You’re looking for a sales qualified lead in all the wrong places.

Sales is like dating. It’s all about relationships. You have to decide what you’re looking for in the perfect mate (or prospect), and then figure out the best way to meet that person (or sales qualified lead).

Imagine you’re single and looking for a long-term relationship. You’re a little older and wiser now, so you take time to reflect on the profile of your ideal match. It turns out you want someone sober, smart, hard-working, and honest, and who loves theater and concerts. Would you go looking for that person in a bar? Probably not.

It’s the same with a sales qualified lead. We have to change how we talk about sales leads and what actually counts as “qualified.”

You Call That a Lead?

Inquiries are not qualified leads, and neither are those coveted lists of names. Someone who’s downloaded a white paper is not a sales qualified lead, nor is someone who’s viewed a demo. This kind of thinking is how we get our pipelines clogged with cold leads that rarely or never pan out.

Leads are people who are truly interested in talking to us about your product or service. They match the profile of our ideal client. They have budget—and a need. And they want to learn more about how we can help grow their businesses.

Unfortunately, in our frantic chase for the bright, shiny object, we get leads that suck and become customers who suck.

You Know Who They Are a Mile Away

How is it we end up with a few customers that just drive us crazy? I call those customers PITAs—“pain in the ass” customers. PITA customers are never happy, and the red flags are commonplace: PITA customers don’t return calls, they batter salespeople on price, and they make unreasonable demands. In short, they’re draining, using up valuable resources in the organization. Have too many PITA customers and before long profits will dwindle—not a compelling scenario.

Yet, companies continue to accept this bad business—all the while thinking it’s better than NO business. But is it?

When companies take bad business, it is an opportunity cost—a lost opportunity to take their scarce resources and go after the phenomenal clients they want and need to make money! Serving a PITA customer takes away time we could spend doing something extra for our great customers. They’re the opposite of our ideal client, and often we’re tempted to take them. Many times it’s because salespeople are accountable for a certain number of leads in the pipe. But you don’t want just any old lead in that pipe—you want a sales qualified lead.

Some Customers Aren’t Worth the Headache!

PITA clients push you to do more for less. Once you say yes, you’ve locked yourself into a downward spiral. Sure, they pay their bills—many times late. But if you collect too many PITA customers, that lost opportunity cost builds up, and you’ll watch your profits dwindle … not a compelling scenario.

But wait, there’s more:

  • You’ll be nickel-and-dimed and then expected to deliver additional services—quickly and at no charge.
  • They’ll challenge the expertise of your sales reps and question their every move.
  • Your resources (and energy) will be drained.
  • Your team will consider mutiny, but be too exhausted, frustrated, and demoralized to follow through with it.
  • Your profit margins will be squeezed.
  • Because PITAs hang out with other PITAs, you’ll only get referrals to other demanding, stingy people.

Why are PITAs in your sales pipeline? Because your sales reps have a quota.

Many sales leaders create unrealistic expectations that they can turn a bad situation into a good one. Are you dreaming? Bad business is bad business. Period. If prospects push you too hard, be willing to walk away. That really turns the tables.

If you really need to take this business, because your company wants a new logo, be sure you double their investment, because your profits will dwindle. (Yeah, I know that’s not realistic, but at least charge them more and give tighter terms.)

Now That’s a Pipeline

When it comes to sales qualified lead generation, think quality, not quantity. Good salespeople know that the key to increasing sales pipelines isn’t filling them with as many people as possible. Instead, the goal is to keep them brimming with hot leads—the kind you get with referral selling.

Activity is important, but what really makes a difference in your lead generation is that you’re talking to the right people, nurturing those prospects, earning their trust, and hastening their passage through the sales cycle. This decreases the time it takes to close deals, which increases sales and reduces costs.

Where do you find these ideal clients? Probably not in a bar. Probably not from your marketing department (qualifying leads is your job, not theirs). And definitely not through cold calling.

You find them by asking your current ideal clients for referrals. It’s as simple as that.

For more on increasing sales pipelines via referrals, tune into my new sales TV show—Back in the Black on The Sales Experts Channel. New episodes premiere on the third Tuesday of every month at 2:00 Pacific/5:00 Eastern. The first several episodes are available now on demand.

(Featured image attribution: Skitterphoto)

This article was originally published on May 6, 2014.