Sales Prospecting and a Targeted Selection Process
What is a targeted selection process? In terms of prospecting, it is the process or system of determining who to contact and performing due diligence in data collection to understand who you are contacting and why you are selecting them.
This can be as simple as picking an industry, picking a company name from the Yellow Pages, identifying the right level of contact, and finding a name that matches the title.
Or it can be as complex as an expensive customer relationship management (CRM) system for existing customers that determines the market share of your product portfolio and routinely taps into existing bases to expand revenue streams.
But here’s what’s important to understand
Your target selection process is a separate part of your sales strategy. It stands on its own. But it is directly related to your other sales performance indicators. The level of success you will have in the sales business is proportional to raising and maintaining these success indicators above the industry norm. And the direction you choose is strategic to the outcome. I call it the “playing field”. Because that’s where it all begins… that’s where the game begins.
That’s what I mean. Basically, there are (2) strategies in choosing your “playing field”; Bottom-up or top-down approach.
Below is an example of a bottom-up approach. The telecom officer initiates a phone call to the company and asks, “Who is taking care of your telecom needs?” Guess where they were sent? If you said “office manager,” you guessed it right. If you say “head janitor” you won’t go far.
Is there something ‘wrong’? Not really; It’s legal and a lot of people out there are doing it.
But let’s think of this option the way “businessman” does. Let’s learn about our sales process and individual Key Performance Indicators (KPIs); Speak to appointment ratio, first appointment to offer ratio, close ratio, sales cycle, and average revenue per sale. Because the success indicator is a gateway that directly affects the result of a sales process.
Are your KPIs rising or falling with a bottom-up approach? In the past, the bottom-up approach has encouraged:
- The suggestion rate for the first date has dropped
- Graduation rate dropped
- The sales cycle lengthens
- Average revenue per sale is falling
In essence, you are leaving time and money on the table when you choose the Target strategy. We will look at the conversational KPIs for appointments in a moment.
At the other end of the Target spectrum is the “top-down” strategy for securing new Target business appointments. Let’s say the same telecom rep took this approach when looking for new business. The first step in this process is “homework”; some due diligence before picking up the phone.
- Make a list of suitable industries
- Determine the highest level of contact appropriate for each account; by company and industry size
- Research the contact name for each title and the corresponding account
- Examine what each business is doing to survive and grow
Sounds like a bit of work. But what happened in the past with the “top-down” approach in alignment with sales performance KPIs?
- The ratio of first-time appointments to nominations has increased
- The closing ratio increases
- Cycle sales down
- Average revenue per sale increases
- We agree it’s a no-brainer. So it all boils down to the first and most important sales performance indicator, your call-to-appointment ratio.
It’s simply how often you have the conversation with the target prospect versus how often you reach them. And the national average of these KPIs is between 4% and 18%; Top-down or bottom-up approach. So it takes 10, 12 or 20 conversations to reach 1 or 2 appointments. And that’s a lot of work. In fact, research from JDH Group shows that salespeople spend an average of 50% of their time on prospecting activities, or about 22 hours per week.
This leads any reasonable person to conclude that one must focus on efficiency when prospecting. And to secure that “competence” you must develop a communication “system” that aligns with your business solutions, your “top-down” perception of prospects, and your competitive advantage.
Not from a product/service perspective, it’s “selling” over the phone. But the communication methodology is suitable for “business intelligence”; Insight into the strategic aspects of your prospects’ business goals, what pains they are experiencing due to recent events or what changes could affect their current status quo.
Next, you need to figure out how to communicate to your “top-down” goals the likely benefits of your product/service in terms of their financial KPIs; Line items such as ROI, IRR and payback time. It is an indicator of success that organizations rely on to measure progress toward their business goals. It is their “scorecard”.
So lesson number one. If you are tackling a target level that has budget sovereignty; President/Owner of a small business or CFO/Controller of a medium-sized company, they should speak in terms of what they need to achieve and not in “sales language” that gives the impression that the prospect doesn’t understand you (1) you business and (2) just trying to make a living.
From 10,000 feet up, understand and communicate what’s in your target prospect’s “top-down” business goal, “Front Burner”… not clear in the freezer!
You can choose not to accept the default Sales 101 playfield.
Identify your individual performance components (KPIs) that are critical to your success and develop or seek systems to increase your competency rate and performance efficiency. Begin your process by choosing a top-down playing field and learning about your world.