SaaS Sales Lead Qualification: Tips You Should Know

Lead qualification tips, terms, and strategy for SaaS sales development professionals.

8 min readJun 12, 2020

This article is about perfecting performance at the top of the SaaS sales funnel, where you have your first opportunity to qualify the buyer. How your teams qualify leads at the top of the funnel directly affects the quality of leads that reach your high-powered salespeople. If your salespeople are double qualifying or struggling to maintain communication with the prospect, then you need to rethink your strategy at the top end of the sales funnel. Note: I am not referring to the marketing funnel. The sales funnel begins with your first opportunity to qualify the buyer.

Before we get into tips and strategy, let’s start with the basics.

The Lead Journey

The largest role of the sales development team is to qualify out poor leads, develop leads who are at the beginning of the buyer’s journey, and seek, qualify, and handoff quality leads ready for sales to ensure the company’s pipeline is healthy and growing. Healthy and repeatable sales are all that matters to investors and the stability of your company’s growth.

Lead qualification tends to move through a pipeline. This is where you may have heard of terms like “Cold Lead,” “IQL,” “MQL,” “SQL,” and other industry names, which can get confusing after a while. Here’s a primer for your reference:

Cold Lead or Suspect Lead

Buyers your company intends to sell to and aligns to vertical, industry, company size, etc. These are “cold” leads because there is no intention and the prospect may not even know about your brand.

Information Qualified Lead or IQL

Leads that are at the top of the funnel and at the beginning of their buyer’s journey. These leads are educating themselves and may have a need for your product but are not quite ready for the call. For example, they download papers, attend webinars, or revisit your website for more information. These leads can be valuable.

Marketing Qualified Lead or MQL:

Also known as a “warm” lead, these leads show an interest in speaking to you. They explicitly ask for demos or a conversation to understand more. They have likely researched the industry, your competitors, and have done ~70% of the work before reaching out to your company (Miller Heiman Group, 2018). This is when marketing hands off the lead to your sales development team for the qualification outreach.

Sales Accepted Lead or SAL

SALs are accepted by the sales team and may require additional qualification to move to a sales cycle. This is often accepted in startups because innovative products have a different cadence during the sales cycle. The customers are not quite ready for the pipeline but are moving in that direction. These leads can be worked exclusively by the sales development team, salespeople, or as a joint team to continue the education or discovery.

Sales Qualified Lead or SQL

The “hottest” leads there are in business. These leads have expressed an interest in purchasing or moving into the sales cycle with you to determine viability of solving their needs. This is when your sales development team typically takes their hands off and the salespeople move the deal forward.

Depending on the complexity of the business, companies may choose to use all or some of the aforementioned stages. I recommend, at minimum, using:

Suspect Lead
Marketing Qualified Lead (MQL)
Sales Qualified Lead (SQL) or Sales Accepted Lead (SAL) for early-stage, innovative companies

Step 1: Master the value proposition

How well do you know your buyer? What makes your product special and why? Your customers expect to hear this when they take a call. Whether your company is providing you with beautiful marketing materials, or whether you were asked to do it all from scratch, I highly recommend that you do your own homework to truly master the value proposition. What are the secret product ingredients your customers cannot get with any other product or service?

Outline all of your product or service benefits.
Showcase the real value for each benefit you outline.
Crystalize the problem(s) your product solves for customers.
Define and bridge benefits and value to your customer needs.
Display why you are the preferred provider.

At least one value proposition is required, but you may solve many customer problems. This can create a problem for marketing but is a good problem to have; it just requires focus to get off the ground initially. More may mean higher value, but part of being a great SDR is understanding the buyer well enough to suggest the right value proposition(s). Recognize that doing one thing well now may lead to being great at many things later.

Regardless of the sales method you choose, aim to satisfy at least one component — need. Needs drive the conversation. Needs drive understanding. Needs drive budget consideration or requests. If there is no need, discontinue pursuing the sale and continue educating the prospect until timing is right.

In my ALIGNMENT Sales method article, I talk about aligning with the prospect’s needs. Too often are sales development reps pushing to set the next meeting just to hit their numbers. It is a slippery slope because they have to hit a minimum number of meetings. If there’s a bad month, they might loosen the qualification criteria and lie about alignment just to set the meeting.

This causes the “your leads suck” issue and the pipeline will suffer over time.

If you’re leading a team of sales developers, set honest and realistic goals that focus on quality not quantity. Set the tone that initial calls should be customer-aligned to ensure the product is a fit for their needs and will be worth the salesperson’s time.

Additional tip for you, change the way you judge performance of your sales development team. Numbers tell half the story. It takes a lot more time and money to train new reps than invest and grow the ones you have.

Step 2: Master your qualifying questionnaire

Every prospect conversation is different. Varying the following questions should be your sales development team’s specialty. Take these ideas and make them your own.

Depending on who calls and their level of urgency, you may use a series of questions. Be concise, communicate clearly, and most importantly — focus on the buyer.

To gauge interest and help the sales team hone in on selling, try some of the following questions:

How did you hear about [company]?
Why are you interested in [company/solution]?
What led you to our solution [goals/company goals alignment and initiatives]
Who else is integral to implement your needs?
If interested, do you handle purchasing of the product or have you been tasked to find a solution?
What are your pain points, and do you think [company] will solve it?
What tools help currently with your needs/pains?
If applicable, describe your company’s customer engagement and other customer experiences with your company to generate “ah-ha” moments with the prospect.
Are teams collocated, distributed, or mixed?
Is your company cloud friendly and allowed to work with online software?
What examples of SaaS solutions are being used now and is there anything like [Company]?
Are there any IT or Security requirements we should be aware of?
Describe the decision-making process at your company.
Are you in charge of the decision? If not, who is, and can they be present for demonstrations to see the value?
Is there a timeline for finding a solution or is this early discovery/market education?
What alternatives are there you are considering?
What would a successful implementation mean to you?
What are the consequences of not acting on this need?
Is the budget allocated for this or do you need to generate one?
Are there any compelling reasons why this product must be purchased now?

Step 3 — Stay Patient

Hopefully you are not at a company that uses pressure tactics. A pressure tactic is pushing a buyer with superficial incentives before you have established full alignment with your product and their needs. This typically involves an “act-now” approach to get a deal or miss the chance. To be honest, I never understood them. Creating a sense of urgency is a valid strategy, but pressuring a buyer is sleazy. “Buy now or miss a promotion!” That works for toothpaste and discount steaks, but technology is much different because of buyer committees.

Selling innovative products requires an abundance of patience and time. Instead of trying to fit your prospects into an artificial timeline, consider the reality of your buyer’s journey and customize your selection process with the buyer. You may consider creating nurture tracks and building a long-term pipeline of healthy leads, especially for enterprise cycles. According to a Harvard Business Review article by Schmidt, Adamson, and Bird (2015), there are 5.4 people in the sales cycle that have to formally sign off on enterprise purchases — this is partially why enterprise is known to move so slowly.

When the time is right, the customers will be better for your portfolio and salespeople will be much happier.

Step 4 — Stay Honest

Excellent sales development reps understand the value of trust; they respect themselves, the buyer, and the product too much to trick the prospect into thinking their needs can be solved.

How many times have you overheard a call where the sales development rep spins the truth to capture the attention of the prospect? This is very dangerous. Sales may eventually close a deal, but by setting unrealistic expectations, a major churn risk is introduced.

Instead, be very clear about your capabilities. If there is something that is beyond the realm of current possibilities, explore the idea and be honest that it does exist yet. This is a great opportunity to elevate the prospect’s opinions. Customers bring some of the best new feature ideas. It is ok to tell the prospect that their ideas are taken seriously and may be worth the time to tell the prospect what other customers have suggested and how it became a new feature in your product. Sometimes prospects may be a great fit for a customer advisory spot to discuss their ideas for future product enhancements.

This is also a great opportunity to become subject matter experts. If your product cannot do what they need, it is ok to make recommendations and share knowledge with prospects. They may come knocking on your door in the future.

Do not sell pipe dreams or impossibilities — ever.

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Happy Selling!

REFERENCES

Miller Heiman Group. (2018, June 5). Study: Half of B2B Buyers Make Up Their Minds Before Talking to Sales Reps. Retrieved from https://www.millerheimangroup.com/resources/news/study-half-of-b2b-buyers-make-up-their-minds-before-talking-to-sales-reps/#:~:text=CHICAGO%2C%20June%204%2C%202018%20%E2%80%92,division%20of%20Miller%20Heiman%20Group

Schmidt, K., Adamson, B., & Bird, A. (March 2015). Making the Consensus Sale. Harvard Business Review (March 2015).