bmgt 204 chapter_6
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BMGT 204: Sales Strategies and Techniques
Chapter 6: Prospecting: The Lifeblood of Selling
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The Golden Rule: Prospecting
• People buy from those they know and trust
• Prospecting is not easy unless you focus on helping, not selling
• People who trust you give referrals
• Referrals take the burden of prospecting off the salesperson
• Referrals are earned through integrity, trust, and character
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The sales process is a sequential series of actions
10. Follow-up & Service
9. Close
8. Trial close
7. Meet objections
6. Determine objections
5. Trial close
4. Presentation •Product SELLs •Marketing Plan SELLs •Business Proposition SELLS
3. Approach
2. Preapproach/Planning
1. Prospect/Customer
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Compensation for the Salesperson that Prospects is Often:
• Based upon 100% commission – if you do not sell, you do not earn
• Can be lucrative but highly competitive
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Some Prospect, Some Do Not
• Many organizations do not prospect
• Examples are large consumer goods firms as General Mills* and Colgate*
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Compensation for the Salesperson that Does Not Prospect is Often:
• Based upon mostly salary with a small bonus and expenses such as car and office supplies paid
• If you do not sell you still get paid, but not for very long
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The Prospector Has the Most Challenging Sales Career
• This is the “order getter” who:
• Finds a lead
• Converts the lead into a prospect
• Sells one day, and
• Sells in the future too
• That is a challenge
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Steps Before the Sales Presentation
• Prospecting > appointment > planning
• Rule of thumb
• 40% preparation
• 20% presentation
• 40% follow-up
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Exhibit 6.2: Before the Sales Presentation
Prospecting
Obtaining an appointment
Preapproach planning
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Prospecting–The Lifeblood of Selling
• Prospect – qualified person
• Prospecting – Identifies potential customer
• Lead – only know name
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The Leaking Bucket Customer Concept
• All salespeople lose X amount of sales and customers per year. This is illustrated in the Leaking Bucket Customer Concept:
• Customers come into the top and leave through a hole in the bottom
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Planning a Prospecting Strategy
• Prospecting requires a strategy
• A skill that can be constantly improved
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http://www.youtube.com/watch?v=RmOcFund1AM
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Prospecting Methods
• E-prospecting on the Web
• Individuals
• Organizations
• Cold canvassing
• Endless chain – customer referral
• Orphaned customers
• Sales lead clubs
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Prospecting Methods, cont…
• Prospect lists
• Become an expert – get published
• Public exhibitions and demonstrations
• Center of influence
• Direct mail
• Telephone and telemarketing
• Observation
• Networking
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Exhibit 6.5: The Processing System Within a
Telemarketing Center
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Prospecting Guidelines
• Three criteria are:
• Customize to each prospect
• Concentrate on high potential customers
• Call back on no-buys
• Always keep knocking on prospect’s and customer’s door to help them
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Referrals Are Used in Most
• Prospecting Methods
• Cold canvassing
• Endless chain customer referrals
• Orphaned customers
• Sales lead clubs
• Public exhibitions and demonstrations
• Center of influence
• Telephone
• Networking
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The Prospect Pool
LeadsReferralsOrphansYour customers
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The Referral Cycle• Obtaining referrals is a continuous process without beginning or end
• Referral cycle – when and how to ask for referrals
• The parallel referral sale
• Sell the product to person
• Obtain prospect name(s) from person
• The secret is to ask correctly during referral cycle
• The preapproach contact phase
• The presentation
• Product delivery contact phase
• Service and follow-up contact phase: Customer service
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Exhibit 6.8: The Referral Cycle:
When to Ask for Referrals
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Treat the Referral Like a Customer
• Once you have sold the referral, and gotten more referrals, ask the new customer to contact the referring customer on her experience with the salesperson
• Now you have two customers giving referrals
• This can create an endless chain of referrals quickly filling your prospect pool with only customers and referrals
• Now, no more cold calling
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Don’t Mistreat the Referral
• Mistreatment can have a ripple effect
• The mistreated referral tells your customer – you may lose both!
• Remember to follow the Golden Rule
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Call Reluctance Costs You Money!
• Call reluctance refers to not wanting to contact a prospect or customer
• For many salespeople, owning up to call reluctance is the most difficult part of combating it
• Call reluctance keeps you from:
• Helping others
• Earning what you’re worth
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Obtaining the Sales Interview
• Key factor in selling process is obtaining a sales interview
• The benefits of appointment making
• Telephone appointment
• Personally making the appointment
• Believe in yourself
• Develop friends in the prospect’s firm
• Call at the right time on the right person
• Do not waste time waiting