The next step is to differentiate these prospects into those that are very interesting and those that are less interesting.
This process is called qualification, and there are different frameworks for doing this.
The most common is BANT.
What is BANT?
BANT is a framework for qualifying sales opportunities based on 4 aspects: Budget, Authority, Need and Time.
This framework was designed by IBM as a way to separate a bad opportunity from a good one.
On paper, to be one of the good ones, it must meet at least 3 of the 4 criteria:
- Budget: does the lead have a sufficient budget for the solution?
- Authority: does the lead have authority or can he/she influence the buying process?
- Need: does the lead really need your solution?
- Time: how quickly does the lead need to implement a solution?
This framework originally meant a whole revolution in sales, especially in B2B with large accounts.
In fact, we use it ourselves at Efficy.
But you have to be careful, because this way of qualifying customers has its lights and shadows.
What are the problems with BANT?
If you apply BANT as it is and as IBM has proposed it, you run 2 risks:
- Don’t focus on what you really need to focus on.
- Qualify regular customers as very good .
Not putting the emphasis where you really need it
In modern sales, everything should be focused on the customer, not on the company selling.
This is why the usual funnels are not suitable for the buying process of large companies.
As we saw in “How to manage the sales process for large companies” and in the words of Brent Adamson:
The original BANT is also very salesperson-centric:
- Do you have a budget for my solution?
- Do you have the power to buy my solution ?
- Do you need my solution ?
- Are you in a hurry to get my solution ?
To make this process customer-centric and not you-centric, some adjustments need to be made.
Qualify not-so-good customers as very good customers
Imagine that a prospect calls you on the phone: he wants you to present your solution.
They have management approval to hire a solution like yours, and there is a budget.
Plus, he’s in a bit of a hurry, so he’s selected several suppliers that are suitable, and you’re one of them.
Doesn’t that sound good? If we apply BANT to the letter, this prospect scores very well.
However, according to several studies by Harvard Business Review and Gartner, by the time a prospect contacts a vendor, between 60 and 80% of the decision has been made.
It is very likely that the prospect is simply comparing your solution with the one they have already decided to buy. And if this is the case, all your work will be in vain.
In the jargon, this type of prospect is called an established demand : They know what they want, they already have a preferred vendor, and they are well into the buying process.
BANT is very good at identifying prospects of this type, but they are not the most profitable.
On the other hand, there is an emerging demand : These are customers who have a latent need but are not yet aware of it and are at an early stage in the buying process.
Supporting these customers from the beginning is very profitable, but the original BANT is not very good at identifying them.
For Iñaki Alcaraz, managing partner of AGLV, there are in fact 2 types of customers to distinguish: “From my experience in selling services to other companies, there are two main categories of customers:
- The “good and profitable” ones.
- The “bad and ruinous” ones.
They differ not only financially, but also in the emotional cost of acquiring or losing this type of customer.
A good and profitable customer is one who is willing to improve their business by getting the most out of the service they have contracted and who is fully committed to the transformation they need, putting all their efforts into achieving their goals.
This type of customer is a very positive injection of motivation, which is transmitted to the whole company, which is why they are good. Their profitability will depend on our processes and operating margins.
A bad and ruinous customer is the opposite, not only is he not willing to make this transformation, but he wants to change your processes so that you serve him, simply because he pays for it.
While financially it can give you a lot of margin, I see it as a downfall because it can demotivate your team and in the long run infect the rest of your business.
Of course, the BANT method is very helpful in identifying them. I think companies should evaluate, through these or other methods, whether it is worth investing resources in guiding our potential customers to the last stage of the sales funnel and finally become customers, or whether, instead, we should let them go.
I really like the idea behind BANT. We have incorporated it under the name “LEAD NAME” (Need + Authority + Right Time + Financial Resources) as a starting point in finding clients for ourselves and for our own clients.
While BANT is a method that has worked for years and has been adapted to much more automated and technology-aligned marketing, it is important to adapt it to the nature of each business so that lead qualification is effective.”
How to adapt BANT to new times
To continue using BANT, as Iñaki Alcaraz says, we need to adapt it to the times and to each company, so let’s break down each of its 4 points to see how we can do this:
How to approach the budget
This part of BANT aims to clarify whether the prospect has a sufficient budget to buy or not:
- If he really has the budget: go for it.
- If they don’t have the budget: don’t waste your time.
The problem is that large companies can (almost) always find the budget.
If they see enough value in a product or service, they will move it elsewhere and find the money.
Similarly, if they don’t see the value in your solution, the amount of budget they could allocate to it would be 0.
The budget is therefore only a starting point and it fluctuates according to the level of awareness of the customer’s need.
With an image, that’s fine:
Depending on when the company is present, the product or service goes from “nice to have” to “necessary”, or even, at times, “indispensable“.
It goes without saying that the budget that a company can allocate to the same solution has nothing to do with the time it is present.
For Karem Torres, an expert in helping B2B companies and vendors, this is one of the most important points: “My qualification process is not structured by the specific BANT questions, but I use several questions to qualify them. For example, to sell my training courses, I ask:
- For how many people would they be?
- What are their needs?
- What is the investment they have for this?
And more importantly, what priority do they have for it, because there are customers who ask you and you quickly see that they want it, but they don’t need it urgently and you need to know: How quickly do they need your product or service?
Whether you are eligible for BANT or other types of questions, you need to answer them as soon as possible.”
To keep this in mind when qualifying a client, it is very important that you understand where they stand: Is the solution a ‘must-have’ for them or a ‘would be nice’? On this basis, whether they have a budget will be relevant or not.
How to address the authority
As we saw in the ” The differences between selling to large companies and SMEs “, when selling to SMEs it is very important to reach the right person, which is most often the CEO.
But in selling to large companies, the process is very different and the authority is no longer a person, but a committee.
And this committee, made up of different members from different parts of the company, is the one that has to reach a consensus on whether or not to buy your solution.
In fact, although in these committees there is always an executive, very often this is not the person in charge of making the decision, but simply giving the final approval.
Therefore, it is very unclear whether the person you are talking to has authority within the company or is influential. You need to understand their buying process for a product like yours first.
Then you need to find out if the person you are talking to is one of the key people in that process.
You will be surprised how often the opinion of a business partner or a future user of your solution is more relevant to the buying process than that of management, who do not even get involved in the transaction.
How to focus on the need
Asking a prospect how much they need your solution is an instant way to eliminate much of the emerging demand : Managers who may be very interesting, who are not sufficiently aware of their needs, and who are early in their decision-making process.
As a salesperson, your job is to help your prospects understand their problems and discover their needs and move them from “it would be nice to have” to “it’s a must”.
On the other hand, if a customer tells you right off the bat that a product like yours is a “must have”, they are probably well along in their buying process.
In this case, and as many products and services are very similar to each other these days, the sale can become an unprofitable battle of features and price.
The way to avoid this, Iñaki Alcaraz tells us, is to delve into BANT’s A, authority, on the other side of the coin: “Authority is important to approach not only the buyer’s side, but also the seller’s side.
In a society where all the information is at hand to compare offers, a high percentage of buyers go through more than half of the buying decision process by themselves, before contacting a seller.
In fact, we no longer “go out to sell”, but rather “wait to be bought”.
Therefore, if you work under your authority and become a reference in your niche market, you can naturally become an “ambassador of your company”, a facilitator of the products and services your customers were already looking for.
To do this, you need to offer added value to your potential customers.
And we recommend that you start doing this on LinkedIn, the most important social network that puts you at the top of the list of your prospects.
There we will find many potential customers who are at a very early stage in their buying process, who are not well informed about their needs and who are just looking for information.
If you strategically work on your public exposure and generate personal visibility, when your customer’s ideal buying moment comes, you are no longer a cold door contact, you have fewer doubts and you are in control of the process from the beginning.”
For these reasons, in this part of BANT, you don’t need to know your lead’s current need, but their ultimate need.
And if that number is high, walk them through their journey, regardless of their current need.
How to focus time
Urgency for a customer is like budget: it is absolutely variable.
If they see your solution as indispensable, they will act very quickly.
If it is not so important to them, they will move slowly until they stop.
This is why getting rid of a prospect because you say “now is not the time” can be a very bad idea.
To address this point, you need to find a critical event for your customer, and reverse engineer it:
With an example, it becomes clearer: We sell a CRM for all departments in the company, but sales people get a particular benefit.
Therefore, if a prospect tells us that they need to have their sales department up and running by March 1, and we know that implementing a CRM can take 6 months, we need to let them know: “We’ve already worked with over 4,500 customers and we know that in order to be up and running by March 1, we would have to sign up and start the project on September 1.
The customer doesn’t care about your deadlines, but they care a lot about theirs.
Buying a CRM on September 1, December 1 or February 1 is not very important to a sales manager.
What matters to him is that his team sells on March 1st.
That is the key.
To capitalise on this point, you need to understand what your customer’s critical events are in relation to your product, and from there design the backward path.
With these approaches, you are able to qualify your customers with BANT
Because at the end of the day, BANT is just a means to an end.
The key, as we talked about at the beginning, is to differentiate the less interesting prospects from the better ones so that they continue the sales process.
And the next step in the sales process, the sales process itself, we will discuss in the next lesson.
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