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Prospecting is a vital part of every company’s marketing. Prospecting is the act of “finding” prospects or individuals who are expressing interest in one or many of your company’s products/services. Many methods of prospecting exist, so let’s discuss some of the most popular methods of prospecting (marketing) and highlight the pros and cons.
The BIG mistake
Most people and companies make a major mistake in that they confuse ‘sales’ with marketing or ‘prospecting.’ I honestly believe that one of the major reasons that some sales positions have such high turnover is that most people HATE to cold call- and can you blame them? It takes a hard-skinned individual to not be bothered with the constant task of cold-calling. And there’s a major reason they call it “cold-calling!” BUURRRRRRR!!!
Now I firmly believe that every sales person (no matter what profession) should be willing to promote his or her services, but you really need to understand the amount of cold-calling you will be expected to perform to find your own prospects. Some industries are notorious for expecting their sales team to spend most of its time doing cold calls whether by phone or in person. And if you have a low ‘repeat’ business where you’re going to be spending the next several years continuing to do the same amount of prospecting, you may want to truly consider whether you want to commit to a career in that type of industry. (Although you will gain invaluable experience going through this type of lead-generation, even if it’s to help you gain an honest appreciation for finally settling on an industry that provides high repeat or residual business.)
Various methods of prospecting
No matter what type of industry you’re in, there usually exist many types of prospecting or marketing to find your leads. The following are a list of several common types of prospecting:
1) Phone Prospecting
2) Referrals
3) In-person prospecting
4) Sending direct mail
5) Working trade shows
6) Television/Radio
7) Institutional Advertising
8) Combinations!
1) Phone Prospecting
This form of prospecting usually involves obtaining some type of list of companies or leads and calling on each lead until you find a decision maker who is interested in meeting with you or in at least talking with you on the phone. We have been able to utilize this type of prospecting cost effectively and effectively for years. (will get to later under ‘combinations’
Pros: Ability to make tons of contacts fast and relatively inexpensively.
Cons: Can consume a lot of time (and be a big waste especially if your time would be better spent actually in front of people trying to sell them!)
2) Referrals
This type of prospecting involves asking a customer or prospect the names of other people who may be interested in your product or services.
Pros: Usually has a high success rate (easier to get through to referrals, get appointments, and to close them.)
Cons: NONE.
3) In-person prospecting
In-person prospecting is the practice of ‘cold-calling’ in-person- Physically going into the office building where your lead or prospect works, and attempting to get an ‘on the spot’ appointment or demo right then! This is usually one of the rarest of all types of prospecting as most people do not enjoy this type of work. It also takes an amazing amount of time.
Pros: Highly effective (very difficult for prospect to avoid you such as ‘hanging-up on you with phone prospecting.)
Cons: Big time investment, low efficiency do to having to physically move from prospect to prospect, and get shut down by gate keepers such as secretaries.
4) Direct Response Marketing
This type of lead generation or prospecting can be a fantastic success! Direct Response Marketing entails sending out mailers, postcards, letters, etc to pre-selected members of your target market with the hopes of eliciting a response showing they are indeed interested in your product. Direct Response Marketing can take many forms; there are many FANTASTIC sources for learning to do this successfully (although unfortunately, there’s also a lot of trash out there!)
Pros: Avoids taking staff time to ‘cold-call’ or perform in-person prospecting, helps decrease employee turn-over, incredibly exciting when running a successful campaign (i.e. all salespeople love getting ‘call-ins.’ Helps you cut right through to the true prospects. Some shelf-life (mailers sometimes get response weeks or months later-while your phone call or in-person call is usually forgotten with seconds.)
Cons: Difficult to master (takes an expert or expert advice) can be EXTREMELY costly if not done correctly, you can lose time and money if you don’t have an adequate tracking system.
5) Trade Shows
This involves investing in and attending a marketed event that your leads attend to gain information about their occupation or industry. The trade shows are usually sponsored by vendors within an industry. Trade shows can last anywhere from part of a day to a week or more. Most of the trade shows attended by our company last 1 to 2 days.
Pros: Usually effective- able to make contact with many prospects in short amount of time. Often provides decent number of leads at a decent cost per lead.
Cons: Takes some skill and aggressive behavior to successfully work the show. A more ‘timid’ rep will often just hang-out behind the table and not talk to anyone. Can be difficult to have decent communication with prospects, can also run into failures if the show has low attendance. Can be very costly to attend (airline tickets, hotel, shipping the displays to and from, plus all other costs from the booth fees to electrical hook-up, meals, etc.)
6) Television/Radio
Running ads on television or radio is a successful method of lead generation for thousands of businesses all over the country. When done correctly, this type of advertising can provide an endless pipeline of leads for a company to utilize.
Pros: Can yield HUGE results at very decent cost per lead, reduce turn-over, and establish brand-recognition Can be extremely expensive to produce, especially if a failed campaign.
Cons: Can be very expensive due to low response. Can create overhead expenses especially with low response. Possible high cost for production.
Make sure you know the station’s demographics!
7) Institutional Advertising
This lead generation or marketing tool involves any ‘static’ type of ad such as billboards, park signs, newspaper and magazine ads where your message is usually conveyed to the masses or in some cases targeted such as with niche magazines.
Pros: Can be an awesome source of cost effective leads if conducted correctly, prevent turn-over.
Cons: Can be ineffective and expensive if not done correctly, often difficult to track.
8) Combinations
Most companies end up using combinations of lead generation devices. For example, our company utilizes a call, send, call system to find leads. First, we call to ‘data-mine’ or collect basic information about our lead such as their name, and free-time or ‘best time’ to get a hold of them. We then send a direct response mailer to attempt to elicit a response from the lead, and finally, if we haven’t gotten a response, we then make a phone call to introduce ourselves, build rapport, and find out if there’s any interest. Since the prospect should have theoretically received the mailer, we often find easy leads who had just not been motivated enough to call us. If our team finds a prospect, they then either set an appointment or transfer the lead to the appropriate sales person.
Other companies utilize different institutional ads to elicit the first response, then have the prospect leave their name, phone number, etc to receive a ‘free packet.’ The packet then acts as the first ‘sales attempt.’ Often the prospect then calls in directly to order, or to then talk with a sales person. Either way, companies are able to save their sales people’s time by ensuring they spend more of their time actually talking to prospects.
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