Time management and thorough planning of work are earmarks of above-average salespersons. They look for ways to “stretch” productive selling time. They arrange travel and call schedules to economize on time spent en route and distance traveled. They make appointments to avoid prolonged waiting for callbacks. They do not waste time trying to sell to people who cannot buy or are not likely to do so. The planning work, which is essential in eliminating calls on nonbuyers, is called “prospecting.” Improvement in prospecting is one way to stretch productive selling time. Many sales personnel devote too little time to prospecting and, as a consequence, too much to calling on nonprospects. Salespersons who are proficient in prospecting apply their selling efforts productively; they do not call on nonprospects and can devote their full attention to those likely to buy.
Some companies use specialized personnel for prospecting, but most regard it as one of the salesperson’s responsibilities. Even though salespersons may not do “all” the prospecting, they often have access to information on likely prospects that is not available to central office personnel.
Steps in Prospecting
The steps in prospecting are (1) formulating prospect definitions, (2) searching out potential accounts, (3) qualifying prospects and determining probable requirements, and (4) relating company products to each prospect’s requirements.
Formulating prospect definitions. Prospective customers must have the willingness, the financial capacity, and the authority to buy, and they must be available to the salesperson. Salespersons waste time when they attempt to sell individuals who have neither the need for the product or the money to pay for it. Salespersons waste time if they try to sell to the wrong persons; so it is important to ascertain which persons in each firm have the authority to buy. Although individuals may qualify as prospects in other respects, they may be inaccessible to the salesperson. The president of a large corporation, for example, may need insurance and be willing and able to pay for it, but a particular salesperson may have no way to make the contact.
In addition to meeting the stated requirements, there are other requirements unique to each company’s customers. Starting with data on the profitability of present accounts, any characteristics typical of profitable accounts but not shared by unprofitable accounts should be detected. These identifying characteristics ideally should be the ones recognizable from information appearing in directories or lists. Prospects in many businesses and professions, for instance, are readily identified from classified listings in telephone and city directories. Key characteristics that identify profitable accounts are assembled into descriptions of the various classes of customers, and these are the prospect definitions.
Searching out potential accounts. Using the prospect definitions, the salesperson combs different sources for the names of probable prospects, or “suspects,” as they are called. Sources of prospect information include directories of all kinds, news and notes in trade papers and business magazines, credit reports, membership lists of chambers of commerce and trade and manufacturers’ associations, lists purchased from list brokers, and records of service requests. Other sources are responses to company advertising, sales personnel of noncompeting firms calling on the same general classes of trade, conventions and meetings, bankers and other “centers of influence,” and the salesperson’s own observations. Salespeople selling services like insurance may uncover prospects among their acquaintances; members of their professional, religious, and social organizations; and the referrals of friends. Another source of prospects is the “endless chain”—satisfied customers suggest, voluntarily or on request, other leads to the salesperson who served them.
Qualifying prospects and determining probable requirements. As information is assembled on each tentative prospect (i.e., “suspect”), it is easier to estimate the probable requirements of each for the types of products sold by the company. Prospects with requirements too small to represent profitable business are removed from further consideration, unless their growth possibilities show promise. Even after tapping all readily available information sources, additional information often is required to qualify certain prospects, and personal visits by salespersons may be the only way to obtain it. These visits may not bring in sales, but they save time, as prospects are separated from nonprospects.
Relating company products to each prospect’s requirements. The final step is to plan the strategy for approaching each prospect. From the information assembled, it is usually possible to determine each prospect’s probable needs. From what the salesperson knows about the company’s products, their uses, and applications, he or she selects those that seem most appropriate for a particular prospect.
The salesperson’s presentation is now easy to construct, and it is tailored to fit the prospect. The salesperson should have clear ideas about specific objections the prospect may raise and other obstacles to the sale that may be encountered. The salesperson is ready to contact the prospect; the only tasks remaining are making an appointment, deciding how to open the presentation, and determining how to persuade the prospect to become a customer.
Source: Richard R. Still, Edward W. Cundliff, Normal A. P Govoni, Sandeep Puri (2017), Sales and Distribution Management: Decisions, Strategies, and Cases, Pearson; Sixth edition.