Know Your Sales Prospects Better Than you Know Yourself
7 min read
In order to sell, you must first understand your sales prospects. They are the recipients of your product or service and form the core axis of your company.
But how exactly do we determine what is and what isn’t a sales prospect? What common traits do they share? And most importantly, how exactly do we change our sales strategy to fit each one?
In order to qualify as sales prospects they must first show these 4, unconditional characteristics known as the BANT method:
BUDGET: Sales prospects should have the financial capacity to buy your product or service. My advice is that if you do establish contact with a prospect who has neither the economic capacity nor possibility of obtaining it…in the best interests of you and your team, forget about them. Not even the finest sales training ideas will be able to help you if they haven’t got the ability to purchase.
AUTHORITY: The prospect must have the authority to make decisions. It’s vital that when qualifying sales prospects, you ascertain whether or not they have significant decision-making power within the company before moving them down the sales pipeline.
NEED: There’s an existential problem or need that your product or service is in a position to solve. It might sound obvious, but over the years I’ve encountered many sales reps that try to sell to sales prospects they’d “like to” rather than those that show any signs of a need.
TIME: How much time is needed to close the deal? Knowing how long a prospect requires to make the final decision is vital if you are to know which deals to prioritize over others.
Without sales prospects, your company wouldn’t exist!
Before differentiating the various types of sales prospect you will encounter, you need to ask yourself these 3 questions:
Could you name every product in your catalogue?
Do you know the profiles of each of your competitors?
Do you know everything worth knowing about your sector or industry?
According to Cosimo, Carlotta and Ludovica Chiesa and their book Sell More, Sell Better, (Spanish) every field sales team should be comfortable answering them before meeting with any sales prospect. If you can’t come across as an expert in your own game, they argue, you’ve got no business playing in the first place.
What is the value formula of your company? → In other words, what sales prospects receive must be of equal value of what they’re expected to pay.
How does your product differ from the competition? → You can use sales skills training methods such as Neil Rackham’s SPIN, which aligns your UVP (Unique Value Proposition) to a series of questions, leading sales prospects to the conclusion your product / service is the best solution for their needs.
Have you completed a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats)?
What is your pricing strategy?
Are you in contact with the logistics, administration and marketing departments? Or are you at least familiar with their processes, goals and how they operate as a team?
What are their products and services?
Do you know the key differences between their product and yours? Strengths, weaknesses, etc…
Do you know their business strategy? Their value formula? They may focus on SMBs whereas you are more specialized in enterprise business, for example, or maybe they have more traction in a specific vertical of your industry.
What is their pricing policy?
Are you aware of the positioning of your direct competitors?
Do you know the individual market segments?
What are the trends of each segment?
Where are the greatest opportunities and risks?
Which are the most successful value formulas?
How much are sales prospects worth?
It is extremely difficult to classify sales prospects as definitively as if they were numbers within a complex mathematical formula. But it is possible to group them based on a series of common criteria such as their status or personality.
What are the most common types of sales prospects you are likely to encounter?
Sales prospects by Status
Current: those who buy your products or services regularly.
Active: they purchase your products but unlike the previous group, it’s on an irregular basis
Inactive: those who have bought from you within the past, but are no longer clients.
Potential: one of the most important groups to consider, these are the sales prospects who haven’t yet bought from you but are interested in your product or service.
Probable: this type of prospect has never bought nor expressed any interest in your company, but due to their characteristics, they could be a good fit or target to consider for the future.
Sales prospects by personality
Those who find it hard to decide between the various options that exist on the market. So how do you go about squeezing a confirmation from an indecisive prospect? By being impactful, direct and straight to the point. They are willing to move forward with your product or service but need a gentle nudge in the back to get them going in the right direction.
These are difficult sales prospects that always seem to find flaws and objections in the product or service that you are offering. But do not be discouraged! I like to view objections from a slightly different perspective. Look at it is a gift. A sign of interest. An objection, sometimes, is a lack of information and how can we overcome that?
Recognize the sales prospect’s right to an alternative point of view.
Show them how and why we arrived to our conclusion.
Build an integrated proposal.
These are types of sales prospect that are, in my opinion, the most difficult to handle when closing deals. With any prospect it’s important to build a relationship on trust but when someone who is suspicious of your intentions it can prove a real challenge.
When sitting down with them for the first time try using a mixture of open, closed and leading questions to find out their needs and concerns. This way the conversation flows naturally as if you were talking with a best friend or partner, helping break down any barriers of suspicion and distrust and hopefully, giving you a greater chance of success in moving them forward.
As the name suggests, negotiators are sale prospects that seek the best offer at the best price. They’ll hammer you down into the ground if it means they shave a handful of dollars off the price.
With that in mind, I want to share with you one of the strategies used to defend against their incessant hammering: the Tit for Tat method. Widely used by the psychologist Anatol Rapoport, this strategy implies collaboration and reciprocity, an exchange of giving and receiving. For example: You start collaborating → If the sales prospect doesn’t, you don’t either → If they collaborate, you begin to reciprocate that behavior and collaborate too. The objective is to convince them of the “win-win” scenario where you both come to some sort of agreement. Before meeting with the prospect, make it clear that there will be a degree of “collaboration” or wiggle room but you are confident in your product or service and think its price reflects its quality.
Ambassador or Influencer
Ambassador, well that sounds grand doesn’t it.
This group of sales prospects is coveted by all companies across the planet. Everything is positivity and satisfaction. They like the brand, the product and they will even refer you to their network if the opportunity presents itself. So one word of advice here; look after them!
This final group of sales prospects can be difficult to close as they usually need a lot of time to make a decision. The best route for success here is to go with the flow: we should never get impatient or press them to make a decision as that will only push them further away.
An interesting strategy you could employ when thinking of sales training topics to cover this quarter is synchronization. Based on neuro linguistic programming researchers suggest that sales reps try to “tune-in” with sales prospects. For example: Verbal: Use the same words and expressions and even mimic the tone of voice. Non-verbal: Repeat your gestures with elegance (sit as they sit, if their posture is relaxed and a little lazy, then mimic how you hold yourself as they do). It’s about sending the subliminal message “we are from the same team”.
If I win, you win!
A sale is a relationship between two people: the buyer and the seller. And in order for it to work, they both have to win. To achieve this we use the value formula; a method by which we analyze whether the value received by the client is equal to what they will pay.
To put this in context with a sales scenario, the formula would look a little something like this:
Of all the elements that make up this formula, I’m going to highlight the 3 that I think require some special attention:
Service: Delivering a personalized customer experience can greatly enhance the value of your product offer. It’s a great way differentiate yourself from the competition without having to invest heavily in added gimmicks. Get your field team invested in offering this experience and you could see a significant jump in sales figures.
Inconvenience: A way of enriching your value formula is identifying potential inconveniences for sales prospects during a deal and seeing if there’s any way you could work around them.
For example, if you are a car insurance company you could offer a service for collecting a damaged vehicle at home and swapping it for a courtesy car. You could even go the extra mile and deliver it once repairs are made.
Insecurities: Sometimes sales prospects need to feel a sense of complete trust and security against risk factors before they are able to move down the pipeline.
Using the same example as a car insurance agent, you could provide an extension of the guarantee or reduce any type of penalty for any damage initially sustained to the vehicle. A feeling of comfort and support can help get tough deals over the line.
In short, the goal is to enrich your value formula so you can provide a greater service and reduce the discomfort and insecurities your customers may be facing.
To further support this point, let’s analyze two insurance companies that sell exactly the same service but with slightly different approaches:
Company A What do they offer?
Product: Life insurance that guarantees a set payment to family members in case of death or permanent disability of the policy holder.
Brand: Considered an industry leader worldwide, recognized for the quality of their insurance and outstanding customer service.
Service: They have a medical team on 24 hour stand-by, 365 days a year to answer and questions policyholders may have.
What does it cost? Price: $150 per month
Insecurities: None, the customer service is second to none. In short, the service sales prospects receive more than counterbalances the cost of buying a life insurance policy with this company. You’d be confident they’d end up high on a buyer’s list after researching potential insurance providers.
Now let’s take a look at the second option:
Company B What do they offer? Product: Life insurance that guarantees a set payment to family members in case of death or permanent disability of the policy holder. Brand: Considered an industry leader worldwide with over 50 years of experience.
Service: Same services provided as company A.
What does it cost? Price: $150 per month
Inconveniences: There are a few, especially when signing a contract. It’s a long-winded process with additional “administrative fees” that tend to irk customers a little.
Insecurities: Despite supposedly having a 24/7 customer support service, online reviews suggest this is far from the case. Both companies are clearly “offering” the same policy for exactly the same price, but because of the added value of good customer service without the “admin fees” company B is likely to win these sales prospects’ business. If you are not offering sales prospects something unique or extra over your competitors, then lowering prices will be your only option. So to conclude, I think we can now confidently say who is and who is not a good prospect for our business, how to classify the different types of sales prospects as well as the important role they hold at the core of our business. Finally, we’ve also seen how the “win-win” sales relationship works. Now it’s time to put that knowledge, into action.