Missed meetings, spinning wheels, lagging results. These are characteristic of most enterprise sales team experiences. But they don’t have to be. Deal qualification is one of the most lucrative areas of potential for seed stage and scaling B2B SaaS founders and team.
Today, Dougal Cameron from GSTVC walks us through how he views qualification.
Human tendency leads most of us to expect the best. This optimistic tendency is ever more pronounced among entrepreneurs and sales staff. Our psychological biases drive us to hear what we want to hear in a conversation. When we are talking about politics at the dinner table the stakes are low. But when we are driving a sales organization spending thousands of dollars each week, confirmation bias can wreck the company.
Deal qualification is intended to mitigate the effects of confirmation bias on a seed stage and scaling B2B SaaS company.
Controlling confirmation bias
The objective of good deal qualification is to control confirmation bias. This requires objective and verifiable metrics that the deal must meet. This objectivity removes the decision of ‘qualification’ from the mind of the optimistic sales lead to an external standard.
The external standard can come in three different levels: company, opportunity and contact.
The company level tests whether the deal fits the parameters of a ‘sweet spot’ deal for the firm. For instance, questions you might ask here include:
- Is the company in your target industry?
- Is the company in your target size?
- Is the company in your territory (if relevant)?
This level is usually very objective and easy to independently verify.
The second level of analysis is the opportunity level. This level is what most people consider qualification. However, we have seen a lot of sales effort expended on deals that should have failed the first level of analysis. For opportunity level sales qualification the objective is to determine if the need exists at the company and if the need is strong enough to require a purchase decision. There are several popular frameworks for this level that we will explore below.
The last level is the contact level. This is also frequently overlooked. Sales teams will get excited about a marque logo and fail to recognize that the contact they are communicating with cannot make a purchase decision. The questions for this stage usually dig into whether the person the rep is communicating with is a decision maker.
Frameworks for opportunity level qualification
There are several frameworks for establishing qualification at the opportunity level. All of them seek to answer the same question: Is the customer’s need profound enough to justify the investment?
A qualification framework inevitably shapes the process of the customer journey. If the framework leads with the customer’s pain, then the reps will dig into that first. However, if the framework leads with the customer’s budget, then the reps will start there.
Here are a few of the frameworks we use:
- BANT (Budget, Authority, Need, Timeline)
- CHAMP (Challenges, Authority, Money, Prioritization)
- GPCTBA/C&I (Goals, Plans, Challenges, Timeline, Budget, Authority, Negative Consequences & Positive Implications)
Sales reps should strive to provide proof during the qualification process that is fact based and impartial. Vague conversations about a customer’s frustration with a competitor solution doesn’t justify the ‘need’ qualification.
Develop a qualification checklist with your team and hold them to it. Documenting a qualification process is a key area of managerial leverage in scaling B2B SaaS companies. Don’t let your team spin wheels and lose traction.