PROFESSIONAL SALESMANSHIP
CHAPTER 3 & 4
STRATEGIC PROSPECTING AND PREPARING FOR SALES DIALOGUE
3-1 THE IMPORTANCE AND CHALLENGES OF PROSPECTING
STRATEGIC PROSPECTING A process designed to identify, qualify, and prioritize sales opportunities, whether they
represent potential new customers or opportunities to generate additional business from existing customers.
Prospecting is extremely important to most salespeople. Salespeople who do not regularly prospect are operating under
the assumption that the current business with existing customers will be sufficient to generate the de sired level of
future revenue. This is a shaky assumption in good times, but it is especially questionable in the tough business
environment of recent years. As market conditions change, existing customers might buy less. Or, customers might go
out of business. Some customers might be ac quired by another firm, with the buying decisions now being made outside
the salesperson’s territory. The salesperson could also simply lose customers due to competitive activity or
dissatisfaction with the product, the salesperson, or the selling firm. Because there is typically a consider. able time lag
between the commencement of prospecting and the conversion of prospects to customer status, salespeople should
spend time prospecting on a regular basis. Otherwise, lost sales volume cannot be regained quickly enough to satisfy the
large majority of sales organizations-those that are growth oriented.
Despite its importance, salespeople often find it difficult to allocate enough time to prospecting. Many sales people do
not like to prospect because of their fear of rejection. Today’s buyers are busy, and many are reluctant to see
salespeople. An emerging trend faced by Ricoh and other sellers is that more B2B buyers are not relying on salespeople
to provide information early in their buying process. . These buyers are completing most of their pre purchase research
online before they want to interact with a salesperson. Studies indicate that the buying process may be over 50 percent
complete before a buyer contacts a salesperson and that more people are involved in the buying process than in the
past. Therefore, salespeople must be more proactive in identifying prospects earlier in their buying process and in
identifying all members of the buying center sooner, so they can have more of an impact on the final buying decision.
This trend increases the difficulty of prospecting for many salespeople.²
Salespeople can overcome the challenges of prospecting and become more effective in determining the pros best sales
opportunities by following a strategic sales prospecting process, utilizing a variety of prospecting methods, developing a
strategic prospecting plan, and preparing for sales dialogue with prospects.
3-2 THE STRATEGIC PROSPECTING PROCESS
The first step in the trust-based sales process is strategic prospecting. STRATEGIC PROSPECTING is a process designed to
identify, qualify, and prioritize sales opportunities, whether they represent potential new customers or opportunities to
generate additional business from existing customers. The basic purpose of strategic prospecting is to help salespeople
determine the best sales opportunities in the most efficient way. Effective strategic prospecting helps salespeople spend
their valuable selling time in the most productive manner.
The strategic prospecting process (illustrated in Figure 3.1) pg 59 is often viewed as a sales funnel or sales pipeline
because it presents the entire trust-based sales process and the strategic prospecting process in the form of a funnel.
The funnel is very wide at the top, as sales people typically have a large number of potential sales opportunities. As
salespeople move through the strategic prospecting process and the other stages in the trust-based sales process, the
funnel narrows because only the best sales opportunities are pursued and not all sales opportunities result in a sale or
new customer relationship. For the most productive salespeople, the sales funnel is normally much wider at the bottom
than the bottom of the funnel for less productive salespeople. The most productive salespeople pursue the best sales
opportunities and translate a larger percentage of these opportunities into actual sales than less productive salespeople
do. We will now discuss each step in the strategic prospecting process.
3-2a Generating Sales Leads
The first step in the strategic prospecting process is to identify sales leads. SALES LEADS or SUSPECTS are organizations
or individuals who might possibly purchase the product or service a salesperson offers. This represents the realm of
sales opportunities for a salesperson. In the Ricoh example, all organizations that might need office equipment would be
sales leads. USA Financial sells financial and marketing products to independent financial advisors, so sales leads would
include all independent financial advisors.
Although more sales leads are usually better than fewer sales leads, there are normally large different in sales
opportunities among all of the sales leads generated by salespeople. For example, larger organizations might purchase
more office equipment, and larger independent financial advisor firms might buy more financial and marketing
products. Thus, the larger organizations and firms would typically represent better sales opportunities than the smaller
ones. If salespeople merely generate as many leads as possible and pursue most of them, they are likely to be spending
a great deal of their time with sales leads that are not good sales opportunities for them.
3-26 Determining Sales Prospects
The most productive salespeople evaluate sales leads to determine which ones are true prospects for their product or
service. This evaluation process is usually called qualifying sales leads. Salespeople search for, collect, analyze, and use
various types of screening procedures to determine if the sales lead is really a good sales prospect. Although specific
companies define sales prospects in different ways, a SALES PROSPECT is typically an individual or organization that:
• Has a need for the product or service.
• Has the budget or financial resources to purchase the product or service.
• Has the authority to make the purchase decision.
Those that meet these criteria move down the sales funnel (see Figure 3.1) into the sales prospect category, while those
that do not are set aside. Ricoh awards points to sales leads based on the number and types of materials accessed in
responses to company emails. Once a specified number of points are accumulated, the lead becomes a prospect in
Salesforce.com. USA Financial emails each lead five key questions about the situation at their firm. Those scoring above
190 on these questions are considered qualified prospects. Interestingly, only 14 percent of the independent financial
advisors responding to recent emails were found to be qualified prospects. Salespeople who spend the time and effort
qualifying their leads limit the time wasted on making calls with a low probability of success and focus their efforts on
the more fruitful opportunities.
SALES FUNNEL OR PIPELINE A representation of the trust-based sales process and strategic sales prospecting process in
the form of a funnel.
SALES LEADS OR SUSPECTS Organizations or Individuals who might possibly purchase the product or service a
salesperson offers.
QUALIFYING SALES LEADS The salesperson’s act of searching out, collecting, and analyzing information to determine the
likelihood of the lead being a good candidate for making a sale.
3-2C PRIORITIZING SALES PROSPECTS
Even though the qualifying process has culled out the least promising sales leads, the remaining prospects do not all
represent the same sales opportunity. The most productive salespeople prioritize their sales prospects to ensure that
they spend most of their time on the best opportunities. One approach is to create an IDEAL CUSTOMER PROFILE and
then analyze sales prospects by comparing them with this ideal customer profile. Those who most closely fit the profile
are deemed to be the best sales prospects. Another approach is to identify one or more criteria, evaluate sales
prospects against these criteria, and either rank all of the sales prospects based on this evaluation or place the sales
prospects into A, B, and C categories, with A sales prospects representing the best sales opportunities. Ricoh and USA
Financial both prioritize their prospects according to the points assigned to a prospect from their scoring system-the
more points, the better the prospect. At Ricoh, the telephone sales team calls the best prospects to set up an
appointment with a Ricoh field salesperson. At USA Financial, the salespeople contact the highest scoring prospects
directly to schedule a meeting. The net result in both situations is that their salespeople are spending their valuable time
with the best sales opportunities.
SALES PROSPECT An Individual or organization that has a need for the product or service, has the budget or financial
resources to purchase the product or service, and has the authority to make the purchase decision.
IDEAL CUSTOMER PROFILE The characteristics of a firm’s best customers or the perfect customer.
. 3-2d Preparing for Sales Dialogue
The final step in the strategic prospecting process is to prepare for the initial contact with a sales prospect by planning
the sales dialogue. The information accumulated to this point in the process is helpful, but additional information is
usually required to increase the chances of success in the initial sales dialogue. The types of additional information
required are discussed later in this chapter. An example of the strategic prospecting process is presented in “From the
Classroom to the Field: Effective Strategic Prospecting.”
3-3 PROSPECTING METHODS
Many different sources and methods for effective strategic prospecting have been developed for use in different selling
situations. A good selling organization and successful salespeople will have a number of ongoing prospecting methods in
place at any given time. The salesperson must continually evaluate prospecting methods to determine which methods
are bringing in the best results. New methods must also be evaluated and tested for their effectiveness. Many popular
prospecting methods are presented in Exhibit 3.1.
COLD CALLING CONTACTING a sales lead unannounced and with little or no information about the lead.
REFERRAL A name of a company or person given to the salesperson as a lead by a customer or even a prospect who did
not buy at this time.
INTRODUCTION A variation of a referral where, in addition to requesting the names of prospects, the salesperson asks
the prospect or customer to prepare a note or letter of Introduction that can be sent to the potential customer.
3-3A COLD CANVASSING
Cold canvassing occurs when salespeople contact a sales lead unannounced with little if any information about the lead.
COLD CALLING is the most extreme form of cold canvassing because salespeople merely “knock on doors” or make
telephone calls to organizations or individuals. This is a very inefficient prospecting method. Typically, a very small
percentage of cold calls produce, or lead to future sales dialogue with, qualified prospects. Because there is so much
rejection, many salespeople do not like to cold call sales leads.
Using referrals or introductions can improve the success of cold calling. A REFERRAL is a sales lead a customer or some
other influential person provides. Sales people are often trained to ask customers and others for the names and contact
information of potential prospects. Sometimes salespeople can also obtain sufficient information to qualify the lead as a
good sales prospect. Additionally, salespeople can get permission to use the person’s name when contacting the
prospect. In some cases, the person might agree to provide an introduction by writing a letter or making a phone call to
introduce the salesperson to the prospect. This referral approach can work well, but ethical issues might arise, as
depicted in “An Ethical Dilemma.”
3-3B NETWORKING
Salespeople can use various types of networking as effective methods for prospecting. Many salespeople join civic and
professional organizations, country clubs, or fraternal organizations, and these member ships provide the opportunity
for them to build relationships with other members. Sometimes these relationships yield prospects. Some members
might be influential people in the community or other organizations, making them CENTERS OF INFLUENCE for the
salesperson and potentially providing help in locating prospects. Accountants, bankers, attorneys, teachers, business
owners, politicians, and government workers are often good centers of influence.
Networking with salespeople from noncompeting firms can also be a good source of prospects. Business Networking
International (BNI) is a formal organization with each local group consisting of noncompeting salespeople. The basic
purpose of this organization is for the members to generate prospects for each other. There are other sales and
marketing organizations that salespeople can join to create the opportunity to identify prospects by networking with
members.
It is important for salespeople to strike up conversations with other sales representatives while waiting to see buyers.
Noncompeting salespeople can be found everywhere and can help in getting valuable information about prospects. An
example of how noncompeting salespeople can help each other was demonstrated when a Hershey Chocolate, U.S.A.,
salesperson went out of his way to tell a Hormel sales representative about a new food mart going into his territory. The
Hormel representative was the first of his competitors to meet with the new food mart management team and was
given valuable shelf space that his competitors could not get. A few months later, the Hormel sales representative
returned the favor when he found out that an independent grocer was changing hands. The Hershey salesperson was
able to get into the new owner’s store early and added valuable shelf space for his products. The operating principle of
“you scratch my back, and I scratch yours” works when information flows in both directions.
Social media are increasingly being used by sales people to engage in ELECTRONIC NETWORKING by identifying,
gathering information about, and communicating with prospects. Studies indicate that salespeople using social media
actively are more productive and perform better than salespeople not involved with social media. These salespeople use
LinkedIn most often, followed by Facebook, Google Plus, and Twitter. Social media help salespeople identify more leads
and better prospects earlier in the buying process, and provide them the opportunity to share valuable content that
leads to conversations with prospects.
Consider one suggested approach for using LinkedIn. A salesperson can identify leads from the networks of their
LinkedIn connections and from the “Who’s Viewed Your Profile” on their LinkedIn screen. They can then send a
connection request to the lead. Once connected to the lead, the salesperson can email a message with meaningful
content as a way to start a conversation with the lead and to determine if the lead is a qualified prospect. If so, the
salesperson can continue the conversation and try to move into the remainder of the sales process at the ap propriate
time. If not, the salesperson can still share relevant content, because the lead might become a qualified prospect in the
future.
CENTERS OF INFLUENCE Well known and influential people who can help a salesperson prospect and gain leads
NONCOMPETING SALESPEOPLE A salesperson selling noncompeting products.
ELECTRONIC NETWORKING Using social media to help salespeople identify, gather information about, and communicate
with prospects.
3-3c Company sources
Many companies have resources or are engaged in activities that can help their own salespeople with strategic
prospecting, Company records can be a useful source of prospects. Salespeople can review company records to identify
previous customers who have not placed an order recently. Contacting previous customers to determine why they have
stopped ordering could provide opportunities to win back business. Examining the purchasing behavior of existing
customers can also help in identifying opportunities to sell additional products to specific customers.
ADVERTISING INQUIRIES are potentially a good source of prospects. For example, one manufacturer’s rep in the natural
gas industry speaks highly of his company’s advertising plan. They only advertise in trade magazines that they believe
their buyers read. The salesperson’s territory includes Idaho, Utah, Montana, and Wyo ming. Their advertising message
is simply, “If we can help you with any of your natural gas needs (e.g., flow meters, odorizers ), please give us a call.”
These leads are then turned over to the sales person who calls on that territory. One salesperson cannot cover
territories of this size. The advertising program qualifies the prospect (with the help of the telephone) before the
salesperson is sent out on the call.
The Ricoh and USA Financial examples presented earlier in this chapter represent different approaches companies are
implementing to employ Web-based and email marketing campaigns to identify sales leads, qualify and prioritize
prospects, and help salespeople focus on the best sales opportunities.
Chapman Kelly is one company that has used Web-based marketing effectively. The company rede signed its Web site to
include interactive features that created a dialogue with visitors. It worked on the site’s search engine optimization to
get into the top five listings for healthcare audit-related terms and started a company blog. These efforts increased
traffic to its Web site from 10 to 15 visits per week to 1,500-2,000, generated qualified sales prospects, and increased
new business by $2 million. This Web-based marketing approach has replaced cold calling as the major source of new
customers.
Many organizations today use both inbound (prospect calls the company) and outbound (salesperson contacts the
prospect) telemarketing. INBOUND TELEMARKETING involves a telephone number (usually a toll-free number) that
prospects or customers can call for information. Companies distribute toll-free numbers by direct mail pieces
(brochures), advertising campaigns, and their OUTBOUND TELEMARKETING PROGRAM. United Insurance Agency uses
both inbound and outbound telemarketing to serve their market niche of hotels across America. They use outbound tele
marketing to generate and then qualify leads for their sales force. Qualified leads are turned over to experienced
salespeople. Usually, interns do all the outbound tele marketing. Inbound telemarketing is used to resolve problems,
answer questions of prospects, and take orders from existing customers.
Attending conventions and TRADE SHOWS present salespeople with excellent opportunities to collect leads. Generally,
the company purchases booth space and sets up a stand that clearly identifies the com pany and its offerings.
Salespeople are available at the booth to demonstrate their products or answer questions. Potential customers walk by
and are asked to fill out information cards indicating an interest in the company or one of its products. The completed
information card provides leads for the salesperson. Trade shows can stimulate interest in products and provide leads.
For example, bank loan officers attend home improvement trade shows and can offer the home owner immediate credit
to begin a project. Those who sign immediately may be offered a reduction in their interest rate.
Firms can use SEMINARS to generate leads and provide information to prospective customers. For example, a financial
planner will set up a seminar at a local hotel to give a presentation on retirement planning, inviting prospects by direct
mail, word of mouth, or advertising on local television and radio. The financial consultant discusses a technique or
investing opportunities that will prepare the audience for retirement. Those present will be asked to fill out a card ex
pressing their interest for follow-up discussions. The financial consultant hopes this free seminar will reward him or her
with a few qualified prospects.
COMPANY RECORDS Information about customers in a company database.
ADVERTISING INQUIRIES Sales leads generated from company advertising efforts.
INBOUND TELEMARKETING A source of locating prospects whereby the prospect calls the company to get information.
OUTBOUND TELEMARKETING A source of locating prospects whereby the salesperson contacts the prospect by
telephone. trade shows Events where companies purchase space and set up booths that clearly identify each company
and its offerings and that are staffed with salespeople who demonstrate the products and answer questions. seminars A
presentation salespeople give to generate leads and provide information to prospective customers who are invited to
the seminar by direct mail, word of mouth, or advertising on local television or radio.
3-3d Commercial Sources
A variety of sources in print and electronic form can be very useful in prospecting. DIRECTORIES offer an in expensive,
convenient means of identifying leads. Tele phone books today contain a business section that lists all the community’s
businesses. This list is usually broken down further by business type. Manufacturers, medical facilities, pharmacies, and
grocery stores, to name a few, can be easily identified by using the business pages of the phone book. Many other
directories exist, such as chamber of commerce directories and trade association lists. The online versions of these
directories are especially valuable, because they are updated regularly and usually have search capabilities to facilitate
the identification of targeted leads.
There are a growing number of companies providing a variety OF LEAD MANAGEMENT SERVICES, such as lists of
targeted businesses or individuals with detailed contact and other information, as well as email, direct mail, telephone,
and Web-based marketing services to connect with the targeted leads.
3-4 DEVELOPING A STRATEGIC PROSPECTING PLAN
The most productive salespeople use a variety of prospecting methods and follow the strategic prospecting process by
generating leads, qualifying them to identify true prospects, and then prioritizing these prospects so that they pursue
the best sales opportunities. The use of a strategic prospecting plan can help salespeople continuously improve their
prospecting effectiveness. An example of increasing prospecting effectiveness is presented in “TECHNOLOGY IN SALES:
Improving the Strategic Prospecting Plan.”
A STRATEGIC PROSPECTING PLAN should fit the individual needs of the salesperson. As illustrated in Figure 3.2, the focal
point of a prospecting plan should be the goal stating the number of qualified prospects to be generated. Formalized
goals serve as guides to what is to be accomplished and help to keep a salesperson on track. The plan should also al
locate an adequate and specific daily or weekly time period for prospecting. Having specific time periods set aside
exclusively for prospecting helps to prevent other activities from creeping in and displacing prospecting activities. A
good TRACKING SYSTEM should also be a part of the prospecting plan. A tracking system can be as low-tech as a set of 3
x 5-inch note cards or employ one of the many computerized and online contact management or customer relationship
management software applications. Exhibit 3.2 shows an example of a simple, but effective, paper-and-pencil tracking
form. The tracking system should record comprehensive information about the prospect, trace the prospecting methods
used, and chronologically archive outcomes from any contacts with the prospect. A fourth element of the prospecting
plan is a system for analyzing and evaluating the results of prospecting activities. Continuous evaluation should be
employed to ensure that the salesperson is meeting prospecting goals and using the most effective prospecting
methods. The fifth and final element of a prospecting plan should be a program to review and stay up-to-date on
product knowledge and competitor information to emphasize and underscore that the salesperson’s products and
services offer the best solutions to customer needs and problems. Self confidence is critical to success in selling, and a
base of comprehensive knowledge and understanding is the key to believing in one’s self.
As with all phases of the sales process, salespeople must exercise judgment and set priorities in prospecting. There is a
limited amount of time for prospecting, and a better understanding of the concepts and practices illustrated in this
chapter can help a salesperson be more productive. An added bonus is that the sales process is more enjoyable for
salespeople calling on bona fide prospects who can benefit from the salesperson’s offering.
DIRECTORIES Electronic or print sources that provide contact and other information about many different companies or
individuals.
LEAD MANAGEMENT SERVICES Lists of targeted businesses or individuals with detailed contact and other information,
as well as email, direct mail, telephone, and Web-based marketing services to connect with targeted leads.
STRATEGIC PROSPECTING PLAN A salesperson’s plan for gathering qualified prospects.
TRACKING SYSTEM Part of the strategic prospecting plan that records comprehensive information about the prospect,
traces the prospecting methods used, and chronologically archives outcomes from any contacts with the prospect.
3-5 GATHERING PROSPECT INFORMATION TO PREPARE FOR SALES DIALOGUE
The basic objective of the strategic prospecting process is to provide salespeople with a list of prioritized sales prospects.
Salespeople can then select the best opportunities and move into the next stage of the trust-based sales process, which
is covered in Chapter 4, “Planning Sales Dialogues and Presentations.” Some information about the prospect has been
collected throughout the strategic prospecting process, but more is needed to be effective at each stage of the trust-
based sales process. In many cases, the next step is for the salesperson to contact the prospect by telephone. Although
the purpose of this call is usually to set up an appointment, salespeople are often able to collect additional useful
information. All of the information collected prior to meeting with a prospect provides a foundation for completing the
Sales Dialogue Template addressed in Chapter 4. An example of assembling prospecting information before meeting
with current customers to generate more business is presented in “SELLING IN ACTION: Prospecting Information for
Current Customers.”
The more information a salesperson has about a prospect, the better chance a salesperson has to make a sale. Thus,
gathering relevant information is an ongoing activity throughout the trust-based sales process, but especially important
prior to the initial sales dialogue with a prospect. The information needed varies depending on the product or service
being sold and the specific buyer’s situation. We will examine the types of basic information about the prospect and
