What Is Prospecting?
Prospecting is an invaluable step in the sales process that allows you to uncover new opportunities for your business and warm up cold leads. Prospecting also allows you to make the best use of your time, as it often involves in-depth research to qualify leads before ever reaching out via email or phone call. Successful prospecting takes practice and development to find the techniques that work best for you. In this article, we discuss what prospecting is, the difference between leads and prospects, different methods for prospecting and steps you can take to start prospecting for your own business.
What is prospecting?
Prospecting is the first step in the sales process that consists of any activities used to identify potential customers. It refers to the activities of sales representatives who are looking for new sales opportunities for an organization. It can involve cold calling, sending cold emails, SMS messages or other methods to reach people who may be potential buyers or nurture leads that have gone cold.
Differences between leads and prospects
While the terms "lead" and "prospects" are often used interchangeably, there are several key differences between the two.
Level of qualification
One of the key differences between leads and prospects is the level of qualification. Leads are often gathered in large quantities through marketing channels like social media and website traffic driven by search engine results. This means that people who are generated as leads may not fit the ideal criteria of the ideal customer.
Prospects, on the other hand, have been pre-selected as being a good fit for the business. Whether your company found the prospect by buying a list, searching the internet or simply going through cold leads in your own company's database, these people meet at least some of the criteria for your ideal customer.
Level of engagement
The level of engagement is another way to differentiate between leads and prospects. While a lead has requested to be contacted, there has usually been no engagement beyond them providing their contact information. A prospect, though, generally has already spoken with a sales rep or someone at your company, opening the door for two-way communication. As leads are gathered and they are engaged by sales reps, they become prospects.
There are a number of methods that are popular for identifying new prospects or warming up cold ones. Some of the most common include:
Phone calls: Often called cold calls, these calls are designed to initiate a conversation with the person on the other end of the line.
LinkedIn groups: LinkedIn groups are good for not only raising brand awareness but also for establishing yourself as an industry expert and engaging with members—commenting, asking and answering questions and sharing information—to get new clients.
Facebook groups: You can use Facebook groups in the same way you use LinkedIn groups. It's important to note, though, that most Facebook groups have rules that prohibit the solicitation of business. However, if you bring consistent value and position yourself as an authority figure, you generally accumulate prospects anyway.
Automated voicemail messages: Automated voicemail messages can be recorded to try to get the listener to take some kind of action, whether it's visiting a website or placing a phone call.
Email: Cold emails are a common tactic and often are used with cold lists that companies have purchased. Like the automated voicemail message, emails are designed to get the recipient to take action.
Direct mail: This kind of cold outreach tactic involves sending postcards, flyers or catalogs through the mail to encourage the recipient to take a specific action, such as making a purchase.
How to prospect
Here are the basic prospecting steps you can take to uncover new opportunities for your business:
Prepare for outreach
Evaluate the process
Before reaching out, it's important to qualify the prospects as much as possible through research. Start by identifying whether the prospect's business is a good fit. Some questions to ask are:
Do you sell to people in that industry?
Does the prospect fit the buyer persona for the company?
Is the prospect in your territory?
If the answer is yes to all these questions, you then want to move forward with identifying the key decision-makers. The person you may be reaching out to, the one who will be using the product, may not be the decision-maker and may be unable to commit to a sale. Next, you should research to identify whether there are any factors that could impact whether the company or the individual can meet any time requirements associated with your offer. For example, if you're proposing a new software solution that would involve a time-consuming implementation, you will first want to determine if the company has anything that would prevent them from having the resource of time. If a company has recently launched a new marketing campaign, for example, they may have time and you should follow up with them later.
The last question to consider is whether the company has any awareness of what your company has to offer. If they have heard of your company or your offer before, they may be more receptive to talking to you and better able to see the value that you have to offer.
The next step is to prioritize your prospects so you can feel confident that you're giving your strongest effort to the prospects who are most likely to become customers. You can do this by breaking down the qualifying dimensions above into percentages based on how important they are to the sales process. Those dimensions, again, may include things like time constraints and organizational fit. You may have other considerations you want to include as well. When you have finished, multiply the size of the opportunity (as a percentage) by the size of the opportunity dimension weight.
For example, if a prospect's size of opportunity rating was 90% and the opportunity dimension weight was found to be 60, the end store would be 54.
3. Prepare for outreach
The goal for this step is to gather the in-depth information you need to perfect your pitch and personalize your approach for reaching out to prospects. You can start this by identifying what they are about. You can do this by:
Reading the company blogs or articles to find out what they're taking the time to write about
Reading any updates on their social media sites
Reading the About Us page on the company website
After you have done the research to find the information you are looking for, look for reasons to connect. For example, have they recently been to your website and filled out a contact form? Which pages did they look at? You can look at LinkedIn as well as determine whether you may have someone in common.
4. Reach out
In this step, you will reach out to the contact for the first time. The outreach should be tailored to the prospect's industry, business and interests. Some tips to keep in mind for this first touch is to:
Be human: Be personal and try to develop some rapport with the person you're speaking with, complimenting them on their products or even just inquiring about a recent holiday.
Personalize: Regardless of whether you're reaching out via email or phone call, personalize your message to address a specific problem that they are encountering with a specific solution.
Provide value: Keep in mind that the process is entirely focused on the needs of the prospect. Make your call about providing value and ask for nothing in return. For example, you might suggest doing a free audit of their technology solution to see how their workflows are working for them.
5. Evaluate the process
Keep notes as you go through the prospecting process to determine which activities generated the most value throughout your efforts. Evaluate how well you uncovered challenges, understood the decision-making process for the prospect, identified the potential results or success and confirmed the availability of the prospect's budget. By evaluating the process frequently, you will improve your prospecting techniques and processes for the future.