The 3 levels of sales qualification: account, opportunity, sponsor

It makes for pretty uncomfortable reading: CSO Insights’ latest global study of sales forecast accuracy suggests that - on a deal-by-deal basis - it is at close to an all-time low at 46.5%. To put that in context, simply tossing a coin would give more accurate results.

The consequences are equally unpleasant: forecasts get missed, stock prices get hammered, investors get burned, personal and corporate credibility evaporates, and people at every level from CEO to sales rep and beyond can end up losing their jobs.

Our observations - and our conversations with dozens of CEOs and Sales Leaders - suggest that the two primary root causes are poor sales qualification and ineffective (sometimes spectacularly incompetent) sales execution.

What do top performers do differently?

I’ll be returning to the subject of sales execution in a series of future articles, but today I want to concentrate on sales qualification. It’s clear that some sales people, some sales managers and some sales organisations do this far more effectively than the average.

When we dug in and tried to understand what the top performers did differently, two key patterns emerged: they saw qualification as a process, not an event, and they qualified deals at multiple levels: account, opportunity and sponsor(s).

Oh, and one more thing: they pretty much universally recognised the weaknesses of BANT (Budget, Authority, Need and Timeframe) as a framework for sales qualification (you can read why here).

Qualification is a process, not an event

In a complex, often dynamic sales environment, it’s dangerous to see qualification as a one-time event or stage. Qualification is something that happens progressively, and can and should be refined throughout the life of the project.

Top qualifiers typically revisited their qualification of projects at regular intervals, and often explicitly re-qualified every deal before allowing it to be promoted to the next phase of the pipeline.

Weighted scoring systems, and additional stage-related questions were regarded as particularly useful - as was management insistence on formally re-evaluating projects against clear (and often progressively more stringent) criteria as the deal evolved.

Some balance is required: it’s essential that you avoid making the system over-complex, or replacing informed judgement with mechanical processes. I suggest you start by evaluating your recent wins and losses and looking for the handful of indicators that can be most strongly linked to success or failure.

3 levels of qualification

My second observation is that highly effective qualifiers look at a hierarchy of related factors when determining which projects to invest in.

Organisation-level qualification

At the highest level, they judge whether the prospect organisation is a company they want to do business with, and have the potential to establish a profitable long-term multi-project relationship with. This is often the earliest level of qualification: it can pre-date the identification of a specific opportunity.

Top qualifiers typically have a clear sense of what an “ideal customer” looks like, and these criteria are more likely to be documented and shared across the organisation, and marketing tasked with reaching out to and into targeted organisations.

Opportunity-level qualification

At the next level, top qualifiers have a clear sense of what they are looking for in specific projects or opportunities - factors that determine whether the customer is likely to buy anything, whether they are likely to buy from the vendor, and whether the deal is likely to be profitable even if the sale is made.

The specific factors will vary somewhat from one product or market to another, but in most situations some variation of the Pareto principle will apply: a relatively small number of indicators will have the highest predictive value. You need to identify the ones that consistently matter in your environment.

Stakeholder-level qualification

The third level of qualification relates to the stakeholders, sponsors and decision-makers who are involved in the project. A critical question is whether your putative sponsor or champion is a true “mobiliser” - someone who has the power to make change happen within his or her organisation.

Top qualifiers we have spoken to regard qualification of their sponsor(s) as a critical element in determining whether to invest resources in the opportunity. There’s little value to be gained in winning the recommendation of someone who lacks the authority and influence to navigate their preference through their organisation’s internal approval process.

In summary

So there you have it: it is possible to make qualification less of a lottery, and the best way to accomplish this is to regard qualification as an on-going process rather than a one-off event, and to qualify projects from multiple inter-related perspectives: the prospect organisation, the specific opportunity, and the sponsor’s ability to make change happen.

How are you applying these principles today? Can you see how they might improve your ability to qualify deals, allocate resources, increase win rates and improve forecast accuracy? And can you share any other factors that have helped you qualify more effectively? If so, please leave a comment below.