This is a question I always ask when meeting salespeople and sales managers.
The answer I often hear is “cold calling or managing referrals from existing clients.”
The next question I ask is “what processes do you have in place to maximise these opportunities?”
The answer is usually “none”!
Which leads me to the subject of this article which is “Prospecting Activities” or
more specifically – “Planning your Prospecting”.
The first place to start in developing your plan is to work out your numbers. The key numbers for us in sales are:
• Total sales for the year expressed in dollars
• Conversion ratios – leads to appointments – appointments lead to sales
• Number of sales we can expect from existing clients
• Number of new sales to new clients
• Average client value based on sales over 12 months e.g. an average customer spends $600/week every week, over 12 months they spend $31,200. This is the real dollar average sale
By working through your numbers you will arrive at the estimated number of referrals you need to generate on a weekly basis to achieve your sales targets.
This will help you to focus on the prospecting activities that will yield the highest return for the time invested.
In my experience there is a hierarchy of prospecting activities salespeople participate in.
I have ranked these as to what I believe is the value of their effectiveness in generating qualified referrals which give the highest chance of converting to sales.
1. Referrals from centres of influence
2. Referrals from advocate clients
3. Self referrals from marketing and advertising
4. Referrals from business referral groups
5. Attending networking events
For many salespeople the biggest challenge is managing their prospecting time
effectively, therefore focusing on the right prospecting activities can pay huge dividends if managed properly.
No 1 on this list is referrals from centres of influence. This is the most valuable prospecting activity if managed correctly.
The key is selecting the right centres of influence.
The criteria we use is:
1. The very best at what they do
2. Have the same type of clients that you do but don’t compete
3. They are active in sales and business development
4. You may only have one in each field
Once we have selected our centre of influence (C.O.I.) the next step is managing the relationship. This is where most salespeople drop the ball – they sell the concept of swopping referrals to the potential C.O.I. then neglect to follow up.
The key to managing these people is regular contact. I recommend monthly face to face as this leads to a more solid relationship which in turn leads to more referrals therefore more sales.
We will look into this in more depth in my next article.
Sales Action Step –
Make a list of at least 10 professions who have the same type of clients that you have but don’t compete. These will form the nucleus of your centre of influence group.
Brett Burgess is a Sales Trainer and Programme Developer for Sales Impact Group.