Chapter 3. Prospecting for And Qualifying Prospects: Filling ...

Chapter 3. Prospecting for And Qualifying Prospects: Filling ...

Chapter Four Prospecting and Qualifying: Filling the Salespersons Pot of Gold PowerPoint presentation prepared by Dr. Rajiv Mehta Chapter Outline Stages in the personal selling process The importance of prospecting Prospecting for leads

The prospecting plan Prospects: the salesperson's pot of gold Qualifying: how a lead becomes a prospect Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 2 Learning Objectives After reading this chapter, you should understand: The steps in the personal selling process. The importance of prospecting. How to qualify leads as prospects. Several prospecting methods. The steps in developing a prospecting plan. Royalty-Free/CORBIS Copyright Houghton Mifflin Company. All rights reserved.

Chapter 4 | Slide 3 Stages In the Personal Selling Process The professional selling process is a continuous, interacting, and overlapping cycle of seven stages: Chapter Review Question: 1. Prospecting and qualifying prospects 2. Planning the sales call (the preapproach) 3. Approaching the prospect Identify and describe the seven basic stages in the selling process. 4. Making the sales presentation and demonstration

5. Negotiating prospect resistance and objections 6. Confirming and closing the sale 7. Following up and servicing the account Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 4 Figure 4.1: The Personal Selling Process (PSP) Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 5 The Importance of Prospecting Prospecting, the initial stage, is necessary for several reasons: Need to increase total sales.

Royalty-Free, Photodisc/Getty Images Customers switch to other suppliers. Customers businesses are taken over by another company. Customers have only a one-time need for the product. Relationships with some customers deteriorate, and they stop buying from you. Your buying contacts are promoted, demoted, transferred, or fired, or they retire or resign. Customers move out of your territory. Customers go out of business. Customers die. Chapter Review Question:

Give some basic reasons for planning sales calls. Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 6 Prospecting for Leads Two basic ways to search for leads to qualify as prospects are: 1. Random Searching 2. Selective Searching Selective lead searching can also be classified as non-effort or effort. Non-effort leads are leads that are supplied by the company or from an individuals voluntary inquiry or response to advertising. An effort lead is one that is generated solely by the salesperson.

Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 7 Table 4.1 Looking for Leads Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 8 Table 4.1 Looking for Leads contd Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 9 Random-Lead Searching Sometimes called "blind" searching, generates leads by randomly calling on businesses. Examples of random-lead searching include:

1. Door-to-door canvassing and cold calls Door-to-door canvassing refers to knocking on doors in a commercial area without an appointment to locate prospects. Cold calling refers to approaching or calling a business without an appointment for the purpose of prospecting or selling. Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 10 Random-Lead Searching contd 2. Territory blitz of organizations A territory blitz refers to an intensified version of door-todoor canvassing in which several salespeople join efforts to call on every organization in a given territory or area. 3. Advertising Using broadcast or print media. 4. Electronic mail and websites Sending emails and using websites to look for leads.

Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 11 Selective-Lead Searching: Direct Sources This refers to systematic strategies to generate leads from predetermined target markets.

Friends, neighbors, and acquaintances Satisfied customers and former customers Junior salespeople and sales associates Professional sales organizations Mailing lists and directories Personal observation Centers of influence Spotters Chapter Review Question: Endless chain What is the centers-of-influence Networking approach to finding potential Internet (e-mails) customers? Why is the centers-ofCompany records influence approach the preferred method for seeking leads among

Newsletters professionals such as doctors, Surveys lawyers, insurance agents, financial advisers, and accountants? Royalty-Free, Digital Vision/Getty Images Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 12 Table 4.2 Selected Internet Sources of Information For Prospecting Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 13 Internet Sources For Prospecting

To find information on industrial activity, go to: http://www.census.gov/cir/www/ To find data on over 10,000 corporations, go to : Royalty-Free/CORBIS Copyright Houghton Mifflin Company. All rights reserved. http://www.moodys.com/cust/defaul t.asp Chapter 4 | Slide 14 Selective-Lead Searching: Indirect Sources

General announcements or calls to potential markets, hoping that prospects will come forward and identify themselves. Examples of indirect sources of selective-lead searching include: 1. Direct mail: When preparing a direct mail piece, follow these guidelines: Address your letter to an individual Use an attractive format Keep it simple Stress benefits Provide proof Ask for action Follow up your mailing Keep records of mailing results Royalty-Free, Photodisc/Getty Images Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 15

Selective-Lead Searching: Indirect Sources contd 1. Trade shows, fairs, and exhibits 2. Professional seminars, workshops, and videoconferences 3. Contests 4. Free gifts 5. Unsolicited inquiries 6. Telemarketing for proposals Copyright Houghton Mifflin Company. All rights reserved. Chapter Review Question: Distinguish between random searching and selective searching for leads. Give some examples of each. Chapter 4 | Slide 16

Marketing Information Systems An organizations MIS is a systematized, continuous process of gathering, sorting, analyzing, evaluating, and distributing market information that can be useful in prospecting and obtaining leads. Chapter Review Question: What is a marketing information system (MIS) and how can it help manage leads? Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 17 Customer Relationship Management

A business strategy designed to augment revenues and increase profitability of companies through better understanding of customers needs and behaviors Uses sophisticated computer systems to help identify prospects and put customers at the center of a companys business activities and decision-making processes Royalty-Free, Digital Vision/Getty Images Brings together diverse information (compiled from data sources within and outside the

organization) about customers, sales, and marketing to develop a more holistic view of each customer Royalty-Free, Digital Vision/Getty Images Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 18 Customer Relationship Management contd CRM provides precise computerized information about individual customers to help company employees (sales, customer service, and marketing representatives)

Royalty-Free, Digital Vision/Getty Images Develop target marketing strategies Create up-selling and cross-selling opportunities Use successful competitive positioning tactics Assist customers in making fully satisfying purchases that lead to long-term customer loyalty Chapter Review Question: Define customer relationship management and discuss how it be used to manage relationships with customers. Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 19 Data Mining Systems

A procedure that uses statistical software to mine volumes of data to identify hidden interrelationships among buyers and the products they purchase, along with associated complementary products Can be used to identify leads, prospects, and buying patterns Used by diverse firms such as Harrahs Entertainment and Wal-Mart Chapter Review Question: Describe data mining. Royalty-Free, Photodisc/Getty Images Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 20 Sales and Marketing Executives Marketing Library

For prospecting or any other stage in the PSP, Sales and Marketing Executives Marketing Library is an outstanding source of information and help for salespeople. The library offers: Royalty-Free, Stockdisc/Getty Images More than 200,000 searchable articles on sales and marketing Discussions by top marketing/sales leaders about their latest strategies and ideas Access to the worlds first knowledge base in sales and marketing. Company and industry profiles The latest compensation data for salespeople,

sales managers, and marketing managers, plus much more Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 21 The Prospecting Plan To maximize prospecting activities, salespeople must develop and execute a comprehensive prospecting plan, which has several steps: 1. 2. 3. 4. 5. 6. Set objectives for prospecting

Allocate time for prospecting Become familiar with prospecting techniques Choose one or more prospecting techniques Systematize the prospecting plan Evaluate the results (use Prospecting Methods Evaluation Form) Chapter Review Question: Describe the different elements of a prospecting plan. Royalty-Free, Digital Vision/Getty Images Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 22 Figure 4.2 Prospecting Methods Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 23

Prospects: The Salesperson's Pot of Gold Without prospects, the personal selling process cant begin Prospects are essential to the continuing health of any sales organization An old maxim for salespeople is Apply your ABPs, i.e., Always Be Prospecting Royalty-Free, Digital Vision/Getty Images Copyright Houghton Mifflin Company. All rights reserved. Royalty-Free, Digital Vision/Getty Images Chapter 4 | Slide 24

Qualifying: How a Lead Becomes a Prospect contd A lead points to a potential buyer Salespeople must qualify a lead in terms of 4 basic criteria that can be remembered by the acronym NAME, as follows: 1.Need or want 2.Authority to buy Chapter Review Question: What four criteria determine 3.Money or ability to buy whether a lead becomes a 4.Eligibility to buy prospect? Two other qualifying criteria are:

1.The accessibility of the individual 2.The potential profitability of the prospect over the long run Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 25 Key Terms Personal Selling Process (PSP) Also known as the seven-stage process of professional personal selling,

from prospecting and qualifying prospects to following up and servicing customers. Prospecting The process of searching for leadspeople and organizations that might need your product and then qualifying them as prospects or potential customers. Random-Lead Searching Generation of leads by randomly calling on organizations. Sometimes called "blind" searching . Selective-Lead Searching Application of systematic strategies to generate leads from predetermined target markets. Door-to-Door Canvassing Knocking on doors in a commercial area without an appointment to locate prospects. Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 26

Key Terms contd Cold Calling Approaching or calling a business without an appointment for the purpose of prospecting or selling. Territory Blitz An intensified version of door-to-door canvassing in which several salespeople join efforts to call on every organization in a given territory or area. Spotters People who work in jobs where they meet many other people and who can help salespeople obtain business leads. Also called "bird dogs."

Endless Chain A classic method of prospecting in which the salesperson simply asks recent prospects for further prospect referrals. Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 27 Key Terms contd Networking Meeting others in social or business settings to talk informally, establish rapport, and build relationships with people who can be contacted later for referrals or as potential prospects.

Centers of Influence Individuals or groups of people whose opinions, professional activities, and lifestyles are respected among people in the salesperson's target markets. Marketing Information System (MIS) Any systematized, continuous process of gathering, sorting, analyzing, evaluating, and distributing market information. Can be helpful to salespeople in obtaining leads and prospects. An MIS can be particularly helpful to salespeople in obtaining new leads and prospects. Customer Relationship Management A business strategy designed to augment revenues and increase the profitability of companies by better understanding their customers needs and buying behaviorsand, in that process, developing a stronger relationship with their customers.

Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 28 Key Terms contd Data Mining A procedure that uses statistical software to mine volumes of data to identify hidden interrelationships among buyers and the products they purchase, along with associated complementary products Lead Anythinga name, address, or telephone numberthat points to a potential buyer. Prospect

A lead that has been qualified as a definite potential buyer. NAME An abbreviation for the process of qualifying a lead in terms of need for the product, authority to buy, money to buy, and overall eligibility to buy Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 29 Chapter Review Questions 1. Provide some basic guidelines for preparing a direct mail piece to obtain leads on potential customers. 2. How can internal company records, such as warranty cards, be of value in developing lists of prospects? 3. Describe the survey approach to generating leads. Copyright Houghton Mifflin Company. All rights reserved.

Chapter 4 | Slide 30 Topics for Thought and Class Discussion 1. Why is prospecting and qualifying prospects such a crucial stage in the selling process? Do you think innovations in telecommunications will necessitate more or less prospecting and qualifying of prospects? Why? 2. If you were hired by Fidelity Investments to contact businesses and nonprofit organizations to sell them retirement plans, which prospecting methods do you think you would use? Why? 3. In making a cold call on a medium-sized manufacturing company to sell a contract building maintenance service, how would you go about qualifying the company? Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 31

Topics for Thought and Class Discussion contd 4. Its October 1 and your first day on the job as a salesperson for a central air conditioning firm in a town of about 65,000 people. Your boss, the owner of Stibbs Commercial Air Conditioning, has said, Go out and get some business customers. Until now, Mr. Stibb has relied on a small advertisement in the local telephone directory to generate sales, but because sales are particularly slow during the fall and winter months, he has hired you as his first salesperson. Your earnings will come solely from commissions. How will you prospect for potential customers? Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 32 Topics for Thought

and Class Discussion contd 5. Your sister and two of her female colleagues have recently graduated from business school, pooled their limited resources, and opened up an accounting firm in three rooms on the sixteenth floor of an office building in Los Angeles. The three partners want to audit the financial statements and annual reports of small- to medium-sized companies in the metropolitan area. They all attended the same East Coast high school and college, and none of them has any long-time friends or acquaintances in Los Angeles. Although you know little about selling accounting services, you promise to come up with a strategy. What prospecting methods do you think might best help the three accountants generate potential business clients? Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 33 Topics for Thought and Class Discussion contd

6. What student prospecting strategies would you recommend to a market research firm that specializes in carrying out research projects and developing marketing plans for colleges and universities? Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 34 Internet Exercises 1. Assume that you work as a sales representative of a Fortune 100 pharmaceutical company that manufactures various drugs for the treatment of heart disease. Use the appropriate Internet websites identified in Table 4.2 and conduct a web-based search to locate the

following leads in your zip code and/or county: Cardiovascular physicians at hospitals who perform heart surgery and prescribe drugs for the heart Doctors associated with an HMO who prescribe drugs for preventing heart disease Doctors associated with a private practice who prescribe drugs for preventing heart disease Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 35 Internet Exercises contd 2. As a newly recruited salesperson, you need to find leads you can call upon to carry your Fortune 500 companys line of household products and kitchen appliances (windows, blinds, convection and microwave ovens, dish washers, cooking ranges, and so on). Use the appropriate Internet websites identified in Table 4.2 and conduct a web-based

search to find the following leads: Giant retailers such as Sears, Wal-Mart, Home Depot, Lowes, and Ace Appliances located in your state Small- and mid-sized retail stores found in small-town USA Home remodelers located in your state Interior designers located in your state Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 36 Internet Exercises contd 3.

In your job as a textbook salesperson working for a Fortune 500 publishing company, use the Internet websites identified in Table 4.2 and conduct a web-based search to locate the following leads in your state: Professors, in community colleges and universities that offer architecture, business, and engineering courses, who can use books on these fields in their classes Bookstores located on the campuses that will sell textbooks on architecture, business, and engineering Stores (such as Barnes & Noble, Borders, and Walden Book Stores) that sell books Copyright Houghton Mifflin Company. All rights reserved.

Chapter 4 | Slide 37 Projects for Personal Growth 1. Develop a direct-mail or e-mail letter to send to generate business prospects for a new video cell phone for salespeople to take on sales calls. In your prospecting letter, be sure to specify the benefits the cell phone will offer the company, translate them into financial terms, provide proof of those benefits, request specific action, and supply an incentive to act promptly. Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 38 Projects for Personal Growth contd 2. Prepare a list of ten organizations in your area that you think would be good prospects for the products listed below. Describe your sources and criteria for selecting the

organizations, and explain how you would go about qualifying them. Automobile leasing Overnight package or freight delivery Professional nursing uniform supplies Bottled water for offices Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 39 Projects for Personal Growth contd 3. In newspapers or trade magazines, find five examples of companies using: a. b. c. d. e.

Telemarketing Mail-in response cards Toll-free telephone numbers Websites A combination of two or more of these to generate leads. Explain the reasoning behind the lead-generating strategy of each approach. Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 40 Projects for Personal Growth contd 4. Research and prepare a report on the trade show or exhibit marketing industry. In your report, cover the following points: What is a trade show or exhibition? Who attends trade shows? How can a company generate leads or prospects by participating in a trade show? What industries hold the largest shows?

What cities hold the most? Is the number of trade shows increasing or decreasing each year? Why? Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 41 Projects for Personal Growth contd 5. While reading your local newspaper or browsing the Internet over the next few days, find two industrial firms, two nonprofit organizations (such as a church, university, or museum), and two professional service firms (such as consulting or landscaping) that are prospecting through advertising, either online or off-line. Critique the effectiveness of the six advertisements in accomplishing their objectives. How would you change each? Copyright Houghton Mifflin Company. All rights reserved.

Chapter 4 | Slide 42 Case 4.1: Prospecting By Driving Around 1. After hearing Charlie describe his week, what do you think his sales manager, Melinda, will say to him? 2. Do Charlies prospecting strategies sound effective and efficient for his territory? Why? Can you offer Charlie any suggestions to improve his prospecting strategies and tactics? 3. Do you think RealVoice should help Charlie develop leads? What prospecting methods could RealVoice use to help Charlie and other company salespeople? Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 43 Case 4.1: Prospecting By Driving Around contd 4. With the companys new product, the In-Touch 200, what

can Charlie and/or RealVoice management do to generate leads and stimulate sales? 5. How do you think Charlie is performing in qualifying the leads he finds? What could he do better? Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 44 Case 4.2: When Cold Calling Turns Cold 1. What are some underlying reasons why Securevest salespeople are having increasing difficulty selling to new accounts? 2. What does the situation facing Securevest salespeople seem to tell you about cold-call prospecting? 3. What alternate prospecting techniques should Securevest salespeople consider? Why? 4. If you were a Securevest salesperson, what action would you now take in your territory?

Case 4.2 is found online at http://college.hmco.com/pic /andersonps2e. Copyright Houghton Mifflin Company. All rights reserved. Chapter 4 | Slide 45

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