PROSPECTING

2. PROSPECTING chapter 7 • Why is prospecting important for effective selling? • Are all sales leads good prospects? What are the characteristics of a qualified prospect? • How can prospects be identified? • How can the organization’s promotional program be used in prospecting? • How can an effective lead qualification and management system aid a salesperson? • How can a salesperson overcome a reluctance to prospect? SOME QUESTIONS ANSWERED IN THIS CHAPTER ARE: 7-2 McGraw-Hill/Irwin

3. “Being consistent and thorough with prospecting and follow-up is the key to winning new business.” ~Amanda GonzalesNetworkIP 7-3 McGraw-Hill/Irwin

4. The Importance of Prospecting • Many experts believe it is the most important activity a salesperson does • The world is constantly changing • More important in some fields than in others • No salesperson can ignore leads, even in a position requiring less emphasis on new contacts 7-4 McGraw-Hill/Irwin

5. Relationship Between the Steps in the Selling Process and the Designation of the “Buyer” 7-5 McGraw-Hill/Irwin

6. Characteristics of a Good Prospect • Does a want or need exist? • Customers buy to satisfy practical needs as well as intangible needs • Does the lead have the ability to pay? • A client is not a real prospect without resources to pay for the product • Ability to pay includes both cash and credit • Does the lead have the authority to buy? • Knowing who has purchasing authority saves the salesperson time and effort and results in a higher percentage of closed sales 7-6 McGraw-Hill/Irwin

7. Characteristics of a Good Prospect (continued) • Can the lead be approached favorably? • Possibility of getting an interview • Chances of making a sale • Is the lead eligible to buy? • Volume • Status • Sales territories • Other criteria • Timing of the purchase • Long-term customer potential 7-7 McGraw-Hill/Irwin

8. Satisfied Customers • Current and previous customers are contacted for additional business and leads • The most effective source for leads • To maximize usefulness: • Make a list of potential references from among most satisfied customers • Decide how each customer can help • Ask for the names of leads and the specific type of help needed • Keep in touch 7-8 McGraw-Hill/Irwin

9. Satisfied Customers (continued) Selling deeper Additional sales to satisfied customers who provide leads. Referral events Gatherings designed to allow current customers to introduce prospects to the salesperson, to generate leads. Negative referral Customer who tells others about how poorly you or your product performed. 7-9 McGraw-Hill/Irwin

10. Endless-Chain Method 7-10 McGraw-Hill/Irwin

11. Networking • Salesperson uses personal relationships with those who are connected and cooperative to secure leads • Suggestions: • Call at least two people per day and go to at least one networking event every week • Mingle at events • Learn about your prospect’s business and nonbusiness interests • Thank your contacts for leads • Follow up with your new contact on a regular basis • Center of influence • Sales person cultivates well-known, influential people in the territory who are willing to supply lead information • Buying community • May never buy 7-11 McGraw-Hill/Irwin

12. The Internet, Ads, and Direct Mail • The Internet • Salesperson uses websites, e-mail, listservers, bulletin boards, forums, roundtables, and newsgroups to secure leads • Extranets • E-selling • Ads and direct mail • Salespeople use these forms of promotional activities to generate leads • Postcard pack • Bounce-back card 7-12 McGraw-Hill/Irwin

13. Shows, Fairs, and Merchandise Markets • Salespeople use these venues for lead generation • At many tradeshows all attendees are customers • In some industries, almost all sales to resellers occur during markets • Timely follow-up of leads is critical if sales follow a show 7-13 McGraw-Hill/Irwin

14. Seminars, Lists, and Directories • Seminars • Salespeople use seminars for prospects to generate leads • Appeal to a specialized market • Invite good prospects • Go high-quality • Be involved before, during, and after • Lists and directories • Salespeople use secondary data sources, which can be free or fee-based • SICs and NAICS • Purchasing lists 7-14 McGraw-Hill/Irwin

15. Data Mining, CRM Systems, Cold Calling, and Spotters • Data mining and CRM systems • Salespeople use sophisticated data analysis software and the company’s CRM system to generate leads • Interactive databases • Cold calling • Salesperson tries to generate leads by calling on totally unfamiliar organizations • A blitz • Spotters • Salesperson pays someone for lead information • Also called bird dogs 7-15 McGraw-Hill/Irwin

16. Telemarketing and Sales Letters • Telemarketing • Salesperson uses phone and/or telemarketing staff to generate leads • Outbound vs. inbound telemarketing • Sales letters • Salesperson writes personal letters to potential leads • Follow up with a telephone call • Include promotional items 7-16 McGraw-Hill/Irwin

17. Other Sources of Leads • Personal observation • Nonsales employees within the salesperson’s firm • Government agencies • Clubs • Other salespeople • Trade associations • Volunteer activities 7-17 McGraw-Hill/Irwin

18. Lead Qualification and Management Systems • Prequalification • Analyzing lead value • Evaluating profitability of sales resulting from lead-generating activities 7-18 McGraw-Hill/Irwin

19. Overcoming a Reluctance to Prospect • Reasons for reluctance: • Worrying about worst-case scenarios • Spending too much time preparing • Being overly concerned with looking successful • Being fearful of: • Making group presentations • Appearing too pushy • Losing friends or family approval • Using the phone for prospecting 7-19 McGraw-Hill/Irwin

20. Overcoming a Reluctance to Prospect (continued) • Feeling intimidated by people with prestige or power, or feeling guilt at having a career in selling • Having a compulsive need to argue, make excuses, or blame others 7-20 McGraw-Hill/Irwin

21. Overcoming a Reluctance to Prospect (continued) • Helpful activities: • Identify and evaluate excuses not to call • Engage in sales training and role-playing activities • Make prospecting contacts with a supporting partner or sales manager • Set specific goals for all of your prospecting activity • Realize the economic value of most prospecting activities 7-21 McGraw-Hill/Irwin

22. Overcoming a Reluctance to Prospect (continued) • Helpful activities (continued): • Stop negative self-evaluation from ruling your behavior • Remember that you are calling on prospects to solve their needs • Control your perceptions of what prospects might say about you, your company, or your products • Learn and apply relaxation and stress-reducing techniques • Recount your own prospecting successes, or those of others 7-22 McGraw-Hill/Irwin

23. Summary • Locating prospective customers is the first step in the sales process. • Not all sales leads qualify as good prospects. • Many methods can be used to locate prospects. • The best source is a satisfied customer. • Effective prospecting requires a strong plan that hinges on developing a lead qualification and management system and overcoming reluctance to prospect. 7-23 McGraw-Hill/Irwin