The banking and mortgage industry gave loans without pre-qualifying and it turned into a disaster for virtually all participants. Pre-qualifying prospects is the sign of a seasoned professional. It is tempting to jump on every new opportunity in hopes of a new sale, but in the long run it can result in less business, lowered revenues, and loads of frustration.
Pre-qualification is one of the most common sense activities for a business yet it is frequently overlooked. It slows down the sales cycle and it creates extra work. It might result in less clients. For some it is an inconvenience. For smart businesses, pre-qualification is a great differentiator. The best run companies create a pre-qualification process around the profile of their ideal customer.
Does your business have a pre-qualification process? It can save you time in the long run because you will not engage with clients that are a drain on your resources. It can make you more profitable because you will not work with businesses that are unable to pay for your services. It will help you see that not every phone call from a prospect is a good fit for your business. Pre-qualification takes time, but a good system will help you quickly determine whether or not a prospect is a good fit for your company. The time you save will help you focus on the clients that will help you grow your business.
Below are some important points about creating a pre-qualification process for your business. Your objective is to make the process of filtering out the unwanted prospects as quickly as possible.
Can you really help them? - Does the prospect need a service that you offer? Introducing a new service for every new client will make serving them a nightmare. When you offer too many services you tell the world that you are not an expert of anything. It is better to go deep and narrow than shallow and wide. People want to hire experts. You can only be an expert in some very narrow areas.
Are they buying or just kicking the tires? - Figure out their level of commitment to their project. Have they thought it through? Can they describe in detail what they want? Do they have a sense of direction? Do they expect you to figure it out for them? Do they have a deadline? If they have no idea when they want to start of the project and when they want to finish, they haven’t really thought it through. If there is too much focus on price, they will not be able to focus on the other important issues. You should focus on approximate costs from early on. Also, mention that you take a deposit for every project you work on. Your business is best served if you filter out the lookers from the buyers.
What is the budget? - Rookie business owners and salespeople tend to avoid the topic of costs. Determining the budget should be part of the first conversation. A serious prospect knows exactly what she can afford. If you don’t get a straight answer, it is unlikely that you will close the prospect. If the client has a budget you should dig deeper about how the budget was determined. Ask if there is any flexibility in the budget. If their budget is unrealistically low, explain them the reasons. Most reasonable people will understand. They might increase their budget or shelf the project until more funds become available.
Can you do it today? - Some of the worst clients are the ones that are already way behind by the time they contact you. A prospect in a huge rush is a bad sign. They have not thought the process through. They left it to the last minute. They might have hired the wrong person for the job and now want you to fix the mess in an unreasonable time frame. Regardless of how much of a hurry they are, you have to be firm on setting realistic schedules. Explain the reasons why the project takes as long as it does. If it is impossible to complete the project as fast as the prospect requires, explain the reasons.
What is your first impression? - You should trust your instincts. Do you feel that you would be comfortable working with the person? Are they difficult to deal with during the pre-qualification? Are they disorganized? Do they minimize the cost, skills, and time it takes to complete the project? If they seem like they are just making it up as they go, you know that you are dealing with someone that did not do her homework. It is tempting to land a new project, especially in a slow economy, but you should listen to your internal red flag counter. Trust your gut feeling before committing to a new project.
There is no full proof pre-qualification process, but you have the power to filter out much of the unwanted business. Your clients have needs and so does your business. To succeed you have to be working with the right clients. Any business can handle the occasion pain in the neck clients, but too many of them will set you back. It is possible that a prospect will fail most of your pre-qualification requirements, but your gut tells you to help the client. You might take on a big brand client just to be able to add them to your public portfolio. If you are brand new to the business with few or no clients, you might have to take on less than desirable clients.
The bottom line is you know who you are and what you want. You have the power to set your pre-qualification requirements in a way that helps you build the business you desire. A quick pre-qualification process will help you build a book of clients you enjoy serving.