Chapter I: What is Prospecting?
This question is often partially explained, incorrectly explained, or confused. Three words that have multiple interpretations and synonyms; “What is Prospecting?” Is prospecting finding new business? The answer is yes. We prospect to find new customers to supplement our current customer base and afford us new business opportunities. We use a multitude of resources to identify suspects to lead us to these prospects. We examine the markets or industries where our current customer base exists to lead us to new suspects that may be their competitors or purveyors. They too may have the need for our product or services and often be willing to entertain an appointment via phone or in person. The search will also vary depending on the sales force deployment strategy. Geographic deployment strategies for example, allow for segmentation by market and vertical market in addition to city, state, or area. Industry specific deployment allows the assignment of industry or market specialists who only handle customers from a specific industry or vertical market.
An example is company XYZ Corporation, a prominent manufacturer of plastic for automobile windows that sells to Johnsons Automotive, a premier auto distributor in the area. While speaking with your customer at Johnson, the conversation leads you into a discussion about the construction of the windows. The owner at Johnson tells you about an accident that transpired at the dealership where a large window in the showroom was shattered. Knowing your company’s products, you tell him that you manufacture a window similar to the windows in the car that would not shatter and therefore would be safer in the showroom. The owner, understanding the value of your product, gives you the name of the window supplier and recommends that you contact them to offer your services. This is an example of a customer referral to a vertical market.
Is prospecting calling traces or existing active accounts? Again, the answer is yes. Current customers may have the opportunity to lead you to additional people within their organization that may have additional business for you. The introduction or referral from your existing customer makes it a “warm call” versus a “cold call.” Warm calls are received much better and allow you to use a previously established relationship to take the edge off establishing a new one. As in the previous example, a call to an existing account can lead to a referral within the same organization, a purveyor, a competitor, or a contact at another affiliated organization that can utilize your services or product.
Just think; growing up, when you wanted to meet that guy or girl at school or at the party; it was much easier to break the ice if you were introduced by a mutual friend or acquaintance. The same principle applies in business.
We are all saddled with the daily task of trying to get through the things on our To Do List and do whatever we can to avoid unnecessary interruptions. We have gatekeepers and voice mail to screen our calls and deter those pesky people that would begin by asking for a few minutes of our time, but as we know; a few minutes would turn into an in-depth conversation, followed by an attempt to set an appointment and additional calls to develop that infamous relationship that every salesperson searches for.
Networking and operating within the nucleus of your existing accounts often opens the door to a gold mine of potential leads.
Is it calling on old customers that have not been re-solicited in a long period of time? Yes, re-kindling relationships is a very lucrative source of business and is far less expensive than starting from scratch and cultivating a new business relationship. Past or old customers have a point of reference with your company. The experience, if positive, may allow you to reopen or reestablish the account to active status by fulfilling a new need, better servicing, fulfilling their past need with an improved product, or just proving that the product they may have previously changed to was not better than the product you had been offering. Many times, a customer would have come back to your company, but no one had solicited their business in a very long time. They did not feel a sense that your company valued their business or relationship. A call from an old friend is often welcome and appreciated.
Many companies spend hundreds and thousands of dollars to uncover new customers, desperately in search of that magic list of customers that has not yet been discovered by their competitors. The sobering truth is that this list does not exist. If new accounts are uncovered, the number is small, and the cost of securing a new account is five times more expensive than maintaining an existing relationship or rekindling a past relationship, that for whatever reason has been dormant for the last few years. Prior customers have an experience with your organization and many of them have had a good experience. Sales, unfortunately, has a high turnover rate and therefore relationships often fall though the cracks with the transition. Try opening the drawer where these old files are stored or looking in the computer to that area that has not been frequented due to turnover in staff or emphasis on a new direction.
Is prospecting calling existing customers? This is the fourth and final yes to our questions. Existing customers as stated earlier are the key to new customers in their organization, industry, or just within their business, or social network. Prospecting is the means to an end, the end being developing and maintaining sustained customer relationships. Most existing customers continue to work with us because they are happy or satisfied with the service we provide. What better opportunity will we ever have than to ask for someone else within their organization or within their network of contacts who they think may benefit from our services? Think about the last time you purchased a product or service from someone who took their time and gave you outstanding service. How did you feel? Most of us who experience exemplary service look forward to the opportunity to refer our family, friends or associates who may have a similar need, to the individual or company that gave us the outstanding service.
A Fortune 500 or large company often holds many opportunities for us to sell our product or services and often we stop the solicitation process with a few contacts. For example, we may do business with the accounting area of a company with great success and frequent orders or requests for our product or services. The question that often goes unasked or unanswered is, “Are there other departments or individuals within your organization that may have a need for our product or services?” Most companies have additional departments such as sales, human resources, engineering, information technology, and others that may have the same needs as our current customer. An introduction or referral from this person and an endorsement of your level of service will get you in the door and off to a positive start. This changes the cold call into a warm call and stimulates interest in what you have to say.
Another example from an instance early in my career was a presentation we prepared for a major Fortune 500 company. We worked night and day to prepare and identified over 300 contacts within the organization that had potential business for our company or who were current business contacts. We were very excited to present our findings and knowledge of the company. We bound and prepared our findings to present to the company executives. The meeting began. We explained our philosophy and selling process along with the diligence of the Account Manager assigned to their company. We had done our homework and had documented information on the account and its value.
The most sobering experience of my young career was about to unfold. At the conclusion of our presentation, we sat to allow our customer to give us feedback on our work. How well (we thought), we knew the account. To our dismay, the lead person from the organization to whom we were presenting, thanked us for our time and work, but proceeded to tell us that our hard work was a good start. Our customer went on to tell us that they had internally identified over 3,000 individuals within their organization that had the ability to do business with our company. The cold, harsh reality of the situation is that we had totally underestimated the full potential of the account and had not scratched the surface of its business opportunities and new potential customer contacts within it.
The scenario may not be exactly the same, but far too often the situation plays out in the same manner with many customer relationships. We as salespeople must ask the next question; that open-ended probing question; the one that gets the customer to open the door to additional business opportunities and contacts within their organization. Examples of these kinds of questions are:
- What prompted you / your company to look into this?
- What are your expectations/ requirements for a supplier?
- What process did you go through to determine your needs?
- How do you see this happening?
- What is it that you’d like to see accomplished?
- With whom have you had success in the past?
- What challenges has that created in the past?
- What are the best things about that process?
- What other items should we discuss?
These are a few of the kinds of questions that can be used to get the customer talking. These kinds of questions cannot be answered with a yes or no. The questions require the customer to divulge more information and elaborate on their ideas, company policies and ideals. An old adage says that the best salespeople are not the best talkers, but the best listeners. “Listen well and allow the customer to tell you what they need.” As a salesperson, it is our responsibility to identify customers with a need and tailor our product or service to fulfill that need.
The second and equally important kind of question is closed-ended. These questions allow you to confirm what a customer is telling you. These questions require a yes or a no answer. Once the customer has responded to your open-ended questions with information or opinions, you may confirm your understanding with a closed-ended question. Examples of some closed-ended questions are:
- What do you see as the next action step?
- Are you the decision maker?
- Can I call you next week to review the proposal with you?
All of these questions can be answered with a simple answer; many times yes or no or a very definitive response.
So, you ask, what is prospecting really? Prospecting is the process of utilizing all the resources available to you to find new business. That business may come from any of the above sources and a host of others. We must remain hungry sales detectives to continue to uncover new prospects and open the door to additional business.
There are many reasons salespeople come up with nothing to prospect: “Prospecting is all cold calls. Nobody likes rejection and I certainly don’t feel like it today!” The cold call label placed on prospecting deters many a great salesperson. The fear of rejection keeps many of us from realizing our true destiny. The key to overcoming this fear is to diffuse it at all costs.
Many years ago, I was given this inspirational message from a former boss who mentored and molded me as a sales professional. It was called the Truth:
80% of All Sales are Made After the Fifth Call
48% of All Salespeople Make One Call and Quit
25% of All Salespeople Call Twice and Quit
17% of All Salespeople Call Three Times and Quit
10% of All Salespeople Keep Calling
80% of All Sales are Made by 10% of All Salespeople
When you put it in these terms, it really allows you to see that spending the time in the prospecting mode will pay the dividends that we all so desperately seek. The issue is perseverance and dedication. The Truth says that the dedicated salesperson is the one that finds success.