Chapter 6

Prospecting:
The Lifeblood of Selling
 Learning Objectives

6-1:  Define the sales process, and list and describe its 10 steps in
the correct sequence. 
6-2: State why it is important to prospect. 
6-3: Describe the various prospecting methods. 
6-4: Ask for a referral anywhere during the referral cycle. 
6-5:  Make an appointment with a prospect or customer in
person or by telephone or by e-mail.

6-2
 The Core Principles: Prospecting

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
character
6-3
 The Selling Process Has
10 Important Steps
Our focus is on prospecting The sales process is a
sequential series of actions
1. Prospect/Customer
2. Preapproach/Planning
3. Approach
4. Presentation
5. Trial close
6. Determine objections
7. Meet objections
8. Trial close
9. Close
10. Follow-up and Service
6-4
 Prospecting

First step in the selling

process
What is a prospect:
• Qualified person or
organization that has
the potential to buy
your good or service.

6-5
©Abel Mitja/Getty Images
 Prospecting: Lifeblood of Sales

Why:
• Identifies potential
customers.
Why is prospecting
important:
• To increase sales
• To replace customers
that will be lost over
time
6-6
©Business Images/Getty Images
Why Is Prospecting Important To Business? 1

Developing new customers creates revenue

• Firms needs to sell products and services to create
revenue
• Revenue funds firm’s strategies and activities
• Cost of goods sold (i.e., the materials used to manufacture
or provide your firm’s products or services)
• Ongoing expenses in conducting business
• Pays for salaries of everyone in firm

6-7
Why Is Prospecting Important To Business? 2

“What or who generates revenue?”

• Salespeople and their activities
• Locate customers
• Develop long-term relationships with customers
• Create revenue

6-8
 Prospecting Process: The Basics 1

Lead generation: Developing a list of potential customers

• Lead: Person/firm with potential to become a customer

Qualifying a lead: Steps salesperson uses to evaluate lead

• Salesperson uses predefined criteria to determine:
• Does lead have the money to buy

• Does lead have the authority to buy

• Does the lead have the desire to buy

Sales Prospecting Funnel

• All leads and prospects must be considered and filtered through MAD
process before they become qualified prospects
6-9
 Prospecting Process: The Basics 2

Lead Qualification and Scoring:

• Lead scoring system: Grades each lead based on range
of criteria
• Helps salespeople understand which leads becomes
prospects
• Categorizes prospects into groups
• In effect, it helps prioritize the salesperson efforts

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 Prospecting: An Ongoing Process

The Leaking Bucket Customer Concept

• All salespeople lose X amount of sales and customers per year
• Customers come into the top and leave through a hole in the bottom
Prospecting is a continuous process
• Firms face customer attrition: Loss of customers over time
• U.S. attrition rate: 20%
• Europe attrition rate: 30%

Why does attrition occur:

• Competitive offerings
• Firms go out of business
• Firms may merge and require fewer suppliers or providers

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 Where to Find Prospects

Sources may be varied or few

Depends upon:
• Industry, organization, selling context and type of
customer the sources may vary
Prospecting requires a strategy based on
situation
• A skill that can be constantly improved

6-12
 Prospecting Methods Vary & Depend On
Context
Salespeople must decide upon the best 1. E-Prospecting
method to meet and attain new 2. Cold canvassing
customers
3. Endless chain – customer referral
4. Orphaned customers
5. Sales lead clubs
6. Prospect lists
7. Get published
8. Public exhibitions and
demonstrations
9. Centre of influence
10.Direct mail
11.Telephone and telemarketing
12.Observation
13.Networking
6-13
 Prospecting On the Web

Salespeople use Internet E-mail Marketing

• Purchase lists of potential customers
• Learn about potential buyers
• Emails opportunities to gauge
• Contact potential buyers interest and potential response
Social Media
• Communicate products and services
• Showcase testimonials from existing
customers
• Learn about potential customers &
their needs
Online Events
• Webinars, demonstrations, on-
demand videos
6-14
 Cold Canvass

Contacts prospects via phone, Examples:

sales, mail
• Home security
Goal: Use law of averages salesperson goes door-to-
door visiting
A certain percent will
neighborhoods
purchase
• Office supply salespeople
• Introduce themselves to
businesses each day

6-15
 Endless Chain Customer Referral

Referral: Person or organization recommended

Individual who makes recommendation believes
salesperson has valuable solution to offer others
Be cautious on your approach to collect referrals
• Ask “do you know of any other individuals/firms that
might be interested in finding out about our
product?”

6-16
 Orphaned Customers

Customers whose salesperson left company,

inactive accounts, customers who have not
purchased for a long time
Determine why customer stopped buying
• Re-establish contact
• Determine if you can help them with their goals
• Determine whether a transition/change occurred
which limited their purchasing
6-17
 Develop A Prospect List
Develop a strong understanding of Conduct research to find
current customers similar types of potential
Apply understanding to other customers
groups that meet/require similar
solutions SIC numbers
• Who are my ideal
prospects/customers Readership lists from
• What characteristics do most of publications
my existing customers share
Purchase a list from a
• What kind of organizations commercial list company
(households) or industries do
they belong to
• What changes, trends are they
encountering
6-18
 Publish Articles, Blogs, Content That
Potential Customers May Find Valuable
Goal:
• Develop credibility or perception of expertise within
potential customers
Research publications and insights
• E-books, white papers, executive summaries,
research overviews

6-19
 Exhibitions & Demonstrations

Focused on special interest gatherings

• Trade-shows, seminars, association meetings
• Provides contact with a large number of potential
buyers over a brief time
Creates opportunity for introductions and
interactions
• As prospects visit booth/display, salesperson
qualifies leads and attains contact information

6-20
 Center of Influence

Find key influencer of group, community, industry,

association
• Goal: Network with key influencer for assistance with
introductions to prospects
How:
• Become a member of civic association (Rotary/Chamber of
Commerce)
Don’t take advantage of influence or network
• Ensure you express appreciation for their assistance
• Provide value to them when opportunity exists (reciprocity)
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 Direct Mail & Telemarketing

Direct Mail Telemarketing

• Contacting large pools of • Makes outbound calls to
potential prospects potential customers

• Uses written/mailed • Often uses technology to

communication increase quantity of calls

• Tends to utilize specialists (to

make call) and then later pass
them to an account executive

• Often use memorized or very

structured script

6-22
 Teleprospecting

Distinct from telemarketing

Qualify prospect and determine if organization is
a right fit for salesperson’s products
• Involves a number of meetings/conversations
• Involves skills, such as need assessment and listening

Tends to be more of the sales process/except

over the phone

6-23
 Inside Sales

Result of firms’ need to reduce cost of sales

• More cost effective means of enabling salesperson-customer
interaction

Uses centralized sales centers vs. dispersed sales force

Involves wide array of technology
• Video conferences, online demonstrations
• Uses same skills as professional selling
• Major difference: Technology mediated communication

6-24
 Networking

Developing and leveraging contacts

Build a business network
• Associates, colleagues, customers, influencers,
friends
Utilize information of network to learn about
potential customers and their needs

6-25
 Prospecting Guidelines
No single optimal approach to
prospecting
Choose prospecting approach
based on industry and selling
situation
Customize or choose
prospecting method that fits
situation
Concentrate on high potential
customers
Always call ack on prospects
that did not uby
6-26
 Referrals Are Used in Most

Prospecting Methods
• Cold canvassing
• Endless chain customer referrals
• Orphaned customers
• Sales lead clubs
• Public exhibitions and demonstrations
• Center of influence
• Telephone
• Networking

6-27
 The Prospect Pool

Group of names gathered from various sources

Usually gathered from four main sources:
• Leads
• Referrals
• Orphans
• Your customers

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 The Referral Cycle 1

Obtaining referrals is a continuous process

without beginning or end
Referral cycle – when and how to ask for referrals
The parallel referral sale
• Sell the product to person
• Obtain prospect name(s) from person

6-29
 The Referral Cycle 2

Many salespeople hesitant to ask for referral

The secret is to ask correctly during referral cycle
• The preapproach contact phase
• The presentation
• Product delivery contact phase
• Service and follow-up contact phase: Customer
service

6-30
 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 Core Principles of
Professional Selling

6-31
 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
6-32
 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 others
• Earning what you’re worth

6-33
 Obtaining the Sales Interview

Key factor in selling process is obtaining a sales interview

The benefits of appointment making
• Telephone appointment
• Personally making the appointment
• Believe in yourself
• Develop friends in the prospect’s firm
• Call at the right time on the right person
• Do not waste time waiting

Wireless E-Mail Helps you Keep in Contact and Prospect

6-34
 Applying CRM Technology to Prospecting 1

CRM serves as a critical tool to use in prospecting :

• Collection of potential leads
• Tools to segment this pool of potential customers
• Enables scoring of prospects

6-35
 Applying CRM Technology to Prospecting 2
Lead Generation and Tracking via
Marketing Automation
• Develop automated marketing
campaign (i.e., you automate
• Trials of products and services,
direct mail, e-mail, and other
promotions
Contact Management
• CRM system combines addresses,
emails, business card information
about customer
• Allows salesperson to create a
central storage area for each
prospect’s information.

6-36
©Ariel Skelley/Blend Images LLC
 Applying CRM Technology to Prospecting 3
Lead Scoring
• Input qualifying criteria for lead scoring process
• System automatically calculate each lead’s score
• Allows sales team to prioritize efforts and resources quickly
Data Integration and Learning
• Integrate best practices for prospecting and nurturing relations
• Share learning across organization
Pipeline Management
• Number of prospects and customers in each stage of the sales process
• Helps understand potential for business in the immediate term (current customers)
and future term (prospects).
• Generates reports to understand movement of prospects through sales process
6-37
 How Is Prospecting Changing? 1

Social sales technology

• Any social interaction–enhancing technology that can be deployed by sales
professionals to generate content (e.g., blogs, microblogs, wikis) and develop
networks (e.g., social networks, online communities)

Seller’s can communicate information about company, their

products, services, and capabilities
• Websites; social media posts, such as Twitter, LinkedIn, and Facebook; blogs;
whitepapers

Buyers initiate search for product and service information

• Visit websites, join LinkedIn groups and follow perceived thought-leaders in
their industries
6-38
 How Is Prospecting Changing? 2

LinkedIn
Social networking website for
businesses and their employees
• Allows salesperson to learn about
needs of prospects and their firms
• Salespeople access comments and
posts of prospects
Used in prospecting process
• InMail, LinkedIn’s internal e-mail
system
• Used by sales representative to e-
mail any LinkedIn user without an
introduction
6-39
©Anatolii Babii/Alamy Images
 Social Listening

Use of LinkedIn and other social media

• Goal: Better understand buyers and their activities
• Means of understanding customer needs

• Monitor use of social media of new and existing

customers
• For example:
• Who is accessing information, posting comments, and
downloading documents

6-40
 Can You Answer? 1

1. What is prospecting? What are two key reasons

for salespeople to look out for prospects?

2. What are three questions to determine if an

individual or organization is a qualified prospect
(hint: use the MAD acronym)?

3. List any four of the prospecting methods a

salesperson may use.

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 Can You Answer? 2

4. What are four commonly faced situations where

a salesperson may ask for referrals?

5. What are four main sources for a salesperson to

create a prospect pool?

6. In what ways does CRM technology help in

prospecting?

7. What is social selling? What is social listening?

6-42