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CHAPTER 9 Developing and Qualifying a Prospect Base Learning Objectives • Discuss the importance of developing a prospect base • Identify and assess important sources of prospects • Describe criteria for qualifying prospects Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-2 Learning Objectives • Explain common methods of organizing prospect information • Describe the steps in managing the prospect base Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-3 Prospect, Prospecting, and Prospect Base Defined • Prospect: a potential customer that meets the qualification criteria established by your company • Prospecting: identifying potential customers • Prospect base: is made up of current customers and potential customers Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-4 Importance of Prospecting • Every salesperson must cope with customer attrition: • Customer may have a one-time need • Customer may move outside the salesperson’s territory • Firm may go out of business or merge • Sales may be lost to the competition Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-5 Girard’s Ferris Wheel—Supply FIGURE 9.1 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall FIGURE 9.1 9-6 Prospecting Requires Planning • Increase number of people who board the Ferris wheel • Improve the quality of prospects • Shorten sales cycle by determining which prospects are “qualified” • Prospecting plans must be monitored continuously for effectiveness Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-7 Sources of Prospects • Referrals • Website • Centers of influence • Computerized database • Directories • Cold calling • Trade publications • Networking • Trade shows and special events • Educational seminars • Telemarketing and e-mail • Prospecting by non-sales employees • Direct-response advertising and sales letters Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-8 Referrals • Prospect recommended by current satisfied customer or one familiar with product or service • Endless chain: ask contact who else could benefit from product • Referral organizations: facilitate networking • Friends, family members, centers of influence: a person who may have influence on opinion leaders Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-9 Lead Generation See the Website Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-10 Lead Generation See the Website Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-11 Directories • Hundreds of business and industrial directories available • Many major trade associations publish directories • Be sure to use current copy or edition as prospects shift firms; track people and companies Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-12 Popular National Directories • Middle Market Directory www.dnb.com • TrackAmerica www.trackamerica.com • Standard & Poor’s Corporation Records Service • Thomas Register of American Manufacturers www.thomasregister.com • Polk City Directory www.citydirectory.com • The Encyclopedia of Associations www.gale.com www.spcglobal.com Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-13 Trade Shows/Publications • Trade shows and conventions: your company may have a booth at key trade shows/expositions • Trade publications: each industry has trade publications that sales professionals need to read • Join trade associations: many salespersons join trade associations to gain access to potential buyers Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-14 Telemarketing • Telemarketing: the practice of marketing goods and services through telephone contact • To identify buyers and generate contact lists for sales staff • To qualify prospects • To verify sales leads generated by other methods • To conduct follow-ups Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-15 Direct Response and Sales Letters • Direct response advertising: often features inquiry cards or information requests via mail or telephone • Sales letters: send sales letters to decision makers, then follow up Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-16 Website • Websites provide a cost-effective way for sales professionals to: • Project personal image • Provide additional information • Generate leads from visitors to site • Present product information • Establish e-mail lists Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-17 Computerized Databases • In-house databases: your firm may already have a comprehensive database, sometimes referred to as the “house list,” with details on customers, purchase patterns, and so forth • List sources: wide range of precise lists available from variety of sources • See www.infoUSA.com Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-18 Computerized Databases • Purchasing databases or lists can be costly; price usually set on cost-perthousand names • Not all relevant databases are equal; some “pull” better than others • Pull is the percentage of the list resulting in qualified prospects or actual sales Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-19 Cold Calling • Simply calling prospects without referrals • New salespeople rely on these as they haven’t built a referral base • Must be strategically planned • Prelude to in-person appointment • A way to introduce yourself and your company to a prospect Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-20 Networking • Making and profiting from personal connections • Networking guidelines • Meet as many people as you can • Tell them what you do • Do not do business while networking • Offer business card • Edit contacts and conduct follow-ups Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-21 Three Types of Networks FIGURE 9.2 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-22 Educational Seminars • Provide opportunity to showcase product without pressuring to buy • Require extensive preparation • Start value-added process • Can attend or present at industrysponsored seminars or offer your own Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-23 Non-Sales Employees • Non-sales personnel can be valued source of leads • Prospecting not necessarily exclusive task of sales force • Non-sales personnel often need training and incentives Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-24 Combination Approaches • Salespersons generally rely on combination of prospecting methods • Some methods have higher yield than others • Important to use CRM technology to help maximize efficiency Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-25 Qualifying Prospects Basic questions: • Does the prospect need my product? • Does the prospect have the authority to buy my product? • Does the prospect have the financial resources to buy my product? • Does the prospect have the willingness to buy my product? Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-26 Collecting and Organizing Prospect Information • Sales data can be collected and organized into Customer Relationship Management (CRM) Systems • Examples of popular applications: • Salesforce.com • Oracle • NetSuite • Microsoft Harvey Mackay suggests a 66-question customer profile. See it at:mackay.com Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-27 The CRM Contact Sheet FIGURE 9.3 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Sample CRM Contact Sheet from Salesforce.com 9-28 See the Website Managing the Prospect Base FIGURE 9.4 Sample CRM record for one salesperson’s prospects from Salesforce.com Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-29 See the Website Prospecting and Sales Forecasting Plans • Important to balance time and organize contacts: • Prepare a list of prospects • Forecast potential sales volume for each new account, by product • Carefully plan the sales route to minimize time and cost Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-30 The Portfolio Model for Classifying Prospects FIGURE 9.5 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-31 The Sales Funnel Model FIGURE 9.6 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-32 Using CRM Technology for Pipeline Management Sample CRM pipeline dashboard from Salesforce.com See the Website FIGURE 9.7 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-33 Key Concept Discussion Questions • Discuss the importance of developing a prospect base • Identify and assess important sources of prospects • Describe criteria for qualifying prospects • Explain common methods of collecting and organizing prospect information • Describe the steps in managing the prospect base Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-34 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-35