When you want to paint a picture, you have to start with a blank page. Just like that, when you want to make a sale, you have to start with a list of cold calls or a list of target customers who are blank to you.
What is Sales Prospecting?
If you have a database of 100 people, you won’t know in advance which amongst them is most interested in your products, who is going to ignore you completely, and who is going to give a luke warm response. The act of finding out potential leads from a neutral database is known as Sales Prospecting. Reaching out to people to find out which amongst them can be a potential customer is another definition of Sales prospecting.
Sales prospecting might be outbound or inbound in nature. When you are doing outbound sales prospecting, you will be contacting many customers through cold calling and pitching them about your product. You might be attending trade events or other such promotional events to promote your products. There, you might collect a number of visiting cards. These visiting cards are your prospects. You have collected a handful of potential prospects from an event full of people.
On the other hand is inbound marketing, wherein Email marketing or Social media marketing or website marketing plays a role. Even telemarketing used to play a major role in inbound marketing but has slowed down in recent years. In inbound marketing, the customer drops his email id or contact information on the website or on social media. You might receive 100’s of email subscriptions per month. Now, you have to do sales prospecting to find out which one amongst the many email subscribers received is a potential customer.
A famous concept of sales and selling is building the sales pipeline. Prospecting is a crucial function of the sales pipeline and covers multiple layers of the pipeline. A sales prospect is generally categorised in three ways.
The three kinds of prospects in sales prospecting
- Cold prospect – These are prospects whom you have contact but they are not interested in your product
- Warm prospect – These are prospects whom you have contacted and they had a lukewarm response to your product or services. Such prospects might not have a current need of the product and might have to be pushed with a discount or will have to be contacted later on a specified date.
- Hot prospect – This is a prospect whom you contacted and who is immediately interested in purchasing your product or service.
Overall, an efficient sales person will spend maximum of his time in sales prospecting. Sales is not an easy job and the sales person knows that he will not close a sale the moment he comes in contact with the customer. In fact, several customers might take months before arriving at a decision. So it is the sales executives job to stay in touch with the prospect till the time he gets converted from a warm prospect to a hot prospect and finally to a customer.
During sales prospecting, the sales executive also needs to have some tricks up his sleeves to push customers who have a warm response. He can offer a discount to such customer or follow up vigorously and create some excitement so that the prospect actually gets interested in the product and purchases it.
Importance of Sales Prospecting
Prospecting ensures that the bottom level of your sales pipeline is always full. Because prospecting involves continously contacting new leads for sales and converting them into the three types of prospects mentioned above, the process of prospecting ensures that you are never short of warm or hot prospects to add in the sales pipeline.
The longer you keep prospecting, the longer will be the sales pipeline and hence the better will be the sales revenue. Hence you will notice, businesses which have been existing since a decade don’t do prospecting any more or don’t invest much in new customers. This is because they invested quite well in their hay days and that effort pays off in the long run. Once a steady stream of customers starts flowing in, you only need to take care of the referrals and then the cycle continues.
This does not mean that if your business is good, you stop prospecting. In fact, the crux of a growing business and the secret to keep it growing is continous Sales prospecting. This saves the business even during dire times such as recession solely because the business has such a huge customer base.
Another reason which justifies the importance of Sales prospecting is that it increases the productivity of sales executives and managers. An executive who is blank and does not know his prospects is probably shooting out in the dark and he will never be able to forecast the right sales figures. As a result, his sales figures will probably be poor and off the mark too.
A manager or executive who spends his time on prospecting, knows which of his clients are likely to close and he spends his time only on those clients, thereby using his time much more productively. This changes the overall performance aspect of sales professionals as well. Hence, many companies invest in the art of sales prospecting to improve the performance of their employees during prospecting.
Also Read Steps in Prospecting
Do you take part in Sales prospecting? And how do you prospect for leads?