Prospecting for Gold
If gold could be found lying on the surface, everyone would pick it up. The fact is that you need to dig for it, sometimes deeper than you may want to. The same is true if you are digging for new business.
There are two kinds of people in the world; there are those who follow the daily patterns and wait for things to happen and there are those who go out and make things happen. It’s the proactive prospector that gets the best return on time invested.
A few interesting facts about people that sell.
- 48% of sales people never follow up with a prospect
- 25% make a second contact and stop
- 12% make 3 contact
- 10% make more than 3 contacts
And a few more interesting facts about people that buy.
- 2% of sales are made on the first contact
- 3% second
- 5% third
- 10% fourth
- 80% take between 5 and 12 contacts
So if 80% of sales take place after the client has been touched between 5-12 times then the follow up is essential.
The breakdown of the typical sales person’s activities is to spend 10% of time prospecting, 15% on face to face meetings, 20% of time on account management and a whopping 55% on administration. Whereas, a top performing sales person will spend 50% of their time prospecting, 20% in face to face meetings with only 5% if time spent in account management and only 25% on boring old admin!
Prospecting is the life blood of sales
So the top sales person spends 50% of their time prospecting – what does that mean?
Cold calling? Networking? Talks/seminars? Targeted mailings? Newsletters? Walk ins? Social media? Referrals? Ad hoc prospecting opportunities?
Yes it does mean all of the above – all those proactive things we are less inclined to do, preferring instead passive vehicles for lead generation: Trade shows, Websites, Advertising, Sponsorship, Un-targeted mailings, Social media, Referrals.
Formula for Prospecting Success:
So how do we stop procrastinating on the administration chores and spend more time sifting for that gold? The formula is a combination of:
- Technique – your strategy, your preparation and your focus.
- Behaviour – your goals, your plans and the action you take.
- Attitude – your confidence, your outlook and your responsibility.
Choosing the most appropriate prospecting method depends on your business, whether your clients are few or many; whether you or your company is a leader in the field or relatively unknown and how big your current contact base is. Your choice will also depend on your attitude, application and skill. If you have a phobia for cold calling then double your efforts in another area for direct prospecting as, you just aren’t going to cold call well.
Success rates for prospecting
- Cold calling 3% 167 calls
- Direct mail 5% 100 mails
- Email campaign 2% 250 emails
- Referrals 20-50% 10 -25 referrals
- Networking 15% Meet 35 people
- Trade show 10% Meet 50 people
The power of the referral
Did you notice how high the success rate is for referral prospecting? If you said to each and every client ‘I hope you don’t mind me asking but I grow my business through referrals, do you know of anyone who would also benefit from what I have done for you?’ If you haven’t been asking your delighted clients for referrals consider multiplying the number of delighted clients you have by your average sale. That is how much you’ve been leaving on the table each time.
You can’t manage yourself if you don’t measure your performance. You do need to know some statistics in relation to your pipeline sales:
- What is your average sales value?
- How many sales do you need to secure each month to meet your desired income?
- What is the average number of meetings you have before a prospect becomes a client?
- How many times do you touch a prospect before you get a meeting?
- How many contacts convert into prospects?
- How many new contacts do you need to add to your data base to meet your monthly target?
- When you know how many contacts you need you can start to work out what you need to do to fill your pipeline.
- Once you have identified your chosen methods for prospecting transfer the activities into a weekly planner which allows you to track your progress.
After all, you cannot fail at prospecting unless you fail to prospect!
With thanks to Alistair Powell of Clanjo Ltd for his ideas and inspiration.
PS – if you are interested in some strategic networking exercises – please find a discounted link to my Udemy course Strategic Networking for the confident networker