Not All Prospects Are Created EqualPosted on 05/15/2013 in Prospecting and Business Development
"...there are two great myths that destroy margins -
all customers are created equal and
all customers should be treated the same."
- STAR client
The most common prospecting mistake is to go after the wrong prospect. Not only does it waste time and money, but if you do succeed in making a sales you will likely regret it.
An effective business development strategy should always be to win more and better quality new business. The following process will help you to identify, gain access, and win new business with the right accounts.
Set Clear Goals to Reflect "The Ones Worth Winning"
How do you know who is worth winning? You must target your best markets and prospects. The first step in the prospecting pipeline is to set clear goals. Average salespeople only set quantitative goals such as:
5 new accounts this quarter
New sales revenue of $250,000 this year
However, they fail to consider the qualitative difference of those accounts. Are all accounts equally valuable? Or are these accounts equally profitable? Business development and sales strategies today utilize smart segmentation. Focus on your best clients and prospects and deselect the least profitable ones. A better way to state the above goals would be:
5 new accounts this quarter with a minimum gross margin of X% at each account
New sales revenue of $250,000 this year in market segment XYZ (or for product/service ABC)
A Great Prospect
What are some key differentiating factors that distinguish a great lead or prospect?
- The prospect has a genuine need or interest for your service or product. You want to avoid being "shopped."
- The potential size of the sale justifies your selling effort and resources. One tip: you shouldn't always go after the largest accounts. Quite often, it is more profitable and easier to win mid-tier accounts.
- The timing is right (in terms of the "decision process" and deadline for decision). How urgently does this customer need your product/service?
- Your contact(s) have the authority to buy.
- The money or funding is available in the budget.
- The prospect values what you provide and is not just interested in price.
Visit our Sales Prospecting and Business Development workshop page for more details.