Sales Prospecting Definition.
Nailing a sales prospecting definition can be difficult depending on your sales process, product and market. So, what is sales prospecting and what sales activity does it entail in winning new customers or business?
To start, lets agree that the stated aims of any business to is acquire, develop and maintain customers at a profit. Sales prospecting is focused on the acquire new customers activity in a business.
A sales prospecting definition is
“The sales activity involved in researching, engaging and nurturing new prospects so they eventually become paying customers for the business.”
Sales prospecting is NOT about trying to find buyers in the market now to purchase your particular product or service. It’s not that easy!!
The end goal is to eventually move prospects through the sales funnel until they convert into revenue-generating customers. It is associated with a goal of increasing the customer base of the company and generating new revenue streams. This definition can be customized to a particular business to account for their ideal customer profile, market, products and business model.
Without new customers, a business will have limited potential to grow, while some sales growth will come from existing customers, it is not sustainable due to customer loss, churn and circumstances. This is why sales prospecting is one of the most important sales activities any salesperson can undertake. Prospecting is the first step in the sales process and the key which unlocks future relationships with paying customers. Unfortunately, too many companies still do not have their own sales prospecting definition which can lead to an unstructured approach to acquiring new customers.
Sales prospecting is now a multi-channel activity covering social selling, emails, cold calling and events. Tactics include sharing content, white papers, articles and case studies along with offering demos, free trials or invites to events. It should also be noted that effective prospecting is a process not an event, it begins with researching a potential prospect, their industry, their business, establishing criteria as to why they are a suitable prospect and then putting in place a plan to gradually nurture a relationship with them prior to any sales pitch.
Some people ask “what the difference between a sales lead and a prospect?”
Well, leads are potential customers where you have either profiled them or who have expressed interest in your company or services through behaviors like visiting your website, subscribing to a blog, or downloading an eBook. So, leads are where you have some contact details, a match against a buying profile or an expression of interest via inbound marketing (regardless of how loose) so that you can prospect to them.
Then, leads become prospects if they engage with a salesperson and the interactions mean they could become a potential customer set against some qualifying criteria (size, existing situation, budget etc), meaning that they align with the profile of your target buyer. A prospect may also be classified as a potential customer who has limited or no interaction with your company, but they would not be considered a lead.
Successful Sales Prospecting
Successful sales prospecting starts with understanding the type of buyer who would most likely be interested in what you have to offer. In order to find this out, it can be helpful to answer questions such as
What type of buyers or customers use your products or services?
If you are an existing business, who are your most loyal customers?
What similarities do they share (revenue, industry, size, business models, age etc)?
Another point to remember when creating a sales prospecting definition is that there are usually three types of prospects.
- The Cold prospect or lead. These are prospects whom you have identified as worth trying to engage or you are in the process of trying to get them to interact with you. PS. Just because they connected with you on LinkedIn doesn’t make them a warm prospect.
- The warm prospect. These are the prospects where some level of positive interaction has happened but they remain in their status quo position in relation to your product or service (see no need to change right now). Such prospects will make up a large chunk of your prospect database as at any given time, less than 10% of your market are actively looking to change product or supplier. These prospects have to be nurtured with content, articles, and information that brings value to their roles. They are not looking to be sold to, so focus on the relationship.
- The Qualified hot prospect. This prospect has started a buyer’s journey and is in consideration mode. Their actions (free trial, meeting etc) demonstrates the potential to purchase your product or service. They also pass your qualifying criteria around budget, needs, authority and timescale.
Sales prospecting does require sales training but regardless of whatever sales prospecting definition you settle on, the really positive effect is that effective prospecting not only increases the productivity of the sales teams but also their selling skills.