top of page
Open Site Navigation

Why Disqualifying Potential Customers is an Effective Business Growth Strategy

Potential Customers

You probably pulled a face when you read the headline for this article. We all know it’s counterintuitive to be disqualifying potential customers, and this is especially true in the startup space.

Even though it may sound illogical at first, disqualifying potential customers is an effective business growth strategy built upon the idea that by concentrating your sales and marketing efforts on only the most qualified leads most likely to return a profit, your business will become more efficient and more suitable for growth.

The importance of a selective acquisition mindset

The importance of a selective acquisition mindset

“Acquisition” is a word you eat, sleep, and breathe. The thought of turning large numbers of potential customers away is enough to strike fear into the heart of even the most resilient founder. But what if this acquisition mindset is actually hindering the growth of your startup?

Could being more selective about your potential customers help you reach your startup’s growth goals faster?

We’ll take a look at the benefits of having a selective acquisition mindset and why disqualifying potential customers is a business growth strategy that’s overlooked by many startup companies. Strategically excluding specific customers from your list of prospects can actually grow your business faster. We’ll bring to light why this is and how to decide which prospects to disqualify, so your sales team can focus on potential customers who are the most qualified leads.

Why disqualifying potential customers is an effective business growth strategy

Why disqualifying potential customers is an effective business growth strategy

Hope springs eternal, but unfortunately business resources do not. Being choosy about who you let into your sales funnel is a smart business growth strategy.

Funnels that let anyone and everyone through can drag your sales and support teams down with too many unqualified prospects that don’t intend to go the distance with your product. After all, the more time and effort you waste chasing down the wrong potential customers, the less bandwidth you have to close the deal with those who will be most valuable to the company over time.

For any startup, acquisition dollars spent and the energy of a team can be sucked away by spending too much time dealing with ill-fitting leads. If your sales team ends up wasting time and effort — facing daily frustrations by trying to convince skeptical leads to purchase — the reality is they’ll get demoralized pretty fast, all of which can hinder startup growth.

If you’re a company selling high ticket items, or you have a long sales cycle, it’s especially important that your teams are clear on what a good potential customer looks like for your business. Focusing specifically on closing highly qualified leads gives you stronger opportunities for growth over the long term.

By specifically concentrating your efforts on acquiring highly qualified customers who truly need your product, your business can grow more efficiently, with a lower overall customer acquisition cost (CAC), greatly improved customer retention, and a higher customer lifetime value (CLTV).

Developing a disqualification mindset for your startup

Developing a disqualification mindset for your startup

How do you know that a lead is going to turn bad? They self-identified, they showed interest, they signed up for a demo. These potential customers are clearly looking for a solution, and they chose you. That’s good…isn’t it?

While this lead might seem ready to buy, with a fistful of sign-up dollars in their hand, this can often be misleading for your sales team. Time spent on a bad prospect is time that could have been better invested moving a qualified prospect further along your funnel.

For example, if your sales rep has a $500,000 annual quota to meet, then their hourly rate works out at around $240. Now, think about the time they spend talking to every potential customer that:

  1. Doesn’t really have the budget right now

  2. Isn’t sure your product is exactly what they’re looking for

  3. Think