Step 1 – Prospecting

Lifeblood of Selling

Prospecting is the first step in the selling process. A prospect is a qualified person or organisation that has the potential to buy your product or service. Prospecting is the lifeblood of sales because it identifies potential customers. There are two reasons that a salesperson must look constantly for new prospects:

• To increase sales
• To replace customers that will be lost over time

A prospect should not be confused with a lead. The name of a person or organisation that might be a prospect is referred to as a lead. A lead can also be referred to as a suspect, indicating the person or organisation is suspected of being a prospect. Once the lead has been qualified, the lead becomes a prospect. As a salesperson, you can ask yourself three questions to determine if an individual or organisation is a qualified prospect.

• Does the prospect have the money to buy?
• Does the prospect have the authority to buy?
• Does the prospect have the desire to buy?

A simple way to remember this qualifying process is to think of the word mad. A true prospect must have the financial resources, money, or credit, to pay and the authority to make the buying decision. The prospect also should want your product. Sometimes an individual or organisation may not recognise a need for your product. Your challenge is to create a desire for the product.

Prospecting Methods

The actual method by which a salesperson obtains prospects may vary. Prospecting is the lifeblood of selling. While some salespeople do not have to prospect, most rely on prospecting to increase sales and make money.

E-Prospecting on the Web

The most recent advancement in prospecting is the use of the Internet to find potential buyers. This is called E-prospecting and it is a fast and easy way to find information about individuals or businesses by using technology.

Finding information about individuals on the Internet can be very helpful to a salesperson. Peoplefinder.com offers a list of over 200 different links to sites that search for information about people. Some of the links are free, and others are not, depending on the amount of information they give. A search engine could also be used to find information on a person. A good example in South Africa is LinkedIn.

Cold Canvassing

The cold canvas prospecting method is based on the law of averages. For example, if experience reveals that one person out of 10 will buy a product, then 50 sales calls could result in five sales. Thus, the salesperson contacts in person, by phone and/or by mail, as many leads as possible, recognising that a certain percentage of people approached will buy. There is normally no knowledge about the individual or business called on. This form of prospecting relies solely on the volume of cold calls made.

The door-to-door and the telephone salesperson both employ cold canvas, prospectors. For example, each summer The South-Western Company hires college students to sell its books and other educational publications.

These salespeople go into a town and knock on the door of every person living on each block they work often contacting up to 75 people each day. They frequently ask people if they know of others who might like to purchase their products. Many office supply salespeople do the same thing, going from one business to another. Real estate, insurance, and stock brokerage firms are other businesses that use cold calls.

Endless Chain – Customer Referral

Cold calling is tough! Contacting strangers, day after day, is challenging even for the most motivated of individuals. Yet, many new salespeople have to begin their sales careers cold calling to get customers. Once someone is sold, the salesperson has two possibilities for future sales.

Firstly, satisfied customers are likely to buy again from the salesperson. That is why the importance of building a relationship with the customer is stressed. It is critical to your success. Secondly, the customer often refers the salesperson to someone he/she knows.

This is known as the endless chain referral method of prospecting. This is a highly effective method for finding customers. Customers and customer referrals are the two best sources of future sales, with repeat sales from customers being better. A referral is a person or organisation recommended to you by someone who feels that this person or organisation could benefit from you or your product.

Do not ask current customers, “Do you know anyone else who could use my product?” Clients are rarely eager to judge whether colleagues are prepared to make a purchase. Instead, ask whether your customer knows any other individuals or organisations who might be interested in finding out about your product.

If you sense hesitation from customers to give out referrals, it is probably because they are afraid that their associates may not want to be pestered. Say, “Let me tell you what I am going to do with any names you give me, I will make one phone call to each party, indicate that you were nice enough to give me their names and give them a brief outline of what we do.” “If they express an interest, we will get together, and I will give them the same professional service I have given you. If, on the other hand, they express no interest, I will thank them for their time and never call them again.” This approach puts your customers at ease and moves solid, new prospects onto your lead list.

Do not forget your prospects are friends, neighbours, relatives – anyone and everyone you know or encounter. They may know people who are looking for your product and the great service you provide your customers. Everyone is a prospect.

Orphaned Customers

Salespeople often leave their employers to take other jobs. When they do, their customers are orphaned. These orphans are great prospects. A salesperson should contact such customers to begin developing relationships. You can turn orphans into a lead-generating gold mine.

In addition, if you have been selling for a while, you have surely built up a backlog of inactive accounts. Weed out the names who, for whatever reason, will never buy. The rest are solid prospects. Call them again and find out why they are not buying from you anymore. What would it take to change that?

They may have stopped ordering your type of product altogether or they may have gone with a competitor because of a special one-time offer, or there may have been a management change and therefore a change in buying patterns. You must determine why the customer stopped buying from you. After you do that, re-establish contact and turning that prospect into a customer.

Sales Lead Clubs

Organise a group of salespeople in related, but non-competitive, fields to meet twice a month to share leads and prospecting tips. To start, write a formal mission statement, charge dues to ensure commitment and grant membership to only one salesperson from each specific field. Next, set up administrative procedures and duties to keep the club on track and committed to its stated mission. Finally, determine guidelines for group leads by effectiveness, so members can better understand which leads can help the rest.

You may even have every member who closes a lead contribute to a kitty. Each month the winner can be the member who provided the most closed leads.

Get lists of prospects – make a list of what your ideal prospect looks like. Ask yourself the following questions:

• Who are my ideal prospects?
• Which economic bracket do they usually fall into?
• What kinds of organisations do they belong to?
• What characteristics do most of my existing customers share?
• Are they married, single, widowed, or divorced?
• Do they have children?
• Do they have particular political inclinations?
• Do they have similar occupations, educations, hobbies, illnesses, transportation needs or family concerns?

Public Exhibitions and Demonstrations

Exhibitions and demonstrations often take place at trade shows and other types of special interest gatherings. Many times, related firms sponsor a booth at such shows and staff it with one or more salespeople. As people walk up to the booth to examine the products, a salesperson has only a few minutes to qualify leads and get names and addresses to contact them later at their homes or offices for demonstrations.

Although salesperson-buyer-contact is usually brief, this type of gathering gives a salesperson extensive contact with a large number of potential buyers over a short time. However, remember that success at trade shows stem from preparation. Here are several things to do:

• Set up an interesting display to get people’s attention. A popcorn machine, juggler or expensive giveaways are clever ideas.
• Write down your message so that it fits on the back of a business card.
• Practice communicating two or three key points that get your message across concisely. Get it down perfectly but do not memorise your sales pitch to make it sound overly canned.
• Make a list of the major buyers at the show you want to pursue for contacts.
• Set up to maximise your display’s visibility based on the flow of traffic.
• Be assertive in approaching passers-by. Instead of the common “Hello” or “How are you?” try “Do you use [product or service] in your operations?” or “Have you seen [product or service]? If I can show you how to be more profitable, would you be interested?” Next, offer them a sample to handle, but not to keep. Do not let them take the item and move on without talking to you.
• Use lead cards to write down prospect information for efficient and effective post show follow-up.
• Be prepared for rejection. Some buyers will ignore you. Do not take it personally. Be brief but professional. Your time is too valuable to waste on non-prospects.

Observation

A salesperson can often find prospects by constantly watching what is happening in the sales area – the observation method. Office furniture, computer, and copier salespeople look for new business construction in their territories. New families moving into town are excellent leads for real estate and insurance salespeople. No matter what prospecting method you use, you must always keep your eyes and ears open for information on who needs your product.

Networking

For many salespeople, prospecting never ends. They are always on the lookout for customers. Everyone they meet may be a prospect or that person may provide a name that could lead to a sale. The term given to making and using contacts is networking.

Networking can be the most reliable and effective ways to find new prospects. People want to do business with and refer business to people they know, like, and trust. The days of one-shot salesperson are over; today, the name of the game is relationship building.

Building a network is important, but cultivating that network brings sales. The key is positioning, not exposure. The goal of cultivating your network is to carve a solid niche in the mind of each of your contacts so when one of those contacts or someone he/she knows, needs your type of product or service, you are the only possible resource that would come to mind.

Here are several tips for cultivating your network to dramatically increase your referral business:

• Focus on meeting centre-of-influence people. These people have established a good reputation and have many valuable contacts. A few places to find the key people in your industry are trade association meetings, trade shows or any business-related social event.
• Ninety-nine percent of your first conversation with a networking prospect should be about his/her business. People want to talk about their business, not yours.
• Ask open-ended, feel-good questions like, “What do you enjoy most about your industry?”
• Be sure to ask, “How would I know if someone I am speaking with would be a good prospect for you?” If you are on the lookout to find this person new business, he will be more inclined to do the same for you.
• Get a networking prospect’s business card. It is the easiest way to follow up with your new contact.
• Send a handwritten thank you note that day: “It was nice meeting you this morning. If I can ever refer business your way, I certainly will.”
• When you read newspapers and magazines, keep the people in your network in mind. If you find an article one of your contacts could use or would enjoy, send it.
• Stay on your contacts’ minds by sending them something every month; notepads with your name and picture are perfect. They will keep these pads on their desks and be constantly reminded of you and your product or service.
• Send leads. The best way to get business and referrals is to give business and referrals.
• Send a handwritten thank you note whenever you receive a lead, regardless of whether it results in a sale.

When meeting someone, tell them what you sell. Ask what they do. Exchange business cards and periodically contact the person. Eventually, you may build a network of people talking to each other, sharing ideas, and exchanging information. In addition, you can use several of the previously discussed methods of prospecting to build your network such as the endless chain or centre of influence methods.