Last week (May 30 – June 2), I facilitated two cohorts of the Marketing, Selling and Business Networking Skills programme for over 100 graduate trainees as part of the GMAP initiative of the Academy of UBA Plc.
During these sessions, I emphasized the importance of prospecting as the most crucial sales activity. I made it clear to the participants that prospecting can significantly impact a salesperson’s results, accounting for up to 60% of their success. In other words, by mastering prospecting, one can improve their revenue by 60%. Surprisingly, though, many business development professionals possess limited knowledge of who exactly qualifies as a prospect. As I would usually do in my sessions, I asked participants one of my favourite questions, “Who is a Prospect?”
Typically, the answers I receive vary from “a potential customer” to “anyone I am trying to persuade to buy my products and services” or even “everybody is a prospect.” This is where the main challenge in sales arises. Participants are often taken aback when I inform them that their answers are not entirely accurate, leading them to often ask, “So, who is a prospect?”
A Prospect is anyone who CAN do business with YOUR company, bus has not started. It’s important to note that I emphasized two words in this definition: “CAN” and “YOUR.” So, what are the elements of “CAN,” and how do they relate to “YOUR”?
- A prospect is an individual or organization that has a NEED for YOUR company’s products or services. However, it’s crucial to understand that not everyone in need of a product qualifies as YOUR prospect. Let me illustrate this. If I am hungry (and not intentionally avoiding food), I have a NEED for food. However, if food vendors approach me assuming that I am a prospect, they may be mistaken. For instance, if I am on a carb-free diet and their menu consists of carb-rich foods, then I am not their prospect, despite needing food. In this instance, I CANNOT do business with them. I would only be a prospect for food vendors offering carb-free options.
- A prospect is a person/organization that PERCIEVES VALUE in YOUR products/services. In the realm of selling, value is the PERCEPTION of WORTH that makes you pay a PRICE to obtain a product/service. If I need a product/service, but do not perceive worth sufficient for me to pay the price/fees to obtain that product/service, then I CANNOT do business with YOUR company. Therefore, I am not your prospect.
- A prospect is a person or organization with the CAPACITY to meet YOUR terms and conditions for acquisition. For example, if I need to open a corporate current account with a bank and I perceive value in that bank’s services, but they require me to provide evidence of business entity registration, which I do not possess, then I am not a prospect for that particular product of the bank. If that is the only product or service I need from the bank, it means I CANNOT do business with them.
- A prospect is a person with the AUTHORITY to buy from YOUR organization. Unfortunately, many salespeople mistakenly equate TITLE with authority. Numerous individuals hold impressive titles but lack any real authority. If you are engaging with someone who lacks the authority to make purchasing decisions for themselves or their organization, and they cannot influence the person who holds that authority, then you are not prospecting. Instead, you are wasting your time.
- A prospect is a person or organization that is currently facing CHALLENGES or difficulties with their existing providers/suppliers and believes that by switching to YOUR organization, they will avoid those same issues. Every salesperson should know that their best prospects are their competitors’ best customers. Virtually every prospect you are targeting is likely already being served by your competitors. For instance, if a customer of JFK Bank is to be considered a prospect for FMI Bank, that customer must be experiencing hassles and must believe that by switching to FMI Bank, they would not encounter the same problems. Unless the prospect’s decision is based purely on emotional or relational factors, you need to demonstrate that you are faster, more cost-effective, uniquely different, or better than their current provider. If you cannot prove this, then that customer of JFK Bank is not YOUR prospect. Pursuing such prospects would be a waste of your time.
In conclusion, if we define a prospect as anyone who CAN do business with YOUR company but has not yet initiated any transactions, it becomes evident that prospecting involves actively seeking out individuals or organizations that CAN do business with YOUR company but have not yet done so.
There are four key questions that prospecting helps you answer:
- Who are the individuals or organizations that have the potential to do business with your company but haven’t started yet? (This pertains to profiling and understanding your target audience.)
- Where can you find the individuals or organizations that can do business with your company but haven’t started yet? (This focuses on location and identifying target markets.)
- How can you effectively reach out to the individuals or organizations that can do business with your company but haven’t started yet? (This involves strategies for access and communication.)
- Among the people I already know, who can introduce me to the individuals or organizations I want to connect with? (Utilizing close contacts to gain access to distant prospects and expand your network.)
By addressing these four questions, prospecting enables you to identify potential customers, determine their locations, establish effective communication channels, and leverage existing connections to reach your desired prospects.
As a salesperson, it is crucial to always remember that prospecting is the engine and key driver for sales success.