The Ultimate Guide to Sales Prospecting
Even if your business offers a revolutionary product, without acquiring new customers your company is doomed to fail. That’s why sales representatives play a key role in building a successful brand. Not only do sales reps garner customers and investors, they also do the leg work of tracking down leads and prospects.
What is sales prospecting?
is the act of researching and pursuing potential customers for your business. In the language of marketing, a sales lead is any individual or business that has the potential of becoming a customer. A sales prospect, on the other hand, is a lead that meets specific criteria of your target customer. Many sales reps also refer to prospects as people who have already shown an interest in your product or service.
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For example, say you run a luxury interior design company. A lead would be any person or business with a need for an interior designer. A prospect would be an apartment community in your local area that is currently searching for a new upscale interior design company within your price range. Basically, a prospect is a more powerful lead that has shown greater evidence and interest in purchasing your services.
Techniques for sales prospecting
So, how can sales reps generate leads and prospects? This can be achieved through two main avenues: outbound marketing and inbound marketing. Sales reps can also employ third-party to help find suitable prospects for you. This frees up sales representatives to focus more of their time on pitching to prospects and closing sales deals.
Outbound marketing is when a sales rep pursues customers through such as email marketing, cold calling, networking, and social media. You are symbolically reaching out your hand in search of potential buyers. Inbound marketing, however, is when the customer comes to you. Inbound marketing can be achieved by having a call to action on your website where interested parties can submit their contact information. Maintaining an active blog on your website is also a great way to attract customers already interested in your field.
Photo Credit: Inbound Sales vs. Outbound Sales: How Doing Both Can Maximize Results ()
Inbound and outbound marketing efforts are most effective when backed by detailed prospect research. There are situations, or , that make prospects more likely to purchase your product or service at a given time. Some of the key that can alert a sales team to a prospect primed to make a purchase include new funding rounds, changes in management, discontinued service with a competitor or a pending IPO.
Tools and resources for sales prospecting
Prospecting can be daunting for any sales team. The following resources and can help any organization maximize efficiency and boost overall lead generation.
- – Crunchbase Pro gives users the ability to perform in-depth research on their sales prospects to ensure quality leads in addition to offering insight on the best time to make a pitch. With a digital library of and , utilizing Crunchbase Pro takes the confusion out of sales prospecting.
- – Apollo enables users to send the most effective communications to prospects with its recommended messaging and data-driven email technology.
- – Emissary offers a platform that pairs sales professionals with former executives at companies they are targeting and trying to pitch.
- – Cirrus Insight allows you to track your prospect’s collateral usage and engagement to better understand which pieces of your collateral is most influential in closing deals.
- – Hunter makes contacting prospects easy by giving you the ability to acquire email addresses from an organization in seconds in addition to listing all the people working at a company.
- – PandaDoc helps you eliminate the tedious paperwork and administrative tasks that keep you from engaging prospects and closing deals.
How to qualify sales leads
Once you have a pool of leads, it’s time to separate the from the qualified prospects. Essentially, you are categorizing who you want to devote your time to and eventually set up a meeting.
For instance, you may think that your lead, a flourishing start-up business, would make a great prospect or buyer for your office software company. However, after researching you find out this start-up is already contractually obligated and completely happy with their current office software service. This would make your lead a dead end.
It can be helpful to ask yourself this series of questions before pursuing leads. If you answer yes to the majority of questions, that means your lead is likely a prospect and should become a focus in your sales efforts.
7 great sales qualifying questions
- Is your product within your lead’s price range?
- Does your lead have a need for your product?
- Is your lead unhappy with his or her current product or service?
- Is your lead able to switch to your product at the current time or in the near future?
- Have you been speaking to a decision maker at your lead’s company?
- Has your lead shown an interest in learning more about your product?
- Has there been an established timeline in your sales pipeline?
How to build a sales pipeline
A sales pipeline is a visual representation of your sales process, from finding a lead to closing a deal. Each category of your sales pipeline can vary in time depending on your type of industry and specific prospect. However, most sales pipelines include these four stages: prospecting, meeting, proposal, and closing.
Prospecting. Prospecting is essentially the research stage of your sales pipeline. It’s the time frame when you are searching for leads, whether that’s through inbound and outbound marketing or utilizing a third-party platform. Within this initial stage, you are also categorizing your leads into dead ends or prospects using the qualifying questions.
Meeting. Now that you’ve found a prospect that fits your customer persona, you have to prepare and deliver your in person. This is the meeting stage of your sales process, and it’s important to tailor your sales pitch to suit each of your prospects. Let your prospect know why he or she should purchase your product within the first thirty seconds of your pitch. You should also set aside a time at the end of your meeting for a Q and A so your prospect has the chance to voice any questions and concerns.
Proposal. The proposal stage is when sales reps send their official offers to prospects. This proposal lists all of the terms of your sale including pricing, length of service and specific features of your product or service. If the prospect disagrees on certain terms, you can also negotiate any changes during this phase.
Closing. Of course, no sale cycle is complete until you . The closing stage is when your prospect agrees to your proposal, signs on the dotted line and officially becomes a customer. While this is the most important stage, it can also be the most difficult. To avoid a failed closing, practice active listening, clear communication, compromise and set concrete deadlines.
Nurturing your sales pipeline
With all the stages of a sales pipeline, it’s easy for sales reps to get halted or sidetracked. Set consistent deadlines throughout your sales process. Upon contacting your lead, set a date for your first meeting. You should also set deadlines for your lead in regard to deciding on your proposal. Consistently setting timelines will help build a sense of urgency and speed up the process.
Make sure you communicate with a decision maker during your prospecting phase. Speaking to a middle man or an employee who doesn’t have any real purchasing power will prolong your overall sales process. It’s especially important that you set up your pitch meeting with a key decision maker – rather than having to pitch your product multiple times to multiple employees.
Keeping communication open will also keep your sales pipeline moving. with your prospect after your sales pitch. Be prompt with answering your prospect’s questions and be flexible in creating your proposal. It’s also crucial to keep communication open during your proposal stage, which will gear your prospect towards closing. Be there for your prospect. If you feel it’s necessary to set up additional in-person meetings or phone calls, don’t hesitate to reach out.
Auditing your sales pipeline
It is easy for a sales pipeline to become congested with dead-end leads that can confuse a sales team and reduce efficiency. For this reason, it is important to conduct regular . The goals of a pipeline audit are twofold:
Remove unqualified leads.
Eliminating unqualified leads from your sales pipeline will help to ensure that your sales team does not waste time on pitching companies that ultimately will not close. By keeping the sales pipeline clean, you improve your team’s chances of closing more deals throughout the year.
Identify and reinforce positive prospecting trends.
Scheduling regular pipeline audits allows sales managers to identify trends that can help propel increases in sales. For example, a regular pipeline review can unearth trends about characteristics that make a prospect more likely to close such as level of financing, size of a company, and average budget size.
To perform an effective sales pipeline audit, establish a lead scoring or ranking system. This is a calculation that applies a certain score for prospects based on factors such as their budget, readiness to purchase and an overall need for your product or service. Specific factors and how they are weighted will vary from company to company, so be sure to identify which factors are most important to your individual sales cycle. Once you’ve completed your audit, you can use the information to set realistic sales quotas based on the updated sales pipeline.
How to set sales quotas
Setting sales quotas, or goals within a specific time frame, is a balance of optimism and realism. You want to create a goal that your sales team has to work toward but is still attainable. A recent showed that two-thirds of salespeople don’t meet their individual quotas. This is likely because sales team leaders create quotas that are often unattainable. Setting unreasonable and outlandish quotas will only lead to failure and a discouraged sales team.
For example, setting a quarterly revenue quota of $1 million to a salesperson who’s previously averaged $50,000 of net profit will set up your salesperson for failure. Instead, set realistic quotas based on past data. Review your sales revenue and activity. See how long an average sales cycle lasts and try to find the rate at which a salesperson closes a deal and makes a profit. Then build your quotas with your existing data as the foundation.
As the , you should set a variety of quotas. Create individual sales quotas for each member of your sales team in addition to a quota for your entire team. Sales quotas can vary in length of time, so having a broader annual quota made up of weekly, monthly and quarterly quotas will help achieve a more organized process for your sales staff.
Refer to these resources for guidance and inspiration on creating quotas for your sales team:
Types of sales quotas
There are three main types of sales quotas: revenue quotas, activity quotas, and volume quotas. Revenue quotas deal with the net profit or how much a salesperson makes from closing a deal and starting a contract.
Activity quotas can be general goals such as acquiring new customers, or it can also be more specific goals such as reaching a certain number of cold calls or setting up a specific number of meetings. Lastly, volume quotas refer to how many times you’ve sold your product.
In translation, a revenue quota is a money-based goal. An activity quota centers on a salesperson’s progress in his or her pipeline. On the other hand, a volume quota deals with your actual product. Some salespeople opt for combination quotas, such as revenue/volume quotas, since these areas are interlinked. You can also set cost-based quotas if you’re trying to limit in-house expenses.
From to closing a deal, achieving a single sale can be an extensive and lengthy process. Many individual components must first succeed if you want to achieve your sales quotas. However, by effectively generating leads, prioritizing qualified prospects and keeping communication open throughout your sales pipeline, you can succeed in transforming tentative leads into satisfied customers.