The Qualified Lead Definition: Best Practices for Closing Business without BANT Leads
In the 2014 TOPO Sales Development Benchmark, only 27% of companies surveyed still used BANT (Budget, Authority, Need, Timeframe) for their sales qualified lead (SQL) definition. This represents a recent, yet significant change in thinking about what constitutes a sales qualified lead. While BANT qualification still works well in certain organizations, the majority of organizations are using a looser definition such as ANUM (Authority, Need, Urgency, Money) or AN (Authority, Need).
Percent of Companies Using Common SQL Definitions
As a matter of fact, many of the organizations that we benchmarked had actually moved from BANT to a non-BANT SQL over the last year. For example, one organization made the change from strict BANT in June. They interviewed leads that the SDRs did not pass to sales because they didn’t qualify for their strict BANT criteria. Their analysis revealed that 30% of those non-passed leads were actually legitimate sales opportunities. These leads had a compelling business driver that the company’s product could solve, yet they weren’t passed because they couldn’t answer the budget or timeline questions. The organization changed their SQL definition so their SDRs would pass these types of opportunities to sales. As a result, they passed 30%+ more SQLs. However, this change exposed a new problem: sales had no idea how to convert these new SQLs.
Salespeople who are used to BANT SQLs are not equipped to have the initial conversation with potential buyers who have not yet accounted for budget or timeline. Their approach, patterns, and plays are built for an SQL who has already recognized their pain, allocated budget, and who is actively evaluating vendors. These types of SQLs are much further down the buying cycle than a lead who still needs help understanding they have a problem and that there are solutions to address this problem. The non-BANT SQLs require a completely different approach.
Trying to determine the best SQL definition for you? Register for our upcoming webinar, 11 High Growth Sales Development Strategies, where I will discuss the key considerations for defining your SQL and other key sales development strategies.
Organizations have to design their process and plays to allow sales to effectively convert non-BANT SQLs. There are four pivotal best practices to implement to be successful:
Define your ICP (Ideal Customer Profile)
The easiest way to think about this is “who should sales be talking to (no matter what)?” The ICP should cover the type of organization (e.g. healthcare organizations over $100mm in revenue) and the roles in the organization (e.g. the person in charge of the data center). The ICP is the key foundational element for all SQL definitions. In the case of a non-BANT SQL, organizations have to be strict about whether SQLs adhere to the ICP. Most sales leaders won’t argue if they look at a list of SQLs and it see 100% of the organizations fit the ICP. For example, we were working with an organization whose VP of Sales was unhappy with the quality of opportunities in the pipeline, and advocated for BANT qualification. When we discussed the matter further, the examples he kept using were about company names (e.g. Joe’s Hot Tubs) and the types of people (e.g. Marketing Intern). What we helped him realize was the problem was not budget and timeframe, but the ICP. The question was simple: “If an SDR sets up a meeting with the Director of Marketing at Cisco, is that a good SQL?” Of course, the answer is yes.
The ICP is the key starting point for a successful non-BANT program. Start by defining the organization by demographic attributes (e.g. company size) and psychographic attributes (e.g. spending $100 million on advertising). And then do the same for the key roles (people in charge of digital advertising). Once the ICP is defined, embed it into the SQL definition so SDRs only pass SQLs that fit the ICP. Then, communicate the SQL definition to sales.
Enable sales to do deep customer discovery
Many BANT sales people are really good at qualifying for a project, extracting the details for that project, and then selling to that project. One sales development manager with a non-BANT SQL definition told me how sales reps were getting off calls with SQLs after 5 minutes. They were focused on qualifying out rather than in; on whether the buyer had a project or not. This mindset must shift to one of learning more about the buyer’s needs, and convincing them they need to initiate a project.
The other mistake with non-BANT SQLs is moving to the demo right away. The buyer may not be ready for a demo yet, or more importantly, the sales person may not know enough to present a relevant demo yet. Over the last couple months, I have seen a number of VPs of Sales move demos back a step in the sales process in order to enforce that their sales reps complete a thorough customer discovery.
A non-BANT SQL may or may not be ready to hear about the product. The key to discovery is to figure out where they are in the buying cycle, what their pains and challenges are, and what their process is today. Here is what sales will need:
- Call structure — An agenda to help sales figure out how to structure the customer discovery call.
- 30 second value prop — Sales has to be able to provide a clear explanation of what their company does, how they are unique, and who it helps in 30 seconds or less. The buyer will need to be bought in conceptually to feel comfortable participating in a discovery call.
- Discovery questions — Provide sales with key discovery questions to help them understand the buyer.
- Buyer personas — If sales can’t understand the buyer quickly, they won’t be able to diagnose anything from the discovery questions. Provide a detailed description of the key roles in the ICP, their day in the life, key challenges they face, and how they buy.
- Use cases — Not case study documentation that can be delivered after the call, but use cases that sales can present while on the discovery call to gain instant credibility with the buyer.
- Training — Most sales leader neglect training their reps to execute discovery which is a big mistake. Train the sales reps on discovery call execution like you would any of the other aspects of the sales process.
All non-BANT SQLs should be routed to a discovery call first. Non-BANT SQLs will be in various stages of the education cycle and effective discovery will allow sales to determine the right next step for the buyer.
Provide multiple options for the initial sales presentation
Once discovery has occurred, the next step is to present the company and the solution to the buyer. The approach has to be customized to the buyer and where the are in the buying cycle. Most sales organizations arm their team to present the company and the product. The problem is the buyer may not be ready to hear about your product. I recently witnessed a great example: a new sales leader sat in on 5-10 sales calls to witness how the team was selling the solution. He realized that sales was presenting a detailed product demo when the buyer wasn’t ready for it. To fix this issue, he developed a market overview presentation designed to educate buyers on the market (versus their product) and why it’s the most important thing they could do right now. Once the market overview was delivered, sales could then start to get specific about their product.
Another company transitioning from BANT created a new sales step called “pain intervention”. They realized that the vast majority of their early buyers had no idea they were in pain. After a deep discovery session, sales is trained to then show the buyer that they have pain, what the costs are to their organization, and the options to do something about it. Once sales has convinced the buyer that they have a problem, the discussion moves naturally to the solution. Without the pain intervention step, their sales development program would fail. SDRs would pass SQLs that sales would treat like BANT leads and conversion rates would suffer.
The takeaway is for organizations to determine the scenarios sales will face on the first call and create customized plays for that initial presentation based on where the buyer is in the buying cycle.
Focus on total opportunities created not the SQL-opportunity conversion rate
BANT SQLs will and should convert to opportunities at a 70-90% rate. Non-BANT SQLs are not as straight-forward. Some organizations track and manage sales opportunities at early buying stages and others don’t. No matter how you manage opportunities, the reality is that you may get a lower conversion rate because non-BANT SQLs have a lower probability of turning into sales opportunities.
However, it is important to note that we have seen organizations drive more opportunities as a result of moving from BANT to non-BANT even with the negative effects on the conversion rate. For example, one sales development team moved from SDRs passing 8 BANT SQLs per month, of which 7 became sales opportunities, to 19 non-BANT SQLs/month, of which 14 turned into opportunities. While their conversion rate dropped precipitously, the number of opportunities doubled.
The recommendations we make in this post are absolutely essential for succeeding with a non-BANT SQL definition. On numerous occasions, we have seen conversion rate issues blamed on the effectiveness of the sales development team. While that maybe true in many cases, often the problem is what happens after the SQL is passed.
Learn more about sales qualified lead definitions and other strategies for high growth at our webinar Wednesday 2/11. Sign up here.