7-17-1McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Prospecting – the Lifeblood of Selling

Chapter7

7-3

The Tree of Business Life: Prospecting

Guided by The Golden The Golden RuleRule, remember: People buy from those they

know and trust Prospecting is not easy unless

you focus on helping, not selling

People who trust you give referrals

Referrals take the burden of prospecting off the salesperson

Referrals are earned through integrity, trust, and characterI

T C

Ethi

cal Service

Builds

T r

u e

Relationships

TT T

T T T TT T T T

7-4

Exhibit 7.1: The Selling Process Has 10 Important Steps

10. Follow-up10. Follow-up

9. Close9. Close

8. Trial close8. Trial close

7. Meet objections7. Meet objections

6. Determine objections6. Determine objections

5. Trial close5. Trial close

4. Presentation4. Presentation

3. Approach3. Approach

2. Preapproach/planning2. Preapproach/planning

1. Prospecting1. ProspectingThe sales process is a sequential series of actions

7-5

Some Prospect, Some Do Not

Many salespeople prospect, both those selling business-to-business and those selling to consumers

Examples are:Financial services as life insuranceReal estate

7-6

Compensation for the Salesperson that Prospects is

Often: Based upon 100% commission – if you

do not sell, you do not earn

7-7

Some Prospect, Some Do Not, cont…

Many organizations do not prospect Examples are large consumer goods

firms as General Mills* and Colgate*

* products and associated images used for illustrative purposes only

7-8

Compensation for the Salesperson that Does Not Prospect:

Based upon mostly salary with a small bonus and expenses such as car and office supplies paid

If you do not sell you still get paid, but not for very long

7-9

The Prospector Has the Most Challenging Sales Career

This is the “order getter” who:Finds a leadConverts the lead into a prospectSells one day, andSells in the future too

7-10

Steps Before the Sales Presentation

Prospecting > appointment > planning

Rule of thumb40% preparation20% presentation40% follow-up

7-11

Prospecting–The Lifeblood of Selling

Prospect – qualified person Prospecting – Identifies potential

customer Lead – only know name

7-12

Prospecting–The Lifeblood of Selling

Qualified prospect is MAD Money to buy? Authority to buy? Desire to buy?

Sales Prospecting Funnel All leads and prospects must be considered

and filtered through the MAD process before they become qualified prospects

7-13

The Leaking Bucket Customer Concept

All salespeople lose X amount of sales and customers per year. This is illustrated in the Leaking Bucket Customer Concept: Customers come into the top and leave

through a hole in the bottom Service/Follow-up

7-14

Where to Find Prospects

Sources may be varied or few Persons selling different services and

goods might not use the same sources

7-15

Prospecting Methods

E-prospecting on the Web IndividualsOrganizations

Cold canvassing Endless chain – customer referral Orphaned customers Sales lead clubs

7-16

Prospecting Methods, cont…

Prospect lists-SIC Codes http://smallbusiness.dnb.com/grow/12320701-1.html http://www.thecityofsandiego.com/

Become an expert – get published Public exhibitions and demonstrations Center of influence (cooperation) Direct mail Telephone and telemarketing Observation (neighborhood) Networking

7-17

Exhibit 7.5: The Processing System Within a Telemarketing Center

7-18

Exhibit 7.6: Reports From a Telemarketing Center to Other Marketing Groups Within the

Firm

7-19

Prospecting Guidelines

Three criteria are:1.Customize to each prospect2.Concentrate on high potential customers

fruit3.Call back on no-buys

Always keep knocking on prospect’s and customer’s door to help them

7-20

Exhibit 7.7: Components of the Prospect Pool

7-21

The Referral Cycle

Obtaining referrals is a continuous process without beginning or end

Referral cycle – when and how to ask for referrals

The parallel referral saleSell the product to personObtain prospect name(s) from person

7-22

The Referral Cycle, cont…

The secret is to ask correctly during referral cycleThe preapproach contact phaseThe presentation Product delivery contact phaseService and follow-up contact phase: Customer service

7-23

Exhibit 7.8: The Referral Cycle: When to Ask for Referrals

7-24

Don’t Mistreat the Referral

Mistreatment can have a ripple effect The mistreated referral tells your

customer – you may lose both! Remember to follow the Golden Rule

7-25

Treat the Referral Like a Customer

Once you have sold the referral, and gotten more referrals, ask the new customer to contact the referring customer on her experience with the salesperson

Now you have two customers giving referrals

This can create an endless chain of referrals quickly filling your prospect pool with only customers and referrals

Now, no more cold calling

7-26

Call Reluctance Costs You Money!

Call reluctance refers to not wanting to contact a prospect or customer

For many salespeople, owning up to call reluctance is the most difficult part of combating it

Call reluctance keeps you from:Helping othersEarning what you’re worth

7-27

Call Reluctance Effects

80% of salespeople fail within the first year due to poor prospecting

40% of all sales veterans experience one or more episodes of call reluctance severe enough to derail their sales career

Call reluctant salesperson loses more than 15 new accounts per month to competitors

Call reluctance loses 10K per month in gross sales

Call reluctance costs the salesperson 10K in commissions each year

7-28

Obtaining the Sales Interview

Key factor in selling process is obtaining a sales interview

The benefits of appointment makingTelephone appointmentPersonally making the appointment

Believe in yourselfDevelop friends in the prospect’s firmCall at the right time on the right personDo not waste time waiting