How to Identify a Bad Sales Lead

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How to Identify a Bad Sales Lead

Sales people waste a lot of time on bad leads that will never buy from their company. They are sometimes referred to as tire kickers or “Lookie Lou’s” since they are glad to talk about buying, but in reality, they never end up purchase anything. Unfortunately, sales team spend an inordinate amount of time not qualifying these bad leads since they get caught up with the quantity of their prospects, not their quality. This results in missing sales goals.  To maximize their sale goals, teams need to only call on prospects that have a high likelihood of buying

Identifying a Bad Sales Lead

Here are surefire ways to spot them before they waste too much valuable selling time:

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Start by Googling

Do background research on the prospect. Google their name and company if appropriate. Determine if they fit the target demographic of your typical customer.

Make a Phone Call

Before setting up a meeting, ask the prospects some key questions by phone.

In their view, what is their problem (that your solution addresses)? Get very specific since people only act when they are trying to solve a real pain.

What does it cost them if they don’t solve the problem? (i.e., if they wait, what is the cost to them?) This helps justify the expense of any new solution.

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What is their budget for solving it? If their budget is too low, it does not make any sense to continue the discussion. For example, if the solution costs $10,000 and the budget is $7,000 this is still within the range and is worth continuing. If their budget is $10 and your solution costs $5,000, then the conversation should stop there with these type of bad leads.

At the Actual Sales Call

Have a very specific further set of questions for the in person meeting.

How do they think your solution will help them (solve their pain)? What exactly do they think your product will do for them and is this a realistic result from your point of view.

What have they tried before? This is critical since you want to know what solutions they have implemented previously and apparently failed. This tells you the level of spending and commitment they have for solving the solution. It also may give an indication if you can really help them.

Who else are they considering? Know who the competition is. If they are considering other vendors (or doing it inside their company), this may show how serious they are or is this just a bad lead.

Where is the budget coming from to make the purchase (and who can authorize it?) This helps identify whether you are actually talking to the decision maker who can buy your product. It becomes part of a series of bad leads if you are selling to someone that can’t authorize or influence the sale.

Always do more listening than talking. Don’t be afraid of a “no” from any of the bad leads or answers that do not move the sale along. The positive outcome about a “no”, is that you can now find other leads that may buy and not waste time with those that actually never will.

Call Photo via Shutterstock

Barry Moltz Barry Moltz gets small business owners unstuck. With decades of entrepreneurial ventures as well as consulting with countless other entrepreneurs, he has discovered the formula to get business owners marching forward. His newest book, BAM! shows how in a social media world, customer service is the new marketing.

5 Reactions
  1. Great advice for domestic leads. What about identifying bogus international leads? It’s unrealistic to just pick up the phone and call. Any advice on how to weed out bad international leads if a phone call isn’t an option?

  2. I would do similar research then asked pointed questions, and then ask for a deposit!

  3. While it may be good to do background checks, you really cannot do this fast in a fast paced environment where you need to make a lot of calls. Or it may be just me.

  4. It’s true that not every lead is a good one. If sales reps learn how to separate the good ones from the bad ones, they can better focus their efforts. Luckily, it’s possible to do some prior research to determine how good each lead actually is.

  5. Good advice, good qualification, throughout the buying process makes common sense, shame it seems so difficult to ensure that it isn’t consistently done.. when I learnt to sell my boss drilled me in asking some variation of of seven qualification question on every interaction with the prospect. And to validate answers with different people in the decision making group.