This article is an excerpt from the Shortform book guide to "New Sales Simplified" by Mike Weinberg. Shortform has the world's best summaries and analyses of books you should be reading.
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What is customer prospecting? How do businesses prospect for new customers? What are some things you can do to identify and target prospects that will guarantee sales?
Customer prospecting is the first stage of the sales process. It involves defining, identifying, and initiating contact with prospects—customers who are most likely to buy your products/services.
In this article, we’ve put together some prospecting tips to help you find and engage with the right prospects.
1. Create a Target List
When choosing your targets, look for potential new customers with a profile similar to that of your best current customers. Ask:
- Who are the company’s best customers?
- What do they have in common?
- What do these companies and their markets look like?
- Where or how can we find potential customers who resemble our best customers?
Target List Parameters
In addition to being strategic, a target list should be:
- Fixed: Zero in on a fixed or limited number of targets that you’ve chosen because they mirror your best customers. Then work the list and keep working it. Don’t give up and move on if you don’t succeed on your first try with a prospect. Most importantly, stick to your prospect list and don’t start pursuing other, non-strategic targets, which won’t be productive.
- Focused: Focus intensely on the category of customers that’s produced sales for you in the past. By doing so, you’ll become conversant in the industry’s or sector’s language, opportunities, and challenges. This, in turn, will help you ask smart questions that build credibility with prospects. With each success, the next will be easier to achieve.
- Written: Have a written, one-page target list literally at your fingertips to keep you focused on your mission. It’s faster and easier to pull out a paper list or spreadsheet than to boot up and scroll through digital pages of a CRM (customer relationship management) system, or to page through an industry directory. Even the act of writing, printing out, and posting a new-business target list on your wall inspires action and ultimately results.
- Feasible: Keep your prospect list short enough that you can give each account enough attention, and long enough to be challenging so you don’t get bored and waste time on other things. Determining the right number of accounts to include depends on the type of business, how easy it’ll be to gain access to each customer, the sales rep’s other responsibilities, and so on. For instance, if you’re selling complex enterprise-level IT software, you’ll need to keep your account list small, perhaps a few dozen accounts, so that managing it will be feasible. However, a telesales rep could handle many more, perhaps hundreds, of accounts for a simple product or service.
Include a Few ‘Dream’ Prospects
Your prospect list should include a few “dream” customers—accounts that would be a huge coup for you and your company. Pick only a handful and develop a plan for tackling each target; do something each week to advance your plan. Meanwhile, keep working hard to pursue the other more conventional targets on your list. You still need to make your sales goals even if the dream client doesn’t come through.
2. Target Higher-Ups
Besides determining which businesses to target, think about whom you should be targeting within those businesses. They should be higher-level people.
Getting access to senior leaders is easier than you think and it increases your chances of sales success. The key to getting their attention is connecting with them on issues that are top of mind rather than delving into the details of your products, services, and processes. You have nothing to lose by aiming high. If you’re denied a meeting, then pursue a mid-level executive. This is a better strategy than starting lower and then going over someone’s head when they turn you down—because this creates enemies in a company whose business you want.
It’s also a win if the executive takes an interest in your pitch and directs you to someone else with the specific knowledge to evaluate your proposal. An internal referral from a senior leader will be paid attention to.
In addition, executives are often easier to work with than with middle managers or purchasing agents—they’re friendlier, more professional, and are big-picture thinkers. While middle managers focus on saving every possible dime, senior leaders are more interested in solving business problems and achieving results.
Resources for Finding Prospects
Once you know what kind of sales prospects you’re targeting, there are many resources for coming up with specific names. Local business journals compile and publish annual lists of businesses in the region by size, business sector, and so on. Another resource is Hoover’s, an online source for business data. With a subscription, sales teams can research targets or potential targets.
Other tools include:
- LinkedIn: Its websites and mobile apps facilitate research, information sharing, networking, and initiating relationships.
- Trade shows and industry associations: They’re old school but still useful for identifying target accounts because they often gather all the major players in an industry in one place. In addition, they provide annual directories.
- Social media: These sites can be useful supplements to connecting with prospects face-to-face—for example, writing a blog can create interest in your product.
3. Develop Referral Sources
In addition to your prospect list for new sales, you should also develop a target list of potential referral sources—people who might provide you with names of prospects.
By referral sources, Weinberg doesn’t mean clients who refer new customers to you, or members of your professional network who pass your name to potential clients. Referral sources are people in a position to provide you with an ongoing stream of referrals—for example, real estate agents are often referral sources for bank loan officers (the agents provide names of potential mortgage clients). Similarly, in a large banking system, loan officers at smaller branches are referral sources for premier bankers seeking wealthy customers.
Once you have a list of target referral sources, develop a plan for approaching them almost as though they were sales targets. Track the results you get from referral sources and focus your energy and attention on the ones that generate the best opportunities.
4. Segment Existing Accounts
The strategic thinking process for creating prospect lists can also be used to prioritize existing customer accounts, so you’re spending the most time on the accounts that deliver the most.
Both inside and outside reps could increase sales among existing customers by “segmenting” or categorizing the customers, then devoting the most time to the ones likely to produce the best results. (Shortform note: Outside reps make face-to-face sales visits, while inside reps make phone calls in the office using system-generated customer lists.)
A simple way to segment existing customers is to use these four groups:
- Largest accounts by dollars spent
- Accounts with the most growth potential (likely to produce incremental revenue)
- At-risk accounts (there’s a high probability of losing some or all of their business)
- Miscellaneous accounts (those that don’t fit one of the other categories)
You’ll want to spend the most time on the accounts in the first three segments and the least on the miscellaneous accounts.
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- A step-by-step plan for strategically selecting sales targets
- How to develop sales weapons
- How to consistently generate new sales
