Stephen B. Castleberry | John F. Tanner Jr.Stephen B. Castleberry | John F. Tanner Jr.

Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

CHAPTER 6CHAPTER 6PROSPECTINPROSPECTIN

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LEARNING OBJECTIVES

• 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 social media be used?

• How can the organization’s promotional program be used in prospecting?

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LEARNING OBJECTIVES

• How can an effective lead qualification and management system aid a salesperson?

• How can a salesperson overcome a reluctance to prospect?

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PROSPECTING

• Locating potential customers for a product or service

• Finding new customers to replace those who:

• Switch to competitors

• Go bankrupt

• Move out of the territory

• Merge with noncustomers

• Decide to do without a product or service

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CHARACTERISTICS OF A GOOD PROSPECT

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EXHIBIT 6.1 - THE SALES FUNNEL

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CHARACTERISTICS OF A GOOD PROSPECT

• Existence of want or need

• Ability to pay

• Authority to buy

• Ability to pay

• Availability of resources to pay

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CHARACTERISTICS OF A GOOD PROSPECT

• Authority to buy

• Saves the salesperson time and effort

• Results in a higher percentage of closed sales

• Systems integrators: Have the authority to buy products and services on behalf of the delegating firm

• Favorable approachability

• Accessibility of leads

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CHARACTERISTICS OF A GOOD PROSPECT

• Eligibility to buy

• Determining factors

• Volume

• Geographic location• Exclusive sales territories: Particular salesperson can sell only to

certain prospects

• House accounts: Large customers that are handled exclusively by corporate executives

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CHARACTERISTICS OF A GOOD PROSPECT

• Other criteria

• Timing of the purchase

• Long-term customer potential

• Insight selling: Evaluating prospects who do not necessarily have a clear understanding of what they need but make quick decisions

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OVERVIEW OF COMMONSOURCES OF LEADS

Source How Used

Satisfied customers

Current and previous customers are contacted for additional business and leads

Endless chain Attempt to secure at least one additional lead from each person he or she interviews

Networking Using personal relationships with those who are connected and cooperative to secure leads

Center of influence

Cultivating well-known, influential people in the territory who are willing to supply lead information

Social media Using online tools like LinkedIn, Facebook, and Twitter to prospect for new customers and maintain contact with existing customers

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OVERVIEW OF COMMONSOURCES OF LEADS

Source How Used

Other Internet uses Using Web sites, e-mail, bulletin boards, forums, roundtables, and newsgroups to secure leads

Ads, direct mail,catalogs, and publicity

Using use these forms of promotional activities to generate leads

Shows, fairs, andmerchandise markets

Using trade shows, conventions, fairs, and merchandise markets for lead generation

Webinars andseminars

Using seminars and online webinars to generate leads

Lists and directories Using secondary data sources, which can be free or fee-based

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OVERVIEW OF COMMONSOURCES OF LEADS

Source How Used

Data bases and data mining

Using sophisticated data analysis software and the company’s databases to generate leads

Cold calling Trying to generate leads by calling on totally unfamiliarorganizations

Spotters Paying someone for lead information

Telemarketing Using phone and/or telemarketing staff to generate leads

Sales letters Writing personal letters to potential leads

Other sources Using noncompeting salespeople, people in his or her own firm, friends, and so on to secure information

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SATISFIED CUSTOMERS

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SATISFIED CUSTOMERS

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ENDLESS-CHAIN METHOD

• Getting one additional lead from each person interviewed

• Works best when the source is a satisfied customer and partner

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EXHIBIT 6.3 - EXAMPLE OF THE ENDLESS-CHAIN METHOD OF

PROSPECTING

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NETWORKING

• Utilization of personal relationships by connected and cooperating individuals for the purpose of achieving goals

• Establishing connections to other people and then using those networks to:

• Generate leads

• Gather information

• Generate sales

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PRACTICAL SUGGESTIONS FOR NETWORKING

• Regularly call prospects and attend social events

• Mingle at events and learn about prospect’s business and nonbusiness interests

• Follow up with new contacts on a regular basis and thank people for providing leads

6-19

PRACTICAL SUGGESTIONS FOR NETWORKING

• Send networking contact lead information and circulate business cards

• Monitor networking and join Business Network International

• Prepare to introduce yourself in social settings

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NETWORKING

• Center-of-influence method: Cultivating a relationship with well-known, influential people in the territory to get the names of leads

• Buying community: Small, informal group of people in similar positions who communicate regularly

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SOCIAL MEDIA

• Technological component of the communication and relationship building functions of a business

• Leverages the network of customers and prospects to promote value co-creation

• Approach for using social media, should involve either a push or a pull strategy

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OTHER INTERNET USES

• Using websites, e-mail, listservs, bulletin boards, forums, roundtables, and newsgroups to secure leads

• Extranets: Internet sites that are customized for specific target markets

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SHOWS, FAIRS, AND MERCHANDISE MARKETS

• Trade shows: Short, temporary exhibitions of products by manufacturers and resellers

• Trade fairs: Trade shows in Europe

• Merchandise markets: Places where suppliers have sales offices and buyers from resellers visit to purchase merchandise

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WEBINARS AND SEMINARS

• Webinars: Online seminars

• Key considerations for planning

• Appeal to a specialized market

• Invite good prospects

• Subject should have strong interest

• Go high-quality

• Be involved before, during, and after

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LISTS AND DIRECTORIES

• Secondary data sources, which can be free or fee-based

• Uniform classification for all countries in North America, when researching using secondary sources

• Standard industrial classification (SIC) code

• North America industry classification system (NAICS)

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LISTS AND DIRECTORIES

• Following can be purchased:

• Prospecting directories

• Lead-generating publications

• Mailing lists

6-27

DATABASES AND DATA MINING

• Databases: Contain information about:

• Leads

• Prospects

• Customers

• Data mining: Artificial intelligence and statistical tools

• Discovers insights hidden in the volumes of data in their databases

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COLD CALLING

• Cold canvass method: Generating leads for new business by calling on totally unfamiliar organizations

• Blitz: Call all prospective businesses in a given geographical territory on a specified day

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SPOTTERS

• Individuals provide leads for the salesperson

• Called bird dogs

• Charge fee

• Find out when someone is ready to make a purchase decision

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TELEMARKETING

• Systematic and continuous program of communicating with customers and prospects via telephone

• Outbound telemarketing: Telephones are used to generate and then qualify leads

• Inbound telemarketing: uses a telephone number that leads and customers can call for additional information

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BECOMING AN EXPERT

• Becoming recognized experts in their own field resulting in prospects seeking information from them

• Public speaking

• Speeches at industry conventions

• Luncheons and dinners hosted by prospects and industry representatives

• Writing journal articles

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WRITING A SALES LETTER

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OTHER SOURCES OF LEADS

• Personal observation

• Nonsales employees within the salesperson’s firm

• Government agencies

• Clubs

• Other salespeople

• Trade associations

• Volunteer activities

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LEAD QUALIFICATION AND MANAGEMENT SYSTEMS

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OVERCOMING A RELUCTANCE TO PROSPECT

• Reasons for reluctance

• Worrying about worst-case scenarios

• Spending too much time preparing

• Being overly concerned with looking successful

• Being fearful

• Feeling intimidated by people with prestige or power or feeling guilt at having a career in selling

• Having a compulsive need to argue, make excuses, or blame others

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OVERCOMING A RELUCTANCE TO PROSPECT

• Identify and evaluate excuses not to call

• Engage in sales training and role-playing activities

• Prospecting contacts to be made with a supporting partner or sales manager

• Set specific goals for prospecting activities, considering their economic value

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OVERCOMING A RELUCTANCE TO PROSPECT

• Stop negative self-evaluation

• Call on prospects to solve their needs

• Control your perceptions of what prospects might say

• Learn and apply relaxation and stress-reducing techniques

• Consider prospecting successes

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