We have all heard the term "qualified prospect" in reference to potential customers, but what does 'qualified' really mean? A qualified client-to-be (my term of choice for 'prospect') is someone in your target market whose place in the buying cycle is known. In other words, you have determined how close that person is to buying. Coveted late-stage buyers absorb a lot of your agency's business development resources in the form of meetings, proposals, and other work required to land the account, but without proper qualification, most people assume the client-to-be is closer to buying than he really is. This leads to far too many resources being applied too early in the buying cycle.
You can reduce your business development workload by using the following four areas of questioning to qualify your clients-to-be and determine how close they are to buying:
Does the client-to-be have a current or imminent need, which your company can fill?
If the answer is no, congratulate yourself! You have qualified your client-to-be, and he is a long, long way from buying. No is an answer you can do something with. You have identified that the client-to-be is early in the buying cycle. He's still buying; he's just off in the distance. Don't ignore him, but you certainly don't need to treat him the way you would treat someone who is ready to buy right now. If the client-to-be does have a current need for your services, that's even better: you can move on to the next important question.
What is the decision making process, who are the decision makers and is the person you are dealing with one of them?
The common mistake of applying more business development resources than necessary often begins with selling into an organization at too low a level or at the wrong entry point into the organization, or neglecting other decision makers to court just one. If you don't know how decisions are made or who makes them, your likelihood of closing the account before it gets to a competitive pitch is slim.
I once had a client-to-be that I courted for almost three years. He repeatedly expressed interest in our agency and I repeatedly bought him lunch for his expression of interest. After he left the client-to-be company I found out that the decision-making responsibility for the assignment I was pursuing did not even rest in his department, let alone with him! But I repeatedly rewarded him for not setting me straight. His disclosure would have put an end to his free lunches! If I had known how decisions were made and who made them, my time –and money – would have been better spent on those with real decision-making power.
When does the client-to-be need to have a solution in place?
A client-to-be that admits that he has a marketing challenge that your agency might be qualified to assist with, but who lacks intent to act to address his challenge is one who is still a long way from buying. Do not mistake information gathering for intent to act. Tire kickers are plentiful, and more often than not interest does not immediately graduate to intent. Clients-to-be can be stuck in information gathering mode for a very long time without ever forming an intent to solve their problem. Recognizing a problem exists and deciding to take action to address the problem are two completely different places in the buying cycle separated by an important indicator: the intent to act. This intent is what separates early stage buyers from late stage buyers. Assuming or misdiagnosing this intent is one of the costliest and most common business development mistakes.
Once your client-to-be has truly formed the intent to act, he will act quickly. The question of timeframe is an important one because those with a legitimate intent to act usually have a timeline to do so within six months. Behavioral psychologists know that intent to act outside of six months is no real intent at all. Without a timeline within this six-month window, there is usually little or no intent to buy. Hint: look for the triggering event to back up the timeline: a tradeshow, product launch, annual general meeting, or close of a budget year.
Are funds currently allocated?
Establish whether any money has been set aside for this project, before you worry about how much the budget might be. A client-to-be who has the intent to act as well as resources already allocated to the project is a client-to-be who is ready to buy. These are the clients-to-be who merit proposals. If your client-to-be has intent but no allocated funds, then your objective is to help him set a budget before you present your proposal. Give him a budget range and get approval on it. Then deliver a proposal for a solution within that range.
The price contained in your proposal should never be an obstacle to getting the account. Remove this obstacle prior to presenting the proposal by ensuring that funds are allocated and the price for at least one option within your proposed solution is within the range agreed upon.
Because a proposal represents a significant investment of your time and company resources, you need to make sure it stands a good chance of success. Make sure the client-to-be needs the kind of services you provide and present your proposal only to decision makers who are ready to buy. Period. Do not present a proposal just because your client-to-be requested one. It is common for early-stage clients-to-be with interest but no intent, to ask for proposals. These are the proposals that never get acted upon. They are the opportunities that appear to slowly slip away, when, in reality, any opportunity was still a long way off. No timeline, and no budget assigned, equals no proposal.
Asking the right questions at the right time will help you land more accounts with less work, and save you both time and money.
This article has been provided by Enmark Performance Development. For more information, please visit their website at www.winwithoutpitching.com.