ProspectingProspecting

Chapter 7Chapter 7

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Important Questions Important Questions AnsweredAnswered

Why is prospecting important for effective selling?Why is prospecting important for effective selling? Are all sales leads good prospects? What are the Are all sales leads good prospects? What are the

characteristics of a qualified prospect?characteristics of a qualified prospect? How can prospects be identified?How can prospects be identified? How can the organisations be identified?How can the organisations be identified? How can the organisation’s promotional programme be How can the organisation’s promotional programme be

used in prospecting?used in prospecting? How can an effective lead qualification and How can an effective lead qualification and

management system aid a salesperson?management system aid a salesperson? How can a salesperson overcome a reluctance to a How can a salesperson overcome a reluctance to a

prospect?prospect?

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““The telemarketing aspect of my The telemarketing aspect of my process can be frustrating at times process can be frustrating at times because I’ll call prospects that because I’ll call prospects that won’t give me the time of day.”won’t give me the time of day.”

~Tasha Stulz~Tasha StulzParker Marketing ResearchParker Marketing Research

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Prospects - Dictionary Prospects - Dictionary Meaning Meaning

An apparent probability of advancement, An apparent probability of advancement, success, profit, etc.success, profit, etc.

The outlook for the future: good business The outlook for the future: good business prospects.prospects.

Anticipation; expectation; a looking Anticipation; expectation; a looking forward.forward.

Something in view as a source of profit.Something in view as a source of profit. Potential or likely customer, client, etc. Potential or likely customer, client, etc. A potential or likely candidate. A potential or likely candidate.

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THE CONCEPT OF THE CONCEPT OF PROSPECTING PROSPECTING A salesperson without prospects is out of A salesperson without prospects is out of

business. business. A salesperson without prospects can no more A salesperson without prospects can no more

close a sale than a surgeon without a patient close a sale than a surgeon without a patient can operate. can operate.

Presenting a professional appearance, giving an Presenting a professional appearance, giving an impressive presentation and closing like a impressive presentation and closing like a master are not enough to prevent failure if too master are not enough to prevent failure if too little attention is given to prospecting. little attention is given to prospecting.

If your closing ratio is lower than you like, the If your closing ratio is lower than you like, the major problem may be that you don't have major problem may be that you don't have enough good prospects -- not that you are a enough good prospects -- not that you are a poor closer.poor closer.

You must have someone to whom to tell your You must have someone to whom to tell your story -- someone who wants to buy and can buy. story -- someone who wants to buy and can buy.

Prospects are everywhere - find the best Prospects are everywhere - find the best

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QUALIFYING THE QUALIFYING THE PROSPECT PROSPECT

Moving from a "lead" to a qualified prospect

Lead Just a name

                                             

                           

ProspectResearched for need, money authority

QualifiedProspect

Evaluated prospect along with personal information

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Relationship Between the Relationship Between the Steps in the Selling Process Steps in the Selling Process and the Designation of the and the Designation of the

“Buyer”“Buyer”

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The Importance of The Importance of ProspectingProspecting

Many experts believe it is the most Many experts believe it is the most important activity a salesperson doesimportant activity a salesperson does

It is the process of locating potential It is the process of locating potential customers for a product or service.customers for a product or service.

The world is constantly changingThe world is constantly changing More important in some fields than in More important in some fields than in

othersothers No salesperson can ignore leads, even in a No salesperson can ignore leads, even in a

position requiring less emphasis on new position requiring less emphasis on new contactscontacts

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Class “A” Prospects Class “A” Prospects

Referral from a person the prospect Referral from a person the prospect respects respects

Has the ability to make a buying decision Has the ability to make a buying decision

Has the ability to pay for the product or Has the ability to pay for the product or service service

You have all the personal information you You have all the personal information you need to make a good presentation need to make a good presentation

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Characteristics of a Good Characteristics of a Good ProspectProspect

Starts with a Lead, which should be Starts with a Lead, which should be

qualified.qualified.

Quite some time is spent; amount of time Quite some time is spent; amount of time

spent depends upon the type of sale.spent depends upon the type of sale.

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A qualified prospect is MADA qualified prospect is MAD

He or she has:He or she has: Money to buyMoney to buy Authority to buyAuthority to buy Desire to buyDesire to buy

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Qualify with the MADDEN Qualify with the MADDEN TestTest

M oney •Research credit before

                                             

            

A pproachable •Can you get an appointment

D esire •You may have to create or discover

D ecision-Maker •Often missed by salespeople

E ligible •May be committed already •our company may turn down

N eed •Always a win-win

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Questions Asked To Qualify Questions Asked To Qualify And Pinpoint A Good ProspectAnd Pinpoint A Good Prospect

Does the lead has a want or a need that Does the lead has a want or a need that my product/service can satisfy?my product/service can satisfy?

Does the lead have the ability to pay?Does the lead have the ability to pay? Does the lead have the authority to buy?Does the lead have the authority to buy? Can the lead be approached favourably?Can the lead be approached favourably? Is the lead eligible to buy?Is the lead eligible to buy?

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Does a Want or Need Exist?Does a Want or Need Exist?

People buy to satisfy tangible as well as People buy to satisfy tangible as well as practical needs.practical needs.

Sometimes sales are made through Sometimes sales are made through creating high pressure tactics but in this creating high pressure tactics but in this way a potential long-term customer is way a potential long-term customer is lost.lost.

The lead must want to solve a problem to The lead must want to solve a problem to be considered a qualified prospect.be considered a qualified prospect.

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Does the Lead have the Ability Does the Lead have the Ability to Pay?to Pay?

The ability to pay separate Lead from The ability to pay separate Lead from prospects.prospects.

A client is not a real prospect without A client is not a real prospect without resources to pay for the productresources to pay for the product

Ability to pay includes both cash and Ability to pay includes both cash and creditcredit

The client may have a desire to buy but if The client may have a desire to buy but if she/he is unable to pay, is not a Prospectshe/he is unable to pay, is not a Prospect

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Does the Lead have the Does the Lead have the Authority to Buy?Authority to Buy?

Knowing who has purchasing authority Knowing who has purchasing authority saves the salesperson time and effort and saves the salesperson time and effort and results in a higher percentage of closed results in a higher percentage of closed salessales

It is better to simply ask that person if It is better to simply ask that person if that person has the authority to buy.that person has the authority to buy.

Companies also delegate their Companies also delegate their purchasing tasks to outside vendors – purchasing tasks to outside vendors – system integratorssystem integrators

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Can the Lead be Approached Can the Lead be Approached Favourably?Favourably?

At times they are very difficult to be At times they are very difficult to be approached e.g. Chief Executives etc that approached e.g. Chief Executives etc that the salespeople do not consider them as the salespeople do not consider them as prospectsprospects

Possibility of getting an interview and Possibility of getting an interview and Chances of making a saleChances of making a sale

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Is the Lead Eligible to Buy?Is the Lead Eligible to Buy?

Salespeople should be careful in contacting Salespeople should be careful in contacting as if the company sells to wholesalers then as if the company sells to wholesalers then only the wholesalers should be contacted.only the wholesalers should be contacted.

Salespeople should also be careful in Salespeople should also be careful in locating the prospects that they should be locating the prospects that they should be in their exclusive sales territoriesin their exclusive sales territories

VolumeVolume StatusStatus Sales territoriesSales territories

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House accountsHouse accounts

large or potential customers that are large or potential customers that are handled exclusively by the corporate handled exclusively by the corporate executives should not be contacted by executives should not be contacted by the salespersonsthe salespersons

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Other CriteriaOther Criteria

Leads that meet five criteria are Leads that meet five criteria are generally considered excellent prospects. generally considered excellent prospects. At times a few more are added to the list At times a few more are added to the list depending upon the company/item being depending upon the company/item being sold.sold.

Timing of the purchaseTiming of the purchase Long-term customer potentialLong-term customer potential

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Why we lose old customers Why we lose old customers

Customer's company goes broke Customer's company goes broke

Competitor takes your customer Competitor takes your customer

Customer moves or dies Customer moves or dies

Merger or downsizing Merger or downsizing

Customer-salesperson relationship Customer-salesperson relationship deteriorates deteriorates

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How and Where to Obtain How and Where to Obtain Prospects?Prospects?

Satisfied CustomersSatisfied Customers Endless-Chain MethodEndless-Chain Method Centre-of-Influence MethodCentre-of-Influence Method NetworkingNetworking Promotional ActivitiesPromotional Activities

The InternetThe Internet Inquiries from Advertising and Direct MailInquiries from Advertising and Direct Mail ShowsShows SeminarsSeminars

Lists and DirectoriesLists and Directories CanvassingCanvassing SpottersSpotters

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TelemarketingTelemarketing Limitations of Telephone ProspectingLimitations of Telephone Prospecting Tie-in With Other ToolsTie-in With Other Tools

Sales LettersSales Letters

Other Sources of LeadsOther Sources of Leads

How and Where to Obtain Prospects?How and Where to Obtain Prospects?( contd.)( contd.)

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How and Where to Obtain How and Where to Obtain Prospects – Satisfied Prospects – Satisfied

Customers Customers (contd.)(contd.)

Negative referralCustomer who tells others about how poorly you or your product performed.

Selling deeperAdditional sales to satisfied customers who provide leads.

Referral eventsGatherings designed to allow current customers to introduce prospects to the salesperson, to generate leads.

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Prospecting Methods that Prospecting Methods that Work!Work!

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Telemarketing Telemarketing

Salesperson uses phone and/or Salesperson uses phone and/or

telemarketing staff to generate leadstelemarketing staff to generate leads Outbound vs. inbound telemarketingOutbound vs. inbound telemarketing

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The Processing System The Processing System Within a Telemarketing Within a Telemarketing

CenterCenter

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Reports From a Reports From a Telemarketing Center to Telemarketing Center to Other Marketing Groups Other Marketing Groups

Within the FirmWithin the Firm

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Referrals Referrals

Have referral make the initial contact Have referral make the initial contact

Learn how to ask for a referral Learn how to ask for a referral

Get letter of introductionGet letter of introduction

Have referral call the prospect Have referral call the prospect

Referrals tend to be horizontal Referrals tend to be horizontal

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Why people don't give Why people don't give referrals referrals

Can't think of anyone Can't think of anyone

Object to giving referrals Object to giving referrals

Time constraintTime constraint

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Centers of Influence Centers of Influence

Sales person cultivates well-known, Sales person cultivates well-known, influential people in the territory who influential people in the territory who are willing to supply lead informationare willing to supply lead information

Buying communityBuying community Believes in what you are selling Believes in what you are selling Is influential with a number of peopleIs influential with a number of people Is willing to give you names Is willing to give you names The names given to you are at least The names given to you are at least

partially qualified prospects, more than partially qualified prospects, more than just leads just leads

May never buyMay never buy

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SpottersSpotters

Salesperson pays someone for lead Salesperson pays someone for lead informationinformation

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Group Prospecting Group Prospecting

Give a brief presentation to a group Give a brief presentation to a group

Follow up with interested prospects Follow up with interested prospects

Trade shows Trade shows

Speaking engagements Speaking engagements

Seminars Seminars

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SeminarsSeminars

Salespeople use seminars for Salespeople use seminars for

prospects to generate leadsprospects to generate leads Appeal to a specialized marketAppeal to a specialized market Invite good prospectsInvite good prospects Go high-qualityGo high-quality Be involved before, during, and afterBe involved before, during, and after

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Shows, fairs, and Shows, fairs, and merchandise marketsmerchandise markets

Salespeople use these venues for lead Salespeople use these venues for lead

generationgeneration At many tradeshows all attendees are At many tradeshows all attendees are

customerscustomers Timely follow-up of leads is critical if Timely follow-up of leads is critical if

sales follow a showsales follow a show

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Planned Cold Calling Planned Cold Calling Salesperson tries to generate leads by calling Salesperson tries to generate leads by calling

on totally unfamiliar organizationson totally unfamiliar organizations At least one out of seven will be receptive. At least one out of seven will be receptive. Treat cold calls as a supplement. Treat cold calls as a supplement. Develop effective, memorable doorDevelop effective, memorable door Don't neglect others by too much of this. Don't neglect others by too much of this. Preplan Cold Calls Preplan Cold Calls openers openers Limit Waiting Limit Waiting Fifteen minutes Fifteen minutes Keep busy while waiting Keep busy while waiting Remain Enthusiastic Remain Enthusiastic

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Direct Mail or Fax Direct Mail or Fax

Prospects do read well targeted direct Prospects do read well targeted direct mail mail

Watch quality of purchased listsWatch quality of purchased lists Create your own newsletter Create your own newsletter Mailing is good and CheapMailing is good and Cheap Postcard packPostcard pack Bounce-back cardBounce-back card

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Sales lettersSales letters

Salesperson writes personal letters to Salesperson writes personal letters to potential leadspotential leads

Follow up with a telephone callFollow up with a telephone call Include promotional itemsInclude promotional items

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InternetInternet

Salesperson uses websites, e-mail, Salesperson uses websites, e-mail, listservers, bulletin boards, forums, listservers, bulletin boards, forums, roundtables, and newsgroups to roundtables, and newsgroups to secure leadssecure leads

ExtranetsExtranets E-sellingE-selling

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Ads, catalogs, and publicityAds, catalogs, and publicity

Salespeople use these forms of Salespeople use these forms of promotional activities to generate promotional activities to generate leadsleads

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Joining Civic Groups Joining Civic Groups

Assume leadership responsibilities Assume leadership responsibilities Become highly visible Become highly visible Set contact goals for each club Set contact goals for each club

meeting meeting Keep files on each contact made Keep files on each contact made Use "re-meet " goals to help you Use "re-meet " goals to help you

develop closer relationships develop closer relationships Reach out to new members Reach out to new members Use active listening Use active listening Look for sales opportunities Look for sales opportunities

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Networking - active Networking - active cooperation cooperation

There are formal groups that you can joinThere are formal groups that you can join Sharing information makes good sense Sharing information makes good sense Salesperson uses personal relationships Salesperson uses personal relationships

with those who are connected and with those who are connected and cooperative to secure leadscooperative to secure leads

Suggestions:Suggestions: Call at least two people per day and go to at least Call at least two people per day and go to at least

one networking event every weekone networking event every week Spend most of your initial conversation with a new Spend most of your initial conversation with a new

contact talking about his or her business and contact talking about his or her business and learn about the person’s nonbusiness interestslearn about the person’s nonbusiness interests

Follow up with your new contact on a regular basisFollow up with your new contact on a regular basis

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Endless chainEndless chain

Salesperson attempts to secure at Salesperson attempts to secure at least one additional lead from each least one additional lead from each person he or she interviewsperson he or she interviews

Referred leadReferred lead

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Example: Endless-Chain Example: Endless-Chain MethodMethod

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Using Directories Using Directories

Salespeople use secondary data sources, Salespeople use secondary data sources, which can be free or fee-basedwhich can be free or fee-based

Purchasing listsPurchasing lists Sales and Marketing Management - Sales and Marketing Management -

buying power index buying power index Moody's Industrial Manual Moody's Industrial Manual Poor's Register of Directors and Execs Poor's Register of Directors and Execs The Dun and Bradstreet Reference book The Dun and Bradstreet Reference book The Thomas register of American The Thomas register of American

Manufacturers Manufacturers Contacts Influential Contacts Influential

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Observation Observation

Prospects are everywhere Prospects are everywhere Always be looking Always be looking Read the news Read the news Trade journals Trade journals

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Other sources of leadsOther sources of leads

Salesperson uses noncompeting Salesperson uses noncompeting salespeople, people in his or her own salespeople, people in his or her own firm, friends, and so on, to secure firm, friends, and so on, to secure informationinformation

Government agenciesGovernment agencies

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Company Initiated Company Initiated Prospecting Prospecting

Telemarketing

•Telephone •Human calls •Computer generated calls

•Fewer leads •Lower cost                                              

Advertising •Direct mail •Newspaper •Other media

Past Customers •Go over list of inactive accounts

Trade Shows

•Selecting the right show •On the spot vs. lead generation •Display planning •Staffing the booth •Pre show training •Getting high visibility •Managing information collected at show •Planning follow up

Web Sites•For Prospecting •Streamline the sales process •Joint marketing with other firms

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MANAGING PROSPECT MANAGING PROSPECT INFORMATION INFORMATION

Initial Recording of Leads

1.Record all basic information 2.If you don't have a computer then use index cards

Classification of Prospects

1.                                    A simple method for manual systems a.Class A - You have enough information to make a presentation b.Class B - You need more information to make a presentation c.Class C - a "lead" you don't know much more than the name

2.Sophisticated, multi dimensional classifications can be done with a computer

Scheduling Contacts

1.Contact prospects using a prioritized list 2.Keep a tickler file.

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USING TECHNOLOGY TO USING TECHNOLOGY TO MANAGE PROSPECT MANAGE PROSPECT

INFORMATION INFORMATION Personal Databases

                                                                                     

     

Corporate Databanks

Improving Communications

•Salespeople now have access to the most current information

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Lead Qualification and Lead Qualification and Management SystemsManagement Systems

The process developed by the salespeople The process developed by the salespeople for qualifying leads is called Lead for qualifying leads is called Lead Qualification SystemQualification System

The process of analysing the relative The process of analysing the relative value of each lead is called Lead value of each lead is called Lead Management SystemManagement System PrequalificationPrequalification Analyzing lead valueAnalyzing lead value Evaluating profitability of sales resulting Evaluating profitability of sales resulting

from lead-generating activitiesfrom lead-generating activities

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Overcome a Reluctance to Overcome a Reluctance to ProspectProspect Salespeople usually face a natural reluctance to prospects. Salespeople usually face a natural reluctance to prospects.

Reasons for this may be one or several out of the following:Reasons for this may be one or several out of the following: Worrying about the worst-case scenariosWorrying about the worst-case scenarios Spending too much time preparingSpending too much time preparing Being overly concerned with looking successful etc. Being overly concerned with looking successful etc. Being fearful ofBeing fearful of Making group presentationsMaking group presentations Appearing too pushyAppearing too pushy Losing friends or family approvalLosing friends or family approval Using the phone for prospectingUsing the phone for prospecting Feeling intimidated by people with prestige or power, or Feeling intimidated by people with prestige or power, or

feeling guilt at having a career in sellingfeeling guilt at having a career in selling Having a compulsive need to argue, make excuses, or Having a compulsive need to argue, make excuses, or

blame othersblame others

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Helpful activities to Helpful activities to Overcome Overcome a Reluctance to Prospecta Reluctance to Prospect

Helpful activitiesHelpful activities Identify and evaluate excuses not to callIdentify and evaluate excuses not to call Engage in sales training and role-playing activitiesEngage in sales training and role-playing activities Make prospecting contacts with a supporting partner or sales Make prospecting contacts with a supporting partner or sales

managermanager Set specific goals for all of your prospecting activitySet specific goals for all of your prospecting activity Realize the economic value of most prospecting activitiesRealize the economic value of most prospecting activities Stop negative self-evaluation from ruling your behaviorStop negative self-evaluation from ruling your behavior Remember that you are calling on prospects to solve their Remember that you are calling on prospects to solve their

needsneeds Control your perceptions of what prospects might say about Control your perceptions of what prospects might say about

you, your company, or your productsyou, your company, or your products Learn and apply relaxation and stress-reducing techniquesLearn and apply relaxation and stress-reducing techniques Recount your own prospecting successes, or those of othersRecount your own prospecting successes, or those of others

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Reasons for Call Reluctance Reasons for Call Reluctance Yielder • Fears intruding on others or being pushy.

Overpreparer • Overanalyzes • Underacts.

Emotionally unemancipated • Fears loss of family approval • Resists mixing business and family.

Separationist • Fears loss of friends • Resists prospecting among personal friends.

Hyper-Pro • Obsessed with image • Fears being humiliated.

Role rejecter • Ashamed to be in sales.

Socially self-conscious • Intimidated by upmarket customers.

Doomsayer Worries, won’t take risks.

Telephobic • Fears using the telephone for prospecting or selling.

Stage fright • Fears group presentations.

Referral aversions • Fears disturbing existing business or client relationships.

Oppositional reflex • Rebuffs attempts to be coached.

Locating prospective customers is the Locating prospective customers is the first step in the sales process.first step in the sales process.

Not all sales leads qualify as good Not all sales leads qualify as good prospects.prospects.

Many methods can be used to locate Many methods can be used to locate prospects.prospects.

The best source is a satisfied customer.The best source is a satisfied customer. Effective prospecting requires a strong Effective prospecting requires a strong

plan that hinges on developing a lead plan that hinges on developing a lead qualification and management system qualification and management system and overcoming reluctance to prospect.and overcoming reluctance to prospect.

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SummarySummary

End of Chapter 7End of Chapter 7

Thank youThank you