A Matrix for Qualifying New Business Opportunities

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At the start of this year, as we became more diligent at Barrel about tracking certain business development metrics, our Partner and Creative Director Lucas Ballasy wondered if it could be helpful to come up with a scoring rubric for new leads. The thinking was that, over time, a data set would emerge and offer some potential insights while making the exercise of qualifying leads less intuitive and more rigorous.

Lucas and I quickly mocked up a “New Biz Matrix” that consisted of 9 criteria that would be scored on a scale of 1 to 5, 1 being Strongly Disagree and 5 being Strongly Agree. Since then, our Director of Business Development Dan Fleishaker and I touch base weekly to run the latest batch of “pre-qualified” leads (leads that seemed promising enough for an initial conversation) through the matrix. To date, we’ve put over 50 deals through the matrix and learned quite a bit.

In this post, I share a template that you can modify for your own needs. It includes 3 realistic examples to give you a sense of how we use the matrix at Barrel and the convos we have. Below, I dive into each of the questions and why we ask them.

A few things to note:

  • I’ve cut the number of questions from 9 to 8 because one of them didn’t really make sense anymore
  • Scoring is no longer from 1 to 5 but from -2 to 2 with a 0 for Undecided/Not Applicable. I felt this was a better way to take into account the fact that a few of these questions will often be marked “Not Applicable”
  • I added a “cheat sheet” area where you can list your industry verticals and common project types/services (“expertise sweet spot”)

Instructions: Grab a copy of the matrix scoring template in Google Sheets. Make a copy of the “Template” tab and label it with the prospect’s name on the tab and at the top. Use the Scored Leads tab to keep an overview of all the opportunities that you end up scoring to see how they fare in the long run. If you do this right, the higher the score, the more wins you should see for those opportunities.

The Criteria / Matrix Questions

Here’s the list of the 8 questions we ask to score a lead and figure out our next steps.

  1. Client’s budget allows for profitability?
  2. Reasonable timeline?
  3. Does it fit our industry positioning?
  4. Expertise sweet spot?
  5. Expands our assets/IP/frameworks?
  6. Relationship building opportunity/obligation?
  7. Lifetime value opportunity?
  8. Chances of winning are good?

1. Client’s budget allows for profitability?

By the time we run the matrix, we’re likely to have touched upon budget. The prospect has either given us a ballpark number, or for those who decline to share a number, they’ve at least given us indication that our typical ballparks are in the range of what they have in mind for the project or set some kind of “max” budget. (Beware of the max budget, though! I’ve found that some clients are willing to spend more if they find the potential engagement compelling.)

This particular question prompts us internally to discuss whether or not we think there is enough margin of safety in the overall budget to make a decent profit. We review the project requirements, cross-reference with budgets & time sheets of similar past projects, and sketch out some rough estimates to see how they stack up against the ballpark budget. If the ballpark budget feels too tight, we’ll score this lower and if the budget feels pretty good (usually 30-60% margins depending on the project size), we’ll score it higher.

2. Reasonable timeline?

This question helps us flag prospects who’re looking for turnaround times that may not be feasible or would require us taking on a great deal of strain to deliver. Most prospects will score “Undecided” on this matrix. The ones that score higher tend to be larger organizations or non-profits that are accustomed to seeing projects take no less than 9-12 months.

3. Does it fit our industry positioning?

Over the years, we’ve been able to build clusters of solid work examples and experience around a few different industries. These include beauty, fashion, consumer electronics, and consumer packaged goods. We are familiar with the prospect’s challenges, competitive landscape, tech stack, marketing approach, team structure, and unit economics. Our initial conversations are much more consultative and can go deeper because of our domain expertise. A prospect that scores 1 or 2 on this scale is a great lead for us. We may ultimately not end up doing a project right now, but it’s very likely that our paths may cross later.

4. Expertise sweet spot?

We have certain service offerings and project types that are stronger with a longer list of case studies. These include ecommerce user experience design, Shopify website builds, email marketing, and paid social marketing. When prospects come looking for help in areas outside of our core services, we know there’s risk–we might not be able to deliver quality results, we might not make a good profit, and/or we may be up against a competitor with deeper experience who’ll beat us out. Scoring this question accurately allows us to filter for opportunities where we’re more likely to see success.

5. Expands our assets/IP/frameworks?

Within our expertise sweet spot, we have areas where we are actively working to develop more robust repeatable methodologies, code bases, design systems, and deliverables. If a potential project looks like an opportunity that will not only add to our cluster of relevant cases studies but also give us an opportunity to use and expand our collection of assets, we will credit the opportunity with a higher score.

6. Relationship building opportunity/obligation?

This question helps address a couple of scenarios that pop up every now and then.

  • A relationship-building opportunity could be with someone whose network and connector abilities can unlock many new opportunities via intros and referrals. They may have a small ask or need some kind of favor (e.g. price break on a project, extra oversight to get something done quickly, etc.) and being able to deliver can mean build-up of relationship capital.
  • A relationship obligation is one where there is history and perhaps the person has been great to us and always a fan and it makes sense to stretch to make a project work even if it’s not the greatest fit. This is a slippery slope because it can quickly get out of control if not carefully handled, so it’s important to establish some boundaries on how much of a “favor” the team can repay. Oftentimes, an honest answer and facilitating them finding a different partner who can do the job well is just as effective.

This question often gets a “Not Applicable” mark but can tip the scales when it scores Agree or Strongly Agree on certain opportunities.

7. Lifetime value opportunity?

When we consider taking on a new client, we try our best to gauge the potential for a long-term relationship. Will there be opportunities for us to add value beyond the first project? Is the client in a position to engage the entire breadth of our service offering? Is there the possibility of becoming a multi-year agency partner? Our initial conversations, the stage of the prospect’s business, and their previous or existing agency relationships are clues to whether or not a long-term relationship is likely.

8. Chances of winning are good?

We ask how many other agencies are in the running, if their incumbent agency is also a choice, and what the selection criteria is for choosing the right agency. Most prospects are fairly forthcoming about the number of agencies in contention. Some will be reluctant to share anything at all. Unless the prospect has made it clear that we are the only ones under consideration or it’s down to two agencies and we are the preferred option, we typically mark this “Undecided” or lower.

Getting the Most Out of the Matrix

In the template, I’ve included 3 examples: Good Fit, On the Fence, and No Go. Check them out to see the scoring in action.

What we experienced in the early months of using the template was that it took quite a few reps to calibrate the scoring. There will always be subjectivity in how you score each criterion, so it’s possible that the difference between Strongly Agree/Agree or Strongly Disagree/Disagree may evolve as you run more opportunities through the matrix.

Even today, Dan and I will sometimes go back and forth on a few items and have to adjust scores. This is okay. What matters for us is that we stick to the discipline of using the matrix and then seeing how things play out. After 50+ leads scored, we’ve been able to see that our win rate skyrockets when we pursue opportunities above 7 total points and are likely to be a coin toss or worse when we bid on opportunities scoring less that 5 points. The matrix has been helpful in giving us the historical data and confidence to quickly turn down poor fit opportunities and focus our energies on leads that score much higher.

What began as a very simple “better than a gut-check” tool has become a core driver of some very important discussions in our business development process. I’m sure the tool will continue to evolve and be enhanced in different ways. I’m excited to see the insights that emerge as we surpass 100 and eventually 1,000+ opportunities. I’m sure by that point, we’ll have built something more robust than a spreadsheet, and if we do, I’ll be sure to share.

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