A Conversation, Not an Interview: Thoughts on Effective Qualification From Lighter Capital’s Allen Johnson
Collin Stewart, CEO
07 Dec 2017
Qualifying prospects can often appear, at least on paper, feel like a one dimensional task. Get your prospect on the phone and ask them your company’s set of predetermined qualifying questions.
Budget, need, authority, timing, anyone?
Of course, qualification is far from a simple, even monotonous task – qualifying prospects is a critical piece of the sales process, and should never be looked at as an exercise in ticking a few boxes before moving along to more important things.
In fact, it should be seen as time to understand your prospects, get to know them and their business, and share how your and your service / offering can provide value for them, according to Allen Johnsen, Managing Director of Seattle-based Lighter Capital, an investment which first qualifies and then invests in tech startups.
“For us, it’s all about maximizing the entrepreneur’s time, which is limited. So, we go through a sales call in a way that we are gathering information, showing our genuine interest in what they are doing, while building trust and being transparent,” says Johnson, on a recent edition of The Predictable Revenue Podcast.
“And that goes back to the idea of time – you don’t need to be asking about decision makers or board meetings if you aren’t qualifying and asking about fit.”
To ensure Lighter Capital’s sales team is having the right conversations at the right time, Johnson, along with other directors and investment specialists at Lighter Capital, designed a staged qualification rubric for its team members to follow.
Each stage is centred around an overarching theme, and has certain criteria that a member of the Lighter Capital team is expected to capture.
Lighter Capital’s levels of selling
- Qualify – industry; revenue, number of customers etc.
- Fit – offering; technology, niche, customer concentration etc. Metrics, revenue model, churn, margins, trends.
- Alignment – request; needs, uses, amount, timings etc. Motivation, working capital, retain equity, VC funding etc.
- Validation – Business model; products, market, contracts, revenue etc. Financials; ownership, debt, AR / AP, burn, runway etc.
- Decision – process; decision makers, board members, competition etc. Timing; motivation, roadblocks, board meeting, next steps etc.
But, stresses Johnson again, that information isn’t gathered in an interview-style chat. It’s captured during a series of quick yet engaged, two-way conversations.
“All of this is must be entrepreneur focused. We respect time, show genuine interest, build trust, and provide transparency. Throughout the process, we weave in Lighter Capital value, and discuss how we can help and provide value. Again, we’re not just asking questions,” says Johnson.
“Step 1 is typically a very quick conversation, handled by our SDRs. It’s about making sure companies hit minimum criteria. The “Fit” calls are handled by directors. If time was not an issue, you could get through fit, alignment, validation, and decision on one call. But, the entrepreneurs time is so limited, we don’t have that luxury. So, as you notice, the structure is such that if we don’t hit everything in qualify, it doesn’t make sense to go further. There’s no ambiguity about why the conversation may not be proceeding.”
A key, but often overlooked, component of promoting engaging conversations with prospects is tone, responsiveness and what Johnson calls “active listening.” It’s easy to tell your SDRs to pay attention to what prospects say, but when the pressure of quotas and other responsibilities begin to pile up, it’s easy to slip into running through your basic prospecting questions.
To combat that easy pitfall, Johnson suggests harnessing natural breaks in the conversation as a way to propel the call towards different topics. Think of it as leading the call in a productive, respectful way.
“Entrepreneurs will tell you a lot, these companies are their babies. So, leading a conversation is having a deep understanding of transition points, and how to keep the conversation moving forward. And, understanding how to put your services and value into context,” says Johnson.
“It’s about finding ways to weave that into a discussion. You should refer to whatever was just discussed and go to the next phase of the conversation. Calls aren’t stream of consciousness – they have breaks and segments. We have to recognize those breaks and use them to move the call along, and in the right direction. Scripts for your SDRs are great, again for a framework. But if you are too focused on a script, you don’t listen. And, how can you build trust when you’re aren’t listening? By listening, and putting their time and interests first, you will build trust.”
Finally, trust isn’t simply built on the back of a qualifying call. Trust is the product of the entire sales process. As such, Lighter Capital has designed a handoff process to ensure all relevant information is passed along and leveraged by everyone involved.
“We are relatively new – so our SDRs are new, our directors use to handle the entire process. So, we have had some growing pains, we utilize Salesforce. We have to make sure that if anything was captured in that initial call, it is written down in Salesforce. Those key pieces need to be leveraged by the investment team or the directors,” says Johnson.
“The directors are the experts. So, at the qualifying level we stay away from price, process and product. We let the entrepreneurs know that it is better if the directors answer specific, technical questions.”
For more on Johnson’s qualification and sales methodologies, check out his recent edition of The Predictable Revenue Podcast.