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Chapter 9 Developing and Qualifying a Prospect Base © 2010 Education Canada Inc. 9- * Discuss the importance of developing a prospect base Identify and assess important sources of prospects Describe criteria for qualifying prospects Learning Objectives © 2010 Education Canada Inc. 9- * Explain common methods of collecting and organizing prospect information Describe the steps in managing the prospect base Learning Objectives (continued) © 2010 Education Canada Inc. 9- * Success in selling depends on one’s ability to identify prospects, gain insight into the prospect’s needs, and develop an accurate picture of a prospect’s value “The main purpose of a salesperson is not to make sales, but to create customers.” Gerhard Gschwandtner Editor, Selling Power Prospecting – An Introduction © 2010 Education Canada Inc. 9- * Prospecting – is a systematic process of identifying potential customers Prospect – is a potential customer who meets the qualification criteria established by you or your company Buying Centre – the group of people involved in making a purchase decision Members may include a technical influencer, user influencer, and financial influencer © 2010 Education Canada Inc. 9- * Prospecting – An Introduction (continued) Prospect Base – is a list of current and potential customers Every effort is made to devise and implement a customer strategy that builds, fosters, nurtures, and extends relationships with established customers © 2010 Education Canada Inc. 9- * Prospecting – An Introduction (continued) Average company loses 15% - 20% of its customers every year through attrition: Customer may move to a new location outside the salesperson’s territory A firm may go out of business or merge with another company A loyal buyer may leave their position Promotion, retirement, resignation, or illness Sales are lost to competition Importance of Prospecting © 2010 Education Canada Inc. 9 - * The “Ferris Wheel” Concept © 2010 Education Canada Inc. 9 - * Loss of Customers Sources of Prospects Loss of Customers Relationship between customer and salesperson deteriorates Business failure New buyer buys from another source Acquisitions and mergers Customer moves Death of customer Customer has only one-time need for product Customer needs change because of new technology © 2010 Education Canada Inc. 9 - * Sources of Prospects Referrals Centres of influence, friends, and family members Directories & trade publications Trade Shows & special events Telemarketing & e-mail Direct response advertising & sales letters Web sites & computerized databases Cold calling, networking & seminars Prospecting by non-sales employees © 2010 Education Canada Inc. 9 - * Progressive marketers are doing three things to improve the quality of the prospecting effort: Increase the number of people who board Improve the quality of the prospects Shorten the sales cycle by quickly determining which of the new prospects are qualified prospects Prospecting Requires Planning © 2010 Education Canada Inc. 9- * Some prospecting techniques that worked well in the past may become ineffective because of changing market conditions Referral – is a prospect who has been recommended by a current customer or by someone who is familiar with the product or service (continued) Sources of Prospects (continued) © 2010 Education Canada Inc. 9- * Referral leads result in higher close rates, larger sales, and a shorter sales cycle A productive referral begins an “endless chain” of opportunities to prospect for new business Referral letters and cards can be used as an actual testimonial for the lead Organizations set up to allow for networking opportunities to share ideas, contacts, and referrals Sources of Prospects (continued) © 2010 Education Canada Inc. 9- * Centre-of-influence – establishing a relationship with a well-connected influential person who is willing to provide information about potential prospects Friends and family members can provide sources of information as well Sources of Prospects (continued) © 2010 Education Canada Inc. 9- * Some of most popular directories: Canadian Business Resource Canadian Key Business Directory Canadian Trade Index Fraser’s Canadian Trade Directory Scott’s Directories Polk City Directory Local telephone directory © 2010 Education Canada Inc. 9- * Sources of Prospects (continued) Trade publications provide a status report on every major industry Trade shows can reduce the cost of making a sales call and make many contacts in a short period of time Research studies indicate that it is much easier to identify good prospects and actually close sales at a trade show © 2010 Education Canada Inc. 9- * Sources of Prospects (continued) Telemarketing – is the practice of using telephone contact to prospect for, qualify, sell to, and service customers E-mail – should ideally be sent out to existing customers and “opt-in” lists Response rate is quite low; can work Company name in subject line helps Offer “opt-out” option Newsletter format offers quick digest value © 2010 Education Canada Inc. 9- * Sources of Prospects (continued) Direct-response advertising offers business-to-business impact to generate inquiries Sales letters from databases that can be purchased or generated Require phone call follow-up 3 or 4 days after letter sent to ask for appointment Include a promotional item to break through the clutter © 2010 Education Canada Inc. 9- * Sources of Prospects (continued) Web site – opportunity to acquire product information that can help make a buying decision Likely a prospect if requests information Offer incentive to leave contact information Computerized databases – allow one to match product features with the needs of potential customers quickly and accurately © 2010 Education Canada Inc. 9- * Sources of Prospects (continued) Cold calling – method of prospecting in which the salesperson selects a group of people who may or may not be actual prospects, and then calls, by phone or personal visit, on each one. Can be turned into hot calls through a telephone contact system that uses good call planning, strategic scripting, and effective script delivery © 2010 Education Canada Inc. 9- * Sources of Prospects (continued) Networking – is the practice of making and using contacts; people meeting people and profiting from the connections Professionals, entrepreneurs, managerial personnel, and customer service representatives need to do this 80% of available jobs are not posted (continued) © 2010 Education Canada Inc. 9- * Sources of Prospects (continued) Barry Siskind’s Three Act Process: Approach someone and engage them in conversation “net-chat” collecting and giving information to find out as much as possible quickly Disengage (continued) © 2010 Education Canada Inc. 9- * Sources of Prospects (continued) Guidelines for identifying good referrals: Meet as many people as you can When you meet someone, tell the person what you do Offer your business card Edit your contacts and follow-up (continued) © 2010 Education Canada Inc. 9- * Sources of Prospects (continued) © 2010 Education Canada Inc. 9- * Sources of Prospects (continued) Insert figure 9.2, page 197 Educational seminars Obtain sales leads Promote place of business Showcase and demonstrate expertise Prospecting done by non-sales employees Incentive programs and training help Combination Approaches One type may not be enough © 2010 Education Canada Inc. 9- * Sources of Prospects (continued) Qualifying – the process of identifying prospects who appear to have a need for your product and should be contacted First opportunity to consider what the needs of the buyer might be Get permission to ask questions Possibility of contact lying about level of authority; clarify carefully Be prepared when calling senior executives Qualifying the Prospect © 2010 Education Canada Inc. 9 - * Establish qualifying criteria: Does the prospect have a need for my product? Does the prospect have the authority to buy my product? Does the prospect have the financial resources to buy my product? Does the prospect have the willingness to buy my product? Qualifying the Prospect (continued) © 2010 Education Canada Inc. 9- * File cards and books may be adequate for salespeople with few small customers and simplistic selling cycles Computerized databases are required for complex sales and large territories Sales data – information available from a company’s CRM system Collecting and Organizing Prospect Information © 2010 Education Canada Inc. 9- * Sales intelligence – gives salespeople access to insights into the prospect’s marketplace, firm, competitors, and even the prospects themselves Answers the prospect’s questions: Do you know me? Do you know my company and my marketplace? Do you have any special value-add? Sales Intelligence © 2010 Education Canada Inc. 9- * High-performance salespeople today are focused on effectively managing sales activities for all prospects in their database Account analysis – estimate of the sales potential for each account Managing the Prospect Base © 2010 Education Canada Inc. 9 - * Insert figure 9.5, page 204 Portfolio Models © 2010 Education Canada Inc. 9 - * Sales process model – total set of prospects being pursued at any given time Balanced funnel – a portfolio of prospects where there are a sufficiently large number of prospects at each stage in the sales process Work the whole funnel: Closing sales Qualifying Within the funnel (continued) Sales Process Models © 2010 Education Canada Inc. 9 - * Insert figure 9.6, page 205 Sales Process Models (continued) © 2010 Education Canada Inc. 9 - * Pipeline management – process of managing all the prospects in the salesperson’s sales funnel to ensure that the sales objectives are met Pipeline analytics – ability to conduct sophisticated data analysis and modelling, allow salespeople to generate new reports regarding the movement of prospects through the sales funnel (continued) Sales Process Models (continued) © 2010 Education Canada Inc. 9 - * Pipeline dashboards – at-a-glance visualizations that define, monitor, and analyze the relationships existing in the pipeline Provides insight into the need to add new prospects Sales Process Models (continued) © 2010 Education Canada Inc. 9 - * Insert figure 9.7, page 206 CRM Technology for Pipeline Management © 2010 Education Canada Inc. 9 - * Success in selling depends on one’s ability to identify prospects, gain insight into the prospect’s needs, and develop an accurate picture of a prospect’s value “The main purpose of a salesperson is not to make sales, but to create customers.” Gerhard Gschwandtner Editor, Selling Power Prospecting – An Introduction © 2010 Education Canada Inc. 9- * © 2010 Education Canada Inc. 9- * Sources of Prospects (continued) Sales Process Models (continued) © 2010 Education Canada Inc. 9 - * CRM Technology for Pipeline Management © 2010 Education Canada Inc. 9 - * Average company loses 15%-20% of its customers every year through attrition: Customer may move to a new location outside the salesperson’s territory A firm may go out of business or merge with another company A loyal buyer may leave their position Promotion, retirement, resignation, or illness Sales are lost to competition Importance of Prospecting © 2010 Education Canada Inc. 9 - * The “Ferris Wheel” Concept © 2010 Education Canada Inc. 9 - * Loss of Customers Sources of Prospects Sources of Prospects Referrals Centres of influence, friends, and family members Directories & trade publications Trade shows & special events Telemarketing & e-mail Direct response advertising & sales letters Web sites & computerized databases Cold calling, networking, & seminars Prospecting by non-sales employees © 2010 Education Canada Inc. 9 - * The “Ferris Wheel” Concept © 2010 Education Canada Inc. 9 - * Loss of Customers Sources of Prospects Portfolio Models © 2010 Education Canada Inc. 9 - *