What Is Prospecting?
Prospecting also called sales prospecting is a marketing concept that involves finding new (potential) customers, making contact with them with the aim to make them qualified customers, and making sales.
In short, prospecting is the process of searching, evaluating, and qualifying prospective customers.
Prospecting is the first essential step of the sales or selling process. The better the prospecting is done the better (more) the sales will be generated.
Sales prospecting is all about discovering potential customers and nurturing them to make sales of goods and services. It is the prime responsibility of the salesperson to convert the prospects into customers.
Prospects are the potential or expected buyers. The expected buyers may be individuals or organizations. In the process of prospecting the prospector (salesperson) may meet different expected buyers.
All the expected buyers may not be turned out to be the customers. Some may not have the capacity to buy and some may not require the product or service the salesman is trying to sell.
That is why it is found that in the selling process sales prospecting is the most difficult task for the salespeople, but with the difficulty, if done effectively it brings more sales conversions and profit.
Sources of Prospects
Since finding customers is the first, foremost, and most essential task of the salespeople, from where do they get new customers?
Salespeople survive and thrive in the market, only if they succeed in regularly converting prospects into customers as well as making prospects repeat customers. Salespeople can use these sources to get potential customers.
- Referrals
- Business related articles in newspapers
- Trade journals
- Civic meetings
- Coctail parties
- Diferent promotional measures.
In addition to the above sources of prospects, a prospector may use cold calling, email, messaging, etc. These are the basic sources the prospectors can obtain plenty of relevant knowledge about the prospective buyers/customers.
To get the relevant information of the prospects, prospectors must have to show their enthusiasm for the sources. Only actively involved salespeople will succeed in finding prospects and converting them into customers.
And, it is also true that all the prospective buyers may not be true customers. Similarly, some may purchase right after the prospecting is done and some may not.
Objectives of Prospecting
In this today’s world, only salespeople are not finding new customers but also customers are searching for new vendors, sellers. In fact, today’s customers are also doing prospecting of their own.
The major objectives of sales prospecting may be mentioned as below,
To Find New Customers. In today’s global competition, salespersons can not survive on limited customers. Therefore, they always try to find new customers either for their existing products or the new ones.
Salespersons task is not limited only to finding new customers but also retaining them. As today’s market has numerous products and salespersons the chances of switching customers is very high. Thus, it is necessary to find new customers as some of the previous customers may not retain and make efforts to retain the previous customers.
To Fill Customers Gap. It is fact that successful selling depends highly on attracting an increasing number of new customers for goods and services. The larger the number of customers, the greater amount of salespeople suffering from high customer turnover, they gain new customers only to lose some of them.
Filling customers’ gaps are just like the act of adding water to a spilling pot. Therefore, prospecting should be a continuous effort so the salespersons can fill the gap of the lost customers.
To Multiply/Retain Sales. There is no doubt that sales prospecting can not multiply the sales. The individual or organization that involves continuously in sales prospecting activities increases their sales either in terms of amount or quantity.
However, if they fail to increase a large number of potential customers but succeed only in reaching the number of lost customers they can maintain the current sales.
To Constitutes Long Term Relationships for Future Potentials. It also serves the objective of future sales potential through established relationships during interactions with prospects while applying different prospecting methods.
To Assist Promotion Activities. While prospecting, the sales organization unit also does personal promotional activities but in the case of most of the retailing, advertising is widely used. In this way, prospecting assist promotion activities.
Process of Prospecting
Most of the sales leaders follow the term “Effective Sales Prospecting”. They say effective sales prospecting is key to making full your sales pipeline and closing more deals.
The salespeople who give top priority to finding better prospects are likely to achieve larger customers, close more sales, and reach their revenue goals.
Whereas, the inability of the salesperson (prospector) to make qualified leads is the main reason for not achieving sales objectives and revenue goals.
So, how to make the sales prospecting process result driving that best works? Here, we will discuss the three major steps for it, the steps are,
1. Search Prospects
The first step in the sales prospecting process is searching for prospective buyers. A salesman can search for prospects based on his sales goals, and the nature of the idea, product, or services he wants to sell.
We already mentioned sources of prospects, the above-mentioned sources are great ways to find expected buyers.
As salespeople are involved in searching for prospects, the customers are also involved in their own. Though the customers are engaged in their own prospecting they do not mind engaging with the seller.
Almost 91% of the prospects are willing to engage with the seller in the early stage of their buying. 50% of the buyers choose the seller who first reaches them to make an offer. Similarly, more than 85% of the customers are ready to go on a sales meeting with the seller who first reaches out to them.
This study showed that customers are also highly engaged in finding their own interests in products. Such types of customers are a blessing for the prospector when he meets with them in his prospecting journey.
In this step, the prospector may also use phone calls, messaging, and emailing to find more future customers. The more prospects the seller gets in his searching journey with the same interest of his, the more successful journey he will get in the end.
2. Evaluate Prospects
Evaluating prospects means comparing the prospects with your objectives of yours. Do the prospective buyers meet the criteria you have set for qualified prospects?
In the sales prospecting process, after searching the prospects, make the profile of the customers and evaluate them in terms of your sales objectives. Such as answering questions too,
- Do my product meets the pain points of prospects?
- Do the prospects have a budget to buy my products?
- Would the found prospects help to reach my sales and revenue goals?
- Will the quality of my product/service meets the expectations of the prospects?
These questions are not all while evaluating prospects, rather with the person to person and sales objectives it must be different.
3. Qualify Prospects
The last step in the sales prospecting process is qualifying prospects? So, what does mean qualifying the prospects?
Qualifying prospects means nailing (deciding) whether an engagement with the prospects is worth the time, cost, and effort that will cost converting them into real customers.
Let’s suppose, you have a list of 6 people, and 4 of them will never buy from you. Would not you want to know before making contact with them? When you know that, it is easier to give more attention to only 2 quality customers. You will be able to give all the necessary information to them and all of your efforts worth it.
All the prospects may not be qualified prospects. So it is necessary to identify prospects as, which one is good and which one is not? The good prospects can be identified with the following points,
- Good prospects have real need of products & services.
- Good prospects have the ability and right to buy products.
- Good prospects follow a favorable approach in the buying journey.
- Good prospects have eligibility to buy, etc.
After qualifying prospects, the seller’s task is to move into the further step of the sales process.
Why Prospecting is Important?
As the 20/80 rule says if 20% of the work is done effectively the rest 80% of work will be automatically done.
Sales prospecting is also making the sales process generate expected results when it is done in an effective way as it is the first step in the selling process.
Suppose, you as a salesperson going to talk to a random guy. You are talking to him but he is looking somewhere. You are continuously introducing your offer but he is clearly not listening. After the conversation is finished, you will feel like you have successfully wasted your effort and time.
This is the condition of the salespeople without sales prospecting.
I think by reading this example you have understood the importance of sales prospecting.
In addition… The research shows the importance of prospecting as follows,
- Almost 82% of the buyers accept the meeting with the seller who proactively reaches out to them.
- The top performers in sales prospecting generate almost 3x times more sales meetings than those who do not perform well at prospecting.
- About 71% of people are interested in the seller’s offers and want to hear the offer of the seller prior to their buying journey.
Before visiting prospective customers, identifying and knowing prospective customers prior to meeting them is an important task in selling as well as marketing. Thus, effective sales prospecting is necessary to get positive responses from the prospects and make more deals.
Also Reads,
- Pre-Approach: The 2nd Step of Selling Process (Made Easy)
- Approach: The 3rd Step of Selling Process (Made Easy)
- Sales Presentation: 4rth Step of The Selling Process (Explained)
- Handling Objection: 5th Step of The Selling Process (Made Easy)
- Closing A Sale: Definition, Importance, and Techniques
- What is Follow Up? Definition, Importance, Methods, and Mistakes