Qualifying a Prospect: Vol. 1 Criticality
Is This Conversation Worth Your time?
The first in a three-part series on how to identify prospects worth your time.
Last week we talked about writing a cold email. The first rule was listen before you pitch: find prospects you actually know are in need of your services before you reach out. But that principle doesn't just apply to cold email. It applies to every prospect you encounter, whether they come to you at a trade show, respond to a marketing campaign, or get handed to you by a colleague.
So how do you know which ones are worth your time?
Open TechCrunch or a prospecting tool like Seamless AI or Discover. You’ll find hundreds of tech firms. How do you separate the ones who will never buy from the ones who might? Over the next three posts we'll cover the three criteria that answer that question. Get all three right and you'll stop wasting time on deals that were never going anywhere, and start walking into every conversation already knowing how to position the sale.
The three criteria, in order: Criticality, Transition, and Demographics.
Today, #1: Criticality.
A sales rep came to me once practically buzzing. "I just had the best call!" he said. "This was the nicest guy, we talked for an hour, he was super interested in our services."
“Great,” I said. “What does the company do?”
"Oh they make these cool widgets and ringtones for phones. Small startup, but they're growing fast!"
This rep was selling managed services for AWS: 24/7 helpdesk, monitoring, backups, security. The minimum package cost $100K a year.
I asked him one question. “What happens if those widgets go down for an hour?”
He thought about it for a second.
The rep spent another week writing up a proposal. He was thorough, detailed, proud of it. You already know how this ends. The moment the prospect saw the price, he vanished. Never heard from him again.
That's a Criticality problem.
The most important question you can ask about any potential deal is whether the customer's business is critical enough to justify what you're selling. If their product goes down for an hour and nobody notices, nobody calls, nobody loses money, why would they spend serious dollars making sure it never goes down?
Criticality has two sides. Is what the customer does critical enough to invest in protection? And is what you're providing critical enough to merit that investment?
Widgets, social apps, games, early-stage startups burning through seed money. These are generally not a fit for mature, expensive services like 24/7 support and enterprise security.
What should this rep have been targeting? Healthcare, finance, education, B2B SaaS.
Businesses where if the product goes down, people are yelling, revenue is bleeding, and someone's job is on the line. Because then spending $100K a year to avoid losing millions is an easy conversation.
One more thing worth knowing: the type of company is only part of the picture. Criticality applies to the specific project or application your sale is supporting. You can be selling into a highly critical business and still be pitching into the wrong corner of it.
Watch out for back-office functions. Payroll, HR, internal communications, desktop support, anything that's internal-facing. Companies will tell you these systems are critical, and in some sense they are. But if internal tools go down for an hour, or lose a few days of data, the business doesn't actually lose revenue. Nobody's customer is calling. The company is inconvenienced, not bleeding. And when budget time comes around, they're going to spend their money protecting the things that generate revenue, not the things that process expense reports.
Criticality means the application or process your sale is supporting is essential to the customer's ability to make money. If it goes down or gets breached, they lose revenue and customers. That's the project you want to be attached to.
Next up: Transition. No one decides to spend money if they don't have to. Something important has to be changing.
At Antimatter, qualifying prospects is one of the first things we work on with sales teams. If your reps are spending time on deals that were never going to close, let's talk.