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Developing and Qualifying aProspect Base

Selling TodaySelling Today10th Edition

CH

AP

TE

R Manning and Reece

9

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Learning ObjectivesLearning Objectives

• Discuss the importance of developing a prospect base

• Identify and assess important sources of prospects

• Describe criteria for qualifying prospects

• Explain common methods of organizing prospect information

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Learning ObjectivesLearning Objectives

• Name some characteristics that are important to learn about customers as individuals and business representatives

• Describe the steps in developing a prospecting and sales forecasting plan

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Prospect, Prospecting, and Prospect Base Defined

Prospect, Prospecting, and Prospect Base Defined

• Prospect: a potential customer that meets the qualification criteria established by your company

• Prospecting: identifying potential customers

• Prospect base: is made up of current customers and potential customers

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Importance of ProspectingImportance of Prospecting

• Every salesperson must cope with customer attrition

• Customers move, firms go out of business, sales lost to competition

• Average company may lose 15 to 20% of customer base every year

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Girard’s Ferris Wheel—SupplyGirard’s Ferris Wheel—Supply

FIGURE 9.1

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Girard’s Ferris Wheel—LossGirard’s Ferris Wheel—Loss

FIGURE 9.1

CONTINUED

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Prospecting Requires Planning

Prospecting Requires Planning

• Increase number of people who board the Ferris wheel

• Improve the quality of prospects

• Shorten sales cycle by determining which prospects are “qualified”

• Prospecting plans must be monitored continuously for effectiveness

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ReferralsReferrals

• Prospect recommended: by current satisfied customer or one familiar with product or service

• Endless chain: ask contact who else could benefit from product

• Referral organizations: facilitate networking

• Friends, family members, centers of influence: a person may not make decision but has influence on those who do . . . opinion leaders

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Hancock’sLead

Generation

Hancock’sLead

Generation

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Business Network InternationalBusiness Network International

Visit the world’s largest referral organization

www.bni.com

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DirectoriesDirectories

• Hundreds of business and industrial directories available

• Many major trade associations publish directories

• Be sure to use current copy or edition as prospects shift firms; track people and companies

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Thomas RegisterThomas Register

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Trade Shows/PublicationsTrade Shows/Publications

• Trade shows and conventions: your company may have a booth at key trade shows/expositions

• Trade publications: each industry has trade publications that sales professionals need to read

• Join trade associations: many salespersons join trade associations to gain access to potential buyers

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TelemarketingTelemarketing

• Telemarketing: the practice of marketing goods and services through telephone contact

• To identify buyers and generate contact lists for sales staff

• To qualify prospects

• To verify sales leadsgenerated by other methods

• To conduct follow-ups

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Direct Response andSales Letters

Direct Response andSales Letters

• Direct response advertising: often features inquiry cards or information requests via mail or telephone

• Sales letters: send sales letters to decision makers, then follow up

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WebsiteWebsite

• Websites provide cost-effective way for sales professionals to:

• Project personal image

• Provide additional information

• Generate leads from visitors to site

• Present product information

• Establish e-mail lists

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Computerized DatabasesComputerized Databases

• In-house databases: your firm may already have a comprehensive database; sometimes referred to as the “house list” with details on customers, purchase patterns, and so forth

• List sources: wide range of precise lists available from variety of sources

• See www.infoUSA.com

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Computerized DatabasesComputerized Databases

• Purchasing databases or lists can be costly; price usually set on cost-per-thousand names

• Not all relevant databases are equal; some “pull” better than others

• Pull is the percentage of the list resulting in qualified prospects or actual sales

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Cold CallingCold Calling

• Simply calling prospects without referrals

• New salespeople rely on these as they haven’t built referral base

• Must be strategically planned

• Prelude to in-person appointment

• A way to introduce yourself and your company to a prospect

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NetworkingNetworking

• Making and profiting from personal connections

• Networking guidelines

• Meet as many people as you can

• Tell them what you do

• Do not do business while networking

• Offer business card

• Edit contacts and conduct follow-ups

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Three Types of NetworksThree Types of Networks

FIGURE 9.2

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Educational SeminarsEducational Seminars

• Provide opportunity to showcase product without pressuring to buy

• Require extensive preparation

• Start value-added process

• Can attend or present at industry sponsored seminars or offer your own

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Non-Sales EmployeesNon-Sales Employees

• Non-sales personnel can be valued source of leads

• Prospecting not necessarilyexclusive task of sales force

• Non-sales personnel oftenneed training and incentives

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Combination ApproachesCombination Approaches

• Salespersons generally rely on combination of prospecting methods

• Some methods have higher yield than others

• Important to use CRM technology to help maximize efficiency

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Discussion QuestionsDiscussion Questions

• If you were selling ACT! contact management software, how might you develop a prospect list?

• If you were a personal investor, how might you develop a prospect list?

• If you worked for an international shipping company, how might you develop a prospect list?

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Qualifying ProspectsQualifying Prospects

Key time-saving criteria:

• Does the prospect need my product?

• Can prospect make the buying decision?

• Can prospect pay for the purchase?

• Will anyone close the sale?

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Organizing Prospect Information

Organizing Prospect Information

• Prospect as an individual

• Prospect as a business representative

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Prospect Information

Prospect Information

Harvey Mackay suggests 66-question customer profile.

See it at:

mackay.com

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Prospecting and Sales Forecasting Plans

Prospecting and Sales Forecasting Plans

Important to balance time and organize contacts:

• Prepare a list of prospects

• Forecast potential sales volume for each new account, by product

• Carefully plan the sales route to minimize time and cost