On this episode, Paul provides great tips to help you choose your next prospect.
Show Notes
“Build a ______ for your prospect.”
Increase your prospecting activity.
Use this formula for a balanced pipeline:
How will you initiate contact?
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What are your three best prospecting tips?
(Transcribed from podcast)
Today, we’re going to continue our question from our previous episode. Kelvin asked us a question regarding timing. What is the best time to reach out to a prospect? You can go back and listen to that episode. The other question Kelvin asked us was, “What are your best prospecting tips?” So, that’s what we’re going to focus on today is “What are your three best prospecting tips?”
Before we get into that, a quick shout-out to Andrea over at The Creative Impostor Studios. Andrea, I just found out that the podcast is now been downloaded in over 64 countries and a lot of that credit goes to you. Thanks for all your help. You do a wonderful job. Make sure you reach out to Andrea. If you’re thinking of starting a podcast, if you have an idea for a podcast, even if you want to build an internal podcast for your company, Andrea can help you out. So, we’re going to have a link to her website on this episode’s webpage. So, make sure you check that out.
Also, pick up your latest copy of Value-Added Selling. We’re now in the fourth edition of the book. There are several prospecting tips in the book, including how to select the right prospects, how to go through and pursue those prospects. These are all critical things we need to know to go out there and prospect effectively. So, pick up your copy. It’s available wherever you get your books.
Also, we have exciting news. Another book is going to be available to you, the sales community, coming this Fall. I’ve got more information to share with you on that, but we’ll have to save it for another podcast.
Let’s get back into that question: What are your three best prospecting tips?
We’re going to go in order. Number one: [The] most important thing you need to do—build a profile for your prospect. You’d be shocked at how many salespeople go out there, they’re not sure who they’re going to call on; they’re not sure what good criteria would be for them to select a prospect. They don’t have a profile of who they’re going after. Basically, anyone with a pulse or a backbone, hey, let’s call on them. They might be an opportune target.
That’s not the way we approach our targets. We’ve got to make sure we have a clear and specific profile that we created. If you’re having trouble figuring out what good business is for your company, reach out to your sales manager, reach out to the owner of the company, whoever it might be and ask them, “Hey, what type of prospect should I be focusing on?” Hear their thoughts. Let them explain what is good business for the company.
Another way you can figure this out on your own is to look at your best customers. Think of your best customers—the ones that deliver most of your revenue—and ask yourself, “What did these customers have in common?” That overlap, the commonalities between those different customers, can help you create a profile.
For example, if you look at your best customers and you realize that they’re all family-owned private businesses, that’s a piece of criteria you can look for. Next, they were all referrals from existing customers. That’s another piece of criteria. And third, they’re all in a specific industry. Now you’ve got three commonalities. You know that your ideal prospect is going to be a family-owned business and a specific industry that is generated by a referral. That’s your ideal prospecting target. That’s who you want to focus on. That’s who you’re going to go after. So, make sure you develop a profile—a profile that determines what’s a good fit.
The last thing you want to do is just go after anyone and everyone. We call that the shotgun approach where you’re just going after every target that’s possible. Or there’s the other example, the Mount Everest effect. The Mount Everest effect in business is when you decide to pursue a piece of business because it’s there. And it’s there, you look at it, you think, ‘Hey, maybe I’ll go after them.’ That’s the Mount Everest effect. Instead, we want to have a clear profile. So, tip number one: build a profile.
Tip number two: you’ve got to fill that pipeline. You have to fill that pipeline and maintain a balanced pipeline. The sales world is filled with peaks and valleys. The goal is to minimize your valleys and extend your peaks as much as you can. In order to do that, you need to balance your pipeline. So, there’s a ratio I want you to remember. I’ve talked about this ratio in the past, and that ratio is usually 4-2-1, but I’m going to switch it up a little bit. Right now, we’re facing a little uncertainty, and during tough times, uncertain times, you need to increase your prospecting activity. So, the new ratio is 6-3-1. You’ll need six potential opportunities that you can qualify into three qualified opportunities that you can convert into one red-hot opportunity.
So, let me go through the lingo. A potential opportunity is just that—they could be a viable opportunity. You have yet to qualify them. You haven’t met with them. Perhaps you did a little research online and you came up with six potential opportunities that could be a good fit for your company. At this point, all they are are potential opportunities. Once you meet with them and you qualify and you determine that they are a good fit, then they become a qualified opportunity. Once they’re a qualified opportunity, you’ve got to determine whether it’s viable or not. Is there a good chance that they will work with you. And to be a qualified opportunity, you have to be able to say that it’s 50/50. You’ve got a 50% chance of winning that business. That’s what qualifies it as a qualified opportunity.
Now, the next step, we’ve got to convert those qualified opportunities into a red-hot opportunity. A red-hot opportunity is an opportunity that you are almost 100% sure—let’s say with 90% certainty you can say, “I’m going to win this business.” Perhaps this prospect gave you a verbal commitment to buy already. Perhaps they started filling out some paperwork. They started asking buying questions like, “Hey, how soon can we get this?” With 90% certainty you can say they’re going to buy from you.
Let’s go through the lingo again. Remember, a potential opportunity, it might be an opportunity. A qualified opportunity with 50% certainty you can say there’s a good chance we’re going to do some business. And then a red-hot opportunity—It’s almost 90% certain that you’re going to win that piece of business. To maintain a balanced pipeline, you need to have six potentials, three qualifieds, and one red-hot opportunity. If you keep your pipeline of opportunity balanced at that level, you’re going to be successful. The key is to maintain that balance. Right now, every time you close a red hot opportunity, yeah, that’s great. You made a sale, but you need to quickly forget about that one and refill the pipeline because it’s going to take six potentials and three qualifieds to help you get another red-hot opportunity. So, you’re constantly having to increase your activity level and convert those potentials to qualifieds into red hot opportunities. Tip number two, again, fill that pipeline and keep it balanced. Use that ratio 6-3-1 to help you.
Next thing you want to do, you want to determine your mode of entry. Once you identify who your targets are that you’re going to go after, you need to decide how you’re going to initiate contact with these opportunities. You can initiate contact at the very top, and the middle, or at the bottom. When I say initiate contact at the top, that means you reach directly out to that high-level decision maker and that’s how you initiate contact with the opportunity. When I say entering from the middle, that means you’re reaching out to those mid-level influencers, those types of decision makers that can help provide you with information and help champion your solution up the ranks to those high-level decision makers.
The third way you can enter that opportunity is through the bottom: procurement. Your procurement buyers, they tend to focus more on price. They tend to be more transactional with their mindset. Here’s the challenge you’re going to face. When you’re meeting with those lower-level decision makers, they’re going to try to block you from other decision makers throughout the organization. So, the choice is yours. You can decide how you want to go after these opportunities. I’d recommend going after the middle or the top and avoid the bottom completely.
The reason we want to enter from the middle or the top is because these are the individuals that are more likely to buy into your value-added solution. Procurement might be easy to meet with. You could get an appointment with them. You have their contact information. They want you to start with procurement. Take the road less traveled. Start at the middle or start at the top. It’s going to help you as you try to generate momentum for your ideas and gather information to present your value-added solution.
All right folks. That’s the show for today.
Again, three tips to help you go out there and prospect more effectively. Number one: make sure you’re building a profile for what good business looks like for your company. Once you develop that profile, you need to fill your pipeline. And to do that, you’ve got to maintain that ratio, 6-3-1: six potentials for three qualifieds to give you that one red-hot opportunity.
And then finally, determine your mode of entry. Are you going to go and meet with high-level decision makers, first go towards the middle, or are you going to meet with procurement first at the bottom? The key? Enter the middle or the top. Try to avoid the bottom.
Make it a big day.
