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Prospecting chapter 6 Mc. Graw-Hill/Irwin Copyright © 2011 by The Mc. Graw-Hill Companies, Inc. All rights reserved.
Some Questions Answered in this Chapter Are: • Why is prospecting important for effective selling? • Are all sales leads good prospects? What are the characteristics of a qualified prospect? • How can prospects be identified? • How can the organization’s promotional program be used in prospecting? • How can an effective lead qualification and management system aid a salesperson? • How can a salesperson overcome a reluctance to prospect? 2
“I have over 3, 000 contacts in my Linked. In network that I can contact though my friends. ” Kevin Johnson Account Executive, Pacioli 3
The Importance of Prospecting • Prospecting – process of locating potential customers for a product or service – most important activity a salesperson does 4
The Importance of Prospecting • Salespeople must find new customers to replace those that switch to competitors, go bankrupt, move out of the territory, merge with noncustomers, or decide to do without a product or service • No salesperson can ignore leads, even in a position requiring less emphasis on new contacts 5
Relationship between the Steps in the Selling Process and the Designation of the “Buyer” Exhibit 6. 1 6
Characteristics of a Good Prospect • Does a want or need exist? – Customers buy to satisfy practical needs as well as intangible needs • Does the lead have the ability to pay? – A client is not a real prospect without resources to pay for the product – Ability to pay includes both cash and credit 7
Characteristics of a Good Prospect • Does the lead have the authority to buy? – Knowing who has purchasing authority saves the salesperson time and effort and results in a higher percentage of closed sales • Can the lead be approached favorably? – Some prospects may not be accessible 8
Characteristics of a Good Prospect • Is the lead eligible to buy? – Volume – Geographic location – “House accounts” • Other criteria – Timing of the purchase – Long-term customer potential 9
Overview of Common Sources of Leads Exhibit 6. 2 10
Satisfied Customers • Current and previous customers are contacted for additional business and leads • The most effective source for leads • Keep in touch 11
Satisfied Customers • To maximize usefulness: – Make a list of potential references from among most satisfied customers – Decide how each customer can help – Ask for the names of leads and the specific type of help needed 12
Satisfied Customers • Referral events – Gatherings designed to allow current customers to introduce prospects to the salesperson, to generate leads • Selling deeper – Additional sales to satisfied customers who provide leads 13
Endless-Chain Method • Endless-chain method – sales representatives attempt to get at least one additional lead from each person they interview. – works best when the source is a satisfied customer and partner 14
Example of the Endless-Chain Method of Prospecting Exhibit 6. 3 15
Networking • Networking – establishing connections to other people and then using those networks to generate leads, gather information, generate sales, and so on 16
Practical Suggestions for Networking • Call at least two people per day and go to at least one networking event every week • Mingle at events • Learn about your prospect’s business and nonbusiness interests • Thank your contacts for leads • Follow up with your new contact on a regular basis 17
Networking • Center of influence – Sales person cultivates well-known, influential people in the territory who are willing to supply lead information – Buying community – May never buy 18
Social Media • Go to the prospect’s Web site • Go to Linked. In and search for the company and the person you want to call on • Follow the prospect on Twitter • Search for the prospect and the company on other networking sites like You. Tube and Slide. Share • Use Facebook Connect to add special features to your Web site 19
Other Internet Uses • The Internet – Salesperson uses websites, e-mail, listservs, bulletin boards, forums, roundtables, and newsgroups to secure leads – Jig. Saw , Lead. Share – Extranets – E-selling 20
Ads and Direct Mail • Ads and direct mail – Salespeople use sophisticated systems to generate inquiries from leads – Postcard pack – Bounce-back card 21
Shows, Fairs, and Merchandise Markets • Salespeople use these venues for lead generation • At many tradeshows all attendees are customers 22
Shows, Fairs, and Merchandise Markets • In some industries, almost all sales to resellers occur during markets • Timely follow-up of leads is critical if sales follow a show 23
Webinars and Seminars • Seminars and Webinars – Salespeople use both for prospects to generate leads – Appeal to a specialized market – Invite good prospects – Go high-quality – Be involved before, during, and after 24
Lists and directories • Lists and directories – Salespeople use secondary data sources, which can be free or fee-based – SICs and NAICS – Purchasing lists 25
Data Mining and CRM Systems Data mining consists of artificial intelligence and statistical tools, to discover insights hidden in the volumes of data in their databases CRM Systems 26
Cold Calling and Spotters • Cold calling – Salesperson tries to generate leads by calling on totally unfamiliar organizations – Blitz • Spotters – Salesperson pays someone for lead information – Also called bird dogs 27
Telemarketing • Telemarketing – Systematic and continuous program of communicating with customers and prospects via telephone – Outbound vs. inbound telemarketing 28
Becoming an Expert • Salespeople can prospect by becoming recognized experts in their field, resulting in prospects seeking information from them. • Public speaking, writing journal articles 29
Sales Letters • Sales letters – Salesperson writes personal letters to potential leads – Follow up with a telephone call – Include promotional items 30
Other Sources of Leads • Personal observation • Nonsales employees within the salesperson’s firm • Government agencies • Clubs • Other salespeople • Trade associations • Volunteer activities 31
Lead Qualification and Management Systems • Prequalification • Analyzing lead value • Evaluating profitability of sales resulting from lead-generating activities 32
Overcoming a Reluctance to Prospect • Reasons for reluctance – Worrying about worst-case scenarios – Being overly concerned with looking successful – Being fearful of making group presentations, appearing too pushy, losing friends or family approval, and using the phone for prospecting 33
Overcoming a Reluctance to Prospect • Identify and evaluate excuses not to call • Engage in sales training and role-playing activities • Make prospecting contacts with a supporting partner or sales manager • Set specific goals for all of your prospecting activity • Realize the economic value of most prospecting activities 34
Overcoming a Reluctance to Prospect • Stop negative self-evaluation from ruling your behavior • Remember that you are calling on prospects to solve their needs • Control your perceptions of what prospects might say about you, your company, or your products • Learn and apply relaxation and stress-reducing techniques • Recount your own prospecting successes, or those of others 35