“I’ve done it!” Yelled a client at me down the phone. “I’ve started a sales pipeline! I’ve got 158 leads in my database!”
“What sort of leads?” I asked her. Never one to let my clients do a half-baked job.
“Perfect ones,” she retorted gleefully.
“You’d be so proud of me,” she continued. “They’re all headteachers, deputies and SENCOs!” (Decision makers, buyers and influencers in her industry).
“They’re all in Hampshire and all in the larger infant or secondary schools which I already know have a desire to improve in my area. And I’ve got all their names, emails, addresses and telephone numbers.”
“Yes, it’s taken me six months to get this far, and yes, alright, I know they’re only in Excel at the moment, but I can start now. I can market to them.”
And she hung up.
Why all the excitement about those contacts?
Now, 158 contact names in a sales database may not seem like much to some businesses.
But to an SME selling new and specialised professional services into schools, this was a major accomplishment and huge step forward. This was the start of her sales pipeline.
These were real, qualified leads.
When three new clients per year is all you need (three good-sized, good-fit clients with a high lifetime value, that is), then putting together a clean database of 158 high quality, qualified leads is exactly where you want to be to start building a solid sales pipeline for the future.
Understanding who goes where in your sales pipeline.
My client and I had already had a few sessions together to get her sales and marketing thinking started.
We’d looked at the various options she had around growing her business, by asking some of the big questions:
- What was her mission (did she have one?)
- Where did she bring the most value?
- Which services did she most enjoy providing?
- Which were her most profitable services?
- What did her best customers use her for and why?
- What story did her past experience support?
And we’d been able to answer most of these fairly quickly.
That gave us – from a sales and marketing perspective – a clear business direction to head in, an abundant but clearly defined target audience and a strong message. Yay!
But we hadn’t had got any actual people to market to. No database. No sales pipeline. Drat.
And now we did. Bingo!
Just what is a qualified lead?
In my own head, when building a B2B sales pipeline, it goes like this.
Dirty data –> clean data –> qualified lead –> prospect –> client
I first think – dirty data.
Which I appreciate isn’t the nicest of terms, but until I clean the data up and qualify it, it’s just that. These first contacts are not leads, nor prospects, and not even people (bit harsh maybe), they are simply data. And dirty data at that.
ONE: That dirty data becomes clean data (real people) – when you know the details you hold on them are definitely correct (company still trading, name, address, email etc.)
TWO: This clean data will morph into a qualified lead only if they pass stage 1 (see below). And if they don’t pass stage 1, they get deleted. From your database, that is, not in real life.
THREE: They only become actual prospects if they also have a valid opportunity within a defined timescale – that is qualification stage 2.
FOUR: If there’s a good fit between what they need and what you can offer – then they can become clients.
Note: It’s worth remembering that whenever you buy a list, you get dirty data. However carefully it’s been thought through, filtered and selected before you buy it. Until you know something more about each company or person, it is unqualified (and therefore dirty) data.
Marketing to unqualified data is like shouting to a huge crowd in a tornado…
…when you should really be whispering to a couple of people in a private room.
Stage 1 – from clean data to qualified lead
In order to begin to qualify people at stage 1 to allow them into your database of leads and prospects, you need to have first sorted out your niche positioning and have a clearly defined target audience. (Help with that bit is available here.)
Here’s a quick check list to help you with that.
- The sector you are targeting (if sector specific)
- The nature of their company and what they do
- The size of their company (set a max and min in terms of turnover, employee numbers or equivalent)
- Where their decision maker/head office is based (if relevant to you)
- The type of job titles that your actual buyers have – and the typical job titles of any influencers, gatekeepers and budget holders
These are criteria against which to benchmark all data.
You also need to have agreed and be able to articulate:
- What your own minimum order value (MOV) is for a single project and/or annual spend
- What your ideal customer provides in the way of minimum lifetime value in an ongoing relationship
- What types of problems your clients have, that you are able to solve
- Why you are (truly) better placed than your competition to solve these problems
- Exactly how you can add value for them – timescales, ballpark costs and ROI
If it fits, it’s a qualified lead. Yay! Add them into your sales pipeline. Start communicating with them.
If it doesn’t, it’s just data, and not part of your universe. You can delete them from your CRM, or (depending on your methods) don’t add them to your CRM in the first place.
Stage 2 – from qualified lead to prospect
So now you have a qualified lead and need to work out whether they are an active prospect whom you could work with in the short to medium term.
What you now need to know includes a lot more detail about them as an organisation and also as people. In the case of providing B2B professional services, this will involve a reasonable length meeting or two (or at the absolute least a couple of decent phone calls) to find the answers.
- Do they have problems within your area of expertise, which you can solve?
- Are they aware of them, and can they articulate them – clearly, partially, not all all?
- Have they got a timescale in mind to solve these matters?
- Do they have budget already allocated to resource it?
- Are you talking to the decision maker and/or budget holder?
If you get a YES to three or more of these, you’re on.
Less than three, and you’ve got a bit more work to do.
All five, and (as long as you’re a good fit), you’ve got a really hot prospect – good luck!
Some exceptions that prove the rule
Now and then you’ll come across a company or person who you just know is the perfect prospect. Then you match them against your criteria and they don’t fit.
Even worse, they definitely don’t fit.
What should you do?
As with any processes, there are exceptions. But the important difference this time is that you are in control of the exceptions.
Rather than wanting to sell your services to any company you come across, you are now making these decisions on who to work with yourself. This moves you to being much more conscious about how you can add value, and gives you more control of the buying relationship.
There are some very good reasons you may decide to define someone as a prospect despite the fact they clearly don’t meet your criteria.
Qualifying a prospect on your own terms
- The portfolio prospect. They are such a well-known, on-trend or well-respected brand in your area, that you can use any work you do with them to win other work, grow your reputation or gain speaking opportunities. Even if they are actually tiny and they will never spend more than 1% of your annual minimum order value (MOV).
- The foot in the door. Their tiny first project value – well below your project MOV – is offset by their potential longer term or lifetime value. In other words, they have a lot of potential. How you judge or value this potential is up to you. Typically this looks like a bigger client starting a relationship with you by testing you with a small, low risk project.
- The stretch client. Everything is a great fit. Ah, apart from one big thing. They might be in completely the wrong sector – but wanting your best-fit product. Or perhaps they want a service you don’t typically provide, but you know them, their industry, competitors, problems etc. inside out. You think carefully before tackling this one – if it fits with your mission and your positioning, then go for it. If not, stay focused and say no.
- Wrong job, right company. Your contact is a very lowly Supporting Assistant Intern, or possibly a very senior Director of Completely Irrelevant Area – but for a really interesting, good-fit organisation. And you’re struggling to find any other contact or way in to a better contact through all the usual channels (LinkedIn, Google, company websites etc.) Time to stop and think. Is it better to spend precious time seeking for a way in to this single possible prospect – or should you spend that time communicating with the people you are already building a relevant relationship with?
- Right company, wrong time. All’s good with qualification, you get on like a house on fire, you’ve learnt lots about them, but do you know what? They simply don’t need you at the moment. This often feels a bit sad, but the action here is simply to keep in regular contact and get to know them better. It’s companies like these who’ll refer you to others – even though they haven’t used you, they fully understand what you do and have a relationship with you. And then, when the time comes, you’ll be there. It might be 10 years later, but then again – how long would you like to be in business?
So there you go.
I hope that’s a useful way to think about your own sales pipeline and prospect database – remembering that for SMEs it’s rarely about quantity. It’s about fit, and to find that out you have to do some planning, some digging, lots of learning and lots of listening.