When executed correctly, marketing efforts generate high-quality CRM leads for salespeople to follow up on.
Whether inbound or outbound, there will always be a percentage of leads that some salespeople affectionately refer to as “crap.”
A disqualified lead is one that a salesperson has reviewed and ruled out as not worth pursuing, at least for now. That’s different from an unqualified lead, which hasn’t been vetted yet and often sits in the CRM’s Leads area.
A bad lead should be changed to the status ‘Disqualified’ in the CRM. Although salespeople are among the least compliant CRM users, a bad lead can sometimes be left indefinitely in an ‘Open’ or ‘New’ status.
To prevent the CRM from becoming a graveyard of stagnant records, organizations must prioritize alignment between sales and marketing to ensure both teams work from a unified definition of a ‘sales-ready’ lead.
The more aggressively a salesperson disqualifies no-good leads, the more time they will have to spend on quality leads. But is it enough to just flag a lead as ‘Disqualified’ in CRM? Not if you want to learn anything from it.
Why Specifying a Reason Matters
There are two good arguments for requiring a reason.
- Momentum. Selecting a reason gets salespeople into more of a disqualification mindset. When the reason is required, there will be a resulting “action taking momentum.”
- Marketing feedback. The reasons that specific leads were disqualified can be important feedback for marketing. While marketing can never eliminate bad leads, it can increase the percentage of leads worth a salesperson’s time to pursue.
How to Disqualify a Lead in Your CRM
Disqualifying a sales prospect takes three steps:
- Change the lead’s status to ‘Disqualified.’
- Select a reason from the ‘Reason Disqualified’ dropdown.
- Decide whether to retire the lead or recycle it into nurture.
Mechanically, most CRM systems can make ‘Reason Disqualified’ a required, dependent picklist that appears when a lead is disqualified. Unlike a free-text note, a picklist value can be counted in a report.
As CRM systems become more autonomous, clean disqualification data matters even more. Microsoft Dynamics 365 Sales, for example, won’t build a predictive lead scoring model until it has at least 40 qualified and 40 disqualified leads to learn from.
When to Disqualify a Lead
How do you identify when to disqualify a lead? Do it the moment a lead fails a requirement you won’t bend on, such as geography, deal size, or budget, or when the sales process stalls.
The example ‘Reason Disqualified’ values below double as a checklist. Drop any that don’t apply and add your own.
Competitor
The lead is either a direct competitor or a service provider for a competitor.
Too Small
There’s a deal value at your company below which it’s not worth pursuing a lead. This reason covers leads below that threshold.
No Budget
You talk with the lead, but they make clear that your price point is well above what they’d consider paying.
Out of Market
You sell only in certain regions or countries. Leads from outside those served areas are immediately disqualified.
Unfindable
The lead used a cryptic freemail address. The web form does not require a company name or phone number. There’s just not enough information to research the person in an enrichment tool or on LinkedIn.
Unreachable
The salesperson has researched this person, and their company looks like a fit for your product or service. However, the lead does not respond to one-to-one emails or phone calls.
No Access to Decision Maker
The lead intentionally blocks access to the decision-maker. The deal is not going to progress.
Already Committed
The lead already bought from a competitor but still wanted to check out your product or service.
Not Interested
The lead may be interested in your content but not in your product or service.
Retire or Recycle? What Each Reason Tells Marketing
Just because a lead is disqualified from sales pursuit doesn’t mean the person shouldn’t be part of an email marketing campaign. There may be a few golden nuggets in a sea of disqualified leads.
| Reason Disqualified | Retire or Recycle? | Marketing Fix |
|---|---|---|
| Competitor | Retire | Auto-flag competitor domains |
| Too Small | Recycle yearly | Tighten company-size targeting |
| No Budget | Recycle next budget cycle | Publish a starting price |
| Out of Market | Retire | Add a required country field |
| Unfindable | Retire | Require company name on high-intent forms |
| Unreachable | Recycle to nurture | Speed up lead routing |
| No Access to Decision Maker | Recycle to nurture | Build offers for decision-makers |
| Already Committed | Recycle before renewal | Capture contract end dates |
| Not Interested | Recycle to nurture | Stop routing content downloads to sales |
By ruthlessly disqualifying leads that would likely be a waste of time, and explaining why those leads were disqualified, salespeople help themselves and the marketing team.
Marketers can implement more robust lead scoring best practices to ensure that only the most sales-ready prospects are passed through the funnel.
In turn, salespeople can focus on the leads most likely to close.
