PROSPECTING PRODUCTIVELY – AND PROFITABILITY

If you need to find new customers to meet your business’ goals, you probably have a mental picture of the sales plan or forecast you need to guide your success. Whether you lead a company or sell/market for one, knowing the best way to convert prospects and create standard procedures is invaluable.

If you do believe there is a “right way” for your business to grow new customers, why not define your best practices just as you would for accounting or manufacturing? Here are six steps toward that objective.

1. Define your prospect’s buying process.

Determine how your prospective buyer will display interest, build desire and take steps to do business with you. Clarify your understanding of your prospect’s behavior until you have it down cold. By examining your previous successes with your best customers, a pattern will emerge.

2. Outline your company’s best way to close new customers.

>From the first time you target a prospect, exactly what happens as you >proceed to close them? When do you use direct mail, advertising, >telemarketing and face-to-face selling? Is there a best way to do this or >is it always a random act? Try to identify the three most likely sequences >that result in closing business. Once you have these scenarios down, take >some time to understand how you qualify prospects. Remember, time is >valuable and all prospects are not created equal.

3. Create definitions for your sales plan.

With this wealth of raw data, it’s time to bring structure to the picture. Define each stage of the process for your business, from your suspect, to your closed customer. Typically:

– A suspect is every company in your entire target market.

– A prospect is an identifiable decision-maker in a company.

– A qualified prospect is a decision-maker who has time, need, authority and money for your product or service.

– A developed prospect is someone to whom you send a proposal, quote or sample.

4. Determine how many new prospects you need at each step of the process.

To start, divide your average sale from a first-time buyer into your new customer sales goal. This gives you the number of first-time buyers you must land. Then decide how many prospects you need at each step. If you need to qualify 10 prospects for each buyer, then plan to do so. Similarly, if you need to contact 1,000 suspects to identify a qualified prospect, then identify enough names and dedicate the resources to do the job.

5. Understand what your prospects are worth and what you can spend to get them.

Now that you know how many new customers you need to meet your goal, decide what your prospects are worth to you.

a) Divide the number of prospects it takes to close a sale into the value of the sale. For example, if a sale is worth $1,000 and you need 10 prospects to close one sale, then a prospect generates $100 of revenue.

b) If you must spend $100 to create those 10 prospects, then each prospect costs $10.

c) By subtracting the cost of a prospect, $10, from the revenue of a prospect, $100, you have $90, the real value of a prospect.

This exercise is critical as it gives you a benchmark of what to invest in a prospect and what to expect in ret urn. You now have a budget and confidence to spend just enough to obtain your new customers.

6. Find great new customers effectively.

With financial guidelines for finding new customers in place, now choose your tactics. Pick your sales, marketing and customer service activities for each step of the way.

For example, you may want to use face-to-face sales to close business, but may choose to emphasize direct mail over telemarketing or advertising to qualify prospects. You can evaluate your activities, tools and programs based on how cost-effectively they deliver the number of prospects you need. Your choices will be easier and less risky than ever because they will be based on meeting the goals you have set.

Remember that finding customers efficiently and profitably is easier if you:

– Focus on your goal of converting prospects, not creating sales and marketing programs.

– Monitor the quality and quantity of the prospects throughout your sales process.

– Always ensure that your efforts to find new prospects pay off.