Chapter 5. Strategic Prospecting and Preparing for Sales Dialogue

Exhibit 5.4: Information about the Selling Situation

-Type of purchase -Motivation for buying -Current supplier -Buying center members and roles -Buying process -Available budget -Competitors involved

Exhibit 5.5: Sources of Information

-Online searches -Online and print directories -Prospect Web site -Social media -Annual reports -Trade and business press -Professional organizations -Company databases -Contact with prospect

What should Meg do?

1. Contact Patrick by phone, mention the positive experience she had working with Max, and try to set up an appointment without a direct referral and e-mail from Max. 2. Contact Patrick by phone and indicate that Max had referred her to him for his office equipment needs and try to set up a meeting. 3. Wait until Max is back at work and call to see if Max would write the referral e-mail to Patrick. Once the e-mail is sent, contact Patrick by phone to set up an appointment.

5-3d. Commercial Sources

A variety of sources in print and electronic form can be very useful in prospecting. Directories offer an inexpensive, convenient means of identifying leads. Telephone books today contain a business section that lists all the community's businesses. This list is usually broken down further by business type. Manufacturers, medical facilities, pharmacies, and grocery stores, to name a few, can be easily identified by using the business pages of the phone book. Many other directories exist, such as chamber of commerce directories and trade association lists. The online versions of these directories are especially valuable, because they are updated regularly and usually have search capabilities to facilitate the identification of targeted leads. There are a growing number of companies providing a variety of lead management services, such as lists of targeted businesses or individuals with detailed contact and other information, as well as e-mail, direct mail, telephone, and Web-based marketing services to connect with the targeted leads. Examples of companies providing different types of lead management services include: InfoUSA (infousa.com), ZoomInfo (zoominfo.com), Hoovers (hoovers.com), and Marketo (marketo.com). An interesting example of using artificial intelligence to manage sales leads is presented in "Selling in Action: Sales Automation for Managing Leads."

Exhibit 5.3: Basic Information about the Prospect

About the Buyer About the Company • Buyer's name, title, and contact information • Type of business • Educational and work background • History of business • Community and organizational involvement • Number of employees • Hobbies and interests • Target market served • Communication style • Products and services offered • Key competitors • Current strategy and performance

From the Classroom to the Field: Identifying the Best Prospects

Alison Hartrum graduated from the University of Louisville in December 2011. She started her sales career as a New York Life agent selling financial and insurance products. Her success in sales for four years led to a promotion to partner with a Fortune 500 company with responsibilities for hiring, training, and developing successful agents. Alison talks about how what she learned in her sales classes has helped her become more effective at prospecting: "My sales classes taught me valuable prospecting approaches that I have been able to use in my sales career. One of the most important aspects of sales success is the ability to prospect and get in front of the best potential clients. The sale itself is always the fun part, but it is the prospecting that makes or breaks a sales career." "One of the keys to my prospecting success is forming strong relationships with individuals in the following professions: Realtor, Mortgage Broker, Property and Casualty Agent, Estate Attorney, and CPA. Clients of these professionals have needs for the financial and insurance products I sell, so I am able to receive and provide prospect referrals. " "In order to help my strategic partners determine the best prospects for me, I created an ideal customer profile and shared this with them. These professionals now focus on identifying referrals similar to my ideal customer profile. When I receive a referral, I compare the characteristics of the referral against the key aspects of my ideal customer profile. My best prospects are those most similar to my ideal customer profile. This approach directs me toward spending my selling time with the best sales prospects. Although my new partner position is a management role, I follow the same basic process by using an ideal customer profile to help determine the best prospects for my sales team and guide my recruiting efforts."

Exhibit 5.1: Prospecting Methods

Cold Canvassing Networking Company Sources Commercial Sources • Cold Calling • Centers of Influence • Company Records • Directories • Referrals • Noncompeting Salespeople • Advertising Inquiries • Lead Management Sources • Introductions • Social Media • Telephone Inquiries • Trade Shows • Seminars

5-3a. Cold Canvassing

Cold canvassing occurs when salespeople contact a sales lead unannounced with little if any information about the lead. Cold calling is the most extreme form of cold canvassing because salespeople merely "knock on doors" or make telephone calls to organizations or individuals. This is a very inefficient prospecting method. Typically, a very small percentage of cold calls produce, or lead to future sales dialogue with qualified prospects. Because there is so much rejection, many salespeople do not like to cold call sales leads. Using referrals or introductions can improve the success of cold calling. A referral is a sales lead a customer or some other influential person provides. Salespeople are often trained to ask customers and others for the names and contact information of potential prospects. Sometimes salespeople can also obtain sufficient information to qualify the lead as a good sales prospect. Additionally, salespeople can get permission to use the person's name when contacting the prospect. Social selling can be an effective way to get referrals. For example, an adviser for Guardian Life obtained 35 referrals from a client's professional network on LinkedIn. This is a much larger number of referrals than from more typical personal methods. This adviser's sales have almost doubled since engaging in social selling for prospecting.* In some cases, the person might agree to provide an introduction by writing a letter or making a phone call to introduce the salesperson to the prospect. This referral approach can work well, but ethical issues might arise, as depicted in "An Ethical Dilemma."

Selling in Action: Smart Automation for Managing Leads

Conversica (conversica.com) performed a study of how well firms responded to Web site leads. The study found that about 33 percent did not respond to these Web site inquiries and most only made one to two attempts to contact the lead. Only 2 percent of the firms could be considered top performers. The top performers provided prompt, personalized responses that mentioned the inquiry and asked for specific contact information for future follow up. Conversica offers a virtual Sales Assistant that addresses many of the problems found in their study. The Sales Assistant responds promptly to Web site inquiries, personalizes every message, and keeps making attempts until it gets in contact with the lead. The messages from the Sales Assistant ask questions to qualify the lead and try to set up a phone call from a salesperson to qualified prospects. lf successful, a salesperson is notified and provided with the phone number and time for the phone call. The salesperson speaks with the prospect and moves through the sales process. Based on experiences with 16,000 salespeople, 1000 companies, and 180 million messages, the Sales Assistant gets a 35 percent response rate, with more than 30 percent engaging with a salesperson, and 13 percent turning into priority prospects.*

5-2c. Prioritizing Sales Prospects

Even though the qualifying process has culled out the least promising sales leads, the remaining prospects do not all represent the same sales opportunity. The most productive salespeople prioritize their sales prospects to ensure that they spend most of their time on the best opportunities. One approach is to create an ideal customer profile and then analyze sales prospects by comparing them with this ideal customer profile. Those who most closely fit the profile are deemed to be the best sales prospects. Zoomlnfo created an ideal customer profile and used it as a basis for prioritizing their qualified prospects. Another example of the value from an ideal customer profile is presented in "From the Classroom to the Field: Identifying the Best Prospects." Another approach is to identify one or more criteria, evaluate sales prospects against these criteria, and either rank all of the sales prospects based on this evaluation or place the sales prospects into A, B, and C categories, with A sales prospects representing the best sales opportunities. Ricoh and USA Financial both prioritize their prospects according to the points assigned to a prospect from their scoring system—the more points, the better the prospect. At Ricoh, the telephone sales team calls the best prospects to set up an appointment with a Ricoh field salesperson. At USA Financial, the salespeople contact the highest scoring prospects directly to schedule a meeting. The net result in both situations is that their salespeople are spending their valuable time with the best sales opportunities.

5-3c. Company Sources

Many companies have resources or are engaged in activities that can help their own salespeople with strategic prospecting. Company records can be a useful source of prospects. Salespeople can review company records to identify previous customers who have not placed an order recently. Contacting previous customers to determine why they have stopped ordering could provide opportunities to win back business. Examining the purchasing behavior of existing customers can also help in identifying opportunities to sell additional products to specific customers. Advertising inquiries are potentially a good source of prospects. For example, one manufacturer's rep in the natural gas industry speaks highly of his company's advertising plan. They only advertise in trade magazines that they believe their buyers read. The salesperson's territory includes Idaho, Utah, Montana, and Wyoming. Their advertising message is simply, "If we can help you with any of your natural gas needs (e.g., flow meters, odorizers), please give us a call." These leads are then turned over to the salesperson who calls on that territory. One salesperson cannot cover territories of this size. The advertising program qualifies the prospect (with the help of the telephone) before the salesperson is sent out on the call.* The Ricoh and USA Financial examples presented earlier in this chapter represent different approaches companies are implementing to employ Web-based and e-mail marketing campaigns to identify sales leads, qualify and prioritize prospects, and help salespeople focus on the best sales opportunities. Chapman Kelly is one company that has used Web-based marketing effectively. The company redesigned its Web site to include interactive features that created a dialogue with visitors. It worked on the site's search engine optimization to get into the top five listings for healthcare audit-related terms and started a company blog. These efforts increased traffic to its Web site from 10 to 15 visits per week to 1,500-2,000, generated qualified sales prospects, and increased new business by $2 million. This Web-based marketing approach has replaced cold calling as the major source of new customers.* Many organizations today use both inbound (prospect calls the company) and outbound (salesperson contacts the prospect) telemarketing. Inbound telemarketing involves a telephone number (usually a toll-free number) that prospects or customers can call for information. Companies distribute toll-free numbers by direct mail pieces (brochures), advertising campaigns, and their outbound telemarketing program. United Insurance Agency uses both inbound and outbound telemarketing to serve their market niche of hotels across America.* They use outbound telemarketing to generate and then qualify leads for their salesforce. Qualified leads are turned over to experienced salespeople. Usually, interns do all the outbound telemarketing. Inbound telemarketing is used to resolve problems, answer questions of prospects, and take orders from existing customers. Attending conventions and trade shows presents salespeople with excellent opportunities to collect leads. Generally, the company purchases booth space and sets up a stand that clearly identifies the company and its offerings. Salespeople are available at the booth to demonstrate their products or answer questions. Potential customers walk by and are asked to fill out information cards indicating an interest in the company or one of its products. The completed information card provides leads for the salesperson. Trade shows can stimulate interest in products and provide leads. For example, bank loan officers attend home improvement trade shows and can offer the homeowner immediate credit to begin a project. Those who sign immediately may be offered a reduction in their interest rate. Firms can use seminars to generate leads and provide information to prospective customers. For example, a financial planner will set up a seminar at a local hotel to give a presentation on retirement planning, inviting prospects by direct mail, word of mouth, or advertising on local television and radio. The financial consultant discusses a technique or investing opportunities that will prepare the audience for retirement. Those present will be asked to fill out a card expressing their interest for follow-up discussions. The financial consultant hopes this free seminar will reward him or her with a few qualified prospects.

5-3. Prospecting Methods

Many different sources and methods for effective strategic prospecting have been developed for use in different selling situations. A good selling organization and successful salespeople will have a number of ongoing prospecting methods in place at any given time. The salesperson must continually evaluate prospecting methods to determine which methods are bringing in the best results. New methods must also be evaluated and tested for their effectiveness. Many popular prospecting methods are presented in Exhibit 5.1. Some of the typical prospecting methods used in the past are becoming less effective in some selling situations. A recent study found that it takes 18 or more phone calls to connect with a prospect, call back rates are less than 1 percent, and only 24 percent of sales emails are ever opened.* More buyers are actively using social media as indicated by a study reporting that 75 percent of buyers are using social media in different ways throughout their purchasing process.* As suggested by Salesforce Vice President, Wendy Johnstone: "Everyone is now connected and our customers are on multiple channels—mobile, social, and digital."* This situation has led many sales people to engage in social selling as an important element of their strategic selling process. Social selling is leveraging social media to identify, understand, engage, and network with prospects to develop relationships.* Although often combined with other prospecting methods, social selling permeates much of the strategic prospecting process for many salespeople. It has been reported that more than 70 percent are involved in social selling activities.* And, the use of social selling has produced favorable results. For example, studies indicate that 72 percent of salespeople using social selling outperformed their peers, and 90 percent of top performing salespeople focused on social selling.* More specifics about social selling are presented in the discussion of social media as a prospecting method.

An Ethical Dilemma

Meg Hagan is a sales representative for United Office Furniture. She sells all types of office furniture to professional firms. Meg has been especially successful in using referrals to get appointments with the decision makers at prospect firms. For example, she used a referral to set up a meeting with Max Pursell, managing partner at an accounting firm, and ended up making her largest sale. Max is very satisfied with the office furniture he purchased for a satellite office. During a recent Chamber of Commerce event, Meg was talking with Max, and Max told a story about a fishing trip with his friend, Patrick Bassett. Meg knows that Patrick is the managing partner at a small, but growing law firm. She recently saw in the business news that his law firm was going to open a new office in the suburbs and would announce the exact location in the next two weeks. Meg asked Max if he would be willing to refer her to Patrick and send an e-mail to Patrick introducing her. Max said he normally does not like to make referrals, but he might make an exception in her case. He said he would think about it and let her know within a week, if he would send a referral e-mail. Meg was excited and began to gather information about Patrick and his firm. After a week went by, Meg had not heard from Max, so she called his office and found out that he was on a three-week vacation in Europe. Meg knows that it is extremely important that she talk with Patrick as soon as possible to have the best chance for the office equipment at the new office location. A sale to Patrick's firm would lead to a hefty bonus for her. But, she does not have the referral approval from Max. Without the referral e-mail, Meg knows it will be harder to get a meeting with Patrick, and she will not have the favorable comments from Max about the satisfied experience he had working with her.

Introduction

Most salespeople have to spend time prospecting to generate business from new customers and to increase business with existing customers. Although some salespeople are responsible for most of the strategic prospecting process, many firms are integrating the marketing and sales function with the latest technology to generate leads, qualify and prioritize prospects, and set appointments for sales dialogue. Significant revenue increases have been achieved from effective sales and marketing alignment with the integration of various types of technology. Studies have reported promising results when sales and marketing work closely together: 36 percent fewer leads were lost, sales efforts at closing deals were improved by 67 percent, and marketing generated 209 percent more value from marketing programs.* Consider how sales and marketing teamwork using different technologies produced improved prospecting in the following company examples: -ZoomInfo implemented an account-based marketing campaign to increase sales for a product. Sales and marketing worked together to create an ideal customer profile to include the company and buyer characteristics of their best customers. Customer relationship management (CRM), marketing intelligence, and sales automation tools were used to identify prospects that met the ideal customer profile. Marketing and sales synchronized their efforts to provide personalized communication attention to these targeted prospects. This strategic prospecting approach produced a large increase in the number of high-priority prospects and led to a 30 percent increase in the customer base for their product.* -Ricoh improved prospecting by using Marketo marketing intelligence software and its Salesforce.com CRM system to integrate sales and marketing. Leads were engaged through personalized conversations offering useful information, such as white papers, case studies, and webinars. Leads were scored based on the materials viewed or downloaded. Once a certain point level was reached, the lead became a prospect and was entered into their CRM system. A telephone sales team contacted the prospects with the highest scores to see if the prospect was ready for a face-to-face meeting. lf so, an appointment was set up and the qualified prospect was turned over to a salesperson. Salespeople were able to close more sales, because they were calling on the best prospects.* -USA Financial employed integrated lead management software with its CRM system to coordinate sales and marketing prospecting. E-mail marketing campaigns were used to generate leads. Leads that responded were directed to a Web site to answer five questions. Responses to the questions were scored, and those scoring above 190 were considered qualified prospects and assigned to a salesperson. Salespeople focused on contacting the qualified prospects with the highest scores. This process generated an increase in clients of almost 20 percent.* The Zoomlnfo, Ricoh, and USA Financial examples illustrate situations where the strategic prospecting process was successful, because of effective teamwork between sales and marketing and the use of appropriate technology. However, many sales organizations give almost total responsibility for all prospecting activities to the salesperson. In between these two extremes, there are many approaches where the different strategic prospecting activities are shared between marketing and sales in various ways. The discussion in this chapter is oriented toward situations where salespeople are involved actively in all or most of the prospecting activities. Regardless of the strategic prospecting approach used by a firm, most salespeople have to cultivate new business if they are to sustain the sales growth objectives their company establishes. However, salespeople typically achieve sales growth objectives by finding the right balance between getting new customers and generating additional business from existing customers. Various prospecting approaches are available, with each having advantages and disadvantages. New technological advances are increasing the tools salespeople can use to determine the best sales opportunities. The purpose of this chapter is to examine the importance and challenges of prospecting, introduce the strategic prospecting process, present different prospecting methods, and discuss preparation for sales dialogue.

Exhibit 5.2. Personal Prospecting Log

PERSONAL PROSPECTING LOG Name ANSWER ↓ Team ANSWER ↓ Date ANSWER ↓ Organization Contact Person Source of Lead Phone Date of Appointment Outcome of Call Follow-up Activity Cummins Engine Tyler Huston Personal contact 765-444-1234 4/11 8:30 a.m. Need info on printer Send in mail Ontario Systems Darrell Beaty Referral 765-223-4117 4/19 4 p.m. Chase Alice Arnold Direct mail sent back 6/02 317-663-2214 4/16 Lunch Didn't seem impressed need more work Need more contact with Alice PACER GAME? Thomson Consumer Electronics Doug Lyon Phone 317-212-4111 4/15 3 p.m. Had bad experience with us several years ago This one will take time

5-1. The Importance and Challenges of Prospecting

Prospecting is extremely important to most salespeople. Salespeople who do not regularly prospect are operating under the assumption that the current business with existing customers will be sufficient to generate the desired level of future revenue. This is a shaky assumption in good times, but it is especially questionable in the tough business environment of recent years. As market conditions change, existing customers might buy less. Or, customers might go out of business. Some customers might be acquired by another firm, with the buying decisions now being made outside the salesperson's territory. The salesperson could also simply lose customers due to competitive activity or dissatisfaction with the product, the salesperson, or the selling firm. Because there is typically a considerable time lag between the commencement of prospecting and the conversion of prospects to customer status, salespeople should spend time prospecting on a regular basis. Otherwise, lost sales volume cannot be regained quickly enough to satisfy the large majority of sales organizations—those that are growth oriented. Despite its importance, salespeople often find it difficult to allocate enough time to prospecting. Many salespeople do not like to prospect because of their fear of rejection. Today's buyers are busy, and many are reluctant to see salespeople. Changes in buying behavior are also making prospecting more difficult. Studies indicate that more people from different functions, positions, and locations are involved in the buying process with the average number increasing from 5.4 to 6.8, with these numbers expected to increase in the future. Many buyers are completing most of their prepurchase research online and may not want to engage with a salesperson until the process is over 50 percent complete. The larger number of people involved in the buying process, the expanding number of purchasing options, and the enormous amount of available information are also making purchasing harder for some firms. This situation is one reason that 60 percent of qualified prospects do not end up making a purchasing decision as found in one study.* Therefore, salespeople must try to identify and qualify prospects sooner, and determine the members of the buying center and the stage in the buying process for these prospects to be able to have more of an impact on the purchasing decision. Salespeople can overcome the challenges of prospecting and become more effective in determining the best sales opportunities by following a strategic sales prospecting process, utilizing a variety of prospecting methods, developing a strategic prospecting plan, and preparing for sales dialogue with prospects.

Technology in Sales: Social Media and Social Selling

SAP introduced social selling in their sales organization in 2012 with the purchase of 50 Sales Navigator licenses. The company now has more than 15,000 licenses worldwide. Account executives use Sales Navigator as well as Twitter, Grapevine6, and SAP's Jam Social Collaboration tool to generate leads, identify the best prospects, and win business. Sales Navigator helps account executives identify and follow leads and listen for opportunities to identify problems buyers are having. Leads with problems SAP can solve are engaged through lnMail in Sales Navigator or a direct message on Twitter, WeChat, or Xing. The Jam Social Collaboration tool and Grapevine6 are used for sales and marketing to work together to determine the content most needed by the lead. This content is shared with the lead in the form of a video business card or video demonstration of a solution. Continued engagement identifies the best prospects for account executives to pursue as sales opportunities. This process of listening, learning, and engaging with potential buyers over social media helps to build trust and credibility early in the buying process and increases the likelihood of a sale in the future. The social selling approach used by SAP has contributed to large sales increases. The highest-performing account executives are usually the best social sellers. These results are also encouraging SAP to increase its social selling efforts around the world. The SAP social selling philosophy is the focus of training programs called "Social Selling All Hands" that are conducted on a regular basis. More attention is also being given to develop benchmarks for social selling performance and business results.*

5-3b. Networking

Salespeople can use various types of networking as effective methods for prospecting. Many salespeople join civic and professional organizations, country clubs, or fraternal organizations, and these memberships provide the opportunity for them to build relationships with other members. Sometimes these relationships yield prospects. Some members might be influential people in the community or other organizations, making them centers of influence for the salesperson and potentially providing help in locating prospects. Accountants, bankers, attorneys, teachers, business owners, politicians, and government workers are often good centers of influence. Networking with salespeople from noncompeting firms can also be a good source of prospects. Business Networking International (BNI) is a formal organization with each local group consisting of noncompeting salespeople. The basic purpose of this organization is for the members to generate prospects for each other. There are other sales and marketing organizations that salespeople can join to create the opportunity to identify prospects by networking with members. It is important for salespeople to strike up conversations with other sales representatives while waiting to see buyers. Noncompeting salespeople can be found everywhere and can help in getting valuable information about prospects. An example of how noncompeting salespeople can help each other was demonstrated when a Hershey Chocolate the United States salesperson went out of his way to tell a Hormel sales representative about a new food mart going into his territory. The Hormel representative was the first of his competitors to meet with the new food mart management team and was given valuable shelf space that his competitors could not get. A few months later, the Hormel sales representative returned the favor when he found out that an independent grocer was changing hands. The Hershey salesperson was able to get into the new owner's store early and added valuable shelf space for his products. The operating principle of "you scratch my back, and I scratch yours" works when information flows in both directions.* As presented earlier, the increasing use of social selling means that salespeople are actively involved with different media tools. LinkedIn is most often used, followed by Twitter. However, Facebook, Instagram, Snapchat, and industry-specific online communities can be effective in selling situations where prospects use them. The social media tools can help salespeople identify more leads and better prospects earlier in the buying process, and provide them with the opportunity to share valuable content in conversations with them.* Consider one suggested approach for using LinkedIn. A salesperson can identify leads from the networks of their LinkedIn connections and from the "Who's Viewed Your Profile" on their LinkedIn screen. They can then send a connection request to the lead. Once connected to the lead, the salesperson can e-mail a message with meaningful content as a way to start a conversation with the lead and to determine if the lead is a qualified prospect. If so, the salesperson can continue the conversation and try to move into the remainder of the sales process at the appropriate time. If not, the salesperson can still share relevant content, because the lead might become a qualified prospect in the future. In addition to the basic LinkedIn Product (linkedin.com), many salespeople use their Sales Navigator product. Sales Navigator (sales.linkedin.com) provides expanded and enhanced features not available in basic LinkedIn. Many salespeople have used Sales Navigator effectively, as evidenced in the example presented in "Technology in Sales: Social Media and Social Selling."

5-5c. Sources of Information

Salespeople have a variety of sources for the needed information. Examples of useful sources are presented in Exhibit 5.5. The use of social media as a valuable information source for salespeople has been increasing in recent years. Facebook, LinkedIn, and blogs are especially useful information sources. Many companies are also accumulating information about prospects and making it readily available to salespeople using the latest technology. The use of new and emerging technologies will certainly improve the availability of prospect information for salespeople in the future. Even the most thorough preparation will usually not provide salespeople with all of the desired prospect information. The additional information is typically collected through questioning the prospect during sales dialogues. The information salespeople collect about prospects prior to the first meeting and throughout the trust-based sales process should be accumulated and updated on a regular basis. Although some salespeople do this manually with paper files, the use of contact management, salesforce automation (SFA) and customer relationship management (CRM) systems is increasing. These technologies are being improved continuously and are valuable tools for salespeople.

5-5b. Information about the Selling Situation

Specific information about the selling situation is extremely valuable to salespeople. Although much of the basic information about the prospect can normally be gathered prior to meeting with a prospect, much of the information about the selling situation will be obtained from the prospect during sales dialogues. However, salespeople should try to obtain this information as soon as possible, because it is useful during each stage of the trust-based sales process. Specific types of selling situation information are presented in Exhibit 5.4. Most of this information helps the salesperson understand all aspects of the prospect's buying process and was discussed in Chapter 3, "Understanding Buyers" and is part of the Sales Dialogue Template prepared in Chapter 6. Several pharmaceutical firms are using smartphone apps so that salespeople can get the latest information about a physician's situation before a sales call. A few clicks on the app and the salesperson is alerted to any changes in the physician's patient population or prescribing habit, as well as any physician engagements with digital media. Selling situation information that cannot be obtained prior to meeting with a prospect becomes a key focus during the sales dialogue.*

5-5. Gathering Prospect Information to Prepare for Sales Dialogue

The basic objective of the strategic prospecting process is to provide salespeople with a list of prioritized sales prospects. Salespeople can then select the best opportunities and move into the next stage of the trust-based sales process, which is covered in Chapter 6, "Planning Sales Dialogues and Presentations." Some information about the prospect has been collected throughout the strategic prospecting process, but more is needed to be effective at each stage of the trust-based sales process. In many cases, the next step is for the salesperson to contact the prospect by telephone. Although the purpose of this call is usually to set up an appointment, salespeople are often able to collect additional useful information. All of the information collected prior to meeting with a prospect provides a foundation for completing the Sales Dialogue Template addressed in Chapter 6. The more information a salesperson has about a prospect, the better chance a salesperson has to make a sale. Thus, gathering relevant information is an ongoing activity throughout the trust-based sales process, but especially important prior to the initial sales dialogue with a prospect. The information needed varies depending on the product or service being sold and the specific buyer's situation. We will examine the types of basic information about the prospect and information about the selling situation. Then, sources of this information will be discussed. Assembling prospecting information before meeting with current customers to generate more business is also very important. An example from a salesperson with an electrical distribution company offers an effective approach. She accesses company records to create a gap analysis. This report indicates the products the customer is and is not buying from her firm. Her next step is to focus on the products the customer is not buying. Then, she reviews her firm's customer database to determine which of the products the customer is not buying would represent the best sales opportunities for her and selects one product to emphasize during the next meeting with the customer. This type of prospecting preparation has helped her emphasize the best sales opportunity with the customer, but also allows her to address other products if the customer indicates more interest in them.*

5-2d. Preparing for Sales Dialogue

The final step in the strategic prospecting process is to prepare for the initial contact with a sales prospect by planning the sales dialogue. The information accumulated to this point in the process is helpful, but additional information is usually required to increase the chances of success in the initial sales dialogue. The types of additional information required are discussed later in this chapter.

5-2a. Generating Sales Leads

The first step in the strategic prospecting process is to identify sales leads. Sales leads or suspects are organizations or individuals who might possibly purchase the product or service a salesperson offers. This represents the realm of sales opportunities for a salesperson. In the Ricoh example, all organizations that might need office equipment would be sales leads. USA Financial sells financial and marketing products to independent financial advisors, so sales leads would include all independent financial advisors. Although more sales leads are usually better than fewer sales leads, there are normally large differences in sales opportunities among all of the sales leads generated by salespeople. For example, larger organizations might purchase more office equipment, and larger independent financial advisor firms might buy more financial and marketing products. Thus, the larger organizations and firms would typically represent better sales opportunities than the smaller ones. If salespeople merely generate as many leads as possible and pursue most of them, they are likely to be spending a great deal of their time with sales leads that are not good sales opportunities for them.

5-2. The Strategic Prospecting Process

The first step in the trust-based sales process presented in Chapter 1 is strategic prospecting. Strategic prospecting is a process designed to identify, qualify, and prioritize sales opportunities, whether they represent potential new customers or opportunities to generate additional business from existing customers. The basic purpose of strategic prospecting is to help salespeople determine the best sales opportunities in the most efficient way. Effective strategic prospecting helps salespeople spend their valuable selling time in the most productive manner. The strategic prospecting process (illustrated in Figure 5.1) is often viewed as a sales funnel or sales pipeline because it presents the entire trust-based sales process and the strategic prospecting process in the form of a funnel. The funnel is very wide at the top, as salespeople typically have a large number of potential sales opportunities. As salespeople move through the strategic prospecting process and the other stages in the trust-based sales process, the funnel narrows because only the best sales opportunities are pursued and not all sales opportunities result in a sale or new customer relationship. For the most productive salespeople, the sales funnel is normally much wider at the bottom than the bottom of the funnel for less productive salespeople. The most productive salespeople pursue the best sales opportunities and translate a larger percentage of these opportunities into actual sales than less productive salespeople do. We will now discuss each step in the strategic prospecting process.

5-2b. Determining Sales Prospects

The most productive sales-people evaluate sales leads to determine which ones are true prospects for their product or service. This evaluation process is usually called qualifying sales leads. Salespeople search for, collect, analyze, and use various types of screening procedures to determine if the sales lead is really a good sales prospect. Although specific companies define sales prospects in different ways, a sales prospect is typically an individual or organization that: -Has a need for the product or service. -Has the budget or financial resources to purchase the product or service. -Has the authority to make the purchase decision. Those that meet these criteria move down the sales funnel (see Figure 5.1) into the sales prospect category, while those that do not are set aside. Ricoh awards points to sales leads based on the number and types of materials accessed in responses to company emails. Once a specified number of points are accumulated, the lead becomes a prospect in Salesforce.com. USA Financial e-mails each lead five key questions about the situation at their firm. Those scoring above 190 on these questions are considered qualified prospects. Interestingly, only 14 percent of the independent financial advisors responding to recent e-mails were found to be qualified prospects. Salespeople who spend the time and effort qualifying their leads limit the time wasted on making calls with a low probability of success and focus their efforts on the more fruitful opportunities.

5-4. Developing a Strategic Prospecting Plan

The most productive salespeople use a variety of prospecting methods and follow the strategic prospecting process by generating leads, qualifying them to identify true prospects, and then prioritizing these prospects so that they pursue the best sales opportunities. The use of a strategic prospecting plan can help salespeople continuously improve their prospecting effectiveness. An example of an effective strategic prospecting plan is exhibited by Northwestern Mutual (NM). Salespeople use a referred lead prospecting approach to reach weekly prospecting goals. Their tracking system indicated that prospecting goals were not being met because clients were not providing enough referrals and were often not making the promised favorable introductions to these referrals. NM addressed these issues by having salespeople use Linkedln, Facebook, or other social media to identify five to six people that the client knows and are likely to be qualified prospects. The client now selects referrals from this feeder list and gives reasons why those selected are good prospects. The salesperson also asks the client to e-mail or text each referral introducing the salesperson and providing some favorable comments, and to copy the salesperson. This new approach has generated more qualified prospects, more favorable introductions, and has led to a higher success rate in securing appointments with the referred prospects.* A strategic prospecting plan should fit the individual needs of the salesperson. As illustrated in Figure 5.2, the focal point of a prospecting plan should be the goal stating the number of qualified prospects to be generated. Formalized goals serve as guides to what is to be accomplished and help to keep a salesperson on track. The plan should also allocate an adequate and specific daily or weekly time period for prospecting. Having specific time periods set aside exclusively for prospecting helps prevent other activities from creeping in and displacing prospecting activities. A good tracking system should also be a part of the prospecting plan. A tracking system can be as low-tech as a set of 3 × 5-inch note cards or employ one of the many computerized and online contact management or customer relationship management software applications. Exhibit 5.2 shows an example of a simple, but effective, paper-and-pencil tracking form. The tracking system should record comprehensive information about the prospect, trace the prospecting methods used, and chronologically archive outcomes from any contacts with the prospect. A fourth element of the prospecting plan is a system for analyzing and evaluating the results of prospecting activities. Continuous evaluation should be employed to ensure that the salesperson is meeting prospecting goals and using the most effective prospecting methods. The fifth and final element of a prospecting plan should be a program to review and stay up-to-date on product knowledge and competitor information to emphasize and underscore that the salesperson's products and services offer the best solutions to customer needs and problems. Self-confidence is critical to success in selling, and a base of comprehensive knowledge and understanding is the key to believing in one's self. As with all phases of the sales process, salespeople must exercise judgment and set priorities in prospecting. There is a limited amount of time for prospecting, and a better understanding of the concepts and practices illustrated in this chapter can help a salesperson be more productive. An added bonus is that the sales process is more enjoyable for salespeople calling on bona fide prospects who can benefit from the salesperson's offering.

5-5a. Basic Information about the Prospect

There is usually a great deal of basic information about the prospective buyer and company that can be obtained and evaluated prior to the initial sales dialogue with a prospect. Examples of the most valuable information are presented in Exhibit 5.3. It is very important for salespeople to do their homework and obtain as much of this information as possible before meeting with a prospect. The basic information about the buyer helps the salesperson understand the buyer from a personal perspective. This knowledge will be useful in establishing rapport with the buyer, which is extremely important early in the trust-based sales process. The basic information about the company provides the salesperson with an understanding of the prospect company that will help the salesperson determine the best questions to ask during sales dialogue. Some companies are employing the latest technology to provide salespeople with useful prospect information. For example, Cintas has created a virtual office of various types of prospect information. Salespeople can access this information electronically and obtain valuable information before contacting a prospect. Prospects are typically impressed with salespeople who are prepared and know a lot about them and their company before the first meeting.*