Functions and Frameworks is dedicated to helping business owners innovate

Tuesday, October 2, 2012

The Sales Process | Prospecting

Most people would say - Sales is just a numbers game. A salesperson is given a sales target in a specific date range. This target is computed based on his skills and on a projected value based on a certain company standard. At the end of the day, the salesperson is measured on how he/she was able to deliver his/her sales target. We all hear this word - quota.

But how does a company measures quota? Quota in its simplest form is the value each salesperson needs to bring-in in order to fuel the company. The computation is profit generated less operational expenses. Now companies who mean business (not those fly-by-night types) knows how much they need in order to become profitable. Now having that number sets the tone of how much each sales person should bring in to the company.

The question now is that once a salesperson is given a target, how would he/she reach that goal? This post is an introduction on a structured process on how to achieve a sales target.

We achieve this by doing the 10-step sales process:

The Sales Process

Step one is PROSPECTING.

What is prospecting?

Prospecting is the first step at which the salesperson will identify and qualify individuals or businesses that have a potential to buy the salesperson's product (or services). 

This is the step where everyone looks for a lead and try to qualify them as potential prospects. Now every company has a different way of doing this but the common aspect is that companies' have a criteria they follow.

Criteria such as (for businesses):

  • Location (prime or secondary)
  • Multi-locations (how many stores they have)
  • high calibre merchants
  • good standing financial statements
  • etc
Criteria for individuals (MAD)

M - Money
A - Authority to buy
D - Desire to buy

Prospecting is essential because nothing happens without this step. One must qualify their leads in order to turn them into possible customers. These leads must meet the criteria set upon by the companies. Some would even do pre-qualification to weed out those unnecessary leads (specially if the criteria has a lot of elements in it). 

Another benefit of doing prospecting is that it helps supply new customers to the company. This in return will help fill the leaking revenue bucket of each company. Why leaking? This is based on the leaking bucket customer concept where new customers come into the top and leave through a hole in the bottom of the bucket due to several reasons. One might be dissatisfaction where the person is now persuaded by your competitors or that person no longer uses the item or the brand. 

So prospecting in a way set the tone of the new customers coming into your revenue bucket. 

So how do people obtain prospects?

These are some of the channels salespeople use to acquire prospects:

  • Web
  • Cold Canvasing
  • Endless Chain Customer Referral
  • Orphaned Customers
  • Public Exhibitions
  • Direct Mail
  • Observation
  • Networking
Lastly, what are the guidelines when doing prospecting? Here are some suggestions:

  1. Customize or choose a prospecting method that fits the specific needs of your individual firm. DO NOT copy another company's method.
  2. Concentrate on HIGH POTENTIAL customer first.
  3. Always CALL BACK on prospects that did not buy.
  4. Look for new customers
  5. Do not be limited to your present customers
Here is the presentation made by my students in De La Salle University taking Market 2 (Fundamentals of selling)