Mining For Prospects
You're sitting in a meeting with a new prospect. He seems mildly interested in what you have to offer, and he isn't using any of your competitors. But at the end of the meeting, the most he'll say is, "I'll think about it." Sound familiar?
If you've been meeting with a steady stream of prospects without closing sales, the problem may be something quite common among new entrepreneurs: You may just be meeting with the wrong prospects.
I recently spoke with a business owner whose meetings with new prospects consistently yielded unsuccessful results. Every time she called a prospect and found he was buying from one of her competitors, she ended the conversation and searched for someone who had never tried her type of service. She was taking herself out of the running for the best contracts, and instead was meeting with prospects who were going to have a much longer selling curve, because they still had to be educated about the benefits of using such a service before they could choose her firm to provide it.
In the United States, it costs an average of $113 each time you leave your office to call on a prospect, according to Sales and Marketing Management Magazine. That's why it's vital to meet only with qualified prospects.
A qualified prospect meets three criteria. He or she:
1. has a need for your product or service;
2. can afford it; and
3. is willing to pay for it.
When meetings with new prospects routinely fall flat, it's often because you haven't differentiated between prospects who are qualified and those who are not. Qualify prospects by phone before scheduling appointments, and listen carefully to how well they fit these three criteria.
Poor prospects will be easiest to spot. Suppose you contact a prospect and she says, "We don't have a need for your type of product in our business. I haven't got a budget set aside for it, and I'd have to go to my management committee for approval. But I have some time this afternoon. If you like, you can stop in and we'll talk about it."
Don't meet with her; you might as well write her a $113 check, because you'll be wasting your time. She's unsure if there's a need for your product within her company, she can't afford to buy it in a reasonable time frame because she has no budget set aside, and you don't know if her management committee will approve. The selling curve for educating this prospect is too long to bother with.
Here's an example of what a good prospect sounds like: "Yes, we use your type of product in our office, but we're using your competitor and we're pretty happy with them. And I'm so busy, I don't know if I can set aside the time to meet with you right now."
Finding out a prospect is using your competitor is great news. Typically, it means she fits all three criteria of a good prospect. In this case, she needs your type of product and is using it now. You know she can afford the product because she's purchasing it from your competitor on a regular basis. Now it's up to you to demonstrate how it will be more beneficial to her to purchase the product from your company than from your competitor's company.
This may take time, and you may not get an appointment on the first call. It can take as many as 10 contacts with a prospect, including phone calls, faxes, direct mailings, meetings and so on, before a sale is closed. With each contact, communicate the benefits your company provides and consistently move your prospect closer to making a buying decision. When you start with the right prospects, you'll end up winning more business over time.