THE IMPORTANCE OF PROSPECTING

Some sales pros work for companies that furnish adequate suspects and unqualified leads to keep them busy achieving their sales goals. I was not as fortunate, working for several technology companies and a few start-ups.  If I did not develop leads, I would have starved and been terminated from my sales role by the company.  Fortunately, that never happened.  However, I had to learn to be resourceful and develop leads in various ways, depending on how much assistance I received from the company’s marketing department, which ranged from none to quite a bit.

Some authors and sales trainers minimize the value of prospecting in developing leads. Still, others, such as Jeb Blount, who wrote a book called “Fanatical Prospecting,”1 emphasize its importance to sales success. Blount’s book is the best one on prospecting’s how-to I have read.

I discuss what I call the “mathematics of the funnel” in my book “Above Quota Performance.” I explain how a sales pro starts with a universe of suspects that gets narrowed to fewer unqualified leads.  Once a sales development person or the sales pro qualifies the leads, an even smaller number enter the sales pipeline as active opportunities.  The sales pro handles the opportunities that go through the standard sales cycle.  Eventually, three things will happen to the opportunity. It will be lost, not purchase from anyone, or become one of the “best few.” Then, the sales pro will close some of the final opportunities. It looks like a funnel when presented graphically.  The sum of all of the opportunities is called the “pipeline.”

A hypothetical example

Let’s look at the importance of prospecting by starting with a sales goal of 10 units:

  • Since I usually win 50% of the time as a finalist, I need to be in the best few with 20 opportunities.
  • I will need 30 opportunities to reach the best few 20 times.
  • Of the qualified leads that I work with, about 67% will become opportunities for me to make proposals. So, I need 45 qualified leads to get 30 opportunities.
  • On average, only 1 in 15 unqualified leads become qualified using our scoring system.
  • So, I will need 750 unqualified leads to qualify.
  • The 750 unqualified leads may come from a universe of 1000 suspects. (250 were worthless: not enough information, false information, or people that wanted to pick up some goodies at the trade show booth.)
  • The company usually provides me with about 20 leads per month.  So, I need to create a business development or marketing program to find 760 more suspects.
  • Given this equation, a sales pro cannot be successful without generating sufficient suspects at the beginning or by changing the ratios in the equation. For example, if one were to win more than 50% of the best few, that would result in the need for fewer opportunities.

So, how can some say that prospecting and calling leads wastes time? They may have operated in an environment where the sales pros received enough leads to achieve their goals. I have never had that luxury, and I suspect many of you have had a similar experience.

When I meet with sales pros who have not reached their sales goals, one of the most common reasons is that they have not done enough business development and prospecting.

There are many ways to build personal lead generation programs, and artificial intelligence has made qualifying and distributing them easier.  I have also found the Sales Navigator function of Linkedin.com to be very helpful.  I recommend a “try them all” approach and see which works best for your team.  But waiting for leads to drop in your lap is a recipe for failure.

Steve Weinberg

 

1 Jeb Blount, Fanatical Prospecting (New York, NY. Wiley, 2015)