CHAPTER

6

(Dis-) Qualifying Prospects

After spending a massive, thankless, and often frustrating amount of work just to secure a first conversation, one might not expect a salesperson’s call objective to be to disqualify the prospect! Remember, Predictable Prospecting is a top-of-the-funnel process designed to identify the highest-value prospects—those with a high profit potential and a high probability of becoming a customer. The time, effort, and money spent futilely pursuing unqualified prospects is better invested elsewhere.

The Predictable Prospecting approach calls for two waves of qualification (we are dropping the “dis-” going forward since the message is clear): are we a fit? (AWAF) analysis and budget, authority, need, and timing (BANT) analysis.

AWAF

The initial wave of qualification is called are we a fit? (AWAF), and it should be completed in an initial 15-minute call. At least two bad situations can happen in sales prospecting. First, as cited earlier, a salesperson can pursue prospects who endlessly string them along. Second, a salesperson can sign up a customer who does not get sufficient value and therefore does not renew, and, possibly, becomes a vocal detractor. In many ways, the second is more destructive than the first. The salesperson might get her commission, but at the risk of her reputation and that of her company.

To avoid either of these traps, every sales team must have a set of (no more than five) must-have criteria that is based, unsurprisingly, on the known characteristics of “bad prospects” and “bad customers.” AWAF criteria useful in qualifying prospects include physical or technology infrastructure, regulatory requirements, and cultural compatibility. For example, it would be useless trying to sell A4 paper (8.27 inches by 11.69 inches) to a company that has printers accommodating only U.S. letter paper (8.5 inches by 11.0 inches). The same is true if trying to sell Apache-compatible, Java-based Internet services to a company wedded to a Microsoft.net web server infrastructure. Or illiquid financial derivatives to an investment fund with regulatory risk constraints. AWAF criteria can be any information ruling out a prospect that could not have otherwise been researched in advance.

We often face a major objection to this piece of advice: “What if our solution is strong enough to motivate the prospects to do a forklift upgrade of their people, processes, or technology infrastructure? For instance, what if we demonstrate that it is worth switching from Microsoft to Apache?” As with all such questions, the answer depends on context. If one has a very small territory with very few prospects, then heavy lifting is called for. However, sales professionals are usually more time constrained than territory constrained (though they will never admit it).

Continuing our example, there are nearly 1 billion registered host names, more than 170 million of which are active, being served from more than 5.5 million Internet-facing computers.¹ Since Apache has a 50 percent market share of all active sites, a salesperson with Apache-compatible-only solutions need not bother trying to convert prospects with a significant investment in their Microsoft infrastructure. If you feel strongly that your solution covers a broader range of scenarios, we suggest you build in qualification criteria for each buying scenario. Using the example above, you could have three buying scenarios, each requiring different sets of qualification criteria: (1) blueprint—a complete forklift upgrade in the technology; (2) refresh—a partial upgrade of older or outdated technology within the existing blueprint; and (3) project—a current initiative involving a use case for an upgrade.

In the AWAF call, as in all interactions with prospects, the salesperson acts as a conversation guide. Less experienced salespeople commonly make either one or both of the following mistakes. The first is sticking too literally to both the sequence and the language of the AWAF questions. A more experienced salesperson allows the conversation to flow in a natural manner, starting with confirmatory questions, then subtly shifting to open-ended questions to ensure that all bases are covered. The second mistake concerns failing to get clear answers to all the AWAF questions. Unfortunately, this frequently happens when the salesperson talks too much instead of actively listening, guides too little for the sake of letting the prospects fully express themselves, or is too eager to gather more detailed qualification information.

In order to better guide the AWAF call conversation, many SDRs use a sales presentation or pitch deck. We support this practice, provided that the presentation is prospect centric, short, and high level. Here is a way to pull off this technique with as few as six slides:

Slide 1: The cover slide positions the primary benefit of the product or service. Additionally, the cover slide allows time for introductory pleasantries and for confirmation of the agenda.

Slide 2: If customization is warranted and/or possible (don’t guess), then this slide provides an articulation of the prospects’ top challenges.

Slide 3: This slide presents solutions to challenges illustrated through one to six use cases.

Slide 4: This slide expresses how the value from the solution will be realized through features and attributes.

Slide 5: If the solution involves product or service options, then this slide provides an overview of the recommended configuration. (For SaaS companies, this would also be the time to conduct a demonstration.)

Slide 6: This slide offers proof that the salesperson’s company can deliver value: customer logos, testimonials, independent reviews, and analyst findings.

Assuming she has confirmed a supplier-prospect fit on all the go/no-go questions, the salesperson’s goal at the end of the AWAF call is to set up a follow-up phone or face-to-face meeting to kick off the second, more detailed wave of qualification. Always be closing for the next step in the sales process.

Let’s look at a specific example of this from Salesforce.com’s Data.com business that was used in a pitch to one of the authors.² As shown in Figure 6-1, the Data.com presentation began with a cover slide articulating the core value proposition of the product: “Accelerate Your Growth with Data.com.” The language is concise and expressed from the perspective of the prospects.

  FIGURE 6-1   Data.com Cover Slide

The Data.com presentation did not include a custom slide expressing our top challenges. Though it is possible the salesperson did not feel she knew our issues deeply enough, we suspect corporate policy prevented her from customization. There is always a trade-off at play here. Customized presentations, provided that they are based on adequate discovery, are better because they “show me that you know me.” However, allowing sales professionals to customize pitch decks carries two risks. The rarer, and therefore less concerning, of the two is that a salesperson will make false claims about the product in order to get the sale. The greater risk is that account executives will waste massive amounts of time modifying presentations—something we see all the time! With high legal risk aversion and a strong brand, large companies such as Salesforce.com tend to standardize sales presentations.

Data.com’s solution slide (Figure 6-2) is one of our favorite slides of all time. During the sales presentation, we spent the bulk of our time on this slide engaged in conversation. We walked through the five use cases, exploring our current approach to each of these sales and marketing processes. Whether we had challenges or were content with our status quo, the Data.com salesperson suggested ways her product could improve our performance. Her tone was that of a partner in our journey, never that of a pushy salesperson.

  FIGURE 6-2   Data.com Solution Slide

With agreement on the concept of improving our sales and marketing processes, the Data.com salesperson moved on to the features and attributes slide in Figure 6-3. This slide was admittedly busy so the salesperson framed it by explaining that the Data.com solution would enhance both contact and account information. She then followed our lead on how deep we needed to go. We were more focused on sourcing and appending contact information so we spent the bulk of our time there and only touched on account enhancement.

  FIGURE 6-3   Data.com Features and Attributes Slide

The Data.com solution required the configuration of multiple products in a family. To explain this, the presentation included the slide shown in Figure 6-4.

  FIGURE 6-4   Data.com Product Options and Configuration Slide

Presentations should be guided conversations, not one-way pitches. To make that happen, each slide should trigger a question that is answered by the next slide. The Data.com presentation started by promising to accelerate our growth. Being skeptics, we thought, “How so?” That question was answered by the solution slide (Figure 6-2) examining our use cases. Our next question, “How will you deliver improvement on those processes?” was answered by the features and attributes slide (Figure 6-3). After that, we wondered, “How will the solution be packaged and sold?” which was answered in the Figure 6-4 slide. Finally, we asked, “What proof do you have that we will get a return on our investment?” The answer, provided in Figure 6-5, set our expectations for improvements as measured by an independent, presumably objective third party.

  FIGURE 6-5   Data.com Proof of Value

We actually saw two versions of this presentation deck. The original one was much closer to the one represented here. The second version consisted of 12 slides (excluding a legally required safe harbor statement slide at the beginning and a thank-you slide at the end). Because we want to discourage you from creating slides that your salespeople will skip, we will merely describe but not show the slides we removed:

“Sixth Largest Software Company in the World”: This slide included awards, revenues, number of employees, and so on. This one was not completely off the mark, but it served more or less the same purpose as the proof-of-value slide. If you insist on including it, then put it at the end.

“Become a Customer Company”: This was the company’s marketing tagline. This did not belong in the presentation and actually disrupted the flow of the story centered on accelerating growth with better data.

Five slides that went very deeply into the features and attributes of the various products in the family: These were appropriate slides for a second meeting, but not necessarily for a first pitch. Our approach would be to include these in an appendix just in case the conversation goes there.

BANT or ANUM

The second wave of full qualification uses either a methodology, reportedly pioneered by IBM,³ called BANT (budget, authority, need, and time frame) or ANUM (authority, need, urgency, and money) and takes one or two meetings.

BANT is the most widely adopted sales qualification framework and the one we recommend for Predictable Prospecting. However, since this framework has come under intense fire over the years, we feel the need to defend this choice.

The primary complaint is that B → A → N → T is in the wrong order, and while we agree, we feel its opponents are taking the acronym too literally. Full prospect qualification is an elegant, guided dance during which the conversation will drift in and out of each of the four components. Even the 24 different permutations of the four letters do not do justice to the nonlinear nature of qualification.

Another complaint about BANT is that the specific words constituting the acronym are either too narrow or not narrow enough. Again, we feel the opponents are being too literal. (In our most jaded moments, we think the opponents are simply trying to co-opt and rebrand BANT for their own benefit.) Applying a broader interpretation may help: (1) budget may be expressed as money, funding, spend, or resources; (2) authority may be expressed as control, power, or responsibility; (3) need may be expressed as want, desire, opportunity, pain, challenge, goal, or plan; and (4) time frame may be expressed as urgency, schedule, or prioritization. Countless acronyms besides BANT can be formed by resequencing the first letters of these synonyms.

Establishing the Need

To the extent that a B2B salesperson can control the qualification flow, we recommend starting with need. Synonyms aside, the process for establishing need has become as contentious as the full BANT acronym. One camp supports the mainly reactive approach of listening carefully to discover wants and unmet needs. The other camp promotes the mainly proactive approach of bringing the prospects to the realization of an opportunity they did not know they had. All salespeople recognize this as a false dichotomy, especially in complex transactions, when sales professionals constantly shift though the quadrants of Figure 6-6 while uncovering needs and suggesting opportunities.

  FIGURE 6-6   Full Range of Options to Establish Need

SPIN (situation, problem, implication, need-payoff) Selling,⁴ the most popular need-centric sales methodology, acknowledges these sorts of shifts. Though published in 1988, the book of the same name is just as fresh today as it was the day it was written. At a high level, the key points of the SPIN Selling approach pertaining to full qualification are as follows:

Precall planning: Before the call, write down at least three potential problems that the buyer may have and that your products or services can solve.

Preliminaries: Establish who you are and why you are there, and gain permission to ask questions. Avoid talking about your products and services until late in the process.

The S in SPIN: In the situation phase, ask fact-finding questions to understand the nature of the prospects’ business and their key objectives. Critically, these should be questions a salesperson could not have gotten answers to via preliminary research. For instance, “What system or process are you using at present?”

The P in SPIN: In the problem phase, the salesperson uncovers implied needs. For example, “What are the biggest challenges you are facing in meeting your strategic objectives?”

The I in SPIN: In the implication phase, the salesperson asks questions designed to increase the size of the problem in the prospects’ mind. Great questions include these: “If x is happening, could that lead to an even worse y?” “How long have you had this challenge?” “What are the consequences if you do not solve this challenge?” “What benefits do you expect if you embrace this opportunity?” (Authors’ note: Avoid implication questions that feel too “slick.”). A current twist on implication questioning is the notion of challenging the prospect on predisposed belief systems.

The N in SPIN: Finally, in the need-payoff phase, the salesperson shifts to positive, solution-centered questions designed to have the prospects express an explicit need. For example, “How would you find (this solution or benefit) useful in addressing (your explicit need)?”

Though SPIN Selling covers most of the bases, The Challenger Sale and The Challenger Customer, two books by researchers at the Corporate Executive Board (CEB), add an important perspective on how to think about need. (Note: The Challenger approach is very much in the proactive camp, arguing that the most effective salespeople bring unexpected insights to customers that increase revenue, lower costs, or control risks.) As reported by the CEB team, the average B2B transaction involves not just 1 but 5.4 decision makers, each with slightly different agendas and risk tolerances.

Think back to our example of a chief marketing officer looking to increase lead generation. Individuals likely to be involved in a purchase decision addressing that need include the CMO, CIO or CTO, CEO, CRO, general counsel, line-of-business leaders, and so on. The Challenger Customer highlights consensus building across the group as the main barrier to a successful sale.

To that end, the salesperson needs to find the overarching business challenge the group members share. In fact, the CEB researchers found that selling to individual (lower-level) needs is actually counterproductive once the parties come together. In our example, that means it is a mistake to sell accelerated lead generation to, for example, the CMO, easy technical implementation to the CIO, or cost savings to the CFO. Stepping up a level, these individuals collectively want to increase profitability. The salesperson’s job is to prove that among the many options for accomplishing the goal of increasing profit, the supplier’s solution is worth the investment of time, effort, and energy.

Confirming the Time Frame

With need established, a salesperson’s next order of business, again assuming some degree of control and linearity, is confirming the time frame. Leveraging one of the synonyms for the T in BANT, the salesperson must classify the prospects’ sense of urgency as: immediate, high, medium, or low. Organizations that are time limited rather than prospect limited classify only immediate and high as qualified.

Additionally, the salesperson must understand at least three separate but related time frames, including the time to a signed deal; the time to assess, develop, and deploy the solution; and, most important to the prospects, the time to achieve the expected benefits. If the prospects’ expectations do not meet the supplier’s ability to deliver, either those expectations need to be adjusted or the salesperson needs to flag the prospects as not yet qualified.

Finally, the time frame may involve critical dependencies, most notably, available resources. Independent of budget, there may be insufficient management bandwidth, or there may be other human resources bandwidth constraints that delay the time frame.

By working within a more flexible definition of time frame, you have leeway to ask a range of effective qualification questions:

What kind of time frame do you have in mind?

Do you already have a relationship with another supplier or partner? When is the renewal?

What other suppliers or partners are you considering?

When was the last time you evaluated a solution to this problem? What was the outcome?

Where does this rank in your overall priorities?

What are the consequences if a decision is delayed?

Aggregating the Authority

In this final complaint about the literal interpretation of BANT, the qualification framework assumes a single decision maker with full authority to approve a transaction. While only one person’s signature makes it onto a contract, the Corporate Executive Board (CEB), as previously mentioned, found that an average of 5.4 people are involved in B2B decision making. Hence, knowing who the ultimate decision maker is should not be the sole criterion for checking the box on the A in BANT.

This leaves a sales organization with options that are dependent on the type of deal. In the most complex deals, a lead may be qualified on the basis of need and timing alone. Then the painstaking process of identifying authority becomes part of closing rather than qualification. As an alternative, the salesperson may be expected only to map out the set of individuals involved in making the decision, including titles and names, to meet the authority qualification hurdle. If a salesperson is lucky, an individual prospect in the account may even serve as a guide and share knowledge about what makes her colleagues tick.

Authority questions must be asked with more delicacy than need and time frame questions. Our personal favorites are these:

In addition to you, who else in your organization is responsible for (will benefit from) solving this problem?

What does the decision-making process look like at your company for purchases or partnerships like this?

Who else do you expect will need to be involved in this project? (We doubt anyone asks the direct question, “Are you the final decision maker?”—the most direct, yet still appropriate, question.)

Securing the Budget

In complex B2B transactions, budget, even more than authority, has become less of a qualification criterion, having shifted to being part of the closing process. If a group of prospects with authority in an account have a shared need and high sense of urgency, then they will find the budget to purchase a solution (from the salesperson or her competitor). So, rather than confirming that a budget is available, the salesperson can meet the budget qualification hurdle by knowing the answer to the question, “How will funding for this project be determined?”

If the CFO’s name does not come up, the salesperson should bring him up since it is very likely he will be involved. Though a bit more direct, some of the people we work with find success with, “Have you already set aside funds for this project?”

This final question is most appropriate when a salesperson suspects the prospect is already quite far along, possibly at the early stages of vendor selection.

To recap, when sales professionals are more constrained by time than by lead volume, qualification is meant to rapidly convert the most profitable, most likely to close leads into opportunities. Are we a fit? (AWAF) should be accomplished in a 15- to 30-minute phone call. BANT, in whatever permutation applies, should be accomplished in one or two guided conversations of up to one hour each. Leads that are not yet qualified should be returned to nurturing with some notes about what made them fall short, along with further intelligence that can be leveraged for mass, data-driven nurturing.

Though sales managers might want to capture all the nitty-gritty details of qualification, it is not practical to do so. If extensive detail were optional, most salespeople would ignore it, and the data would be useless. If extensive detail were required, most salespeople would tacitly rebel, making sure that forms were complete albeit with highly suspect data. We have seen both of these situations more times than we can count. At the end of the day, high-level activity reporting is sufficient. Armed with that data, sales leadership can determine the two metrics that most matter in the qualify stage: the number of touches needed and the time lapse to qualify.