Costs of Poor Qualification

All of us in sales understand the importance of opportunity qualification. In fact, at mbyl, we are convinced that the qualification step is the most important in any commercial process. But what happens when we qualify poorly? How do we measure the cost of misqualifying an opportunity? The first thing that comes to mind is that a poorly qualified opportunity can make closing impossible, meaning we have wasted our sales time that could have been dedicated to other opportunities. And surely, we've had to give explanations more than once in the forecast meeting. That's not all. How much does it cost my company to misqualify, or to have a poorly qualified funnel?

Underestimation in the qualification of B2B sales opportunities can result in significant internal costs for a company. When opportunities are not rigorously evaluated, valuable time and resources are allocated to prospects with little conversion potential. This inefficient allocation of resources generates considerable internal expenditure, consuming the energy and time of the sales team on clients who may not be ready to buy or who do not properly fit the offer. Additionally, this diversion of resources can disrupt sales metrics and forecasts, complicating strategic decision-making. To avoid these internal costs and ensure optimal resource utilization, establishing robust qualification processes that accurately identify the opportunities with the highest likelihood of success is essential.

And how are these internal costs calculated? Well, every opportunity requires the involvement of various profiles to a greater or lesser extent, not just the Salesperson. We need Specialists, Pre-sales, Consultants, Support, and maybe some more.

If we consider the hourly cost of each of these participants and the time they allocate to an opportunity, we obtain the internal cost of carrying it forward.

This exercise gives us an additional piece of information: Are all opportunities worth it? Maybe we should review what is the minimum ticket we are willing to tackle…

In addition to these internal costs, there are other costs that are difficult to assess, but easy to understand. The time these professionals dedicate to my opportunity is time they cannot devote to opportunities with a better chance of closing.

And finally, is qualification always done in the same way? At mb&l, we understand the qualification process and devote a lot of time to its study. We also understand that opportunities don’t always arise from a Client’s request (pull sale); some are generated by needs our Clients don’t know they have, or by technological innovations that we “push” because they represent benefits for the Client (push sale). Although the qualification process is the same, the documentation and arguments we will have to process will have additional information… But this is a topic for another discussion.

If you have doubts about qualification or other Commercial Process topics, consult us.