Personal Selling: Chapter 7

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  • Personal Selling: Chapter 7

    1. 1. Prospecting Chapter 7
    2. 2. Important Questions Answered Why is prospecting important for effective selling? Are all sales leads good prospects? What are the characteristics of a qualified prospect? How can prospects be identified? How can the organisations be identified? How can the organisation’s promotional programme be used in prospecting? How can an effective lead qualification and management system aid a salesperson? How can a salesperson overcome a reluctance to a prospect? 2
    3. 3. “The telemarketing aspect of my process can be frustrating at times because I’ll call prospects that won’t give me the time of day.” ~Tasha Stulz Parker Marketing Research 7-3
    4. 4. Prospects - Dictionary Meaning An apparent probability of advancement, success, profit, etc. The outlook for the future: good business prospects. Anticipation; expectation; a looking forward. Something in view as a source of profit. Potential or likely customer, client, etc. A potential or likely candidate. 4
    5. 5. THE CONCEPT OF PROSPECTING A salesperson without prospects is out of business. A salesperson without prospects can no more close a sale than a surgeon without a patient can operate. Presenting a professional appearance, giving an impressive presentation and closing like a master are not enough to prevent failure if too little attention is given to prospecting. If your closing ratio is lower than you like, the major problem may be that you dont have enough good prospects -- not that you are a poor closer. You must have someone to whom to tell your story -- someone who wants to buy and can buy. Prospects are everywhere - find the best 5
    6. 6. QUALIFYING THE PROSPECT Moving from a "lead" to a qualified prospect Lead Just a name Researched for need, moneyProspect authorityQualified Evaluated prospect along withProspect personal information 6
    7. 7. Relationship Between the Steps in the Selling Process and the Designation of the “Buyer” 7-7
    8. 8. The Importance of Prospecting Many experts believe it is the most important activity a salesperson does It is the process of locating potential customers for a product or service. The world is constantly changing More important in some fields than in others No salesperson can ignore leads, even in a position requiring less emphasis on new contacts 8
    9. 9. Class “A” Prospects Referral from a person the prospect respects Has the ability to make a buying decision Has the ability to pay for the product or service You have all the personal information you need to make a good presentation 9
    10. 10. Characteristics of a Good Prospect Starts with a Lead, which should be qualified. Quite some time is spent; amount of time spent depends upon the type of sale. 10
    11. 11. A qualified prospect is MAD He or she has:  Money to buy  Authority to buy  Desire to buy 11
    12. 12. Qualify with the MADDEN TestM oney •Research credit beforeA pproachable •Can you get an appointmentD esire •You may have to create or discoverD ecision-Maker •Often missed by salespeople •May be committed alreadyE ligible •our company may turn down 12
    13. 13. Questions Asked To Qualify And Pinpoint A Good Prospect Does the lead has a want or a need that my product/service can satisfy? Does the lead have the ability to pay? Does the lead have the authority to buy? Can the lead be approached favourably? Is the lead eligible to buy? 13
    14. 14. Does a Want or Need Exist? People buy to satisfy tangible as well as practical needs. Sometimes sales are made through creating high pressure tactics but in this way a potential long-term customer is lost. The lead must want to solve a problem to be considered a qualified prospect. 14
    15. 15. Does the Lead have the Ability to Pay? The ability to pay separate Lead from prospects. A client is not a real prospect without resources to pay for the product Ability to pay includes both cash and credit The client may have a desire to buy but if she/he is unable to pay, is not a Prospect 15
    16. 16. Does the Lead have the Authority to Buy? Knowing who has purchasing authority saves the salesperson time and effort and results in a higher percentage of closed sales It is better to simply ask that person if that person has the authority to buy. Companies also delegate their purchasing tasks to outside vendors – system integrators 16
    17. 17. Can the Lead be Approached Favourably? At times they are very difficult to be approached e.g. Chief Executives etc that the salespeople do not consider them as prospects Possibility of getting an interview and Chances of making a sale 17
    18. 18. Is the Lead Eligible to Buy? Salespeople should be careful in contacting as if the company sells to wholesalers then only the wholesalers should be contacted. Salespeople should also be careful in locating the prospects that they should be in their exclusive sales territories Volume Status Sales territories 18
    19. 19. House accounts large or potential customers that are handled exclusively by the corporate executives should not be contacted by the salespersons 19
    20. 20. Other Criteria Leads that meet five criteria are generally considered excellent prospects. At times a few more are added to the list depending upon the company/item being sold. Timing of the purchase Long-term customer potential 20
    21. 21. Why we lose old customers Customers company goes broke Competitor takes your customer Customer moves or dies Merger or downsizing Customer-salesperson relationship deteriorates 21
    22. 22. How and Where to Obtain Prospects? Satisfied Customers Endless-Chain Method Centre-of-Influence Method Networking Promotional Activities  The Internet  Inquiries from Advertising and Direct Mail  Shows  Seminars Lists and Directories Canvassing 22 Spotters
    23. 23. How and Where to Obtain Prospects?( contd. Telemarketing  Limitations of Telephone Prospecting  Tie-in With Other Tools Sales Letters Other Sources of Leads 23
    24. 24. How and Where to Obtain Prospects – Satisfied Customers (contd.) Selling deeper Additional sales to satisfied customers Referral events who provide leads. Gatherings designed to allow current customers to introduce prospects to the salesperson, to generate leads. Negative referral Customer who tells others about how poorly you or your product performed. 7-24
    25. 25. Prospecting Methods that Work! 25
    26. 26. Telemarketing Salesperson uses phone and/or telemarketing staff to generate leads Outbound vs. inbound telemarketing 26
    27. 27. The Processing System Within a Telemarketing Center 27
    28. 28. Reports From a TelemarketingCenter to Other Marketing Groups Within the Firm 28
    29. 29. Referrals Have referral make the initial contact Learn how to ask for a referral Get letter of introduction Have referral call the prospect Referrals tend to be horizontal 29
    30. 30. Why people dont give referrals Cant think of anyone Object to giving referrals Time constraint 30
    31. 31. Centers of Influence Sales person cultivates well-known, influential people in the territory who are willing to supply lead information Buying community Believes in what you are selling Is influential with a number of people Is willing to give you names The names given to you are at least partially qualified prospects, more than just leads May never buy 31
    32. 32. Spotters Salesperson pays someone for lead information 32
    33. 33. Group Prospecting Give a brief presentation to a group Follow up with interested prospects Trade shows Speaking engagements Seminars 33
    34. 34. Seminars Salespeople use seminars for prospects to generate leads Appeal to a specialized market Invite good prospects Go high-quality Be involved before, during, and after 34
    35. 35. Shows, fairs, and merchandise markets Salespeople use these venues for lead generation At many tradeshows all attendees are customers Timely follow-up of leads is critical if sales follow a show 35
    36. 36. Planned Cold Calling Salesperson tries to generate leads by calling on totally unfamiliar organizations At least one out of seven will be receptive. Treat cold calls as a supplement. Develop effective, memorable door Dont neglect others by too much of this. Preplan Cold Calls openers Limit Waiting Fifteen minutes Keep busy while waiting Remain Enthusiastic 36
    37. 37. Direct Mail or Fax Prospects do read well targeted direct mail Watch quality of purchased lists Create your own newsletter Mailing is good and Cheap Postcard pack Bounce-back card 37
    38. 38. Sales letters Salesperson writes personal letters to potential leads Follow up with a telephone call Include promotional items 38
    39. 39. Internet Salesperson uses websites, e-mail, listservers, bulletin boards, forums, roundtables, and newsgroups to secure leads Extranets E-selling 39
    40. 40. Ads, catalogs, and publicity Salespeople use these forms of promotional activities to generate leads 40
    41. 41. Joining Civic Groups Assume leadership responsibilities Become highly visible Set contact goals for each club meeting Keep files on each contact made Use "re-meet " goals to help you develop closer relationships Reach out to new members Use active listening Look for sales opportunities 41
    42. 42. Networking - active cooperation There are formal groups that you can join Sharing information makes good sense Salesperson uses personal relationships with those who are connected and cooperative to secure leads Suggestions: Call at least two people per day and go to at least one networking event every week Spend most of your initial conversation with a new contact talking about his or her business and learn about the person’s nonbusiness interests Follow up with your new contact on a regular basis 42
    43. 43. Endless chain Salesperson attempts to secure at least one additional lead from each person he or she interviews Referred lead 43
    44. 44. Example: Endless-Chain Method 7-44
    45. 45. Using Directories Salespeople use secondary data sources, which can be free or fee-based Purchasing lists Sales and Marketing Management - buying power index Moodys Industrial Manual Poors Register of Directors and Execs The Dun and Bradstreet Reference book The Thomas register of American Manufacturers Contacts Influential 45
    46. 46. Observation Prospects are everywhere  Always be looking  Read the news  Trade journals 46
    47. 47. Other sources of leads Salesperson uses noncompeting salespeople, people in his or her own firm, friends, and so on, to secure information Government agencies 47
    48. 48. Company Initiated Prospecting •Telephone •Human callsTelemarketing •Computer generated calls •Fewer leads •Lower cost •Direct mailAdvertising •Newspaper •Other mediaPast Customers •Go over list of inactive accounts •Selecting the right show •On the spot vs. lead generation •Display planningTrade Shows •Staffing the booth •Pre show training •Getting high visibility •Managing information collected at show •Planning follow up •For ProspectingWeb Sites •Streamline the sales process 48 •Joint marketing with other firms
    49. 49. MANAGING PROSPECT INFORMATION Initial Recording of Leads1.Record all basic information2.If you dont have a computer then use index cards Classification of Prospects1. A simple method for manual systems a.Class A - You have enough information to make a presentation b.Class B - You need more information to make a presentation c.Class C - a "lead" you dont know much more than the name2.Sophisticated, multi dimensional classifications can be done with a computer Scheduling Contacts1.Contact prospects using a prioritized list2.Keep a tickler file. 49
    50. 50. USING TECHNOLOGY TO MANAGE PROSPECT INFORMATION Personal DatabasesCorporate Databanks Improving •Salespeople now have access to the most current Communications information 50
    51. 51. Lead Qualification and Management Systems The process developed by the salespeople for qualifying leads is called Lead Qualification System The process of analysing the relative value of each lead is called Lead Management System  Prequalification  Analyzing lead value  Evaluating profitability of sales resulting from lead- generating activities 51
    52. 52. Overcome a Reluctance to Prospect Salespeople usually face a natural reluctance to prospects. Reasons for this may be one or several out of the following  Worrying about the worst-case scenarios  Spending too much time preparing  Being overly concerned with looking successful etc.  Being fearful of  Making group presentations  Appearing too pushy  Losing friends or family approval  Using the phone for prospecting  Feeling intimidated by people with prestige or power, o feeling guilt at having a career in selling  Having a compulsive need to argue, make excuses, or blame others 52
    53. 53. Helpful activities to Overcome a Reluctance to Prospect Helpful activities Identify and evaluate excuses not to call Engage in sales training and role-playing activities Make prospecting contacts with a supporting partner or sales manager Set specific goals for all of your prospecting activity Realize the economic value of most prospecting activities Stop negative self-evaluation from ruling your behavior Remember that you are calling on prospects to solve their needs Control your perceptions of what prospects might say about you, your company, or your products Learn and apply relaxation and stress-reducing techniques Recount your own prospecting successes, or those of others 53
    54. 54. Reasons for Call Reluctance Yielder • Fears intruding on others or being pushy. Overpreparer • Overanalyzes • Underacts.Emotionally unemancipated • Fears loss of family approval • Resists mixing business and family. Separationist • Fears loss of friends • Resists prospecting among personal friends. Hyper-Pro • Obsessed with image • Fears being humiliated. Role rejecter • Ashamed to be in sales. Socially self-conscious • Intimidated by upmarket customers. Doomsayer Worries, won’t take risks. Telephobic • Fears using the telephone for prospecting or selling. Stage fright • Fears group presentations. Referral aversions • Fears disturbing existing business or client relationships. Oppositional reflex 54 • Rebuffs attempts to be coached.
    55. 55. Summary Locating prospective customers is the first step in the sales process. Not all sales leads qualify as good prospects. Many methods can be used to locate prospects. The best source is a satisfied customer. Effective prospecting requires a strong plan that hinges on developing a lead qualification and management system and overcoming reluctance to prospect. 7-55
    56. 56. End of Chapter 7
    57. 57. Thank you

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