24 March 2020
Sales prospecting is the process of searching for the ideal customer
The ideal customer definition isn't about finding a perfect match, it's more about avoiding a perfect mismatch.
A sales prospect is a person who is currently in the market for your products or services. Trouble is, they either don't have your company high on their consideration list or worse don't even know that you exist! The aim of sales prospecting is to find those people and introduce yourself.
Sales prospecting in the good 'ol days
Selling is one of the oldest professions, and the term "sales prospecting" derives from prospecting for gold (or any mineral) walking around kicking rocks, digging and sifting dirt looking for the gold nuggets. Similarly in sales, in order to find buyers you had to meet a lot of people, do a lot of networking, knock on doors and generally "beat the bushes" to find sales prospects. Hard work.
You have to sift through a lot of dirt to find the gold
Advertising activity in the good 'ol days (TV adverts, Press, Magazines, Radio, bill boards and posters) was a substitute or supplement to sales prospecting and helped make the phone ring (a sales enquiry). Advertising and sales prospecting essentially have the same purpose - lead generation (Advertising can also be used to build brand awareness).
In modern times we have seen the rise of digital marketing as the go-to method for generating sales leads.
In many selling models the sales rep is relieved of the burden of prospecting and is tasked with servicing enquiry, qualifying leads and facilitating the sale. It's valid because it is an effective selling model. Sales people are rarely good at sales prospecting (most loath it) and digital marketing ensures their time (and expense) is directed to where it is most needed.
However, for some industries and some products and services, digital lead generation is less effective. For example in the world of B2B and big-ticket items (think infrastructure projects, fighting platforms for Defence, and expensive, specialised business services) the number of sales targets is small, the sales targets are more easily identified and people are less likely to respond to online marketing.
Further, even for some less expensive items (motor vehicles for example) sales prospecting still has a place and some people simply do not spend enough time online to be reached through digital marketing.
Some sales people love the thrill of the chase, enjoy networking and are highly effective sales prospectors. In business services firms (engineering, architecture, law, accounting and consulting) such people are called "Rain Makers."
Sales Pipeline
Sales prospecting is the first step toward filling the sales pipeline. The sales pipeline concept depicts the process of converting sales leads to sales.
B2B sales prospecting
Organizations don't buy, people do.
When talking about B2B sales prospecting the underlying principle is that you are looking for a person not an organization. To be clear, in B2B sales the final sales transaction is business-to-business, however sales activities take place between individuals working for the selling organisation (the sales person or sales team) and the buying organisation (the customer or the buying team).
We often talking about "teams" in B2B selling because often B2B sales are more sophisticated than consumer sales (particularly as the value of the transaction can be large) and the buying decision is rarely made by one person and often a number of specialists are needed by the selling organisation to effectively conduct the selling process.
More is written on this topic here: what is industrial marketing? and B2B Marketing: selling planes, trains and widgets.
What is sales prospecting?
Put simply, sales prospecting is asking the question "are you interested in my product or service?" Ask enough people that question and eventually the answer will be "yes."
However, the art of sales prospecting is to adopt a more sophisticated approach to achieve efficiency and to improve success rates.
The ideal customer
The first step toward improved efficiency is to begin with a clear understanding of the type of person (or organisation) you are looking for. This definition is called "The ideal customer."
Old saying in the world of sales "people don't buy, prospects do."
The saying speaks to the concept of efficiency - why waste time trying to convince someone who is not remotely interested in buying when you could be using that time talking to somebody who is? This introduces the idea that a sales person is less a persuasive person and more a facilitator of the sale. In fact, in the age of digital marketing (digital lead generation) many speak about teaching the sales person "not to get in the way of the sale."
The ideal customer definition is used to guide research and networking activity in order to identify "Suspects" (refer to the sales pipeline diagram above). Suspects are people who the salesperson judges might fit the ideal customer profile - thus justifying putting further effort into contacting them to determine if they are interested (or might be worthwhile staying in contact with, because potentially they may have a need in the future).
The car industry is a good example. If you are sales person working for a luxury car dealership (let's say Lamborghini. Ferrari, Maserati or similar) your ideal customer is someone who A) can afford one B) has the right personality type. We all know people who can clearly afford such cars but seem to still buy vehicles that are less ostentatious.
However, with experience, the luxury sports car sales person will get to know who is a suspect and better still where to find them.
The analogy is applicable to all market places for products and services. If you want to increase your chances of meeting a hot prospect, find out where they hang-out and put yourself there. This is called a 'target-rich environment'.
However, often your ideal customer is sitting behind a screen and keyboard tucked away in their daily work environment. You need to break through the impenetrable corporate barriers, convince them to break from what they are doing, and engage in a conversation they didn't plan having. It's a tough gig.
Sales prospecting methods
Leaving aside digital marketing in all its forms , let's discuss the various sales prospecting methods...
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Ideal customer: as mentioned above, the first step is to define the ideal customer. Many organisations target different market segments so there could be more than one. The ideal customer definition isn't about finding a perfect match, it's more about avoiding a perfect mismatch. The sales team need to know where to direct their prospecting efforts to find a good fit. Having drafted a clear profile, prospecting is improved if you also define the best places to find the ideal customer. In B2B marketing online searching is the obvious method particularly using tools like LinkedIn.
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Prospect list: The sales team undertakes a continuous process of research to keep building the prospect list (or more correctly - the suspect list) these are people who have yet to be contacted, but have been identified through research. Using the ideal customer definition, the sales team conduct online searches looking for organisations or individuals who fit the profile and then obtain their contact details. A CRM (see what is a CRM) that includes a sales pipeline module is a good tool for this purpose. Other sources of sales prospects include social media (for B2B marketing LinkedIN is a great tool), Facebook, and various forums and blog sites are a rich source of information.
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Sales prospecting plan: One of the reasons sales reps don't enjoy prospecting is because they don't have a process. Open ended tasks like "go and do some sales prospecting" is too much of a blank sheet of paper. However, if the sales person is provided with a proven process "this is how we go about sales prospecting" they are far more likley to be productive. It is also possible to dedicate a person or team to the task of doing the sales prospecting heavy lifting. The sales prospecting plan is tailored to products and services and different industry and market segments. Essentially, you are looking to identify the best source of information that can be used to indicate potential sales prospects. For example, organisations that sell products and services to the wedding market (photographers, flowers, catering etc.) may routinely scan engagement announcements published in newspapers, and then have a process for tracking down the betrothed couple's contact details. A B2B Sales prospecting plan for a concreting contractor may be based on subscribing to a bureau that compiles local government planning approvals. The modern online world is a rich treasure trove of free data, which often is incorrect but with some intelligent process and some fact checking can yield outstanding results.
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Networking: Of all the methods of sales prospecting, networking is the most obvious and contentious. It isn't an efficient sales prospecting method for many products or services. But, some sales teams find it is great way to meet decision makers. Networking has two main meanings; you are either leveraging your own business and personal networks to gain introductions to people on your prospect list (and LinkedIn is a way of finding out who they might know), or attending meetings, clubs, associations or trade shows where you either know in advance your potential prospects might be in attendance or simply judge to be a target rich environment. The problem comes with the decline in attendance at networking opportunities. In the good 'ol days, a lot of people used to attend networking events. These days family life is more demanding and people are more time poor. Memberships of clubs and associations are lower and attendance at events are also lower. Many events are more attended by sellers than buyers. However, there are still worthwhile events - but, be highly selective; do your research. Many events publish committed speakers and trade show confirmed bookings. Personality type is important. Some sales people just aren't good at networking (which doesn't necessarily make them bad sales people) - conversely some are naturals.
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Referrals: Customers tend to know other people in the same industry. So it is logical that current customers are a good source of referrals particularly if they are satisfied with the outcome. While referrals can happen unprompted, the seasoned sales professional doesn't leave it to chance. Further, if a new type of customer comes on to the books (for example from a new industry) then the obvious next step is to analyse if this represents a new market segment opportunity.
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The sales call: The old sales adage is "sell yourself FIRST, Company SECOND and Product or Service LAST." Why is that? When sales prospecting personal credibility is critical. Having done the research and planning and the time comes to make contact with the sales prospect, a well thought through approach is helpful. The topic of how to conduct a sales phone call and conducting a first meet face-to-face is too big a topic to cover in one bullet point. However, here are a couple of hints; if you are selling B2B you will probably need to first understand their requirements before being able to develop and cost a solution. This is best done face-to-face. Consequently, the only thing you should sell over the phone IS THE APPOINTMENT. Old B2B sales saying, unless the sale is purely transactional "don't try to sell a product or service over the phone." The second hint is when meeting face-to-face, they aren't interested in what you have to say. This seems counter intuitive, but you are already in the door, if you are selling solutions you need to spend most of the time understanding the problem they are trying to solve. Save the sales pitch for when you have developed a customised solution that addresses their pain points and are ready to deliver a proposal.
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Building rapport: Another big topic too big to cover thoroughly in one bullet point. Building rapport is achieved through finding common ground (particularly personal commonalities - like interests, family situation, or hobbies) . However, you need to be flexible in your approach and use your emotional intelligence to pick-up what type of person you are dealing with. Some people are business only (task oriented) - and want to discuss only the business to hand. Waxing lyrical about irrelevant topics will only annoy them. Conversely, others like to feel their way with a new contact and want to find out who they are dealing with and develop trust before getting down to business.
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Qualifying leads: Qualifying the sales prospect is the process of determining if your solution is a good fit with the problem they are trying to solve. Part of this process is also to determine their financial capacity and to identify their decision making process. This is done through active listening and the use of open ended questions (rather than asking "How many do you need?" (a closed ended question) you would ask "have you thought about quantities yet?" ) - the purpose is to encourage them to provide you with unprompted information that could be valuable to improving your understanding of their need and additional pain points. Open-ended questions also ensure that the sales prospect does most of the talking, which makes them feel more comfortable (people appreciate being given the opportunity to talk about themselves) and helps you to build rapport because active-listening makes them feel understood and acknowledged.
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Tradeshows: For many industrial companies, particularly specialized industrial machinery, exhibiting at a Trade Show /Industry Expo is a great method to refresh the sales prospect list. See Are Trade Shows Worth It?. Decision makers in industrial settings are particularly difficult to sell sales appointments to. However, trade-shows provide an efficient means for future buyers to research the market
Letting them think they found you
Sales prospecting is part art and part good process. While we all know that selling exists, and some may also acknowledge the role a salesperson plays in providing a solution - we don't like being sold. It's human nature. We naturally distrust and devalue products and services foist upon us. This is particularly true of B2B products and services. While a remarkable few people are gifted at the hard sell, it's not a scalable and sustainable sales model and probably only really works in movies.
To use an example, how would you judge the competency of a medical practitioner you met at a social occasion who handed you a business card accompanied with "if you ever feel unwell, please feel free to contact my surgery. We will provide you with the utmost and professional care."?
Seasoned sales professionals are very good at finding sales prospects at special events or social gatherings, first building rapport and waiting for the inevitable question "and what do you do for a living?" They might then offer "Ah! that's interesting, we have been looking for an organization that can supply us with X, do you have a business card on you?" but, the sales person already knew that.
The sales prospect thinks they found the sales person.
Right place at the right time. That takes research and planning. That's called sales prospecting.
LinkedIN as a sales prospecting tool
LinkedIN is becoming a much used (and potentially overused) prospecting tool for B2B Lead Generation and B2B sales prospecting. It's gaining popularity with many sales professionals. And the reasons are...
- It's a great reference and research tool:
Ok so, LinkedIN is like a giant collection of people's resume's - their skills and experience are listed in a nice convenient easy to digest format along with their current title providing a clear indication of their area of responsibility and seniority. Having established that ACME Manufacturing fits your ideal customer definition you can search LinkedIN to identify who may be the best person or people to approach. Combined with looking-up their profile on Facebook can also provide clues as to their lifestyle, attitudes and interests. All valuable information to help you establish rapport when you finally meet them.
- You can reach out through LinkedIN:
Having you own profile on LinkedIN (and having it looking professional and informative) enables you to contact prospects using LinkedIN's various tools. The first tool is to simply send through a request to link-up. Some people will link with anyone who asks, others will not accept a link request from anyone and treat it like an intrusion on their privacy. More than likley they will check your profile.
LinkedIN also provides several methods to direct message or sending an in-mail. This can be an opportunity to test if they have an interest in your products or services. Personally, I treat approaches on LinkedIN the same as a tacky sell. LinkedIN mirrors face-to-face networking - people need to think they found you. Having informative articles posted on LinkedIN particularly video content can vastly improve your exposure and liklihood of being found. Including a URL to this material enhances your sales message. Participating in conversations and commenting on posts is also another method.
Closing the deal
The ultimate aim of sales prospecting is of course to enable further direct engagement with the potential hopefully leading to not just a sales, but a new customer who buys repeatedly into the future. Sales closing is another topic.
Sales prospecting in the digital age
Many consider sales prospecting a dying art; a practice more associated with old fashioned selling before the digital age. The modern meaning of sales prospecting is to run a digital marketing campaign and then feed the sales enquiries to sales people for follow-up. Again, a perfectly valid approach.
This topic is dealt with more fully here B2B, or not 2B? - that is the question. Are digital technologies killing the sales representative?
However, sometimes a blend of both methods works really well.
If you would like to find out more information about sales prospecting, managing the sales pipeline and selling business-to-business, check out the following further reading...