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What Is Lead Qualification and How Does It Work?

Illustration of two people doing lead qualification in front of a checklist.
Lead qualification helps you determine which leads are worth pursuing so you can close more deals. [Studio Science]

Don't waste time on deals that are unlikely to close. Learn how to identify more right-fit leads and seal the deal.

Reps spend only 28% of their week actually selling, according to the State of Sales Report. What’s more, 69% of sales professionals agree their jobs are harder now. And yet, they’re under enormous pressure to hit their targets. That means sales teams need to hone in on the highest quality leads to make their numbers. That’s where lead qualification comes into play. Let’s talk about what it is and how to do it right.

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What is lead qualification?

Lead qualification helps you determine whether a prospective customer is a good fit for your product(s). Two main factors determine whether a lead is qualified: 1) Your product will fulfill their needs, and 2) they can afford it. While there are other, more detailed ways to qualify a lead, you can generally disqualify them if those two factors aren’t met.

This process is often a team effort between marketing and sales. Done well, sales lead qualification helps your teams prioritize which deals to pursue so they can use their time wisely.

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Qualified leads vs. unqualified leads

If qualified leads are good fits for your product and can afford it, then unqualified leads must be the opposite, right? Yes. But there are a few other ways unqualified leads are identified.

Unqualified leads are:

  • Those that have no use for your offering, perhaps because they don’t have a matching need or because they’re in the wrong industry
  • Leads that you can’t serve based on their demand, for example, if you’re a small business or startup without the capacity to fulfill high-volume orders
  • Prospects that cannot afford to pay your rates

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The difference between lead scoring and lead qualification

While lead qualification and lead scoring are related, they are not the same thing. Each has a different but complementary way of quickly identifying the best prospects to pursue.

  • Lead qualification is a process that helps determine whether a lead is a good fit for a business based on fit, finances, and interest/need.
  • Lead scoring assigns a numerical score to leads when they are brought into the sales funnel. This score is based on each lead’s engagement and qualification factors, usually determined by your sales leaders. In short, it’s a way to gauge how valuable the lead is to the company based on the potential for sales, the likely speed to close, and the ease of ongoing engagement.

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The importance of lead qualification

Lead qualifying helps you quickly home in on high-value, high-potential leads so you can close more deals in less time. How? With a process that elevates potential customers based on the likelihood of closing and the value of each deal, among other factors, helping you use your time more effectively.

If you can quickly identify the best prospects, you can avoid wasting time with leads who aren’t likely to convert. That lets you spend more time on nurturing and closing deals and prevents opportunities from falling through the cracks. At the end of the day, lead qualification can make the difference between quota attainment and lagging sales.

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Common types of qualified leads

Because the lead qualifying process can be complex, it’s important to create as much clarity as possible. You will hear these types of leads when talking about qualifying, so let’s define them:

Marketing qualified leads (MQLs)

Based on your company’s determination, an MQL is either a lead that’s been qualified to receive marketing materials or a lead that your marketing team has nurtured to a high enough score (via lead scoring) that they’re ready to pass on to sales for further qualification.

Sales qualified leads (SQLs)

Depending on how your company uses this term, either an SQL has been qualified, typically by marketing, and passed along to sales for follow-up or a sales rep has qualified the lead themselves and found them to be a good match for the company. Either way, when a lead becomes an SQL, sales takes over to further qualify, pursue, and nurture them toward a sale.

Product qualified leads (PQLs)

Most often, PQLs are prospects that have signed up for a free trial product or freemium version of your subscription or software. Whether marketing or sales follows up with them is a strategic decision for managers at your company.

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A step-by-step guide to lead qualification

According to Lauren Belling, former sales representative with BACA Systems, here’s a common approach to qualifying sales leads:

1. Research

Define the most basic criteria you’ll use to qualify leads and move down that list as you assess each lead. Ideally, your early qualification checklist will include criteria that you can easily find without having to speak to anyone. These might include the type of company, location, region, industry, revenue, or number of employees. (And don’t forget your CRM can help you with this research as well as lead qualification itself.)

2. Contact and evaluate

Once you’ve narrowed down your leads list, it’s time to make contact. You can email or cold-call prospects, but many salespeople also use LinkedIn. The best channels to use may depend on people’s habits within your target industry.

It’s helpful to use a more detailed checklist or a conversation script to evaluate customers during this step (see section below). Ask your sales manager or sales operations leader if they have one you can use as a jumping-off point. If they don’t, consider developing one from your own experience or using generative AI tools, such as Salesforce’s Einstein 1 Platform, to create one for you.

Keep in mind that when leads are cold, you may find more success by starting a conversation with valuable insights the lead can connect with. For example, you can talk about things you’ve read in the news about them or ask about their challenges. Start vetting your prospects only after establishing a rapport.

3. Confirm the point of contact

At this point, you’ve assessed your lead and confirmed that it’s a worthy target. Now it’s time to continue the sales conversation and ensure you’re talking to the right person. To make a sale, you have to speak to the person in charge of purchase decisions. Find out who that person is and get their preferred contact information.

4. Schedule a follow-up

At this point, you’ve fully qualified your lead and determined that a relationship would be mutually beneficial. From here, you’ll need to schedule a follow-up with your point of contact to explain your offering in more detail. This could be a virtual demo, a lunch, or a full sales presentation. Suggest whatever makes the most sense for your situation. Be sure to ask them what they’d like to learn so you can do your best to help them.

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3 lead qualifying frameworks

There are several popular lead qualification frameworks out there. To pick the right one, consider the prospects you’ve worked with so far. Think about their interests, challenges, communication styles, and the process you went through to close successful deals. Based on those experiences, assess which of the below frameworks can best guide your future lead qualification efforts.

1. B.A.N.T.

B.A.N.T. encourages you to get answers to specific questions while qualifying leads. This framework helps you get to the meat of whether there’s a good match between your company and the prospect. However, it may feel a bit aggressive and too focused on your needs rather than theirs. With that in mind, be careful in how you frame questions. Consider this framework if you generally work with leads who are already eager to work with your company.

  • Budget: “What is your budget for addressing this need?” Their answer will not only tell you whether they can afford to work with your company, saving you time if they can’t, but will also guide which solutions you recommend. For instance, companies on a tight budget may be content to purchase a basic software platform while others that have larger budgets and more complex needs may want to pay for custom implementation that offers customizations.
  • Authority: “Who has the authority to make this buying decision?” This question isn’t meant to shunt aside your initial contact person. Instead, the answer will help the two of you get to a closed deal faster by involving the right people in the conversation as early as possible.
  • Need: “What needs are you trying to meet, and what has stood in the way so far?” As they answer, don’t be afraid to ask clarifying questions to make sure you get to the root of the issue. Consider how your product or service can meet those needs and focus future conversations around them. Finally, listen to any of their past frustrations with service from competitors. This can help you deliver better service after closing.
  • Timeline: “When do you hope to make this purchase?” This helps you prioritize your time and collaborate with the prospect to get them everything they need to make their decision promptly.

2. C.H.A.M.P.

While similar to B.A.N.T., the C.H.A.M.P. framework begins with a focus on understanding your lead’s challenges. By starting with an effort to see things from their point of view, you can build a positive, consultative relationship. That makes this framework better for warm, not hot, leads.

  • Challenges: “What challenges are you facing that you’re hoping to solve?” If they’re already using a solution, how hasn’t it met their needs? As they answer these questions, you’re gathering intel to guide your pitch. Make notes about the pain points your solution best solves so you can highlight that in your next conversations and presentations.
  • Authority: “Do you have purchasing authority? If not, can we invite the person who does to our conversation soon?” Make sure you position this question in a consultative way. You want to help guide them in getting what they need, and part of that is collaborating with them to make a business case for the people who matter on their end.
  • Money: “Do you have room for our product or solution in your budget?” This qualifies the lead and saves you both time by helping you decide which services or products you should steer them toward. It’s not fun for either party to get a lead excited about a solution only to find out they can’t afford it.
  • Priorities: “Which challenge needs to be solved first? What other solutions are you considering, and when do you plan to decide how to move forward?” Their answer helps you organize and prepare for your next conversations with this lead while also prioritizing this account compared with others.

3. M.E.D.D.I.C.C.

This one looks complicated, but that’s because it’s the answer to qualifying leads that have a complicated purchasing process. Usually, that’s large enterprises. If you find yourself selling to a lead with a complex procurement process, this may be the best framework for you. Just note that while you might not ask all of these questions, you can still get the answers as you learn more about your prospect’s organization.

  • Metrics: “How would a sales deal affect your finances in the short and long term?” As they answer, consider how you can guide them to see the long-term value of partnering with your company. Share case studies and create projections based on their financial data to illustrate how and when they’ll see a return on investment (ROI).
  • Economic buyer: “Who is responsible for your budget and your profits and loss management?” Ask them whether this person should be involved in a buying committee and when you should bring them to the table.
  • Decision criteria: “How do you qualify your vendors? What do you need to know about us before purchasing?” This allows you to collect the information that matters most to your lead, ensuring they have what they need to make an informed decision quickly.
  • Decision process: “What are the steps you use both to measure and compare vendors, and approve a purchase?” Their answer should guide which information you pull and how you position your company. You’ll also be able to better organize your sales materials and decide how to allocate internal sales resources, such as proposal teams. Depending on the number of steps and their timeline, the answer to this question may even guide your team’s sales projections.
  • Identify pain points: “What are your challenges? What do you need and what are your nice-to-haves?” This is another question that helps you better understand the prospect. Their answer will help you prioritize which information to share and when, guiding how you position your solutions.
  • Champion: “Is there someone internally who will work with us on our sales pitch and vouch for us during the consideration phase?” It never hurts to ask! If you have an ally who likes your solution already and wants to work with you, identify them early and collaborate on your approach.
  • Competition: “Which companies are we competing with for this deal?” This is great intel to have when you can get it. Once you know your competition, you can look into what they offer and their messaging to determine your best chance at winning the deal over them.

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Lead qualification checklist

The above frameworks are all efforts to learn more about each lead, ultimately helping you decide whether a lead meets important criteria before you spend your time pursuing a sales deal. No matter which framework you use, here’s a lead qualification checklist you can use to streamline the process:

  • Are they interested?
  • Can they afford what you offer?
  • Can they make a purchase decision now (pursue a deal) or in the future (route to marketing to keep the lead warm)?
  • Are you in contact with a purchasing authority or will you be soon?
  • Can your offering meet their needs or solve their problems?
  • Can you provide what they need to learn about your company and what you offer?

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Qualifying leads for sales success

Many sales are lost because of poor early qualification and failure to follow up. But when you qualify leads well, you learn what you need to know while also building relationships. By identifying the best leads to pursue and using your time to ask leads the right questions, you will close more sales and improve your company’s sales process — and bottom line.

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Erin Hueffner, Writer, Salesblazer
Erin Hueffner Writer, Salesblazer

Erin Hueffner is a writer from Madison, Wisconsin. Her career spans two decades in tech, journalism, and content marketing. At Salesforce, Erin’s work focuses on sales fundamentals and best practice content for Salesblazers. Erin has a bachelor’s degree in English from the University of Wisconsin-Madison.

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