It Takes All These to Qualify a Lead. Who Knew?

By Gale Crosley, CPA

Reprinted with permission from CPA Practice Management Forum

Unconscionable sums of money are squandered every year by CPA firms chasing down unqualified leads. Through my coaching work, I've seen the costly results of unfocused lead qualification and it isn't pretty.

Developing and closing an opportunity is difficult, even in the best of times. The added challenge of today's highly competitive (and slightly skittish) marketplace underscores the importance of vigorously and purposefully qualifying leads.

What a waste!

Without discipline around lead qualification, firms jump into an unstructured process based more on wishin' and hopin' (apologies to Dusty Springfield...) than on solid facts.

Consider a typical scenario. Firm A learns of an RFP for a company that's grown dissatisfied with its current provider. A dozen firms are bidding on the work. Firm A goes headlong into the effort, investing 30 hours into a boilerplate proposal that does not win the business. At a $300 hourly charge rate, that's $9,000 down the drain. Now multiply that by about 10 such undertakings a year and you're looking at an astronomical sum.

Instead, I recommend a focused process that starts with ensuring that the following conditions are met:

• The prospect must have the money to pay for the service.
• The prospect must be experiencing a degree of pain significant enough to motivate action.
• The CPA firm must have direct access to a decision maker/person of authority.

Is it winnable?

I constantly see firms grasping at unwinnable business. In some instances, they have no sense of how to strategically qualify a lead. In other cases, firm principals pursue and qualify leads with their "happy ears" on, hearing only what they want to hear. They are basically in denial about the potential failure of their pursuit.

These are the same individuals who are appropriately circumspect about their approach to an audit. But when it comes to lead qualification, they operate quite differently. Another possible reason for pursuing an unwinnable lead is to develop skills or establish connections. But at a price tag of $9,000 per pop, this is a very expensive way to practice. So, while appropriate some of the time, this should not turn into a steady diet, as it unfortunately has in many firms. In my view, the best reason to pursue an opportunity is because it's winnable, and you intend to win it.

If you're doing it for any other reason, I suggest you seriously question the benefit compared to other ways of honing skills or developing relationships. For example, the hours spent creating a proposal could be much better spent perfecting the skills required to make better research calls. This is a much more productive tactic that requires interviewing others in your market-leading to strategy, distribution channels, and real buyers.

By the way, I practice what I preach and will not pursue unqualified leads. If the lead isn't qualified, it hasn't earned its right to be pursued.

Fill in the blanks

So what's involved in qualifying a lead? Interview your buyer early in the process, interview multiple decision-makers if necessary, and don't hesitate to ask the tough questions. Leads need to be qualified early and hard. Listen to the answers very, very carefully. Once you've asked the question, based upon the answer, then dig, dig, dig further. Think Colombo, the popular TV detective. The qualification questions are:

• Why buy?
• Why now?
• Why us?
• Who else?
• Who cares?

Why buy? Another way to phrase this is "Why change?" As mentioned above, you want a prospect with a true need and desire to stir things up. Without that, you're not going to get a yes.

Why now? Learning why a prospect is ready to make the change now, rather than last year or next year, will reveal both the level of pain and the length of your sell cycle. It will tell you whether you have 3 weeks, 3 months, or 13 months to make your case. This is essential to planning your strategy.This question and the "why buy" question are designed to reveal deep, often hidden, and personal needs. These are the raw materials of building value and preference for your eventual solution.

Why us? Uncover all you can about the prospect's interest in you and your firm. Do they really understand what you're all about, or are they burdened by some nagging misconception? Is there any dirty laundry that needs to be aired (e.g., did the business use your firm years ago with an unsatisfying result, or was their sister-in-law formerly with your firm and subsequently fired)? I was working with one team who uncovered the nasty fact that the prospect had little respect for the managing partner. They had to address this before becoming a serious contender.

Who else? This is where you find out about the competition. Ask who else is being considered and why. The prospective client may not wish to answer, but it is part of your due diligence to ask and to expect an answer. The best business developers I know ask such probing questions with confidence-non confrontational, yet assured. When you get the prospect comfortable talking to you about your competition, your strategy and resulting odds-to-win soar!

Who cares? Find out who has influence in a possible transaction. Does outside legal counsel have considerable influence with the CEO? Are family members closely involved? Know whom you're dealing with-those across the table and those behind the scenes. Ask questions and think in term of organization charts. All companies have them, even if they're not written down. They lead you to decision makers, recommenders, and influencers. You don't want to be surprised in the eleventh hour by an influential person who suddenly pops out of the woodwork because you skated by this question.

When coaching opportunity pursuit teams, I find that 80 percent of all mistakes leading to a lost opportunity are made right here-as the result of poor lead qualification. Some examples include:

• Influencers who appear late in the sales cycle (mentioned above);
• A decision-making body you were unaware of;
• Deep, hidden needs you never uncovered;
• Competitors with an inside track whom you didn't even know about;
• Other priorities that shift the decision making process or cycle;
• Assumptions that you didn't validate; and
• Countless other surprises, many of which could have been avoided.

Surprises lead to bad strategy and competitive losses.

Got gravitas?

If I still haven't convinced you that qualifying a lead is more than cutting and pasting into a proposal template, ask yourself this question: Do you approach lead qualification with the same gravitas with which you'd approach a tax filing or an audit? Do you think of it as due diligence?

If so, you're on the right track. In order to succeed, you need to treat the selling process as seriously as you treat the delivery of services.

Wishin' and hopin' aren't enough, my friends. You've got to go for it with a purposeful, results-driven process.

Copyright ® 2011 by Crosley+Company
Gale Crosley, CPA, was selected one of the Most Recommended Consultants in the Inside Public Accounting BEST OF THE BEST Annual Survey of Firms for eight consecutive years, and one of the Top 100 Most Influential People in Accounting by AccountingToday for six consecutive years. She is an honors accounting graduate from the University of Akron, Ohio, winner of the Simonetti Distinguished Business Alumni Award, and an Editorial Advisor for the Journal of Accountancy. Gale is founder and principal of Crosley+Company, providing revenue growth consulting and coaching to CPA firms. She brings more than 30 years of experience, featuring a unique combination as a practicing CPA in two national accounting firms, along with significant experience in business development in the cutting edge technology environment with such firms as IBM and MCI. For more information, visit the website at www.crosleycompany.com or contact her at gcrosley@crosleycompany.com.