One of the biggest challanges that salespeople face is building and maintaining sufficient opportunities in their pipeline so they can meet their quotas. When pipelines are inadequate, many salespeople are subjected to intense pressure - whether imposed internally (by their own desire to excel) or externally (by their manager [or spouse]). In many cases, salespeople fail because they are unable to generate interest, and thereby do not initiate buying cycles with buyers. Once in the door, they can do a creditable job; they're just inept at opening the door.
Prospecting is an activity that many organizations do exactly wrong. Many companies ask their brand new salespeople to cut their teeth on the prospecting of new territories. As they progress - assuming they survive - more and more of their work consists of servicing continuing customer accounts. Their prospecting responsibilities, therefore, either decrease or disappear entirely. The salesperson gets the idea (sometimes from his or her sponsoring organization) that prospecting is somehow beneath his or her dignity.
In fact, the vast majority of salespeople would consider the world a better place to live if they never had to take responsibility for uncovering new opportunities. Given a choice of 4 hours of cold phone prospecting or having a root canal, many experienced salespeople would opt for the latter. But this is shortsighted. First, they've already demonstrated that they have some talent at prospecting; otherwise, they would have been long gone. The company needs ongoing utilization of those skills. And second, at least as we see it, a salesperson's overall skills erode if he or she loses the ability to generate interest from strangers. Third, our def-inition of prospecting is causing buyers (including existing customers) who weren't looking to change, to look.
In this chapter, we'll look at the different ways that salespeople drum up prospects - including telemarketing, referrals, and written communications - and suggest techniques for making the prospecting process more customer-focused, and therefore more successful.
Prospecting difficulties come in two flavors: "cannot" and "will not." Each flavor requires a different response.
On an ongoing basis, most sales managers assess whether a pipeline contains sufficient opportunities to allow a salesperson to achieve his or her assigned quota. This analysis is usually done without regard for the mix of new accounts versus add-on business. If a pipeline is thin, sales managers tend to focus on the quantity of prospecting activity, often without helping salespeople improve the quality of their efforts. After a period of time, if a manager determines that one of the salespeople is not generating enough prospects, the knee-jerk reaction is to mandate that a higher percentage of his or her time be spent uncovering new opportunities. And in some cases - namely, cases of "will not" - this is the best way to go: Mandate more activity, and monitor subsequent prospecting behavior closely.
But ordering someone to spend more time on a given task does little good if the individual lacks the requisite skills to accomplish what is expected. And this brings us to the more common problem: "cannot." By and large, salespeople are proud and highly motivated individuals; in fact, in many cases, the desire to excel takes precedence over financial motivation. So lackluster prospecting results are most often due to skill deficiencies. And poor results due to poor skills quickly plant and reinforce the notion that prospecting is drudgery. In other words, "cannot" turns into "will not."
On a recent client engagement, we were hired to assist a vice president (VP) of Sales in reviewing the pipeline of all eighteen of the company's salespeople. We scheduled a 45-minute conference call with each of the salespeople, with the VP sitting in as well. Each salesperson was asked in advance to be prepared to discuss his or her top three opportunities.
During each discussion, we asked - at different times, and in different ways - how the salesperson first learned about each opportunity. Out of fifty-four opportunities in their collective pipelines, a total of four had been proactively prospected. It turned out that in many cases, the salesperson's entire prospecting activities were limited to calling Marketing and asking a pointed question: "Where are the leads from the last trade show?" This opened the eyes of the VP of Sales, who had no idea how little proactive prospecting was being done by his salespeople.
Sales performance is largely driven by human nature. It's very common for salespeople to follow an outstanding quarter with a lackluster one. Why? Because they stopped prospecting as soon as their pipeline looked reasonably healthy. This is human nature: Less attractive activities get put on tomorrow's list. How many times have you made a to-do list, and discovered at day's end that you had done only the tasks you detested the least? So it is with prospecting. Salespeople are extremely creative at finding reasons why they are too busy to prospect.
Everyone who has tried it will agree on one thing: Prospecting can be a humbling experience. Nevertheless, it needs to be done. Closing business is good news: You get the transaction. But there's accompanying bad news: One opportunity has been removed from your funnel, and now needs to be replaced.
In many cases, the first place prospectors turn to is the telephone.
We've already touched on the negative stereotype of sales as a profession. Pretty consistently, public opinion polls place salespeople and lawyers on the bottom two rungs of the ladder of honorable careers. At the very bottom of the bottom, we would guess, are telemarketers who interrupt your family at dinner to sell you stuff at home. In fact, some people get so upset about being disturbed by sales calls at home that they buy electronic "zappers" to identify and screen out computer-dialed calls. Most of us try to introduce telemarketers to Mr. Dial Tone as quickly as possible.
Understanding that they have to sink the hook as quickly as possible, telemarketers resort to one or more techniques that they've been taught to get your attention and keep you on the line. For example, they
Overuse (and frequently mispronounce) your name
Ask, "How are you today?"
Begin with, "I'm not trying to sell you anything"
Ask inane questions, such as, "How would you like to get a higher return on your money?"
Talk nonstop for the first 90 seconds (if you give them that long)
Since nothing we write will make telemarketers go away - and since you may be on the hook to be an effective telemarketer - let's look at some sample dialogues, and think about what works and what doesn't through the lens of Customer-Focused salesmanship. Imagine you are sitting in your den and the phone rings. You pick up the receiver, and you hear:
This is Tom Robinson with Acme Heating. How are you this evening? (brief pause) Acme takes pride in our outstanding reputation for customer service. We offer a complete line of furnaces and would welcome an opportunity to spend about 30 minutes discussing your requirements. We'll be in your area Wednesday evening. Would 7:00 or 8:00 work better for you?
Not bad enough to set your teeth on edge - probably - but there are several things that prospects might find objectionable in this approach, all of which reduce the likelihood of the seller's getting that appointment. For example:
The script contains an insincere personal question in the second sentence. They are calling to sell you something - do they really care how you are?
The script mentions a specific product (a furnace). What are the chances that you were thinking about a new furnace - in other words, that you were already looking to change? Leading with product makes it likely that the buyer will ask about cost early in the conversation (assuming that there is a conversation). It would be virtually impossible for the seller to provide a meaningful response, given the variables of house size, insulation, oil versus gas, and so on. And as we've already seen in other contexts, without the potential value of an offering being established in advance, virtually any figure will seem high. Of course, the salesperson can simply be evasive about price, but this can be deadly, especially early in the call.
The script as written exerts pressure by asking, presumptuously, for an appointment at two specific times that are convenient to the seller - and does so without having generated potential interest.
The objective of this script is to get that appointment. We suggest, however, that the script could be far more effective if there were an initial attempt to gain mindshare. Yes, there's a chance that someone is sitting out there shivering, and thinking about how their current heating unit needs to be replaced. But in almost every case, there is little upside in leading with product (the furnace). Let's assume we make an attempt to improve our odds by doing some precall planning and research. By reviewing recent real estate transactions and stopping by Town Hall, we learn that a particular house has been purchased within the past 2 months, and was built in 1937. Here is a different script, which attempts to generate interest in 30 seconds or less:
This is Tom Robinson with Acme Heating. We've been working with homeowners in Park View Estates since 1990. A common concern of people buying older homes is the high cost of heating them. I've helped my customers reduce energy costs, and would welcome an opportunity to discuss some approaches with you.
Note that we've eliminated the personal question. The opinion about customer service has been replaced with a fact that helps the homeowner reach the conclusion that Acme is an established and reputable business. Rather than mentioning a furnace, we attempt to gain mindshare by referring to the "high cost of heating older homes." This keeps the potential field of discussion broad in the prospect's mind; it might have to do with insulation, water heater or burner maintenance, or other topics, all of which fall into the category of "energy costs." The script heads off a premature discussion of price, and ends in a way that makes a yes/no response difficult.
The script is extremely important, and so is the way you deliver the script. Following are some basic delivery techniques for successful phone prospecting. These apply to all kinds of phone sales efforts, so keep them in mind as you read later sections of this chapter.
As you probably have already discovered, when you are prospecting, it is important that it not sound as though a script is being read. Therefore, you need to internalize the script. (This is not the same as memorizing; by "internalize," we mean make it your own.) Practice by delivering it into your own voicemail, then playing it back to evaluate your delivery. When actually making the calls use a mobile phone, or a headset, or any other device that will allow you to pace and gesture. Your voice and delivery tend to be more natural and animated when you are in motion than when you're sitting at your desk.
Another suggestion is to smile. While we have no research to support the notion that smiling will improve your results, it can't hurt. People can "hear" your smile. You'll feel better. So why not try it?
Studies show that on average, telemarketers have less than 20 seconds to generate initial interest. This window can be shorter or longer, depending on how "salesy" the person sounds and how tolerant the person receiving the call is.
In light of that sobering statistic, the initial objective of a phone script must be to establish curiosity in the mind of the buyer about how to address a need, achieve a goal, or solve a problem. As you'll see, we recommend attempting to create incremental interest with the initial script to gain mindshare and see if you (as the seller) can earn another few minutes to uncover a goal. If you're successful in this effort, you then may want to see if the need can be further developed over the phone. (Most salespeople make a mistake when they try to schedule an appointment at the earliest possible time.)
We'd now like to change the scenario somewhat. Let's imagine that you are a salesperson calling a prospect at his or her office. This means that you're attempting to interrupt the prospect's business day, rather than his or her personal life, which in many cases is easier (but still not easy) to accomplish.
Our definition of prospecting is attempting to cause people who weren't looking to change to consider doing so. As we've seen in earlier chapters, if the expenditure hasn't already been planned, then no budget exists for it. Therefore, your goal is to initiate contacts at levels senior enough to free up funds (create budget). Your chances of success will be improved by using a "rifle" rather than a "shotgun" approach, one that is specific to a particular title, business issue, and industry segment.
We demonstrated this approach in Chapter 8 when we created a menu of issues for a customer relationship management (CRM) offering. In looking at titles, our approach would be to initiate contact with prospects at the CEO or CFO level, because in many cases a VP of Sales or a CIO would lack the ability to get unbudgeted funds.
Let's assume that we've chosen to target CFOs of software companies. The next step is to choose what we believe would be the highest- probability business issue a CFO would be facing. This can be done across the board by making a judgment call on industry trends, but customization after visiting a company's web site or doing some research can improve success rates.
Having said that, there is a constant risk of "paralysis by analysis" in sales. Some salespeople are so reluctant to make cold calls that they spend all their time researching. (On their to-do lists, researching is a more attractive option than prospecting.) You simply can't afford to wait until you know the birth dates of all board members, have analyzed the past four annual reports, and have calculated the associated "acid ratios." Past a certain point, it's better to just dive in, having made some intelligent assumptions.
In looking at the menu of potential business goals of a CFO, without having specific knowledge about a target company our inclination would be to choose "forecasting accuracy" from the menu. Out of 100 CFOs, how many do you feel are satisfied with the accuracy of the monthly forecast provided by their senior sales executive? The choice of this business issue provides the broadest range of potential acceptance. And while they're not happy with the current forecasting methods, most CFOs have concluded there isn't a better way to do it, and haven't given thought to how to improve forecasting.
With phone prospecting, we've found you will have a higher success rate if you lead with a business problem, give a root cause, and finish with the corresponding goal. Therefore, the goal of "improved forecasting accuracy" from the menu of goals should be changed to the problem of "inaccurate forecasting." In addition, you need to get the problem to be more specific, by offering a reason (for which you have a usage scenario) that the CFO may be experiencing that difficulty. Because a CRM system offers the ability to capture close rates by salespeople, this represents a high-probability reason for inaccurate forecasting.
Here, then, is the suggested script:
This is John Busby with The XYZ Company. I've worked with software companies since 2005. A common concern other finance executives have shared with me is inaccurate revenue forecasts caused by varying close rates of their salespeople. We've helped other companies improve their forecasting accuracy, and would like to discuss some approaches with you.
Experience suggests that when a person in a business setting answers the phone, you have 30 seconds or less to generate initial interest with your script. (Note that you've gained a little time over a call into the home.) For that reason, we don't suggest asking how the person is (you will be perceived as insincere), or whether or not this is a good time (given an out, buyers will say no).
In keeping with the rifle versus shotgun philosophy, the company or industry should be referenced. Even vendors with horizontal offerings do the majority of their business with mainstream-market buyers who don't want to be first, meaning that they want to know that your company has done business with others within their market segment. We also include the title of the person we are calling on. We suggest avoiding the use of the title "vice president," because in some industries (e.g., banking and financial services) there are multiple levels of vice presidents (such as AVP, EVP, Sr. VP, and Sr. Executive VP), and a senior vice president may be offended if you speak of "working with vice presidents." Instead, use the function (Sales, Marketing, Finance, IT, and so on) followed by the term executive. Virtually all people in organizations like to be referred to as executives.
The most important portion of the script is the wording of the business issue. In order for you to read the script in 30 seconds or less, the issue must be concise (twenty words or less). As noted, the best hit rates we've seen have been achieved by leading with a problem, including a reason for the problem that points to one of your usage scenarios. Consider how much less compelling the script would be if it read: " . . . other finance executives have shared with me is the inaccuracy of revenue forecasts." Tweaking a few words in stating the problem and the reason behind it can dramatically affect success rates.
A quick word here on a resource that sales organizations leave largely untapped: their customers. One of the best ways to verify that your menus of goals/problems and prospecting scripts are on target is to ask a corresponding title within your existing customer base for an informal review and edit. (This is a favor that you would ask only of a satisfied customer, of course.) Two - and maybe three - good things can come out of this. First, and most important, you can gain valuable insight into how best to approach the customer's counterparts. Second, you flatter the customer by asking and valuing his or her opinion. And third, if circumstances permit, you might ask if the customer can think of any real-life prospects on whom the menus and scripts could be tested.
We believe that if the script initiates a conversation with the prospect, it was successful. So let's discuss the responses you are most likely to get, and how to handle them. Keep in mind that you cannot begin to sell until a buyer shares a goal or admits a problem that you can help to address. Here are some potential buyer responses:
The buyer shows no interest. "I don't have that problem and / or I'm not interested." It could be the person is busy, is in a bad mood, doesn't have his or her attention grabbed by the business issue, doesn't like salespeople, doesn't face that problem, and so on. The most important thing to remember in this situation is not to take the rejection personally. This is easier if you prospect using a script and a plan, rather than winging it. (It's not you they don't like; it's the script.)
When you get this response, offer the other menu items for that title. You can make the transition by saying:
Other issues finance executives I've worked with are facing include
Low margins due to the increasing cost of sales
Increasing cost of Marketing efforts to generate leads
Lost cross-selling revenue because IT cannot provide a single view of customers
Would you like to learn how we've helped our customers address any of these issues?
This yes/no question ends in one of two ways. Either the buyer is curious about one or more of these items, in which case you can begin a conversation, or the buyer says he or she is not interested. In the latter case, thank the person for his or her time, get a dial tone, and make your next call. Keep in mind that prospecting can be done at several different levels in the same organization. Even if one or more people you contacted were not interested, if you have menus and scripts for other titles within that organization, you can continue your effort to begin a buying cycle at that account.
The buyer shows immediate interest in discussing an issue from the menu.
The buyer expresses mild interest and asks you to forward information. Inexperienced salespeople tend to see this as a positive sign. More experienced salespeople are more cynical: They believe (with good reason) that this is a convenient and reasonably polite way to get salespeople to leave you alone. When the time comes to follow up, the prospect (or more likely, the assistant) will say that he or she has reviewed the material and will get back to you if interested. Our suggestion is, pursue these leads systematically, but don't hold your breath in anticipation of a positive response.
When you get a request to send information, do both the prospect and yourself a favor by indicating that you have an extensive set of offerings, and you would like to get a better idea of the prospect's particular areas of interest so that the material you send will be targeted toward them. Either this will allow a conversation (your desired result), or the prospect will ask that you just send the information. In this circumstance, we believe that you still have prospecting to do, as the buyer has not shared a business objective with you. Instead of sending a full set of four-color brochures, consider sending something along the lines of a prospecting letter, fax, or email that is geared toward getting the buyer to consider looking to change. (We'll discuss these tools subsequently.)
In cases where the buyers express interest but don't explicitly sign on with the goal mentioned in your script, your continuing objective is to get them engaged. This means a continuing conversation - either now or later. "Now" means extending this phone conversation, which means, in turn, that you ask if this is a convenient time. "Later" means either on the phone or in person.
To the extent that you control this choice, you should think carefully about how best to use your time. Many salespeople immediately request a face-to-face meeting, but such meetings can be time intensive. You should consider the title of the person you are talking with, the size of the prospect company, and the amount of time needed to make a face-to-face call. Given the obligatory social niceties involved in meeting someone for the first time, you may well find that you can get more done in a 15-minute phone conversation than in a 30-minute meeting.
If a phone call sometime in the near future is the next step agreed to, make sure that the appointment is booked on both persons' calendars - yours and the prospect's - and that time is blocked out for that purpose. It's rarely good enough to agree to "talk Tuesday afternoon." Tuesday afternoon will come, and something else will replace the phone call as a priority - unless a specific time has been reserved.
Let's assume that the prospect is curious and has time now to continue. Keep in mind that a buying cycle has not yet begun because a goal has not been shared. There's more work to be done. The transitional phrase could be
It may be helpful for me to tell you about work I did with another finance executive of a software company who wanted to improve the accuracy of her forecast. This was difficult because close rates varied widely by salesperson. Each month, this executive found that she had to discount the numbers she was getting from Sales, because they were too optimistic. She wanted to capture close rates by salespeople at different parts of the sales cycle on an ongoing basis, so that each month, they could be applied against the gross numbers to create a forecast. We provided that capability. As a result, her forecasting accuracy has improved by 54 percent.
You'll recognize this as a Success Story, described in previous chapters. The Success Story is used to build credibility for both the salesperson and his or her company. It also attempts to cause someone who was not looking to change to share a goal. Part of that effort is to highlight an area the buyer was unaware of, had not considered, or believed was unachievable.
After sharing the Success Story, it is time to provide the prospect an opportunity to speak. The range of responses ideally has been limited to an area the salesperson would like to focus on, with the ultimate intent of having the buyer share either a business goal or a problem. About 90 seconds into the call, you've earned the right to ask, "Is forecasting accuracy an issue you'd like to discuss?" If the buyer says yes, you will see how to proceed in the next chapter. If the buyer responds with a no, thank the buyer for the time and branch to dial tone.
Thus far in our scenarios, we have given the salesperson the great luxury of being able to talk directly to the targeted title. Unfortunately, that does not happen as often as salespeople would like. Many territory salespeople rely almost exclusively on the phone when attempting to uncover new opportunities, and while the phone offers the advantage of minimal time and effort up front, studies suggest that it is not a very effective way of contacting executives.
Therefore, we believe, salespeople have to cover their territories with additional methods, beyond phone calling. These methods include referrals, letters, faxes, emails, recommendations, and seminars on an ongoing basis.
Satisfied customers, as mentioned above, represent a huge potentially untapped asset. People who have made a buying decision have a natural tendency to conclude that they've made a wise choice, which can be further validated if others make the same decision. Consider this: It is rare to get a negative response when you ask people how they like their expensive new car (even if they've had a less than stellar experience with it). Even unhappy customers want to validate their choices, so happy customers tend to be more than willing to help a vendor succeed by finding new accounts.
There are three common reasons why vendors fail to reap the benefit of referrals from their clients:
Salespeople fail to ask for referrals.
When getting referrals, salespeople fail to ask for a "warm" referral, meaning that their customer will make an initial call or do an introduction. Beyond that, salespeople don't make an attempt to discover from their customers what specific business goals or problems the prospect may be facing.
When calling prospects they are referred to, salespeople fail to go much beyond saying: "Joe Smith is one of our happy customers and suggested I contact you." With a referral, as with all other prospects, your objective is to have the prospect share a business goal or problem so you can start selling. One of the best ways to do that is to share a Success Story for the customer that referred you. One of the easiest circumstances in which to make the connection is when the titles of both your customer and the referral are the same. When they are not, be sure you are attempting to relate to business issues the prospect is facing. Go into the meeting with a plan, including a menu of potential goals for the person you are calling on.
The very best sales letter, brochure, or marketing piece is no substitute for even an adequate face to face sales call. Written sales communications should be designed to facilitate the sales process, not replace it.
With that in mind, let’s think about our objective for a sales letter (for brevity’s sake, I’ll refer to all written sales communications as letters). The purpose of a sales letter (or for that matter, any form of sales communication) is to advance the relationship between seller and customer. Period. The litmus test for anything you’re about to send out, therefore, should be: Does this advance the relationship in any way? If it does, you’ve got a good start. (This is true for letters to prospects, as well – if the letter makes it more likely that a prospect will see you, it has advance the relationship.) Following are some ways a good sales letter can advance customer relationships:
Educate the customer. This is perhaps the all-time best way of advancing a customer relationship. If you can impart some piece of knowledge that helps your customer do a better job of running their own business, you win. If you’re selling to end users, think about ways to teach your customers how to better use your products and services; more successful implementations reflect on your knowledge and expertise. If you’re selling wholesale, consider teaching your customers better ways to sell, market, and price your products. If you sell to a vertical market, consider regular communications that help your customers identify industry trends quickly. You get the idea. If you hadn’t already figured it out, “Educating the Customer” is the primary purpose of the HotSheet.
Written correspondence prior to making phone contact can dramatically increase your chances of getting through on the phone and uncovering new opportunities. Here are some guidelines to follow:
Shorter is better. Any prospecting letter longer than one page is not going to be read by many prospects.
Early in the correspondence, it is critical to get the buyer's attention. This can be accomplished by offering a menu of potential goals or problems.
Minimize hype and opinions that start the buyer in the direction of concluding that the message is too "salesy."
A prospecting letter is not a place to get the buyer to understand very much about your company. Focus instead on generating curiosity. If you achieve this short-term objective and the buyer becomes interested, he or she will want to know more about your company.
Understand that there is a decent probability that the correspondence may be screened by an executive's assistant.
Aim high (maybe higher than your targeted title), because if the executive is interested, you may be referred to a lower level.
Prospecting letters do have their limitations. The biggest challenge with letters is getting opened and read before getting pitched. Many salespeople will hand-write addresses on envelopes and use a stamp rather than a postage meter to increase the odds that their prospecting correspondence will get read.
Many salespeople do like to use letters prior to calling. If they get an executive's assistant on the phone and the assistant asks, "Who is this, and what is it regarding?," they have an easy response: "This is Dan Taylor of XYZ Software, calling to follow up on my letter dated November 18. Is Steve available?"
This sounds like a good tactic, but in fact, of the possible responses, most are not favorable. The options, starting with the only good one:
The assistant agrees to put you right through.
The assistant doesn't recall your letter.
The assistant threw your letter out.
The letter has been misplaced.
The assistant read the letter and concluded it was not of interest.
The assistant brushes you off: "I'm sure he's read it. We'll get back to you if we are interested."
So although letters can be effective, they face multiple barriers: getting opened, read, passed along, saved, and so on. Letter campaigns take time, can incur expense in processing and tracking, and usually involve a delay before follow-ups can be done.
Our experience has been that email is the least effective way to make an initial contact in writing. Simply put, if an executive (or their assistant) doesn't recognize the email address of the sender, the chances that the message will be opened and read are small. The title of the email becomes extremely important: It must be scripted very tightly to generate enough interest, perhaps even indicating that some research about the target company has been done, although space is limited.
There are two trends that make text messaging an increasingly valuable prospecting channel:
We talk to strangers on the phone, email strangers, and meet strangers in person, but rarely text strangers. This is why more than any other prospecting channel, familiarity is critical for prospecting via text. The probability of your text message converting – compelling a sales prospect to take further action – increases exponentially if your text comes after prior contact through another channel.
Text messaging works best as an integrated part of a larger prospecting system and strategy rather than a stand-alone channel. According to a marketing study that covered 3.5 million sales lead records from more than 400 companies, a text message sent alone converts to further engagement at approximately 5%. That same message, sent after a phone contact increases the response rate a further 100%+. Why? Once you cross what one expert calls the Familiarity Threshold, your response rate increases very significantly.
You can amplify that impact even further when your text message follows an email contact or social media interaction. You gain even more traction when you text following a positive in-person networking interaction. The better the prospect knows you, the more effective your prospecting text message will be. The less they know you, the more likely you will cause offense. People are averse to getting random text messages from people they don't know – especially salespeople.
Finally, as with all prospecting channels, know your numbers. Track the number of texts you send each day, response rates, and conversions into appointments and, ultimately, sales.
Salespeople generally dislike trying to contact strangers, but prospecting activity on an ongoing basis is essential to meeting or exceeding an assigned quota. For enterprise solutions, the difference between a good and a great year could boil down to causing two additional prospects per month to consider changing. The second key aspect of creating and maintaining a productive pipeline is qualifying and quantifying a buyer's need for your offering - and that is the subject of our next chapter.