Increase Long-Term Revenues - MyStartupLand

Regardless of whether you are a sales professional, a freelancer or a startup founder, spending time on the right prospects is crucial for your business. When talking with potential clients, we often forget to ask a key question, “Is this the type of client that will bring value to my business?“. Focusing on the right clients will help you increase long-term revenues.

In the early days as a sales rep and also as a startup founder, I thought that every single lead was a potential client. Every single person I talked to was worth the same amount of time. Every negotiation deserved the same amount of attention and efforts.

That was wrong.

With time, I learned that daily activities should be prioritized based on the importance of each lead. A few years back, I was introduced to the idea of assessing leads on a list of pre-defined metrics to understand how well these leads fit our needs.

It was the beginning of what today I call – The Ideal Prospect Fit.

Here below, I explain in details how to improve your sales activities and get the most out of each lead you talk to.

Are All Deals Created Equally?

Those who are unfamiliar with sales think that closing a deal is better than not closing one. After all, isn’t it true that sales is a number game? The more you close, the more chances you have to make money.

One thing most of us forget though is the opportunity cost we spend on dealing with clients who don’t match our needs. According to the latest Altify Buyer/Seller Value Index co-sponsored by, the cost of sales reps chasing the wrong deals is $218.000.

Wait, what? Chasing wrong deals can cost me money?!

Not every lead is a prospect and not every prospect should become a client. There are several factors that impact the success of a deal. Generally speaking, we are looking at:

  • Deal Size – How much money is the prospect willing to spend?
  • Buying Behaviour – What steps has the prospect gone through before purchasing?
  • Negotiation – How did the salesperson negotiate the deal terms?
  • Sales Knowledge – How knowledgeable is the salesperson and the prospect about the product or service offered?

These are general factors and depending on the industry you work in, there might be more.

The Most Critical Step: Lead Qualification

Regardless of the industry, qualifying correctly leads is the most important step in the sales funnel. A mistake in the lead qualification process will be affecting the whole sales process. Let’s make an example.

You are talking with someone you have identified as a potential buyer. This person fits your general idea of a good customer. You start talking to her and she seems interested in your service. Great! You move forward with discussing the details of how you provide this service and how she could benefit. There was, however, a point you didn’t pay particular attention to, she mentioned that her company usual commitment to a new service provider is on average 50% lower than what you normally charge. You unconsciously (or not) disregarded that because you are thinking that she will understand the value of your service later on. So you keep investing time on this potential buyer. A few weeks have passed, you met her several times, spent time on phone calls explaining better the solution you offer and how this could fit their needs. She seems interested and she tells you she wants to go ahead. Great job! But there’s a “surprise”… Her initial commitment is indeed lower than what you usually charge. She tells you that she sees the value in your service, but this is a company policy and she cannot change it.

What do you do now? You have been investing weeks, maybe months, in crafting proposals and explanations around your services. Dropping out at this stage would mean throwing out of the window also that time. So you decide to go ahead and close the deal. WHY?

EXCUSE IN YOUR HEAD: You take this as a small concession for a great potential customer in the future.

REALITY THAT SUCKS: You are now stuck with a low-paying client with “high potential” to whom you need to devote the same amount of time you give other better-paying clients.

The opportunity cost of this bad deal will be hunting you for a long time.

A Winning Lead Qualification Process Can Increase Long-Term Revenues

Lead Qualification - MyStartupLand

Lead qualification is crucial to any sales funnel, regardless of the industry you operate in. As shown in the slide above, almost 50% of sales reps admit that lead qualification is the most complicated part of their job. But why?

On the other hand, we also see that 67% of lost sales (and bad deals) are because of a poor lead qualification process. Almost 2/3 of your effort goes wasted because you messed up qualifying properly a lead.

Not Every Lead Is A Prospect

Lead qualification is far from being a straightforward process and, without any doubt, it is difficult to create a model that fits all companies. When looking at lead qualification there are several factors that you might want to take into consideration. The first step is to define what you can influence and what you cannot.

There are factors that are dependent on the industry or market-condition that you are not able to influence. Controlling the macro-factors of success is a difficult task and it is completely up to you to decide how much of an influence these will have on the lead qualification process. Before creating a successful lead qualification process, it is crucial to have all stakeholders at the same table and define the macro factors you are not going to hold accountable for your marketing and sales team.

After you have done this, take a look at the micro-factors. These are what sales and marketing should be able to identify and influence in the qualification process. For example:

  1. Budget – Is there budget associated with this activity? Is the budget allocated to this activity enough for you to be considered relevant?
  2. Authority – How many stakeholders are involved in the decision process? Is the person you are talking to the one taking the decision?
  3. Buying Behavior – What are the steps the lead has gone through before getting where she is? Were you able to track the behavior before the lead entered the qualification process?
  4. Need – Are their needs aligned with your product/service? Can you successfully fulfill their needs?
  5. Time – How long does the buying decision take on the prospect side? When is your prospect looking at making the final decision?

Based on these factors, you will need to identify questions or metrics that your team will need to follow in the qualification process. Here below an example of a lead qualification framework to implement in your company:

N. Factor Questions / Metrics Scoring
1 Budget Discussion about budget approved for the project negotiated.

a. Budget <10,000$

b. Budget <10,001 – 50,000>

c.   Budget >50,001

a. 0 points

b. 3 points

c.   5 points

2 Authority Discussion about the role of the person you are negotiating with

a. Decision Maker

b. 1 level below decision maker

c.   Recommendation Role

d. Advisor Role

e. Gatekeeper

a. 5 points

b. 3 points

c.   1 point

d. 0 point

e. -3 points

3 Buying Behavior Discussion about the level of familiarity with product or service at the qualification stage

a. Familiar

b. Somewhat familiar

c.   Not Familiar

a. 5 points

b. 1 point

c.   -2 points

4 Need Discussion about the match between need and product/service offered

a. Actively looking for such solution

b. Moderately looking around

c.   No Need

a. 5 points

b. 2 points

c.   -3 points

5 Time Discussion about the urgency for your solution

a. Looking to make a final decision within a month (quarter)

b. Looking to make a final decision within 12 months

c.   No urgency

a. 5 points

b. 1 point

c.   -5 points

ABP – Always Be Perfect

Having a clear process on how to assess leads will also help you in the negotiation process. All the metrics you and your team will define and agree on will be the base to increase long-term revenues for your business.

The Ideal Prospect Fit Sheet will serve as a tool for:

  1. All salespeople (or just yourself) on understanding what makes a good deal
  2. Internal prioritization on how to handle new clients and make sure everyone pays the right attention
  3. Reducing time wasted on bad deals
  4. Improving your negotiation power over good prospects

And If You Are A Sales Manager In A Company One Last Advice For You…

Creating such a process per se won’t increase long-term revenues if you don’t align other internal activities.

As a sales manager, you will need to make sure that there is a transparent communication around this new process and everyone else involved in it. Everyone needs to understand the value and the reasons why you decided to implement this. It will also be important for you to align the bonus system to reward the behavior of your sales reps.

Lastly, it will be essential to track everything in the right way in your CRM tool. The Customer Relationship Management software will become the point of reference for management to track how effectively the process is.


Have you ever had a process to assess the quality of the clients you work with? Do you have any other suggestions to improve the lead qualification process? Share your thoughts in the comment section below.

Luca is an experienced sales executive and business coach with a background of over 10 years in sales and management. When not working, Luca runs one of the leading online magazines for startup knowledge, MyStartupLand, with the aim of providing meaningful and helpful content to startup founders and business people.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.