Hidden cost when a prospect is not qualified
It takes a lot of time and effort to prospect and get them interested in your products or services. The temptation is not to let them go and pursue them till the end to close as many or all of those prospects. However, all prospects cannot be treated equally. Each one of your prospects are at multiple stages of their buying cycle and have their own parameters on which they make the purchase decision.
It does not matter if it is just a follow up once in a while on the phone or through email as the cost involved is insignificant or next to nothing. The damage comes in when one of the two conditions occur:
1) False Positives – The sales person by seeing the sheer number of prospects in their funnel gets overconfident that they have so many prospects to handle and how hard it is for them to close a few to hit their quota and does not prospect and fill the top of the funnel. The hard reality hits them at the end of the month/quarter when they do not hit their numbers.
2) Involving the others in the company – It is not a secret that the companies spend a lot of amount for each proposal as the quantum of work involved in understanding the scope, involving the functional experts, management time involved in the closure to name a few. The Pre Sales effort sometimes will involve more than one person in the company because of the complexity. This might also require dedicated teams to visit the customer locations and meet up with multiple stakeholders to do the initial prospecting (travel + time) , doing system study (optional), understanding the scope of the work, doing internal discussions (opportunity loss of time of un-connected stakeholders ) with multiple senior folks. At the final stage, we are also talking about the hours spent by senior management in reviews hoping that they will close this deal and ignoring other opportunities.
What happens if the time spent with these prospects do not turn into business because they were just window shopping or the sales person was playing the game hoping to win even though there was not much of a chance?
Loss of Time, Effort, Money
So it is extremely important to qualify and understand the chances of our winning the deal and involving the others in the company after this logical decision has been taken.