Introduction to Business/Marketing
Prospecting for customers is the first step to real selling, and must always be a salesperson’s top priority. Customers come and go, and a salesperson must continually replace a certain percentage of existing customers who will inevitably fade away. The entire object of any prospecting must be to find sales leads that can eventually be translated into sales turnover. Effective prospecting, however, requires a systematic methodology, as well as personal self-discipline, without which, the reliance on luck, or on the w:law of averages, will only result in a great deal of wasteful time and effort.
The average salesperson, unless he is quite unusual, will always have a natural negativity toward approaching anyone new. Yet, it cannot be over-emphasized that, however good his negotiating or closing skills, he will always fail in his selling if he does not have available, a regular supply of new prospects. The salesperson must therefore overcome the inertia to talk to someone new. The essential rule is to prospect all the time, and not just when he appears to have run out of potential people on whom to call.
Identifying the target marketEdit
Long before a salesperson even goes out into the market to sell his product, he must spend what might seem to be a disproportionate amount of time, analyzing what his potential market is, so that when he starts prospecting, he is at least looking in the most likely places where those customers will be found.
A salesperson must understand his products thoroughly, and ensure that there is a match between product benefits and customer needs, failing which, there will be little point in prospecting for customers.
Where the potential market is very wide, there are significant advantages to be gained by limiting to just one or two specialized market segments, for the following reasons:
- A salesperson simply does not have the time to make everyone his customer. If he then has to decide which segment of the market to target, he must choose the easiest one to close a sales.
- There may well be some products in a salesperson’s product range that match up better to one industry or market segment than another. If he can tailor his products to secure a unique selling proposition (USP) in that particular market segment, he will not need to compete with those who do not have it.
- By focusing on a particular industry, a salesperson can gradually acquire technical knowledge of his customer’s industry, thus enabling him to develop empathy and talk on equal terms with his customers.
- Existing customers are more likely to recommend prospects to a salesperson if the salesperson has already established his credibility in the industry.
- It is far easier to target advertisement|advertisingefforts if they are concentrated in a narrow plain. Also, he can more easily meet the people who will make his best contacts by attending the annual exhibitions and functions that this industry will invariably organize.
To identify which particular market segment to aim for, a salesperson should begin by analyzing the profile of his existing customers, and secure a picture of what his "ideal customer" should look like. The profile should include their psycho-demographic characteristics, such as age, sex, their jobs, and their interests, since all will, in one way or another, control where or when they buy. If viable, the salesperson should also consider using mailshots and advertisement|advertising to evaluate his potential market.
Identifying potential customersEdit
Having decided on a specific market, the salesperson should try to limit his prospecting to remain within that market. The ideal customer (i.e. the one who buys as soon as the salesperson talks to him) is probably non-existent, but the closer a salesperson's prospect matches that ideal customer, the fewer sales objections will be placed in his way. It therefore makes sense to ensure that his prospects at least resemble the specification as accurately as they can. This means identifying the potential of a prospect at the very outset. In particular, the salesperson should know the requirements that a potential customer has set for his future, the priorities that he has decided, and in all probability, his financial resources. Failing to analyze a prospect is the main reason for a great deal of wasted prospecting time spent on a customer who should have been promptly discarded, after due research.
Preliminary research always saves time. Good prospecting is not necessarily dismissing those whose business appear to be static, but it is certainly the ability to select and concentrate one's efforts where one is more likely to secure immediate success.
Gathering information from printed materialsEdit
A salesperson should read all he can about his market, using information that is readily and freely available in libraries, reference books, trade directories, newspapers and magazines. It is vital to be well informed about the specific market and those in it. The smaller local newspapers are full of names, addresses, and occupations of many people in the community, who could use his services.
If the salesperson were cold-calling, he would need the first 15 minutes of any meeting to glean all this information, while in a newspaper it is waiting there for him to absorb before his call. If he relies solely on chance to find those who have recently acquired new appointments, new authority or increased incomes, he will merely be one of the many cold-callers with whom he has to compete. By having prior knowledge of that change, he should be there ahead of the rest.
Developing information networkEdit
The salesperson should develop a system of using other people to provide him with information which can then be usefully followed up:
- Previous business contacts: If he has previously worked for another company, he has a whole hierarchy of personnel who he can contact, most of whom will be only too ready to assist if they are aware that he is not in competition, nor detrimental, to their own business. If he is a financial advisor, he can even offer his new services to them. A salesperson should use his contacts to make other contacts, and he will certainly find this a great deal easier than making every new prospect a cold call.
- Contacts in personal life: The list of people with whom he deals through his home can be equally fruitful. From the opening moment, when he first looked at his new house, he probably may have dealt with builders, estate agents, solicitors, decorators, plumbers, removal companies, and many others, all of whom may have been pleased to do business with him, and might well be prepared to do business in return. Even if they do not follow on to do positive business, they may well pass him on to someone who will, and regardless of that possibility, they will certainly be easier to approach than someone who has not met him before. Why make it difficult for himself by talking to someone he does not know, when he has not tried talking to those who would at least recognize him. And, once he is in that new home, the list of suppliers, from the newsagent through the milkman to the grocery stores, starts all over again, from which he can use them.
- Social contact: In his social life, the salesperson will need to be systematic and professional with those he knows, not promoting his selling, but ensuring that everyone knows what he does and that they are able to trust his judgement when they are looking for the kind of advice that he has on offer. At social meetings, he must avoid talking about business even if he is actually asked to do so, but should merely confine any mention of business to the exchange of cards or telephone numbers so that he can make a professional approach later. Allowing himself to talk business at such gatherings ensure that he will:
- become unpopular for doing so;
- be doing it in the wrong environment to get his message across; and
- be unable to pursue business later in a better environment, since he has used his sales approach already.
The rule must be to restrict his selling only to those occasions when he can be sure of doing it professionally, and in his own chosen environment. Doing it whenever he finds himself at a cocktail party or a social evening, and he should not be at all surprised if he no longer finds himself on the invitation list.
- Personal observation: The salesperson should be observant when he is out and about. The information is often there for him to see in the multitude of shop fronts that lined the streets. With luck, the telephone number will also be displayed. He should take a pocket tape recorder with him in the car, and have it alongside while driving. Such recorders are inexpensive and the cost can easily be recouped by converting just one of the contacts he acquires into a sale. It is more practical than a pen and paper, and because it is easy, he will use it far more readily than any other method.
Even in the reception areas of large office blocks, the salesperson will not only be able to find a great deal of information about the companies that operate there, but he may often find a receptionist or a concierge who will only be too happy to tell all he knows about the people who work there.
Any worthwhile evaluation of a prospect will generate a great deal of information and understanding of the prospect. Whatever information is secured, the salesperson should record it even if he does not plan to follow it up immediately. The information will probably be of value later and, even if it is not, it will have cost very little to retain it. Any other method must rely on a good memory, and there are few of us who could boast to have that at their disposal.
Thinning out the prospectsEdit
While a great deal of selling effort fails because the prospect cannot be convinced of the suitability of the proposal, a still larger number of sales fail because the prospect was not really a prospect in the first place, and very little real work had been done by the salesperson to filter out the good prospect from the bad before the selling operation began.
- Does your product really meet the buyers' needs?
A salesman's product must be relevant to his prospect. If no one's requirements seem to match with what he is selling, then he is either moving in the wrong circles (not impossible), or selling the wrong product. A man without children cannot be convinced of the viability of an insurance scheme to cover the costs of child education. A hermit has no need to cover against the security of his dependants. The unfortunate truth is that many sales are attempted to prospects who could be eliminated as possibilities by a little research.
- Has your prospect the finance to buy?
The salesman must establish on the outset whether the prospects can afford to buy. He should worry later about whether he can convince them to part with it, but if they do not have the funds in the first place, he is certainly digging dead ground. The information required can generally be established very early in a sales interview through a simple trial close such as, "If I can convince you that..., would you be prepared to consider…..?'" You are not asking for a decision, and the prospect, in answering, is merely saying, "You have not convinced me yet, but if you can, I would be prepared etc..." Failing to establish this initial willingness (or ability) to invest will end up with endless discussions which earn little profit.
- Is your prospect the real decision maker?
This comes back to basic selling where it is vital to know who the decision-maker is, so as to save a great deal of time in having to redo yet another sales presentation. It is sometimes necessary to disbelieve someone who says that he is the decision maker. This applies as much to companies as to families, and it is possible that someone who does not have the authority may well be reluctant to say so, possibly to pre-screen the salesperson first, before allowing him to meet the actual decision-maker. In a household, even simple decisions are not always made by the obvious partner.
As a policy, while a salesperson should always ignore the less promising prospects until the end of the operation, he should also ensure that he retains the information on them so that it is easily available later on. It is not impossible that in a year’s time, he can make a new approach based on the possibility that by that time, either the prospect's potential, or indeed the salesperson's offer, may have changed. What may seem a poor prospect today may be one that the salesperson can well afford to spend time on at a later date. If a salesperson merely works through in a rigid format on long, unselective lists, with little regard for their comparative importance, he will find himself with inadequate time to follow up high prospect leads, simply because he is giving the hard work cases equal priority with the others.
Methods of Personal SellingEdit
- Making use of social contacts
- Using existing contacts to make others
- Cold calls
- Prospecting through telephone
A salesperson must adapt his personal lifestyle to his selling career, so that what he does outside his business life contributes to selling. He needs to cultivate friends who are influential themselves, since they are the ones who will be in the best position to help him. It helps to join the same club as the prospects, and if that means joining more clubs than he would otherwise wish to, then this is the price that he has to pay for being a salesperson. After all, if he is dealing with someone who is a member of a club, or association, then having sold to him, it is easier to sell to another member of the same association. People do tend to lean on the experience of others, and the same rules that can ruin his reputation if he sells unethically, will help him do the reverse if unbiased third parties were to vouch for his Product (business)|products and his integrity. Memberships are likely to generate good returns for the salesperson who is prepared to regard anyone he meets as a potential user of his service. Working at the social round often means "belonging" to groups.
Always sell to friends before strangersEdit
It is always easier to sell to friends than to people whom you do not know. Most people, however, are of the opinion that a salesperson should not sell to friends, since this is the quickest way of losing friends. In reality, it is bad selling that prompts this kind of remark. Assuming a salesperson's product or service is of value, it must make sense to share it with others in his social circle who, if there is something to be gained, will certainly not resent his approaching them in the first place. There are several businesses, particularly financial planning, where selling to friends represent a high proportion of turnover, and it would be difficult to imagine this particular aspect of selling, without the friendship that goes with it. The argument against it is that somehow, the salesperson is making use of people, but if the product is good, the salesperson is in fact helping his friends to make an influenced decision, based on trust, instead of the uninformed decision, he makes without it. This kind of advisory selling often enhance Interpersonal relationship|personal relationships, especially when it is mutually beneficial.
Move among the people where your business is likely to beEdit
Once a salesperson has established his own circle, he can then make his entry into their circles, and move among the people where his business is likely to be, always bearing in mind that the people who invite him may have an ulterior motive in getting him into their circles of friends. He should also have a good commercial reason for accepting the invitation, and in the end, everyone benefits from the association. A salesperson only has a limited amount of time at his disposal, and it is essential that he guides his social life into securing a range of contacts who will introduce him to the others who may be of value to him.
The place where a salesperson belongs, and where he spends his "free time" are the places where he ought to be looking for, and securing his business. After all, the potential of his social circle must be one of the reasons why he cultivates it in the first place. The basic principle when endeavoring to sell in any social circle is to have total optimism that it would not be difficult to achieve what he is planning to do. After all, there is only one alternative to trying to sell to friends, and that is trying to sell to strangers. Logic alone would tell which is the easier of the two options. Right through the selling game, the fear of rejection can be very overwhelming, but the salesperson who wins is the one who believes that there is a prospect somewhere in the environment where he is at that time, and who has the confidence to look for that prospect. This means developing his imagination so that he can swiftly recognize the indicators, showing where his customers are likely to be.
It is also essential that the social circle that a salesperson moves in is not comprised too much of like-minded people, as he will probably achieve more by moving among the wealthy and influential. During the time that he is moving among salespersons, he should not forget about the prospect names that he is able to pick up from others. Often, salespeople from another industry can be mutually useful, by providing leads and information that they are unable to make use of themselves. They will, of course, expect the same from the salesperson. In his private life, a salesperson does have many prospects whom he never even thinks of as prospects. Every retailer whom he deals with, every business that enjoys his patronage, even the local authorities to whom he pays his dues, the teachers at school where he sends his children, may all well have a use for his service, and will be more approachable as he knows and deals with them already. It may well be possible to turn the table around, so that the business is reciprocated.
Using existing contacts to make othersEdit
Referrals are special introductions from one customer or prospect to another, and give the salesperson an edge in his initial discussion. The alternative is calling everywhere cold, and that is making hard work, when hard work is not necessary. A reference that a common friend recommends a call to the prospect immediately offers a jumping-off point which starts the conversation off on a more personal basis, and connects it with a person, the prospect can relate with. It gives the salesperson an advantage over a competitor who arrives with nothing in his hand. Once the initial contact is made, the referrer becomes less important.
Referrals are the easiest way of passing on from one prospect to another. However, it is essential for the salesperson to qualify the referrals as far as is possible, and that he secures as much useful information as he can from the people who are supplying them. After all, the salesperson is going to require the information some time, and the friend who gives him the name of a new contact will probably have all the right information already at his fingertip.
Methods of getting referralsEdit
A salesperson, however, must not think that referrals will just come on its own. They will rarely be offered, unless asked for, and they are also unlikely to be refused, if asked. The easiest method of getting referrals is from the people whom the salesperson meets from day to day. A prospect may or may not offer the salesperson any business, but he can certainly suggest a friend who might use his services. If the person is already a satisfied customer, he will probably agree to the salesperson using his name to secure an introduction to a friend, backing it with the knowledge that he believes the salesperson’s offer is worth recommending. If the prospect does not buy from the salesperson, he will feel that in his apology for not doing so, he is offering the salesperson something by giving a referral. Either way, the salesperson is throwing his best chance if he fails to ask for a referral who may well buy.
Referrals need not of course, just come from existing customers, and the salesperson will need to make use of many other people. Many will inevitably be encouraged to supply information to the salesperson, if it is a two-way service, so whenever the salesperson has information which might be useful to someone else, he should make sure that it is passed on. By recommending business to someone, the salesperson has gained someone in the field who will think of him, when a similar chance occurs to return the favor. Relationships with anyone else, either in the salesperson's industry or outside of it, can prove to be of enormous value in his own prospecting for customers.
It is essential to work on the principle of referrals with everyone a salesperson meets. There should be no such thing as a "wasted" call, since every prospecting call which does not produce real business should be able to produce at least one possible prospect for tomorrow. The salesperson should make it a daily habit to always ask everyone he sees. The worst reply that he will get is a "no", and rarely will someone admit that he knows no one who might have use for the salesman's services.
When asking for referrals, the salesperson should never make it too general by saying, "Is there someone else who might be interested in my service?" This almost certainly guarantees a negative answer as the question is far too wide to secure a considered reply, and, as a result, he will get the easiest answer that his prospect can give him. However, if the salesperson is specific, and tries to channel his prospect's mind into thinking of a useful reply, he will phrase his question in a way such as:
- "Mr Burton, I am sure that we have now put your production line on a more effective footing. Is there any other engineering company within your group which you think might be able to benefit in the same way?"
- "Is there another bank manager in this housing estate who also has a family, and might have the same insurance requirements as yourself?"
With personal friends, the salesperson can even be more open in your approach, saying in effect, "I need some more business. Please can you help me with your advice?" People will react properly if they are asked in the right way, so long as the salesperson is straight enough to tell them why he is asking, and how he intends to use the information. Fail to be honest with his friends, and the next time the salesperson asks, he may find them resentful that he has used information which they were not aware was going to be used commercially. The salesperson will probably have to encourage their sympathy to produce the names of people who will be of real interest to him. By doing so, he will ensure that they do not simply supply him with two or three names of people who really do not have a need, and in so doing, they then feel that they have done him a favor. It is better that they be encouraged to give him one cast-iron referral, rather than six casual possibles. The salesperson should not forget that referrals can always be introduced independently by himself, where he knows that the two persons are well-acquainted. "As I was saying last week to Mr Maxwell, I believe you are a friend of his", establishes a link between two people, even though the link may not be as strong as a direct recommendation from one to the other. It cannot be overemphasized in selling that everything that can introduce a rapport of any kind between the salesperson and his prospect will make his presentation that much easier.
Thanking the referrersEdit
Lastly, the often neglected part of using referrals is to make use as often as the salesperson can of the contact who gave him the recommendations in the first place. He should always go back to the person who gave him the referral:
- First, the person will be pleased that the salesperson takes the time, and the rare step of thanking him for the initial information.
- Secondly, the person will be pleased that the salesperson actually acted on his advice by contacting the suggested prospect.
- Thirdly, the person may well encourage his proposal to the third party by directly contacting him himself.
- Lastly, if the person knows one good prospect, he probably knows more, and the salesperson will possibly get a further contact to pursue.
Illogical though it is, the second name might well be a better one than the first, since the person is now aware that the salesperson is prepared to follow up on his suggestions, and he might, as a result, be encouraged to think in greater depth of names that might be useful to the salesperson. The salesperson should secure no more than one or two prospect names each time, as this will give better assurance that they will be of reasonable quality.
While cold-calling may not be the most effective of selling approaches, there will be times when it is the only option available, simply because the salesperson does not have enough appointments through other methods. The object of a cold call is NOT to sell, but to prospect and to decide whether an appointment is worthwhile. The salesperson must never be led into making a sales presentation, even if requested by the prospect, as he must not blow his chance of giving a proper sales presentation.
During the initial approach, whether by telephone or otherwise, the following information must be collected as early as possible:
- Does the customer need the product?
- Can the customer afford the product?
- For companies: What is the customer's buying procedure?
- Who has the full authority to make the purchase (name and position)?
- When is the best time to meet up with the prospect?
If the answers to the first two questions are in the negative, there is no point in proceeding further. Tact must always be exercised in seeking information.
Often, it is not possible to talk to the right person in the case of companies, as the way is usually blocked by a receptionist or secretary who will try to filter the sales call. The salesperson should assert his own authority, and make anyone who blocks his way aware that he considers himself to be on an equal footing to their boss as he has some benefits to offer to the company. While being tactful, the salesperson must never make any subordinate think that they are doing him a favor by arranging an appointment; after all, it is their job to do so.
If the salesperson is unable to meet the right person, he should leave a message that he has called, indicating briefly what it is that he wishes to talk about. It is far easier for the salesperson to talk to someone who is aware that he has called previously. His message will also notify the prospect that he is persistent, and that if the prospect were to reject his second call, he can expect a third call. As a rigid rule, the salesperson should never leave his telephone number, and expect the prospect to call back.
Whether on telephone or otherwise, the salesperson should always endeavor to get his message across as quickly as possible. Statistically, if he is unable to do so within 30 seconds, he will probably never get a chance to do so at all.
Guidelines for cold-callingEdit
The following pointers must always be borne in mind to avoid the pitfalls of call-calling:
- Work to a rigid timetable: The operation must be regarded as a rigid discipline in telephone prospecting. Two hours is probably as long as any salesperson can remain enthusiastic and effective. As with any other kind of prospecting, calls should be recorded so that results can be analyzed. By making a record of where a specific approach has worked, the salesperson can make sure that he uses that approach regularly as part of his presentation.
- Ensure you know WHY you are calling: This will almost always be not to sell, nor even to elaborate on the service provided, but to get information and to make appointments.
- Do not try to sell unannounced: The salesperson should forget about trying to sell anything with a cold-call. People nowadays resent the unannounced intrusion into their premises.
- Learn from failed calls: A salesperson should regard rejection as a feedback that his selection procedure was wrong to begin with. If he regards rejection negatively, he will eventually join the ranks of those salespeople who dismisses cold-calling. Most objections are raised are usually not valid, and more than before, the salesperson needs to meet up with the prospect to find out the real reason.
- Use one call to generate another: Wherever possible, the salesperson should use the call as a method of referral to generate introduction to another.
- Robert Vicar, Prospecting for Customers, Kogan Page ISBN 0 7494 1193 7