Why Effective Prospecting is Critical to Success in Selling
Selling is, at its heart, a numbers game. A look at those numbers reveals why effective prospecting is such an important part of selling. Begin with this question: “How many people do I have to call on to close one sale?” Estimates vary from industry to industry. Regardless of the industry you work in, your answer will eventually be based on hard experience. For now, let’s use numbers which, experience in various industries shows, will serve you in planning your work.
A reasonable estimate of the number of members of your target market/universe that you would have to contact to produce a single suspect is 50. This response rate, 2 percent, is a common benchmark in direct marketing. From this point you can safely apply what I call “The Rule of 3s: For every three suspects you uncover, one will be a prospect; out of each three prospects, one will emerge as a “qualified” prospect; and among three qualified prospects, one will purchase from you at this time.
Now consider this arithmetic in reverse. To close one sale you’ll need to work with three qualified prospects. To do that, you’ll have had to start with nine prospects. These would be drawn from among 27 suspects. To get 27 suspects, you will have had to call on 1350 members of your universe. Suppose your typical call lasts 30 minutes. You could make 14 such calls in a 9-to-5 seven-hour day. At that rate, you would have to work nearly 100 days, or 20 weeks, or five months, to make one sale. If all this were true, one would hope you are selling a big-ticket item that pays enough commission for you to live on for five months (it probably wouldn’t, or the calls would last more than a half hour) and that you have a very patient employer (not to mention family). Otherwise, you are going to be very hungry, or unemployed, or both.
You can improve on these numbers in two ways. First, the better you are at targeting qualified prospects to begin with, the quicker you can move to the front of the numbers game to address those who are most likely to buy from you. Second, the more you improve your skill at converting qualified prospects into closed sales, the more you will convert qualified prospects to customers. You just have to improve the odds slightly to increase your sales. A 10 percent improvement in your selling skills, say, combined with a 5 percent improvement in your ability to qualify prospects, will increase your sales as much as 50 percent.
Remember, the only people who are going to buy from you are qualified prospects. Your employer’s advertising and promotion activity will identify who in the target market/universe are suspects and prospects. Then, it is up to you to learn, as quickly as possible, who among them are qualified prospects.
Personal selling is the most expensive form of communication a company can have with its customers. That necessitates that you be productive during every minute of your work day. Do so by learning to identify qualified prospects and disciplining yourself to spend your selling time with them exclusively. Only in that way will you maximize your productivity, work satisfaction, and financial reward.
Original lesson commentary written by James Porterfield.