Chapter 9

Developing and Qualifying Prospects and Accounts

Chapter Overview and Presentation Agenda

  1. Importance of Developing a Prospect or Account
    • Understanding why creating long-term customers is essential for sales success.
  2. Identify and Assess Important Sources of Prospects and Accounts
    • Discuss where to find potential customers and evaluate their worth.
  3. Describe Criteria for Qualifying Prospects and Accounts
    • Establish the standards prospects must meet to be worthy of attention.
  4. Common Methods of Collecting and Organizing Prospect and Account Information
    • Overview of techniques and tools for managing prospect data.
  5. Steps in Managing the Prospect or Account List
    • Procedures necessary to maintain an effective list of prospects and accounts.

The Role of a Salesperson

Purpose of a Salesperson

  • Quotation from Gerhard Gschwendtner: “The main purpose of a salesperson is not to make sales, but to create customers.”
    • This quote prompts reflection on the core purpose of a salesperson. Do you agree or disagree with this statement?

Understanding Prospecting

Definition of Prospecting

  • Prospecting: The process of identifying and developing potential customers.
    • In B2C (Business to Consumer): Individual consumers are targeted as prospects.
    • In B2B (Business to Business): Focus is on account or business development.

Who is a Prospect?

  • A prospect is defined as an individual or business that meets the qualification criteria set by you or your company.

Customer Attrition

Definition of Customer Attrition

  • Customer attrition refers to the inevitable loss of customers over time.

Causes of Customer Attrition

  1. One-time need or long intervals between purchases.
  2. Movement outside of a salesperson’s territory.
  3. Customer business failure or mergers impacting client retention.
  4. Changes in loyal buyers or purchasing agents.
  5. Sales lost to competitors.

Sources of Prospects and Accounts

Ideal Sources Include:

  • Referrals: Recommendations by existing customers.
  • Centers of Influence: Key individuals who can introduce you to potential customers.
  • Directories: Lists containing contact information for potential prospects.
  • Trade Publications: Industry-specific journals that highlight new businesses and trends.
  • Trade Shows: Events where businesses showcase their products and services.
  • Telemarketing: Direct outreach to potential clients.
  • Direct Mail, E-mail, and Advertising: Promotional methods to reach prospects.
  • Websites and Computerized Databases: Digital tools for finding and contacting prospects.
  • Cold Calling: Reaching out to potential customers who haven't expressed interest.
  • Networking: Building professional relationships that can lead to new opportunities.

Improving Prospecting Efforts

Planning for Effective Prospecting

Three key strategies to improve prospecting efforts include:

  1. Increasing the Number of Prospects: Engaging more individuals or businesses in your prospecting efforts, depicted by the "Ferris Wheel" model.
  2. Improving the Quality of Prospects: Focusing on more promising leads that are likely to convert.
  3. Shortening the Sales Cycle: Quickly determining which prospects meet qualification criteria based on needs, authority, ability to pay, and purchasing authority.

Qualifying Prospects and Accounts

Criteria for Qualifying Prospects

  • Qualifying Process: Identifying those prospects that demonstrate a need for your product.
    • Questions to determine qualification:
    1. Does the prospect or account have a need for my product?
    2. Does the prospect have the authority to buy my product?
    3. Does the prospect possess the financial resources needed for the purchase?
    4. Is there a willingness to buy my product?

Importance of Sales Intelligence

Definition of Sales Intelligence

  • Sales intelligence encompasses the insights needed when a sale is complex or possesses a lengthy closing cycle.

Elements of Sales Intelligence

  • It includes not only sales data but also:
    • Insights about the marketplace.
    • Understanding of the firm itself.
    • Knowledge about competitors.
    • Insights regarding the prospects themselves.

Analyzing Account Opportunities

Portfolio Model of Accounts

  • Differentiation of accounts based on competitive position and the strategic importance:
    • Strategic Accounts: High potential but resource-intensive; require careful service and monitoring to retain.
    • Problem Accounts: Worth pursuing only if competitive weaknesses can be addressed.
    • Hold Accounts: Maintain current sales with minimal resource commitment; should be observed for emerging opportunities.
    • Drag Accounts: Minimal resources should be dedicated, as they seldom contribute positively or can be better served by indirect methods.

CRM Sales Funnel Analysis

Data from Sales Funnel Analysis

  • Total Potential Sale Analysis illustrates potential revenue based on sales process stages. Statistics include:
    • Stage: Prospect to Closed/Serviced.
    • Example figures indicating potential at various stages:
    • Total Potential Sales: 2000 (51%), 450 (12%), 525 (13%), 175 (4%), 425 (11%), 330 (8%).
    • Forecast values across various stages of the sales process.

Learning Objectives for this Chapter

  1. LO 9.1: Explain the importance of developing a prospect or account; understand the Ferris Wheel model of prospecting.
  2. LO 9.2: Identify and assess important sources of prospects and accounts.
  3. LO 9.3: Describe criteria used for qualifying prospects and accounts.
  4. LO 9.4: Explain techniques for collecting and organizing prospect information and the steps in managing prospect or account lists.

Take-Home Study Guide

  • Review all learning objectives and concepts discussed to ensure a comprehensive understanding of the material.