Download chapter 3. prospecting for and qualifying prospects

Chapter Four
Prospecting and
Qualifying: Filling
the Salesperson’s
“Pot of Gold”
PowerPoint presentation prepared by
Dr. Rajiv Mehta
Chapter Outline
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Stages in the personal selling process
The importance of prospecting
Prospecting for leads
The prospecting plan
Prospects: the salesperson's pot of gold
Qualifying: how a lead becomes a prospect
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Chapter 4 | Slide 2
Learning Objectives
After reading this chapter, you should understand:
• The steps in the personal selling
process.
• The importance of prospecting.
• How to qualify leads as prospects.
• Several prospecting methods.
• The steps in developing a
prospecting plan.
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Chapter 4 | Slide 3
Stages In the Personal
Selling Process
The professional selling process is a continuous, interacting, and
overlapping cycle of seven stages:
Chapter Review
Question:
1. Prospecting and qualifying prospects
2. Planning the sales call (the preapproach)
Identify and describe
the seven basic
stages in the selling
process.
3. Approaching the prospect
4. Making the sales presentation and demonstration
5. Negotiating prospect resistance and objections
6. Confirming and closing the sale
7. Following up and servicing the account
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Chapter 4 | Slide 4
Figure 4.1:
The Personal Selling Process (PSP)
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Chapter 4 | Slide 5
The Importance of Prospecting
• Prospecting, the initial stage, is necessary for several
reasons:
• Need to increase total sales.
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Customers switch to other suppliers.
Customers’ businesses are taken over by another
company.
Customers have only a one-time need for the product.
Relationships with some customers deteriorate, and
they stop buying from you.
Your buying contacts are promoted, demoted,
transferred, or fired, or they retire or resign.
Customers move out of your territory.
Customers go out of business.
Customers die.
Chapter Review Question:
Give some basic reasons for planning sales calls.
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Chapter 4 | Slide 6
Prospecting for Leads
• Two basic ways to search for leads to qualify as prospects
are:
1. Random Searching
2. Selective Searching
• Selective lead searching can also be classified as non-effort
or effort.
– Non-effort leads are leads that are supplied by the
company or from an individual’s voluntary inquiry or
response to advertising.
– An effort lead is one that is generated solely by the
salesperson.
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Chapter 4 | Slide 7
Table 4.1 Looking for Leads
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Chapter 4 | Slide 8
Table 4.1 Looking for Leads cont’d
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Chapter 4 | Slide 9
Random-Lead Searching
• Sometimes called "blind" searching, generates leads by
randomly calling on businesses.
• Examples of random-lead searching include:
1. Door-to-door canvassing and cold calls
– Door-to-door canvassing refers to knocking on doors in a
commercial area without an appointment to locate
prospects.
– Cold calling refers to approaching or calling a business
without an appointment for the purpose of prospecting or
selling.
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Chapter 4 | Slide 10
Random-Lead Searching cont’d
2. Territory blitz of organizations
– A territory blitz refers to an intensified version of door-todoor canvassing in which several salespeople join efforts
to call on every organization in a given territory or area.
3. Advertising
– Using broadcast or print media.
4. Electronic mail and websites
– Sending emails and using websites to look for leads.
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Chapter 4 | Slide 11
Selective-Lead Searching:
Direct Sources
• This refers to systematic strategies to generate leads from
predetermined target markets.
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•
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Friends, neighbors, and acquaintances
Satisfied customers and former customers
Junior salespeople and sales associates
Professional sales organizations
Mailing lists and directories
Personal observation
Centers of influence
Spotters
Chapter Review Question:
Endless chain
What is the centers-of-influence
Networking
approach to finding potential
Internet (e-mails) customers? Why is the centers-ofCompany records influence approach the preferred
method for seeking leads among
Newsletters
professionals such as doctors,
Surveys
lawyers, insurance agents, financial
advisers, and accountants?
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Chapter 4 | Slide 12
Table 4.2 Selected Internet Sources of
Information For Prospecting
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Chapter 4 | Slide 13
Internet Sources For Prospecting
• To find information on industrial
activity, go to:
– http://www.census.gov/cir/www/
• To find data on over 10,000
corporations, go to :
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– http://www.moodys.com/cust/default
.asp
Chapter 4 | Slide 14
Selective-Lead Searching:
Indirect Sources
• General announcements or calls to potential markets, hoping that
prospects will come forward and identify themselves.
• Examples of indirect sources of selective-lead searching include:
1. Direct mail: When preparing a direct mail piece, follow these
guidelines:
• Address your letter to an individual
• Use an attractive format
• Keep it simple
• Stress benefits
• Provide proof
• Ask for action
• Follow up your mailing
• Keep records of mailing results
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Chapter 4 | Slide 15
Selective-Lead Searching:
Indirect Sources cont’d
1. Trade shows, fairs, and exhibits
2. Professional seminars, workshops, and videoconferences
3. Contests
4. Free gifts
5. Unsolicited inquiries
6. Telemarketing for proposals
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Chapter Review
Question:
Distinguish between
random searching and
selective searching for
leads. Give some
examples of each.
Chapter 4 | Slide 16
Marketing Information Systems
•
An organization’s MIS is a systematized, continuous
process of gathering, sorting, analyzing, evaluating, and
distributing market information that can be useful in
prospecting and obtaining leads.
Chapter Review Question:
What is a marketing information system
(MIS) and how can it help manage
leads?
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Chapter 4 | Slide 17
Customer Relationship Management
•
A business strategy designed to augment
revenues and increase profitability of companies
through better understanding of customers’
needs and behaviors
•
Uses sophisticated computer systems to help
identify prospects and put customers at the
center of a company’s business activities and
decision-making processes
•
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Brings together diverse information (compiled
from data sources within and outside the
organization) about customers, sales, and
marketing to develop a more holistic view of
each customer
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Chapter 4 | Slide 18
Customer Relationship Management
cont’d
•
CRM provides precise computerized information about individual
customers to help company employees (sales, customer service, and
marketing representatives)
•
•
•
•
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Develop target marketing strategies
Create up-selling and cross-selling
opportunities
Use successful competitive positioning
tactics
Assist customers in making fully satisfying
purchases that lead to long-term customer
loyalty
Chapter Review Question:
Define customer relationship management and discuss
how it be used to manage relationships with customers.
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Chapter 4 | Slide 19
Data Mining Systems
• A procedure that uses statistical software to
mine volumes of data to identify “hidden”
interrelationships among buyers and the
products they purchase, along with
associated complementary products
• Can be used to identify leads, prospects, and
buying patterns
• Used by diverse firms such as Harrah’s
Entertainment and Wal-Mart
Chapter Review Question:
Describe data mining.
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Chapter 4 | Slide 20
Sales and Marketing Executives
Marketing Library
• For prospecting or any other stage in the PSP, Sales and Marketing
Executives Marketing Library is an outstanding source of information
and help for salespeople.
• The library offers:
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– More than 200,000 searchable articles on sales
and marketing
– Discussions by top marketing/sales leaders
about their latest strategies and ideas
– Access to the world’s first knowledge base in
sales and marketing.
– Company and industry profiles
– The latest compensation data for salespeople,
sales managers, and marketing managers,
plus much more
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Chapter 4 | Slide 21
The Prospecting Plan
•
To maximize prospecting activities, salespeople must develop and
execute a comprehensive prospecting plan, which has several steps:
1.
2.
3.
4.
5.
6.
Set objectives for prospecting
Allocate time for prospecting
Become familiar with prospecting techniques
Choose one or more prospecting techniques
Systematize the prospecting plan
Evaluate the results (use Prospecting Methods
Evaluation Form)
Chapter Review Question:
Describe the different elements of a prospecting plan.
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Chapter 4 | Slide 22
Figure 4.2 Prospecting Methods
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Chapter 4 | Slide 23
Prospects:
The Salesperson's Pot of Gold
• Without prospects, the personal selling process can’t begin
• Prospects are essential to the continuing health of any sales
organization
• An old maxim for salespeople is “Apply your ABP’s,” i.e., Always Be
Prospecting
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Chapter 4 | Slide 24
Qualifying:
How a Lead Becomes a Prospect cont’d
• A lead points to a potential buyer
• Salespeople must qualify a lead in terms of 4 basic criteria that can be
remembered by the acronym NAME, as follows:
1.Need or want
2.Authority to buy
Chapter Review Question:
What four criteria determine
3.Money or ability to buy
whether a lead becomes a
4.Eligibility to buy
prospect?
• Two other qualifying criteria are:
1.The accessibility of the individual
2.The potential profitability of the prospect over the long run
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Chapter 4 | Slide 25
Key Terms
•
•
•
•
•
Personal Selling Process (PSP)
– Also known as the seven-stage process of professional personal selling,
from prospecting and qualifying prospects to following up and servicing
customers.
Prospecting
– The process of searching for leads—people and organizations that might
need your product— and then qualifying them as prospects or potential
customers.
Random-Lead Searching
– Generation of leads by randomly calling on organizations. Sometimes called
"blind" searching .
Selective-Lead Searching
– Application of systematic strategies to generate leads from predetermined
target markets.
Door-to-Door Canvassing
– Knocking on doors in a commercial area without an appointment to locate
prospects.
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Chapter 4 | Slide 26
Key Terms cont’d
• Cold Calling
– Approaching or calling a business without an appointment for the purpose of
prospecting or selling.
• Territory Blitz
– An intensified version of door-to-door canvassing in which several
salespeople join efforts to call on every organization in a given territory or
area.
• Spotters
– People who work in jobs where they meet many other people and who can
help salespeople obtain business leads. Also called "bird dogs."
• Endless Chain
– A classic method of prospecting in which the salesperson simply asks recent
prospects for further prospect referrals.
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Chapter 4 | Slide 27
Key Terms cont’d
•
Networking
– Meeting others in social or business settings to talk informally, establish
rapport, and build relationships with people who can be contacted later for
referrals or as potential prospects.
•
Centers of Influence
– Individuals or groups of people whose opinions, professional activities, and
lifestyles are respected among people in the salesperson's target markets.
•
Marketing Information System (MIS)
– Any systematized, continuous process of gathering, sorting, analyzing,
evaluating, and distributing market information. Can be helpful to
salespeople in obtaining leads and prospects. An MIS can be particularly
helpful to salespeople in obtaining new leads and prospects.
•
Customer Relationship Management
– A business strategy designed to augment revenues and increase the
profitability of companies by better understanding their customers’ needs
and buying behaviors—and, in that process, developing a stronger
relationship with their customers.
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter 4 | Slide 28
Key Terms cont’d
•
•
Data Mining
– A procedure that uses statistical software to mine volumes of data to identify
“hidden” interrelationships among buyers and the products they purchase,
along with associated complementary products
Lead
– Anything—a name, address, or telephone number—that points to a potential
buyer.
•
Prospect
– A lead that has been qualified as a definite potential buyer.
•
NAME
– An abbreviation for the process of qualifying a lead in terms of need for the
product, authority to buy, money to buy, and overall eligibility to buy
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Chapter 4 | Slide 29
Chapter Review Questions
1. Provide some basic guidelines for preparing a direct mail
piece to obtain leads on potential customers.
2. How can internal company records, such as warranty
cards, be of value in developing lists of prospects?
3. Describe the survey approach to generating leads.
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Chapter 4 | Slide 30
Topics for Thought
and Class Discussion
1. Why is prospecting and qualifying prospects such a crucial
stage in the selling process? Do you think innovations in
telecommunications will necessitate more or less
prospecting and qualifying of prospects? Why?
2. If you were hired by Fidelity Investments to contact
businesses and nonprofit organizations to sell them
retirement plans, which prospecting methods do you think
you would use? Why?
3. In making a cold call on a medium-sized manufacturing
company to sell a contract building maintenance service,
how would you go about qualifying the company?
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Chapter 4 | Slide 31
Topics for Thought
and Class Discussion cont’d
4. It’s October 1 and your first day on the job as a
salesperson for a central air conditioning firm in a town of
about 65,000 people. Your boss, the owner of Stibb’s
Commercial Air Conditioning, has said, “Go out and get
some business customers.” Until now, Mr. Stibb has relied
on a small advertisement in the local telephone directory to
generate sales, but because sales are particularly slow
during the fall and winter months, he has hired you as his
first salesperson. Your earnings will come solely from
commissions. How will you prospect for potential
customers?
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Chapter 4 | Slide 32
Topics for Thought
and Class Discussion cont’d
5. Your sister and two of her female colleagues have recently
graduated from business school, pooled their limited
resources, and opened up an accounting firm in three
rooms on the sixteenth floor of an office building in Los
Angeles. The three partners want to audit the financial
statements and annual reports of small- to medium-sized
companies in the metropolitan area. They all attended the
same East Coast high school and college, and none of
them has any long-time friends or acquaintances in Los
Angeles. Although you know little about selling accounting
services, you promise to come up with a strategy. What
prospecting methods do you think might best help the
three accountants generate potential business clients?
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Chapter 4 | Slide 33
Topics for Thought
and Class Discussion cont’d
6. What student prospecting strategies would you
recommend to a market research firm that specializes in
carrying out research projects and developing marketing
plans for colleges and universities?
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Chapter 4 | Slide 34
Internet Exercises
1.
•
•
•
Assume that you work as a sales representative of a Fortune 100
pharmaceutical company that manufactures various drugs for the
treatment of heart disease. Use the appropriate Internet websites
identified in Table 4.2 and conduct a web-based search to locate the
following leads in your zip code and/or county:
Cardiovascular physicians at hospitals who perform heart surgery and
prescribe drugs for the heart
Doctors associated with an HMO who prescribe drugs for preventing
heart disease
Doctors associated with a private practice who prescribe drugs for
preventing heart disease
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Chapter 4 | Slide 35
Internet Exercises cont’d
2.
As a newly recruited salesperson, you need to find leads you can call
upon to carry your Fortune 500 company’s line of household products
and kitchen appliances (windows, blinds, convection and microwave
ovens, dish washers, cooking ranges, and so on). Use the appropriate
Internet websites identified in Table 4.2 and conduct a web-based
search to find the following leads:
•
Giant retailers such as Sears, Wal-Mart, Home Depot, Lowe’s, and Ace
Appliances located in your state
Small- and mid-sized retail stores found in small-town USA
Home remodelers located in your state
Interior designers located in your state
•
•
•
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Chapter 4 | Slide 36
Internet Exercises cont’d
3.
•
•
•
In your job as a textbook salesperson working for a Fortune 500
publishing company, use the Internet websites identified in Table 4.2
and conduct a web-based search to locate the following leads in your
state:
Professors, in community colleges and universities that offer
architecture, business, and engineering courses, who can use books
on these fields in their classes
Bookstores located on the campuses that will sell textbooks on
architecture, business, and engineering
Stores (such as Barnes & Noble, Borders, and Walden Book Stores)
that sell books
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Chapter 4 | Slide 37
Projects for Personal Growth
1. Develop a direct-mail or e-mail letter to send to generate
business prospects for a new video cell phone for
salespeople to take on sales calls. In your prospecting
letter, be sure to specify the benefits the cell phone will
offer the company, translate them into financial terms,
provide proof of those benefits, request specific action, and
supply an incentive to act promptly.
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Chapter 4 | Slide 38
Projects for Personal Growth cont’d
2. Prepare a list of ten organizations in your area that you
think would be good prospects for the products listed
below. Describe your sources and criteria for selecting the
organizations, and explain how you would go about
qualifying them.
• Automobile leasing
• Overnight package or freight delivery
• Professional nursing uniform supplies
• Bottled water for offices
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Chapter 4 | Slide 39
Projects for Personal Growth cont’d
3. In newspapers or trade magazines, find five examples of
companies using:
a.
b.
c.
d.
e.
Telemarketing
Mail-in response cards
Toll-free telephone numbers
Websites
A combination of two or more of these to generate
leads.
Explain the reasoning behind the lead-generating strategy
of each approach.
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Chapter 4 | Slide 40
Projects for Personal Growth cont’d
4. Research and prepare a report on the trade show or exhibit
marketing industry. In your report, cover the following points:
– What is a trade show or exhibition?
– Who attends trade shows?
– How can a company generate leads or prospects by
participating in a trade show?
– What industries hold the largest shows?
– What cities hold the most?
– Is the number of trade shows increasing or decreasing
each year? Why?
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Chapter 4 | Slide 41
Projects for Personal Growth cont’d
5. While reading your local newspaper or browsing the
Internet over the next few days, find two industrial firms,
two nonprofit organizations (such as a church, university,
or museum), and two professional service firms (such as
consulting or landscaping) that are prospecting through
advertising, either online or off-line. Critique the
effectiveness of the six advertisements in accomplishing
their objectives. How would you change each?
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Chapter 4 | Slide 42
Case 4.1: Prospecting By
Driving Around
1. After hearing Charlie describe his week, what do you think
his sales manager, Melinda, will say to him?
2. Do Charlie’s prospecting strategies sound effective and
efficient for his territory? Why? Can you offer Charlie any
suggestions to improve his prospecting strategies and
tactics?
3. Do you think RealVoice should help Charlie develop
leads? What prospecting methods could RealVoice use to
help Charlie and other company salespeople?
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Chapter 4 | Slide 43
Case 4.1: Prospecting By
Driving Around cont’d
4. With the company’s new product, the In-Touch 200, what
can Charlie and/or RealVoice management do to generate
leads and stimulate sales?
5. How do you think Charlie is performing in qualifying the
leads he finds? What could he do better?
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Chapter 4 | Slide 44
Case 4.2: When Cold
Calling Turns Cold
1. What are some underlying reasons why Securevest
salespeople are having increasing difficulty selling to new
accounts?
2. What does the situation facing Securevest salespeople
seem to tell you about cold-call prospecting?
3. What alternate prospecting techniques should Securevest
salespeople consider? Why?
4. If you were a Securevest salesperson, what action would
you now take in your territory?
Case 4.2 is found online at
http://college.hmco.com/pic/andersonps2e.
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Chapter 4 | Slide 45