The Power of Prospecting

This article is based on a conversation with Thomas Ray Crowel, author of Simple Selling: Common Sense That Guarantees Your Success (Success Press, 2006) and the head of three multimillion-dollar sales organizations, including property and casualty agencies, a finance company, and a franchise car wash. He can be reached at 8244 Kennedy Avenue, P.O. Box 1996, Highland, IN 46322.  Tel: 219/923-9011.  Web: www.simpleselling.net.

More sales are lost through the failure to prospect than through the failure to do any other step. The reason is simple: without prospects, there is no opportunity to sell. On the other hand, given a steady stream of prospects, even the most inept sales behaviors will sometimes result in a sale. Since prospecting is so important to sales success, here is a simple four-step program for quickly and efficiently creating a strong list of prospects.

Step #1: Understand the Difference between Suspects and Prospects

Sales professionals often confuse “suspects,” “prospects,” and “customers.” Without understanding these terms, it’s difficult to talk intelligently about prospecting.

• A suspect is an individual who might be a prospect. For example, if you’re selling raw materials and you’re given a list of executives in the chemical processing business, then you’ve got a list of suspects to work from. 

• A prospect is a potential customer. A suspect turns into a prospect after you discover that the suspect 1) has a need or desire for your offering, 2) has the money and decision-making power to purchase your offering, and 3) is willing to meet with you to discuss a transaction.

• A customer is a prospect who has purchased your offering. However, if you sell multiple offerings, that customer may also continue to be a prospect for those other offerings.

Prospecting is the process of qualifying suspects so that you’re certain they’re either prospects, in which case you move to the next stage of the sales cycle, or not prospects, in which case you forget about them.

Step #2: Use Experience and Research to Winnow Your Suspect List

Based on where your product has sold in the past, obtain a list of suspects. Such a list can come from a lead generation company, from a mailing list company, from your marketing group, from telemarketing, or (worst case scenario) from the yellow pages. 

Go through the list, name by name, and cross out all suspects whose titles are inappropriate for the kind of product you’re selling. Then use the Internet to find out more information about the suspect and the suspect’s company. You’re looking for evidence, one way or the other, that the suspect has a need for your offering, the money to buy it, and the clout to actually spend the money. Strike out all suspects who…

1. Don’t have the need or want. If the suspect does not work in a business that would typically use your offering, they’re obviously not a prospect. Similarly, if a suspect has recently purchased a similar offering from your competitor, they’re probably not going to revisit the decision any time soon.

2. Don’t have the money. If the suspect’s firm is going bankrupt, has announced spending freezes, or is showing other evidence of financial or organizational turmoil, it’s not a prospect. Exception: If your offering specifically addresses the aforementioned issues (e.g., HR services for downsizing firms), then such signs of turmoil may qualify the suspect a valid prospect.

Step #3: Set Aside Quality Time and Perform Your Initial Prospecting

Now that you’ve got a list of suspects from which the obvious nonstarters have been removed, qualify the remaining suspects:

1. Set the target. Determine how many prospects you will need in order to generate the number of sales that will fulfill your quota. For example, if you must generate 5 sales a week to make quota, and on average you typically close 1 out of 5 prospects, you will need to convert 25 suspects into prospects every week to make quota.

2. Estimate the required time. Based on your experience, estimate the amount of time it will take to convert the target number of suspects into prospects. For example, if you typically convert 1 out of 10 suspects into prospects when cold calling, and you need 25 prospects a week, you’ll need to call 250 suspects a week. If the average qualifying cold call takes 2 minutes, you’ll therefore need to spend approximately 8 hours a week making qualifying calls.

3. Create a qualifying script. Based on your experience or the experience of your peers and manager, determine a conversational way to ask, during an initial cold call, whether or not the suspect has a budget, authority to spend the budget, and a need for your offering.

4. Get yourself in a positive state. Cold calling requires that you operate at peak performance. Think of yourself as a top athlete who must win, even on days when you don’t start out feeling confident and together.

5. Find a place where you won’t be interrupted. If you’re surrounded by distractions, you’re not going to be able to focus. And remember, your goal is the number of prospects you need, not the amount of time you spend. If it takes less time, fine. If it takes more time, tough.

6. Make the cold calls. ‘Nuff said. Note: These are prospecting calls, not selling calls. Unless the suspect brings up a desire to purchase, do not go into your sales pitch. Your goal is to get a meeting with the suspect, thereby transforming the suspect into a prospect.

At the end of this process, you will have a list of prospects that will allow you to meet your quota.

Step #4: Power up Your Prospecting Process

Steps 2 and 3 describe the process of prospecting. To turn this process into “power prospecting,” you accelerate and improve the efficiency of each element within the process. Here is where improvements will have the greatest positive impact:

• Improve the quality of your initial suspect list. The more the suspect list is prequalified, the more likely you are to convert the suspects into prospects. Ideally, your marketing group, assuming you have one, should be doing as much prequalification as possible, either by purchasing high-quality, better-targeted lists or by doing the first level of winnowing themselves. Hint: The absolute best lists of suspects are referrals from existing customers.

• Improve your selling attitude. Working on your attitude and motivation will pay off big time; your effectiveness as a communicator is highly dependent on these “soft” skills. Also, there may be times of the day or week when cold calling is more productive – for both you and the suspects. Hint: Mondays are usually awful days to cold call, because suspects are catching up on what happened over the weekend.

• Improve your cold-calling skills. The more effective you are at getting the right people on the phone and finding out whether they’re qualified to be prospects, the less time you’ll need to spend doing it. As you reduce that time, you’ll be able to spend less time prospecting, or you’ll generate more prospects in the same amount of time. Experiment with different scripts. Keep a record of what works best for you. Do a mental debriefing after each call to decide what you could do better next call.

• Improve your closing rate. If you become a more effective presenter and closer, you won’t need to generate as many prospects in order to make your quota. Failing to pay attention to your ability to close is good news for your competitors, because if you don’t close yourself, your sales efforts will create the exact conditions that your competitor needs to close. Remember, a prospect is ready to buy and will buy. Make sure it’s from you.

Note: When all four improvements are made in parallel, they create a geometric increase in the number of prospects generated. This allows you to dedicate far less time to prospecting and more time to selling and closing…or more time to playing golf, if that’s how you’d rather spend the time.