A Primer on Prospecting
By Keith Mintzer, Managing Partner, TSRI
Although many companies continue to hold their breath, and hope that the economic pinch of the downtrend economy will turn about, others are running out of air. Sales teams have encountered numerous obstacles in their efforts to close deals, including:
- Lower budgets,
- Postponed upgrades, and
- Competitors who appear to be “giving it away.”
Facing flat or declining revenues, no pipeline and no realistic plan to build incremental sales for the organization, some turn to unproven gimmicks or resort to other extreme options that also fail to yield results. However, others are starting to retrace their roots to a proven and established practice that, for many, has been long forgotten…prospecting.
I still vividly recall the first time I mentioned the word “prospect” when advising a large hardware manufacturer. “Prospect?” the vice president of sales blurted, “That’s nothing more than two 4-letter words thrust together…no salesperson worth their salt would do it.”
Now, you might share the thoughts about prospecting (although I have to admit it was the first time I heard it called “two 4-letter words”). I’ve heard it from sales professionals of every level. “Prospecting doesn’t work…it’s a waste of time…my salespeople’s time is too valuable to spend making cold calls.” And, to some extent, they are correct. When a poorly constructed prospecting campaign is put together without thorough planning and execution, they can, and most often do, fail. The dot.com boom of the late 1990s led many people into the false security, thinking they were a qualified high tech salesperson, when in actuality, they were nothing more than glorified (and overpaid) order takers. But now that the sales opportunities aren’t knocking at your door, companies are finding that “what’s old is new again.”
With proper preparation and a solid understanding of the five stages for designing and launching a prospecting campaign, it can be the best and most cost effective resource for your team. Having built sales organizations from scratch (such as GBC Technologies) as well as having turned around sales in poor-performing organizations, I have come to uncover the stages that are essential to creating a campaign that delivers incremental business.
Most commonly referred to today as Demand Generation, the objective of an effective campaign is to pre-qualify interest and opportunity for immediate or long-term sales into an organization. This is NOT telemarketing, but telesales. Telemarketing involves reading from scripts and talking “at” a person on the phone. Telesales differs in that there is a meaningful discussion with the contact, their needs are assessed, and an appropriate call-to-action is presented that yields a future face-to-face meeting with the sales team.
We have witnessed an exponential growth to our demand generation business in the past 12 months. Resellers nationwide have been expressing interest in turning their pipeline from a liability into an asset. Yet, when we initiate discussions with our prospects, we find that they often have skipped, or have ignored, essential planning stages in the process, that, if omitted, will surely result in a failed campaign.
With an understanding of the purpose and intent for a prospecting campaign, I’ve broken down the individual stages that resellers must take to ensure a successful program. Whether you choose to launch a campaign internally or by using an outsourced firm, these steps will mean the difference between failure and success.
1. Know why people purchase technology
Clients and potential clients don’t simply purchase technology on a whim, so blindly calling into a firm asking about printers will certainly not yield results. To generate an opportunity from prospecting, it is important to understand the compelling reasons that prompt people into buying technology. They include:
- New technology breakthroughs that will speed up performance and/or reduce operating costs
- A need to upgrade hardware/software reaching its end-of-life cycle
- Infrastructure needs to support a growing company
- Changes to ensure compliance to new regulations and mandates on a government or industry level
2. Find Your Niche
The days of calling prospects and inquiring “Do you need discount printers?” is long gone. Instead, successful campaigns target the unique technology needs of clients. Likely, your firm has proven technology strengths in certain areas – such as network design, Microsoft products, database management, storage consolidation, etc. – services that you’re currently providing to existing clientele. Take these strengths and exploit them to the greatest extent possible, for if one company in a particular field has need for such services, it’s likely that need could be shared across that vertical.
3. Know Your Vertical
“Narrowcasting” your sales message helps to pinpoint your message and often yields greater results than the old buckshot approach. With few exceptions, resellers agree the SMB space is the most ideal for prospecting new sales opportunities, and the wealth of verticals in the space provides an abundance of directions. Following the lead from existing clientele, resellers already have niche markets, but fail to exploit the opportunity. If, for example, your firm has implemented SAN solutions in two or three law firms, you can tout your expertise in the legal vertical. If you’ve consolidated servers in a school district, you can emphasize your work in K-12. Experiences lead to opportunities…you just have to make a conscious effort to follow though on the sales.
4. Allot Resources
Would you invest 100 work hours “schmoozing” a perspective client who lacked not only a budget and the resources, but also the knowledge of what they want to accomplish? It holds true for your prospecting effort. I’ve seen company after company strongly assert that their prospecting efforts were a complete failure. Yet, after posing some simple questions, I learned that the failure was almost always the result of poor and uncommitted resource planning. Before you even make one phone call, you need to have your process in place. All of your collateral speaking of your technology solution and your target vertical must be ready in print and electronic formats. This includes product sheets, company background, sales letters and calling scripts. You’ll also need to create a call-to-action plan, the incentive which will convince prospects to take the time to meet with your account executives. Whether you are using internally maintained prospect lists or third party research, investing in quality contact information will make sure the time for every outbound call is invested in genuine opportunities. Yes, you may have to spend as much as $5 for a single contact using a research firm, but that targeted information helps you narrow your message to the exact audience you seek. You must also establish a budget that accounts for time as well as money, which will help you decide whether to launch such a campaign internally or contract with an outsourced demand generation firm.
The success of a demand generation campaign rests on one word…persistence. And persistence will overcome resistance using a proven “three-touch process” using alternating methods of contact. Two choices for outbound contact are:
- Letter/email – outbound call – follow-up letter/email; or,
- Outbound call – follow-up letter/email – second outbound call
Even if you’re unable to reach the prospect within the three touches, do not be disappointed. Three is typically the minimum number of touches necessary to reach a contact. In order to transition a prospect to a lead, the telesales caller must gain interest in a solution, confirm a budget is in place, and determine the time frame in which the prospect will make the purchase. Often, our telesales callers may make up to six or seven outbound calls before they can speak with a prospect and qualify the lead.
6. Lead Generation Follow-Up
So, now you have a qualified lead opportunity in hand. What you do in the next 48 hours will determine if you’ve put your resources to good use. Prompt follow-up will enhance the opportunity to close the deal; procrastination will waste your investment. On day one, upon receiving the lead, the salesperson should immediately send out a follow-up sales letter via email or in print. After having done a preliminary background check into the lead (reviewing information previously collected, checking their web site, etc.), the salesperson should initiate outbound call attempts into the lead by the end of the first day. And, just as with prospecting, they should realize that it may take them several attempts to first reach their contact person. Within the first 10 business days upon receiving a lead, the salesperson who makes six outbound call attempts is almost always successful in speaking with the contact and continuing the sales process. You would expect persistence to be instilled among sales professionals, but I have encountered apprehension by salespeople in dozens of firms in recent months. Although they claim to be unable to reach a lead after weeks, our telesales staff is often able to re-establish contact and re-confirm the qualified opportunity in just a few days. However, that delay often caused by a lack of motivation on the part of the salesperson, costs companies valuable leads and revenue.
Demand generation campaigns take time to launch, and also take time to witness a return on its investment. On average, resellers need to invest six to nine months on a telesales campaign before they can see sales opportunities close. However, they should remain diligent to reviewing the process each week and month to ensure the campaign generates interest, the prospects are appropriately targeted and the results continue. It is common to overhaul a campaign after a few weeks or months, while others continue to deliver results for more than a year.
Ultimately, there are no magic short-term solutions. Companies looking to enhance their pipeline cannot rely on gimmicks and sales philosophy mantras. Results can only be generated through persistence and an ongoing effort to seek out new opportunities. Prospecting remains the one cost-effective tactical sales tool that proactively seeks out new opportunities and builds incremental revenue for an organization. By addressing each of the facets, you can make “prospect” into the most lyrical word in your vocabulary.