The Complete Guide to Sales Prospecting for Your Ultimate Presentation
Did you know sales prospecting is the first step in building your ultimate sales presentation?
If you have missed the kick-off article in this “how to” series to building the Ultimate Sales Presentation, you can read it here.
In this article on sales prospecting we will cover:
- Why is prospecting is necessary at some level in every sales role?
- What is the difference is between a lead and a prospect?
- 13 different methods of sales prospecting.
- The 4-step referral cycle.
- 6 things to consider when asking for a referral.
- 3 important steps to manage prospect information.
Sales Prospecting is Necessary
While sales prospecting is necessary for every salesperson, it is absolutely critical for some.
If you think because you are in a retail selling situation, so you don’t need to worry about sales prospecting, sadly, you’re wrong! Sales prospecting is a necessary part of your job, and the better you get at prospecting, the more successful you’ll be as a salesperson.
If you are in a retail sales role like insurance, real estate, or solar systems, sales prospecting is critical.
If you are in a business-to-business sales role, sales prospecting is also critical for you.
Retail Example
Our daughter, Rebekah, to help pay her way through grad school, became a sales associate at Nordstrom’s. In a few months, her manager promoted her to the position of “personal stylist.” In layman’s terms, a personal stylist is a person you go to get advice on assembling a whole head-to-toe ensemble.
Rebekah credits much of her success as a salesperson to sales prospecting. She built up books of private clients who trusted her style advice so much that they would call to make appointments with her directly.
Every single person that became a private client started out as someone just walking through the door. Her design sense and skill at prospecting turned them from casual shoppers into private clients.
B2B Example
My son-in-law, Curtis, is a talented salesperson in the commercial software field.
Curtis learned early in his sales career to focus his time on the most fruitful leads. Subsequently, those qualified leads became sales prospects. He further refined his lists of prospects into the most likely clients to purchase his firm’s products and the likelihood for sales success. (We’ll talk more about this later.)
It wasn’t long before Curtis was teaching his prospecting techniques to the other salespeople and that led to promotions and raises.
Now that we know that prospecting (in some form) is important for every sales role, let’s look into the difference between a lead and a prospect.
Who Is A Prospect?
A prospect is a buyer who has the potential to buy your product or service. Now, a lead is not the same thing as a prospect! A lead is simply when the salesperson has contact information of a client. It is only when the lead has been qualified, that it then becomes a prospect.
A lead becomes a qualified prospect when they exhibit these three characteristics:
- They must have the money to buy,
- They must have the authority to buy, and
- They must have a desire to buy.
I’ve found an easy way to remember the criteria of a qualified prospect is with the acronym M.A.D.
A qualified prospect has the:
- Money,
- Authority, and
- Desire to purchase the product!
Prospecting is the lifeblood of every sales role. Thus, keeping a pipeline full of potential prospects is critical for long-term success. Unfortunately, the problem is that prospecting is a lot of work, and it is an on-going task.
Prospecting is Hard Work
Prospecting is a lot of work because it is a numbers game. For example, for every ten leads, you may only have three possible qualified prospects. Out of those three prospects, you may close only one sale.
So, if you need to close ten sales a month, you will need 30 qualified prospects. Also, to get 30 qualified prospects, you need 100 leads! It’s hard work, and you must be willing to keep at it.
Prospecting is Ongoing
Prospecting is undoubtedly an ongoing task because you must keep that pipeline of prospects full. Every prospect you sell needs to be replaced with a new prospect.
However, it is also ongoing because you are “leaking” customers. Every salesperson loses a certain number of customers every year. They may move away, the business may close, or a new buyer might change their suppliers. There is a whole host of reasons, but every salesperson will lose some of their customers every year. Therefore, these “losses” must be replaced by new customers from the pool of qualified prospects.
Once we know what goes into a qualified prospect, we then need to get busy and find them. For that, we’ll look at some of the most common prospecting methods.
Methods of Sales Prospecting
Usually, the task of finding leads and turning them into qualified prospects is the responsibility of the salesperson. So, with that in mind, it is important for salespeople to be familiar with a variety of prospecting techniques and to use the ones that are best suited for their industry.
Prospecting Methods
Here are 13 of the most common prospecting methods. This list is certainly not exhaustive, but it is enough to keep you busy and productive!
- Referrals. A referral is a name given to you as a lead by someone else. Usually, referrals come from your current customers and friends.
- E-mail. You may send an email to prospects who have requested additional information.
- Websites. How often have you been on a website and a “pop-up” asks you to fill in your name and email to get more information? The beauty of websites when it comes to gathering leads is, they are on the job 24 hours a day, seven days a week.
- Cold canvassing. This method is often door-to-door. Also, cold canvassing requires you to contact people that you don’t already know to see if they can become qualified prospects.
- Orphaned customers. Orphaned customers are customers whose original salesperson has left the company. So, these customers are classed as “orphaned.” Once a relationship is established, they can often be developed into loyal customers.
- Prospect lists. The profile of an ideal customer is established and then lists of potential leads are developed from public sources of information like D&B reports, local Chambers of Commerce, etc.
- Public exhibitions and shows. Conventions, trade shows, and other public exhibitions are a great source for leads, which might provide you with qualified prospects.
- Direct mail. Just like the email method, a direct mail means that you communicate with a potential customer directly. Usually, you will ask for a response to see if they are interested in your product/service.
- New businesses. You can look for new businesses under construction or scan business permit or incorporation documents for potential leads.
- Telephone/telemarketing. Often used as a form of cold canvassing, telephone calls to potential leads are used to qualify prospects.
- Networking. Building your personal/online network is often a starting point for referrals and center of influence prospects.
- Center of Influence. A person with a large, established, and trusted network might be a center of influence. Center of influence people have large, established networks and are willing to refer you to other people in their network because they have a relationship with you and the other person.
- Social media. Linked-In and Facebook, besides the other social media sites where businesses connect to consumers, can be a rich source of prospects.
Several prospecting methods include some aspect of a referral. Cold canvassing, orphaned customers, the center of influence, telephone/telemarketing, networking, and public exhibitions and shows all include some aspect of the referral. All of these methods provide an opportunity to ask someone if they know someone else who might be interested in the product.
Therefore, we also need to understand the referral cycle due to the importance of referrals in prospecting.
The Referral Cycle
Nearly every selling situation provides the salesperson with four distinct opportunities to secure a referral. These opportunities are known as the referral cycle.
In the referral cycle, the salesperson can secure a referral
- In the pre-approach phase,
- The presentation itself,
- During product delivery, and
- The service and follow-up stage.
The salesperson must be prepared to ask for a referral in each of these stages of the referral cycle.
The most difficult phase to secure a referral is the pre-approach phase. This is because you have probably not established a trusted relationship with the customer yet.
In all probability, the best opportunity to secure a referral is during the presentation phase, and specifically, at the close of the presentation.
If your product involves on-site delivery, then this is also a prime opportunity to secure a referral.
Finally, a great opportunity to secure a referral is during the after-sale service and follow-up phase. The product has been delivered, installed, and performing above expectations. The customer is thrilled. So, this is a perfect time to ask for a referral!
But, how exactly should the salesperson ask for a referral? Most people don’t like giving referrals. So, the salesperson must treat the opportunity to ask for a referral like a sale within the sale.
How to Ask for A Referral
Most salespeople don’t sell as much as they could because they don’t ask for the order. They fail to close! The same is true of referrals. Most salespeople don’t get as many referrals as they should because they fail to ask, and they fail to develop a specific plan to secure the referral.
Here are six techniques you can use when asking for referrals. Practice them. Role-play them just like you would an important sales presentation. Remember, a referral represents your best chance to make additional sales!
- Ask respectfully. Recognize that what you’re asking is uncomfortable for some customers. Let the customer know what you are about to ask is important.
- Ask for their help. People love to help others, especially if they have a trusted relationship with you.
- Explain how it works. Let the customer know what you will do with the referral information they give you.
- Describe your ideal prospect. By describing your ideal prospect, you help the customer narrow their focus. You don’t want or need a laundry list of everyone in their contact list. You only want leads that you can qualify as prospects.
- Report back to them. Always report back to whoever gave you the referral to let them know you followed up on their leads. This is an excellent time to ask for additional referrals!
- Thank them! Always follow back up and thank the person who took the time to give you a referral whether the referred person bought from you or not!
Now that you have referrals and a pile of leads that you have qualified as prospects, what do you need to do with all that information? How do you sort through it all and decide who to contact first? You need a system to manage your prospect information.
Managing Prospect Information
So, you’ve worked hard, and you have a pile of qualified prospects. Now what? How do you manage all this information to make the best use of your time? Well, I believe there are three key steps you need to take:
- Collect all the information and record it in one place.
- Classify and prioritize your prospects.
- Schedule contact with your prospect.
Record Information
As you may already know, there are plenty of Customer Relationship Management (CRM) systems available to salespeople today. The key is to use one, even if it is a simple Excel spreadsheet, to record all the information about your prospects in one place.
The more complete the information is that you have on any given prospect, the better. At a minimum, you should know:
- Prospect’s full name, including how they like to be called. For example, most William’s may prefer to be called Bill; most Elizabeth’s may prefer Beth. So, you need to make sure that you know their preference.
- Preferred email address and business address.
- Direct phone number, including cell phone if possible.
- Name of the company.
- Position and title in the company.
- Personal information like college attended, degrees attained, hobbies, service clubs, etc.
- Family information like a spouse’s name, number of children with their names and ages.
- Source of the prospect. How did you get the prospect’s name? Was it through a referral? If so, who?
Classify and Prioritize
The next step in managing prospect’s information is to classify each prospect and then prioritize them.
Classify
An easy classification system is simply to code each prospect as “A,” “B,” or “C” priority.
An “A” prospect is one for whom you have all the basic prospect information. You have qualified them by determining they have the money and the authority to buy your product.
A “B” prospect is one for whom you have most of the basic prospect information. You may not have been able to fully qualify them knowing they have both the authority and the money to buy your product. Your next step with “B’s” is to fill the gaps in your knowledge to determine if they are indeed fully qualified prospects.
A “C” prospect is one for whom you have limited information beyond their names. These are not really prospects, but they are leads. Your next step with “C’s” is to complete your prospect profile and qualify them before taking any action.
Prioritize
Now that all our prospects have been classified, we then need to prioritize them. Your time is limited. So, you only want to call on the prospects that will most likely buy your product.
For that reason, we put the “B’s” and “C’s” aside until we complete their profile and can either upgrade them to an “A” or ignore them as leads because they are not worth pursuing at this time.
Next, we need to prioritize all those “A’s.” That’s what Curtis did. He refined his prospect lists two ways. First, he prioritized the customers with the highest potential volume. Next, he prioritized customers who he felt were most likely to purchase their product.
You need to do the same thing. Try to develop some type of criteria that makes the most sense for your business. Suggested criteria include the anticipated sales volume and the likelihood of making the sale. Score each prospect against these additional criterions to determine who is the highest priority for you to contact first.
For example, you may need to decide between a very high-volume customer with a high degree of difficulty in making the sale. Alternatively, you could focus on a lower volume customer who may be a quick, easy sale. Who is most important to approach first? Rank that customer as “A1.” Then, rank the next most important customer as “A2,” and so on.
Once all you have classified and prioritized all of your prospects, next, you will need to contact the prospect.
Schedule Contacts
Finally! The step that every salesperson has been waiting for—contacting the customer. If you’ve followed the prospecting tips outlined so far you are ready to call your “A1” prospect. After all, you are not going to waste your time on some “C” prospect that you hardly know anything about. Right?!
You can reach out to the prospect in many ways, by phone, email, direct mail, social media, or a personal visit. The key is to make initial contact with the prospect in whichever manner is most appropriate based on the information you obtained in your prospect research.
For this initial encounter, your goal is to secure an appointment to make a presentation. Since securing that appointment is so important, we have decided to dedicate our next article to the pre-approach step that includes securing your appointment.
The Ultimate 10-Step Sales Presentation Series
I hope what I shared with you here has helped you understand and appreciate the power of the Ultimate 10-Step Sales Presentation model. However, I’ve just scratched this surface here! Over the next few months, I’ll be sharing more detail about each step of the model with more examples.
So, if you want to learn more about the Ultimate 10-Step Sales Presentation model, you can subscribe to the series here. That way you won’t miss any of this valuable information!
Join the Conversation
Finally, questions and comments are always welcome. What questions do you have about the Sales Prospecting step of the Ultimate 10-Step Sales Presentation model?
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Category: Salespeople