What is prospecting?
If you’re new to prospecting, getting started can be intimidating; there’s a lot of work be done to qualify prospects and craft the perfect outreach strategy before you even send your first email or make your first phone call.
What is prospecting?
Simply put: sales prospecting is the process by which salespeople perform targeted outbound activities to identify qualified leads and aim to convert them into customers.
Qualifying a prospect ensures that your chances of making a successful sale are greater; a qualified prospect is one for whom you’ve researched whether or not they are a right-fit customer for your business. Qualifying also ensures that you can tailor your messaging strategy to suit their needs.
Having a plan and most importantly, reliable data is the best place to start when prospecting. Your efforts are only as good as the information you have. Cole Information has been serving salespeople powerful lead lists for over 75 years; helping you prospect smarter.
Prospecting is both the most difficult and most important part of the sales pipeline. Outbound prospecting strategies like cold-calling have an average conversion rate of just 2%. This statistic can make it seem that cold-call prospecting just isn’t worth the hassle. While the numbers seem to suggest this is true, prospecting is still one of the most important activities salespeople perform that actively grows their pipeline. Without prospecting, leads run dry and when there are no new leads, sales stop.
Because outbound prospecting is so difficult and, frankly can be daunting when faced with rejection, it is often put on the back burner until it is absolutely necessary: leads have run out or turned cold. If you wait to start prospecting when your leads have run out, it could already be too late to keep a healthy sales pipeline, resulting in more work and more stress for you to build it back up.
In this post, we explore why you should always be prospecting and different strategies to keep your prospecting pipeline in tip-top shape.
What is the sales process?
In order to fully understand the importance of prospecting to fill your pipeline, you have to understand where prospecting falls within the sales process.
The typical sales process follows the same basic structure, roughly 5-7 steps, depending on factors like what type of product you sell and how your ideal client purchases your product. No matter your lead generation strategy, prospecting for leads usually falls at or near the top of your sales process. Once you have identified your ideal client, you can implement your prospecting strategy to get their attention. (Don’t worry, we’re going to get into how to identify your ideal buyer persona next!)
The second step in a well-structured sales process: make the first move. Ask them to the prom! They won’t know what problem you solve unless you reach out and tell them. They may not even know they have the problem you solve or they may not be experiencing the problem yet. All the more reason to put yourself in front of the potential client and explain the value you can deliver when solving their problem.
It’s important to remember that prospective clients are shopping you as much as you are shopping them. What does this mean? It means that although they may not be ready to make a purchase now, when the timing is right, they will remember you, and the problem you solve, and save themselves time by just researching one vendor versus many. In other words, when you put yourself in front of them first, they are more likely to buy from you when they are ready to make a purchase. Studies show that 35-50% of buyers purchase from the salesperson who reaches out first.
Reaching out first isn’t as simple as just making a cold phone call or sending a cold email. The method in which you choose to approach your ideal buyer depends on what product you sell, how your customer engages with the product, and the length of time they need to make a buying decision, among other factors.
The best strategy is to have a multi-channel contact strategy. Leverage phone calls, email campaigns, and social media. It can take as many as 8 attempts to reach your potential customer and studies show that most people don’t open every marketing email they receive. In fact, on average, it takes 3-4 marketing emails to elicit a response- whether they are interested or not. Having a varied approach increases your chances of reaching your target customer and if they aren’t interested, they will let you know. Roughly 50% of the people you contact won’t be your buyer persona, and that’s ok. Qualifying your leads is an important next step in the sales process and eliminates wasted efforts and resources on unqualified prospects.
The third step in the standard sales process is qualifying your leads. Qualifying your leads should be part of every sales process, regardless of what you sell. This allows you to understand what their needs are, their motivations, and any foreseeable challenges. Qualifying also helps you understand how best to nurture the relationship going forward if they aren’t ready to make a purchase, taking the prospective buyer through your funnel and keeping them warm.
Important things to consider when qualifying a prospective buyer:
- What are their needs related to your product or service?
- What are their goals?
- Who makes the buying decision?
- What is their budget?
- What is their timeframe?
- Are they working with another agent/ salesperson?
The fourth step in your sales process is to keep those leads nice and warm and nurtured. No, we don’t mean inviting them over for regular Sunday dinner, what we do mean is, to keep in contact and most importantly, offer them something educational and valuable during the nurture stage.
A good nurture-email campaign should do at least one of two things: educate or entertain. Your emails should always tell your potential client what you want them to do. Having a clear Call to Action removes the ambiguity as to the purpose of your communication. Don’t be shy here, tell your client what you want them to do!
Nurturing leads allows you to develop a relationship over time and establish your authority. A nurture-email campaign also keeps you top-of-mind on their buying journey. When the time comes to make a purchase, they will already have your name in their mouth.
Things to consider when launching an email campaign:
- Deliver something of value. This could be industry tips, a quarterly newsletter with upcoming events and special offers in their community, or a blog or podcast that delivers relevant content.
- Have a purpose but keep it focused. Each email should be focused on one topic. If part of your top-of-funnel strategy includes a downloadable PDF, reference the valuable information therein and relate your email sequence to it.
- Keep it short and concise. Don’t convolute your email with multiple announcements, you’ll confuse your audience.
- Measure. We live in a world where we have access to an abundance of data but the data is only useful if you analyze it. Regularly check the key metrics of how your emails are performing, things like open rates, click-through rates, and unsubscribes can give you insight into who your best-qualified buyers are or if you should change your strategy.
The fifth step is to present your prospective customer with your offer! Take what you’ve learned when qualifying your buyer and provide them with the best possible offer that meets their needs, their budget, and their timeframe. Be prepared to overcome objections. Usually, objections appear earlier in the sales process, allowing you to overcome objections early on in the relationship and create an offer they can’t refuse.
When propspecting and building your pipeline, it’s important to think of every interaction as an opportunity to build a relationship that may pay off in the future whether by direct sale or referral.
How to create a buyer persona.
Before you can start seeking out and reaching out you have to know who it is you’re trying to reach. Building an ideal buyer persona is essential to your prospecting success and it allows you to reach out to the right clients. By defining who your ideal buyer is, you can target their pain points and motivations and prescribe solutions to road blocks on the sales journey. While there is no set number of buyer personas an organization should have, having at least one that fits the profile of 80% of your prospective buyers is a good place to start. How many buyer personas an organization chooses to have is entirely dependent on the product or service it provides; the marketing strategy and preference. A buyer persona can change seasonally, annually or be evergreen- it’s important to evaluate your buyer persona at least once per year and revise as needed.
Next, we will give you tips on how to identify your ideal buyer.
- Identify demographic information of current clients, like; race, age, gender, marital status, education, location, income and family size. The great news is, you don’t have to necessarily ask these questions to get to know your current customers, customer data can be collected via surveys or online customer account profile forms.
- Identify the demographics of your target market. Maybe you’re launching a new product or service or want to service a new area, doing a little research beforehand about the customers you want to serve. Cole’s custom search feature makes it easy for you to select attributes that fit your ideal customer profile.
- Organize your data. Data is useless without segmenting it into a way that is useful to your sales goals. With loads of CRM software options, you can choose the platform that works best for your organization’s size and begin finding patterns and correlations in buying behaviors that you can use for your targeted prospecting campaign.
- Create buyer personas based on your findings. Segment your customers into as many groups as needed, creating a profile of the ideal buyer for each group- your buyer persona!
Example buyer persona for a real estate agent who wants to sell homes in an area with recent or upcoming retirees:
Name: Sylvia Anders
Occupation: Retired School Teacher
Education: Graduate Degree in Education
Family status: Divorced, 3 adult children
Recently retired from a career in elementary school education. She is interested in selling her home and downsizing to something within her retirement budget that will be less maintenance so she can enjoy her retirement years.
- Has had a previous bad experience with a real estate agent when trying to sell her home.
- Her current home needs structural repairs but she lacks the skill or income to complete the necessary repairs.
- Wants to sell before interest rates price her out of the housing market when she is ready to purchase.
Motivations to purchase:
- Timeliness- feels the agent is working fast to sell her home for the best price
- Clear communication with agent on next steps and hurdles
- Feels she can trust the agent to have her best interest at heart
- Spend the seast amount of overhead- will only make a purchase if she can net a certain amount from the sale.
This is just an example of one persona in this fictional agent’s market, but in reality, this agent could have numerous personas in this same market segment; married retirees, widows, etc. that all have similar but unique needs and motivations when it comes to selling their homes.
Knowing who you want to sell to will inform the type of strategy you will deploy for your prospecting journey. Next, let’s jump into ways to prospect and why it’s important to always be prospecting.
Building a prospecting strategy.
Cole Information has served B2C salespeople since the 1940’s. The way we sell to consumers today is unrecognizable from the days of broom-salesmen using a printed directory to reverse look-up homeowners. Advances in technology and communication have paved the way for a smarter way to sell; a way to reach the right homeowners at the right time.
Next we’ll explore new (and old) ways of prospecting and the advantages and disadvantages of each.
The most important thing to remember when starting a prospecting strategy is that prospects are being sold to constantly; across multiple channels and formats. You can’t open your phone or computer without someone trying to get your attention or sell you something. More often than not, this barrage of content is being tuned out unless its purpose is to deliver something valuable and relevant to the recipient.
Warm your prospective customer first
You could reach out cold, but your chances of success increase if the prospective client already has your name in mind.
Once you’ve segmented your market and have a profile for who it is you want to target, meet them where they already are.
A good start to any prospecting strategy is to warm your prospect by connecting with them on social media, whether directly or indirectly through facebook groups. Sponsoring an event in the community is a great way to get your name out there and put yourself in front of your target audience. This strategy works for a variety of different industries; and products and services.
Building credibility as a resource and authority in your industry and market lessens the coldness of a cold call or email. The client already knows you from the playground review you wrote or the community events newsletter you mailed!
Deliver something relevant and valuable
Whether your initial contact involves an informative newsletter, podcast episode, or direct mailer- you should deliver something of value to your prospective customer; some kind of nugget of free information they find both valuable and that asserts your authority as an expert.
A case study or testimonial about a recent client whose problem you solved is a verifiable use of authority that serves as a way to show authenticity and credibility. Don’t forget; the purpose of the interaction is to deliver something they find valuable but you also want to capture their attention for what could lead to a sale- in order for that to happen, you need to give them a clear call to action. Don’t make it confusing- state plainly and confidently how they can purchase from you. Make it easy.
Find the best channel for prospecting
There’s no one right way to prospect. There are ways that work more effectively than others, however. Depending on the product or service, being too narrowly focused on one specific channel could mean missing out on an entire market segment. The key is to research and meet your prospective customers where they already are; Instagram, LinkedIn, their inbox, or their front door; find the best strategy for the market segment and stick to it.
Don’t forget the power of a phone call when prospecting
Ah, the tried and tested cold phone call. Hopefully, it isn’t completely chilled to the core because you have already warmed your target audience and gotten them familiar with the problem you solve and your authority in the industry. Studies show that it takes on average 6 phone calls to turn a lead into a customer and only about 20% turn into an actual sale. So, is it even worth it? If your strategy is to make cold calls in large quantities, then yes, it is absolutely worth it. Successful cold calling takes persistence and practice in overcoming objections. Starting with a good script can help with the initial prospecting jitters and over time, you can find a groove that works for your personality and comfort.
Timing is everything when it comes to cold calling
When you call is as important as why you’re calling. The person you are calling may want the product or service you have to offer but if you’re reaching out during their morning standup meeting or baby’s naptime, you won’t be well-received. Studies show that the best time to reach out is later in the morning hours or early evening; close to the end of the world day but before dinner time. As always, if it’s a bad time- ask when would be a better time! Or, better yet, schedule the call! With so many people working remotely or balancing remote work and childcare, showing that you understand that right now might not be the best time but getting something on the calendar gets your foot in the door and a commitment to connecting when it’s more convenient.
Referrals are EVERYTHING
Referrals really are everything. After you’ve converted your lead into a buyer, the relationship doesn’t end there. Referral business keeps your pipeline healthy and can help shorten the amount of time spent warming a lead and establishing credibility and authority. On top of that, people are more likely to buy from someone a trusted friend, colleague, or family member has worked with, rather than having to do their own research.
Keep relationships warm, even after a sale.
Remember how we said referrals are everything? Well, so is repeat business. In fact, studies show that 65% of business comes from repeat customers. Customer retention, loyalty, and rewards programs- are all strategies around how to generate repeat business. A lot of the same strategies that work to warm new leads will also be valuable to current customers. Things like, newsletters, announcements, special offers, surveys, and personal emails keep your customers engaged and keep you top of mind. Periodic check-ins on how the product or service is continuing to serve them are a great way to re-engage and deliver an above-and-beyond customer experience long after the sale.
Does prospecting really work?
In short: prospecting only works as hard as you do. Every prospect is an opportunity to sell: so the more people you reach, the more people you will convert.
Some things to consider to prospect smarter:
- It’s essential to find a strategy that works for your product or service and for your ideal clients.
- Prospecting is not one-size-fits-all. You should find the channel that works best for your industry and meets your clients where they already are.
- Knowing when to adjust your strategy or when to stick with the plan and be patient is crucial.
- Setting and analyzing key performance indicators like; the number of hours spent prospecting per week, conversion rate, rejection rate, unsubscribe rate, and the number of attempts to contact are among some of the many KPIs you should analyze to measure the success of your prospecting efforts.
Conclusion: Why it’s important to always be prospecting.
Keeping a healthy prospecting pipeline won’t ensure that people will be beating down your door to buy from you. What it will do is ensure you always have someone to sell to. Whether someone is ready to purchase now, six months, or 5 years from now; when your name is already top-of-mind as an industry expert and authority, you’ve removed some of the work they need to do and made it easy for them to buy from you.