You've been to a trade show and you have a bunch of new business cards. You've held a seminar and you have a list of the attendees. Your phone people have been working a list and have given you the names of prospects who didn't hang up on them. What now?

You need to qualify your new business prospects. Sales is a numbers game, and you have limited time and resources to apply to these prospects.

Middle market companies usually find themselves in very competitive markets. You haven't built a complete brand yet and are just beginning to build customer loyalty. To stay competitive and continue to grow efficiently, you need to create decentralized management using rules and concepts rather than direct hands-on management. While this is true for many facets of your business, in sales, it's crucial. Multiple prospects with many different needs and situations must be accounted for.

A sales funnel is a common tool that lets you keep track of these disparate prospects. The funnel is a visualization that illustrates the story of the average sales lead. It's wide at the top, representing unqualified prospects at the initial point of contact, and narrow at the bottom, indicating prospects that you are close to making a final sale with that are confirmed to be worth spending resources on.

But in order to qualify prospects, you must build the right set of criteria that determines whether they move down the funnel or stay where they are. To form these questions, you must consider four specific factors:

  1. Need. Are you selling something that the prospect actually wants to buy?
  2. Authority. Are you dealing with someone who can make a decision to buy? This should be a person who not only can turn you down but also is in the position to say yes to a final sale.
  3. Time frame. Is this something that the prospect needs immediately, or is it a case of a prospect making a vague assertion to finalize a sale sometime in the future?
  4. Money. Do they have the budget to buy what you're selling?

As you work with these prospects and get to know them, you come to a better understanding of their specific situations, while the prospect learns more about your company and what you're selling. This is all fundamental to the sales process.

It's just as important, however, to know which factors to use when determining who not to sell to:

  1. Size. Is the sale so small that your overhead to process and fulfill it will be greater than the profit?
  2. Money. Can the prospect pay you up front and in full?
  3. Expectations. Is the prospect asking for special modifications, treatments, or extra work? If the prospect is expecting extra value out of the sale that you're not willing to give, it's best to walk away instead of taking on what could turn into an unhappy customer.
  4. Framework. Is the prospect requesting something outside of the realm of products or services that you offer? Sometimes it's beneficial to pursue a sale like this, but it's a strategic decision that should not be made by the salesperson alone.

Efficient use of sales resources involves both qualifying leads and rejecting some sales. It's a balance between determining the time and resources available while weighing the potential benefits and downsides to following through on a lead.

Peter Miller is an NCMM contributor and a career entrepreneur who has built sales forces in multiple companies. He is currently COO of Genomic Healthcare Strategies in Charlestown, MA.