I’ve been involved in, and seen, my fair share of startup successes and stumbles. And one thing that consistently separates the winners from the rest is a thorough sales qualification process.
This article breaks down why it’s important and how you can nail it, even if you’re not a sales expert.
Why Sales Qualification is Your Secret Weapon
Let’s start with the basics. Sales qualification is about having criteria that helps you uncover what’s a real opportunity and what’s not. And importantly, it helps you to make sure you’re spending time in the right places and keeping your pipeline clean and focused.
Here’s why it’s so important in early-stage businesses:
- Better customers: When you qualify properly, you end up with happier customers who stick around longer. These are the clients who truly need your solution and will get the most value from it.
- Focused efforts: Instead of chasing every lead that comes your way, you can invest more time in high-quality opportunities. This means deeper relationships and higher close rates.
- Aligned product development: Your tech team will thank you for bringing in customers that fit your product vision. No more feature requests that send you off on wild tangents.
- Improved forecasting: A well-qualified pipeline makes it easier to predict which deals will close and when, giving you more accurate revenue forecasts.
- Efficient resource allocation: By focusing on the right prospects, you’ll make better use of your limited resources. Crucial in any startup.
Creating Your Qualification Criteria
Forget the one-size-fits-all frameworks that everyone uses. I always recommend that you create your own. That way, you know the qualification criteria fits both your business and your sales process. Here’s how to do it:
- List your ideal customer traits: Think about what makes a “shit-hot opportunity” for your business. This could include:
- Geographic location
- Industry
- Company size
- Specific use cases you’re targeting
- Decision-maker roles (e.g., CFO, CTO)
- Tech stack or current solutions they’re using
- Identify the must-haves: Out of your list, pick 4-5 criteria that are non-negotiable. These are your hard qualification points.
- Allow some flexibility: Leave room for 1-2 criteria where you can have some wiggle room without compromising your standards.
- Document and iterate: Write down your criteria and revisit it regularly. As you learn more about your market, you’ll want to refine your approach.
Remember, adding some friction to the process is a good thing. If it’s too easy to qualify, you’ll end up with a bloated pipeline full of poor-fit prospects. It’s better to have a lean, mean pipeline of high-quality opportunities than a bloated one full of maybes.
Not all Prospects are Equal
Once you’ve got your qualification criteria, it’s time to add another layer to your process. That’s tiering your prospects:
- Tier 1 – dream clients: The ones who tick all the boxes. These are the opportunities you’ll want to pull out all the stops for.
- Tier 2 – strong fits with most criteria met: They’re worth pursuing, but maybe don’t warrant the full-court press.
- Tier 3 – qualified, but not as hot as the others: Keep them warm, but don’t spend too much time here.
This approach helps you prioritise where to invest your limited time and resources. It’s especially crucial when you’re a founder wearing multiple hats.
Knowing When to Walk Away
Whether it’s because of VC pressure of reducing runway, it’s difficult to walk away from potential revenue. But the hard truth that many founders struggle with is that knowing when to walk away is just as important as knowing when to pursue.
If a prospect doesn’t meet your criteria, be prepared to disqualify them. It’s much better than onboarding a customer who’ll churn in 12 months and potentially derail your product roadmap.
Red Flags in Qualification
These are the red flags that tell you whether a prospect is serious or just fishing for information. Don’t be afraid to call it out and potentially walk away if these patterns persist. As I mentioned
- Reluctance to engage in your sales process: If they’re trying to skip steps or rush to the end, they might not be serious about solving their problem.
- Immediate demands for free trials or pricing without proper discovery: This often indicates they’re just shopping around and not truly evaluating solutions.
- Blocking access to key information or stakeholders: If they’re not willing to introduce you to decision-makers or share crucial details, it might be a sign they’re not fully bought in.
- Unresponsiveness or constantly rescheduling: While everyone’s busy, consistent delays might indicate a lack of urgency or interest.
- Misalignment on problem definition: If they can’t articulate the problem they’re trying to solve, or if it doesn’t match what your solution addresses, it’s a red flag.
Disqualification, and identifying those red flags, protects your most valuable resource: time. It ensures you’re not spending months trying to close a deal that was never a good fit in the first place.
Make It Repeatable
Once you’ve nailed your qualification process, it’s time to make it repeatable. This is crucial for scaling your sales efforts and eventually bringing on sales team members who can replicate your success.
- Document clearly: Write out your qualification criteria, tiering system, and red flags in a clear, accessible format. Tools like Notion, or even your CRM, can be great for this.
- Use consistently in prospecting: Whether you’re using LinkedIn Sales Navigator or another tool, apply your criteria rigorously when identifying potential leads.
- Build it into your CRM: Set up fields in your CRM that align with your qualification criteria. This makes it easy to track and analyse your pipeline.
- Create a scoring system: Assign points to each of your criteria. This can help you quickly assess the quality of an opportunity.
- Regular reviews: Set up weekly or monthly pipeline reviews where you assess each opportunity against your criteria. Be ruthless about removing unqualified leads.
- Refine based on closed deals: As you successfully close customers, look at what they have in common. Use this data to refine your qualification criteria over time.
Common Mistakes to Avoid
As you’re implementing your qualification process, remember that it’s better to have five high-quality opportunities in your pipeline than 30 that you can’t properly nurture.
Quality over quantity, always.
- Having no qualification criteria at all: This is what I hate the most. Without criteria, you’re flying blind.
- Trying to force-fit generic frameworks: BANT (Budget, Authority, Need, Timeline) might work for some, but for me, one-size-fits-all solutions don’t work. Create criteria that works for your specific business.
- Casting too wide a net: Especially in the early days, it’s tempting to go after anyone who’ll listen. Resist this urge and niche down initially.
- Ignoring your own criteria: It’s one thing to create qualification criteria; it’s another to consistently apply it. Stick to your guns!
- Not involving other stakeholders: Your product and customer success teams should have input on what makes a good customer. Don’t create your criteria in a vacuum.
- Failing to iterate: Your first attempt at qualification criteria won’t be perfect. Be prepared to refine it based on your real-world results.
The Bottom Line: Qualification is Your Foundation for Growth
Getting sales qualification right means you’ll close better-fit customers, have more time to sell properly, and build a product that truly solves your target market’s problems.
It’s the foundation upon which you’ll build a scalable, successful sales machine.
So, take the time to create your own qualification criteria. Make it a living document that evolves with your business. Train your team on it, use it consistently, and don’t be afraid to say “no” to opportunities that don’t fit.
Your future self (and your eventual sales team) will thank you for the clarity and focus it brings. Plus, when it comes time to raise that next round, investors will be impressed by your disciplined approach to growth.
By mastering the art of sales qualification, you’re setting yourself up to attract and retain the ones that will fuel your growth for years to come.
Author: Matthew Codd
I’m Matthew, I have 15 years of commercial leadership experience, helping VC-backed B2B technology companies scale revenue and transition from founder-led sales.
I use my experience to help early-stage start-ups with GTM expertise, sales best practice, and hiring insights.
I co-founded Cosmic Partners in 2022. We are SaaS sales recruitment specialists for VC backed B2B tech companies.
