Qualifying a sales prospect is probably one of the most important elements of selling, especially if you are a small business.
The time you can save by not trying to sell to prospects who ultimately never would have bought anyhow is invaluable, as well as the mental advantage that can be gained by being able to focus only on the right prospects.
The 8 key stages that should be followed are as below and they can remembered easily with the term SCOTSMAN with each letter representing a stage.
(S) Solution – Have you clarified if your prospect understands what it is that you wish to sell them. What is your solution and why will it work for them?
(C) Competition – Have you an awareness of whether there is anyone competing with you to sell to your prospect or for the money they may use to buy from you? Your competition could be internal as well as external.
(O) Objective – Have you a clear understanding on what your client is looking for, what are they in the market for? What is important to them now and in the future? Do you improve their services or processes, or do you save them money?
(T) Time scales – Have you clarified what time scale the prospect is working to? Can you deliver within that time scale? Does the time scale work for you? Is there a timing factor that could be used in your favour, for example a financial year end?
(S) Size – Is the potential size of the deal worth the effort going to be needed to win the business? Have you a clear picture on what size the deal will be? Is it smaller than ideal but could open doors? Is it too big and may have a detrimental impact on your business?
(M) Money – Does the prospect have the money in budget to pay for your solution? If they don’t have a budget, can they find the money or do you need to consider walking away?
(A) Authority – Are you speaking to the decision maker? The person who ultimately will sign the cheque? Are they even aware that you are speaking to their company? It is no longer imperative to deal with just the decision maker, there is a value in dealing with another contact within the business but very few pieces of business are completed without the main authority signing off on it.
(N) Need – Does the prospect actually NEED your solution? Very few deals happen in the current climate without a clear need. There are many reasons why they may need your solution and it is key that you find out which one is relevant and focus on it.
If you can answer all of the questions in a positive manner, then your chances of closing the deal are significantly higher than if you can’t. Very few deals will actually happen if one or more of these 8 key stages are missing, and the time you may waste on chasing shadows is valuable. It can be easy to get sucked into thinking that every deal will happen, and there is also a sort of comfort that some small businesses value in having a large pipeline that “could” close but I would encourage you to qualify properly and allow yourself to focus only the deals that have a chance. You are better off closing 3 out of 5 good prospects than 2 out of 10 prospects as your focus was stretched thin.
Now you are making me feel old! Yes, SCOTSMAN or the MAN principle is so essential to developing an efficient sales pipeline. Can't really argue with it. Another thing that is very useful to quantify even broadly is to understand how much it costs to acquire a customer through the different methods available to you. And whether those costs are supportable by the profit you can potentially make from your customer. For instance if you capture the interest of 10 good prospects at a trade show but it costs you 30 grand to put the show together, but it costs you 5000 to have a telesales company generate meetings with 10 good prospects it seems an easy choice. But if the service you are selling only yields 5000 pounds worth of business, both methods are too expensive.