How can you accurately determine whether a prospect or customer is a diamond, gold, silver, or copper?
Prequalification is best done over the telephone. Questionnaires sent through the mail can be a first step, and these devices can some- times help stimulate response to your package or to cold mailings. But most of us can’t really prequalify a person until we talk with him or her over the telephone. In most instances prequalification is not done in per- son, because one of its benefits is that it eliminates wasting time meeting people who are not good candidates for your service.
I can’t give you the exact questions to ask your prospect because the questions depend on the markets you serve, the way you do business, and the services you offer. But I can offer guidelines to help you formulate your prequalification script, similar to the list of questions that I ask my own prospects.
Basically, the purpose of asking the prequalification questions is to determine whether the person fits the characteristics of a qualified prospect. A qualified prospect:
• Has an immediate or future need to obtain a particular benefit or buy a particular type of service.
• Has the money to do so.
• Can authorize the purchase (or obtain authorization for it).
• Is a person you can work with (meaning that you have personal chemistry).
• Would significantly benefit from retaining your services.
If a person meets each of these five criteria, then he or she can be considered a prime prospect for your service, and you should actively and aggressively direct your sales and marketing efforts toward this person. If a person meets only some of the criteria, or meets all of them but only marginally, he or she can be considered a marginal prospect. You might try to sell the marginal prospect, but you wouldn’t spend much time and effort doing so.
If a person does not meet the criteria, he or she does not qualify as a prime prospect for your services—and you should politely end the call. (Interestingly, some of the biggest nonprospects will waste huge amounts
of your time, if you let them, while some of the best prospects do business efficiently with a minimum of chit-chat and small talk.)
Let’s take a look at each of the five prequalifying criteria in a little bit more detail:
Prequalifying Characteristic #1: The person has an immediate or future need to obtain a particular benefit or buy a particular type of product or service.
The prime prospect is someone who either needs you now or will in the future. Obviously, the best sales leads are prospects with an immediate need. To determine whether the need is immediate, you simply ask, “Do you have an immediate project/assignment/problem I can help you with right now?”
If there is no immediate project, try to determine if there is a fu- ture need. Ask, “Do you use this type of service from time to time?” (“This type” refers to the type of service you render as described in your sales materials.)
Naturally, most prospects will say, “Yes, I use your type of service from time to time” or “I haven’t used this type of service yet, but I’m thinking of doing so.” Otherwise, why would they have requested your brochure? So it’s also a good idea to determine when they’ll have a need by asking them. However, when doing so, don’t say “Will you have a project in the future I can help you with?” because prospects’ tendency is to answer “I don’t know”—which leaves you in a weak position for follow- up. Instead, assume they will have a need and instead ask when they will have a project. For example: “Do you anticipate holding a training semi- nar for your salespeople within the next three months? within six months? this year?” Prospects will generally answer with some time frame, and your response is to offer (and promise) to contact them again around that time.
A few prospects may indeed tell you that they don’t use your type of service. For example, “No, we’ve never had an outside sales trainer do a training program for our sales reps, but I saw your ad and just was curi- ous.” In this case, they might not think they need your services, but they certainly need the benefit your services provide—namely, better-trained salespeople who sell more products and open more new accounts. So you will need to explain a bit about how your services work, what the bene- fits are, and the results you have achieved for your other customers.
For instance, a sales trainer, upon being told a firm never uses an out- side sales trainer, might say, “I understand. But tell me: If I could show you a way to get each salesperson in your organization to increase their gross sales by 10 to 25 percent or more this year, would you be inter- ested?” When the prospect says yes, the trainer then launches into his sales pitch.
Prospects who state that they have no immediate or future need, do not use your type of services, do not express interest in the benefits or re- sults your services provide, and tell you, “I’m not interested and I am just collecting brochures; leave me alone!” are probably not prime prospects for your services. They’ve said they are not interested, and it probably will not pay off to spend your time trying to convince them otherwise.
Prequalifying Characteristic #2: The person can afford to buy from you.
A prime prospect is someone who has the money to buy what you are selling. There are many people and organizations that want your service and could benefit from it but cannot afford your fee. Obviously, because you want to get paid, you must do business only with prospects who can afford you.
Ascertaining the financial status of a potential customer is a bit tricky. Bring up the subject of price too soon, before you have clearly established the tremendous value of what you are selling, and you risk scaring potential buyers away. Bring up the subject of money too late, and you’ll find yourself wasting many hours of your valuable time giv- ing sales pitches to people who under no circumstances can possibly af- ford you. That’s terribly draining on any business but especially so if, for you, time spent selling means time not spent servicing customers and making money.
I can’t tell you exactly when to introduce the subject of cost into your discussions with the prospect, because it depends on what’s customary in your industry. However, if the prospect asks you about money, that’s an excellent sign; the serious buyer is more likely to want to quickly get to the bottom line and find out what the cost will be.
Here’s a rule of thumb you may find helpful in prequalifying prospects regarding their ability to pay: When you’re uncertain in your own mind as to whether the prospect really has money or is just wast- ing your time, bringing up money can quickly separate the serious from the frivolous.
but you suspect it’s more to puff her own ego than to actually buy any- thing from you, it’s perfectly okay to say, “Well, I’d be happy to handle that; my fee is $250 an hour and I’ll need a retainer of $3,000 to get started. Do you want to send a check out today so we can begin this work next week?”
At that point, the serious prospect will ask more questions, because now that you’ve stated your fee (and it’s big), she wants to grill you to make sure she’s getting her money’s worth. The nonprospect will either balk (“That’s outrageous!”) or, to prevent her ego from getting bruised, tell you sure, it’s no problem, she’ll send a check today. Then she quickly ends the call and you never hear from her again.
On the other hand, if you feel good about the prospect—you think it’s a serious inquiry from a person or company with the budget to afford you—then don’t bring up money right away. Instead, set up a time to make your full sales presentation. Remember, the key to selling serious prospects is to present the benefits of your service in a way that makes them desire it strongly—so strongly that your fee, when finally discussed, seems insignificant compared to those wonderful benefits you will de- liver. If you bluntly say “My fee is such-and-such” too early—especially if that fee is large and before the prospect has really become interested in you and your service—you risk seeming too arrogant. And that can be a turnoff to a potential customer.
Prequalifying Characteristic #3: The person can authorize the purchase or obtain authorization for it.
It’s not enough that the prospect has a need or desire for your product or service and can afford it. He or she ideally should also be in a position to sign your contract and write you a check.
If you sell to consumers, for example, how many times have you thought you had the job sold because you convinced your prospect, only to find out you didn’t get the job because “my husband/wife doesn’t want to spend the money”? And if you sell to the corporate market, as I do, you might have heard a prospect tell you “I’m ready to buy”—only to have the customer drag his or her feet and then ultimately say, “My boss thinks it’s too much money” or “The committee didn’t approve it”? Un- fortunately, you haven’t sold your service until everyone who must ap- prove the purchase has done so.
The best prospect is usually someone who can directly authorize pur- chase of your service. This might be the head of a household, the owner
of an apartment complex, or the president of a manufacturing firm. However, it’s not always possible to deal directly with the man or woman in charge. That person may be too busy, not interested, or consider the matter too unimportant to give it his or her personal attention.
If that’s so, the second-best scenario is to deal with prospects who, while they cannot directly approve your contract, are in a strong position to specify or recommend your service. In a business, this might be the manager whose area of responsibility deals with your service and whose direct boss is the person who can sign your paperwork.
The worst-case scenario is to deal with some lower-level employee who has no real knowledge of what you sell, no real understanding of the problem, and no clout when it comes to specifying, recommending, or approving use of your service. For instance, in my business, I’ve learned that almost all inquiries from secretaries and other assistants are worthless. If prospects don’t think it’s important enough to write or phone me themselves, then they don’t understand the importance of what I offer and are unlikely to buy. (This may not hold true for your business, of course.)
Prequalifying Characteristic #4: The prospect is someone you can work with.
You are going to be spending a lot of time with the customer after the sale is made, so it’s important that you get along with the prospect rea- sonably well. You might experience good personal chemistry with prime prospects and a minimal but only an acceptable amount of personal chemistry with marginal prospects. If you can’t stand the person at the other end of the phone—cringe when she speaks, sense he’ll be difficult, or feel the two of you just don’t “click”—then that person is probably not a good prospect for you.
Prequalifying Characteristic #5: The prospect will significantly benefit from buying what you are selling.
If the customer can’t really benefit from your services, he or she will be dissatisfied no matter how well your product performs. And if the cus- tomers are going to be dissatisfied, we should probably dissuade them from buying in the first place.
Why? Because unhappy customers can pose collection problems and generally aren’t good for our reputation. We build our businesses by cre- ating a large number of happy customers, not dissatisfied ones.
How do you determine whether prospects can benefit from your ser- vices? You know better than they do. If you’ve been in business for a year or more, you’ve gained a pretty good feel for what type of problems you can solve, what type of projects you excel at, what type of people can benefit most from your help. You also know what you don’t do well and whom you can’t help.
Did you ever talk to a prospect who resisted your sales pitch, and think, “I’ve got to make this sale because I can really help this person and it would be a tragedy for both of us if he didn’t use my service”? If you get the feeling that prospects will be suffering a terrible loss if they miss out on the opportunity to be helped by you, and that no one else could serve them as well as you can, they’re probably prime prospects.
In other cases, you may feel that you can help prospects, but so can a lot of your competitors. You know you would do a good job, but probably no better or worse than others in your field. People about whom you feel this way are good or marginal prospects, but not prime, hot prospects.
If you feel you are unqualified to help prospects, or that you are qual- ified but your particular services are not right for them, you should prob- ably turn away the work unless you really need it. The best move would be to refer them to a friendly competitor, who (you hope) will reward you with a referral to a different prospect who is more up your alley.