially when the sum of a purchase is not too large. However, when it comes to corporate sales, hardly is the interest ever the main and sufficient factor.
When I started my career, it had seemed to me that having an interest is a great reason to buy. Alas! These dreams lie in ruins of reality. Some customers are very interested and some of them are just great enthusiasts when it comes to something new. But this does not mean that a purchase will be made immediately or even made at all.
A budget for purchase is the best criterion for products with flexible pricing. If a salesperson understands how much money a person is willing to spend, that’s a great step toward making a decision. For example, buyers of travelling services do not hide their budget. This helps a seller to suggest the best offer for them.
However, for the corporate sector, the budget cannot always be disclosed. Sometimes, this is due to the fact that if a budget is mentioned, the position of a customer in the bargaining process becomes weaker. Sometimes, financial planning may be flexible.
Purchase timeframe is another important criterion for lead qualification. It is particularly important for pricey products. If customers are planning an expensive purchase, they are likely to understand when they can buy it. (Exceptions include luxury goods that are sometimes bought spontaneously.)
Here, we come to the last criterion: a person’s authority role within the decision-making process. This option is especially important for corporate lead generation and sales. There are usually several persons involved in a decision-making process.
At the same time, there are consumer sales where a decision is also influenced by several persons. Examples are large family purchases like immovable properties, cars, and education. Every member of a family has his or her own reasons and motivation.
To qualify a lead, you need to prepare a list of qualifying questions. These questions should help to identify necessary information before transferring a lead to the next stage of sales. Responses are usually scored from 0 to 5. This scoring system may at first seem too complicated. However, it is necessary when several people are involved in interactions with a customer during a sales cycle. This scoring system will help to identify the hottest leads for active sales and those who should be for now just nurtured.
I see that you have some concerns already, haven’t you? A lead may not want to share information. Yes, this may happen. A lead generation manager should not insist that a lead reveal information. These questions should be asked very carefully so as to not scare off potential buyers. So choose the politest words or ask indirect questions. After all, the lead has not confirmed a willingness to buy yet and has only expressed a preliminary interest in some category of goods.
For example, do not ask “How much money do you want to spend?” but, rather ask: “What budget do you think will suit you for this type of product?” These questions should leave a customer the option to either answer you about the facts or not – a person has every right to remain silent. Yes, everything one says will be used to speed up the purchase.
You can achieve a buyer’s frankness if you honestly say that you need this information to make the best offer. Having understood someone’s position and background, you can make a proposal that best fits that person’s needs, interests, and budget. You are playing on their side. And even if a person refuses to give answers to some questions, this is still valuable for future sales. No information is also informative.
An example of qualifying questions
Let’s illustrate the aforementioned information with an example: a lead qualification scoring system for a company that provides information security software and consulting. The following table shows some variations of questions asked and an interpretation of results:
Lead Qualification Criteria
Lead Qualification for a Security Software Provider
Variations of Questions asked via Phone
|“As far as I understand, your current security system does not suit your goals. Have you already determined other challenges that need addressed? (…) Have you determined the system requirements?”
“If I understand you correctly, you do not use any network security software currently? Have you already formulated the functional requirements? Do you have some RFP or can I send you a questionnaire?”
|5 points – strong need and product requirements are defined;
4 points – moderate need and most requirements are defined;
3 points – weak need and some requirements are defined;
2 points – weak need and no requirements are defined;
1 point – no need.
||“Previously, have you already considered such solutions? (…) What products and features were of interest?”
“Have you addressed a similar challenge before? What is your priority for the functionality of such solutions? (I am asking so we can focus on this during the meeting.)”
|5 points – strong interest;
4 points – moderate interest;
3 points – neutral position;
2 points – skeptical;
1 point – prefers another supplier.
|“What do you think is, potentially, in case our meeting goes well and you think the functionality of the product suits you, the timeframe in your company for making such purchases?”
“If there is interest after the meeting, tell me, please, how does the purchase authorization process in your company usually go? How long does the process usually take?”
|5 points – 3 months (a client can make a decision in the next 3 months and wants to meet with the provider as soon as possible);
4 points – 6 months and ready to meet in the next month;
3 points – 12 months and ready to meet the next 3 months;
2 points – more than 12 months;
1 point – no defined timeframe exists.
|“Can I ask you if there is any defined budget for the project?”
“If there might be a demand for this service, have you previously allocated a specific budget for it?”“Haven’t you considered such a project before and fixed budget frames? I am asking this in order to prepare the best proposal in terms of functionality.”
|5 points – budget is approved;
4 points – budget is expected to be approved;
3 points – budget is negotiated;
2 points – need to ask for a budget and a possibility of its allocation is quite fair;
1 point – no budget at least for the next 12 months.
|“Tell me, please, in case of success, how is further confirmation usually conducted? Do I understand correctly that you prepare a proposal for your colleagues? Who else is involved in this decision-making process?”
“Tell me, please, will anyone else attend the meeting or participate in future cooperation with our team? Who else will be involved in the decision-making process?”
|5 points – the main/final approval;
4 points – preparation of requirements;
3 points – recommendation role;
2 points – minor role, advising;
1 point – no role.
Then, we calculate the scores for each lead. This allows us to quickly determine lead quality and categorize it as:
- 20-25 points – a hot lead;
- 13-19 points – a warm lead;
- 7-12 points – a cold lead;
- 5-6 – a prospect or a disqualified lead.
While a lead may achieve a high score by qualification criteria, this does not guarantee that a sale will happen. Lead generation will allow you to find prospective customers, to evaluate their willingness to buy, and to create a pool of hot and warm leads. The rest depends on your sales force and product features.
The marketing, lead generation, and sales departments must agree on qualification criteria before the start of any activity. It should not scare you that sometimes after the launching of an activity, it becomes evident that it is necessary to adjust the criteria: to add or to clarify one of answers, for example. This is absolutely fine; conducting lead generation means always working in a test mode.
 RFP – request for proposal