Qualified Leads from Cold-Calling? Good Luck!

Sales organizations are justifiably enamored with the idea of using outbound prospecting to generate ‘qualified’ leads for their sales people. To accomplish this goal, companies may try to build an in-house function and/or contract for outsourced demand creation (cold-calling) services.

While the premise of not wasting valuable ‘selling resource’ time speaking with unqualified prospects makes sense – this is in fact a limiting approach and, in most cases, unattainable objective.

To explain this position we first need to first align our language:

- Prospecting - is the process of seeking to engage potential buyers in a conversation based on assumptions we have about who they are and what kind of needs they might have. The goal of prospecting is to gather basic information relevant to the qualification process and convert an interruption into a scheduled conversation.

- Qualification - is the process of uncovering and understanding a prospect’s needs. Primarily, the goal of qualification is to determine if the prospect is worth investing more specialized and costly 'selling' energy.

- Selling is the art of matching a prospect’s needs with our products/services and helping them calculate/comprehend the economic benefit of investing in our ‘solution.’ Notice I didn’t say ‘convincing them to buy.’ Sales organizations cannot be sustained when they rely on persuasion to convince prospects to buy when the economic benefit of solving their problem does not surpass the cost of investment.

Problem: You Can’t Qualify on a Cold Call: Outbound prospecting falls into the category of ‘Demand Creation.’ You are trying to get someone to talk to you about their needs by reaching out to them. Regardless of the medium, this is, by default, a presumptive and interruptive interaction.

When prospecting (whether by direct mail, email blast, or cold-calling) you must acknowledge you are interrupting someone and your primary objective must be to convert the interruption into a scheduled conversation. Do you honestly expect someone whose day you have interrupted to engage in meaningful dialogue about his or her needs and pain?

When a potential buyer calls you or fills out a form on your website, this falls into the category of ‘Demand Response’ and you can use terms like qualified. Instead of ‘Qualified’ leads, sales teams should seek to provide their talented resources with scheduled conversations based on the prospects Disposition or state or mind.

Problem: Cold Callers will Never have the Skills to Qualify: The resources (people) assigned to prospect do not typically have the requisite experience to effectively qualify. Of course most acquire these skills over time. As soon as they do what happens? They will ‘move up the ladder’ into more lucrative and fulfilling positions. Anyone wishing to argue this position will need to find a team of effective ‘qualifiers’ that consistently make the 100 to 150 calls each day required to schedule appointments.

Problem: Traditional Qualification is binary (yes/no) and Promotes Antagonism Rather than Collaboration Between Demand Creation and Sales: The definition of insanity is trying the same approach over and over again while expecting different results. Breaking the cycle of ‘appointment disappointment’ requires acknowledging the limitation of demand creation prospecting and working within those limits. Only those prospects actively looking for our product or service can be considered qualified. In most cases, qualified prospects will call us and it is statistically unlikely we will stumble upon qualified prospects through demand creation efforts.

The Solution: Shift from the internal conversation focused on an expectation of ‘qualified leads’ to the concept of Prospect Disposition which can be used to categorize unqualified prospects into five ‘states’ to determine whether conversations should be handed off as well as how they can be best handled by the sales resource to maximize conversion to opportunity.

Introducing Prospect Dispositions:

Disposition #1: The ideal situation for a prospecting resource to encounter is a prospect with an Acknowledged Need to Change. This represents the proverbial ‘lucky day’ scenario and is usually accompanied by the phrase: ‘you know we just started looking at alternatives…’ Note, this is the ONLY prospecting scenario where need and intent to buy exist. In these situations, you can typically determine things that salespeople love to know like timeframe, budget, competitors, and even decision-making process. You should expect all other prospecting scenarios to start with the objection: ‘we are satisfied with our current [fill in your product or service category] vendor.

Disposition #2: The next best scenario is encountering a prospect with an Acknowledged (non-price) Feature, Quality, or Service, Deficiency. The easiest way to think about this is imagine some home appliance or electronics item that you have. Now imagine what new features or gizmos this year’s model has. Do you know something better is available? (Yes.) Do you have some gripes about your current version (Of course!) Are you prepared to throw yours in the trash? (I doubt it.) The advantage to this scenario us that the salesperson knows they might be able to entice you with a newer model that has the features you want particularly if they can emphasize a trade-in or discount promotion?

Disposition #3: The third scenario is usually related to services (as opposed to products) and can be referred to as an Acknowledged Financial Deficiency. The easiest way to think about this is think about your cable/satellite service provider. Are you dissatisfied with the service? (Probably not enough to go through the hassle of changing providers.) Is there one feature you can’t live without but can’t get? (See #1 or #2 above) Would you at least talk to a competitor that you believed could reduce your monthly expense by half? (I think you would.) The advantage here is that the salesperson handling the meeting knows they must qualify the prospect for what level of financial benefit would motivate them to change. Would you change satellite providers to save $5 per month? Probably not at the cost of having to learn how to use a new remote but you might be convinced by six months free plus no-charge installation.

Disposition #4: The fourth scenario (and last we would advocate as acceptable for hand-off from a demand creation team to their sales team) is referred to as Non-Acknowledgment of Deficiency but Willingness to Explore. This is obviously the weakest of scenarios and requires a highly talented qualifier/sales person to convert. It is the equivalent of working in a clothing store and hearing ‘just looking.’ 99% of sales people smile and walk away. The other 1% knows the goal is to get you to the dressing room!

Disposition #5: The fifth scenario is referred to as Non-Acknowledgment of Deficiency and Unwillingness to Explore. It my seem strange to include this is the list of prospect dispositions… ‘Why would anyone with this mindset agree to a scheduled meeting?’ The reality is that an effective demand creation prospecting resource (cold-caller) can get a meeting with anyone – even someone in this mindset. The example here is like getting someone into your store through sheer persistence or embarrassment…you might get him or her to walk around for a minute but it is unlikely they will engage on any level with a sales person. The simple advice here is to make sure that these types of appointments never reach your sales persons calendar.

Go-Run-Do! The concept of Prospect Disposition has several powerful benefits. First, Prospect Disposition represents a fundamental departure from the binary categorization of prospects as Qualified or Unqualified…it acknowledges that once we rely on outbound demand creation, lots of grey area exists. Second, Prospect Disposition acts as an expectation setting tool that the demand creation function (in-house or outsourced) can use to hand-off the initial scheduled meetings to the sales team. Most importantly, Prospect Disposition represents a means for the sales team to evaluate and communicate the effectiveness of the demand creation team’s work in a way that can be use for constructive coaching and development.