How to Qualify Sales Leads & Prospects

How to Qualify Sales Leads & Prospects

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Qualifying leads and prospects is an important first step for anyone’s sales process. To be effective in selling you must have a good start and become as productive as possible in identifying qualified leads. This article will lead you through a step-by-step process of where to go for leads, how to get them, what to say when you have got them, and finally, how to get them to buy.

Introduction

Qualifying leads and prospects plays a very significant role in selling. Without a solid prospect list, it will be difficult to build a sales territory. Finding the potential prospects is one of the most critical phases of a salesperson’s work. If a salesperson is not vigilant, he will lose the potential customers to aggressive competitors. Sales prospecting has been compared to panning for gold. Just as a prospector digs for the gold, using his pick and pan, the sales prospector must also look for qualified prospects using his sales tools.

According to an authentic survey, out of every 100 prospects, there are probably ten who are qualified to purchase. Of those ten, there are probably only three who have the immediate need to buy. How do you find those three buyers? That is how the sales process starts.

Jack Staubach, in his book ‘Sell Like a Pro’ tells the story of a salesperson who worked for a business magazine in a major city. Each week the editorial staff covered a specific market segment in their Sunday edition; that is, one week they focused on insurance companies; next week they covered banks; third week they would cover the computer industry, etc. The salesperson, knowing the editorial schedule, contacted all of the computer organisations two months before the start of each editorial segment and sold the advantages of paid advertising in the computer edition of the magazine. The magazine, in a way did prospecting for him. However, it was the salesperson who went out to qualify those leads and found out who in the computer market was interested to advertise in the magazine.

Another effective prospector was the printing salesman who sold customized letterheads, business cards, pads, catalogues and brochures. He offered good printing capabilities at competitive prices. He quickly found out that he had a tough competition with other printing organisations, some of which had been in the marketplace for a long time and were quite reputed. Undaunted, he decided to identify new businesses since they would have the need for his services, and he would be able to avoid the competition. For his prospect list, he checked the local chamber of commerce office and sought out the listing of new businesses that had recently been registered. He was the first salesperson to contact them, bringing with him many suggestions on how they could get quality printing at competitive rates. Every single prospect became a strong potential customer for him. With his innovative prospecting method, he found out a lot of new potential buyers and six out of ten bought his printing services.

The Plan

To be successful in sales, you must have a plan to reach those prospects who are qualified to buy from you. This plan includes these important steps:

1. Finding the Buyers
2. Qualifying the Prospects
3. Finding the Leads

1. Finding the Buyers

Finding the right prospects is the key to successful selling. There are a number of ways to get the required leads. These techniques have been tested and proven by a lot of salespeople.

Referrals. Successful salespeople know the value of a prospect who has been referred by an existing client who is satisfied with your product or services. This prospect is easier to sell than a new lead that knows very little about your organisation. Qualifying this prospect should be much easier than a lead obtained from a cold call.

There is a skill in obtaining a referral. Asking the traditional question, ‘Do you know anyone who can use my product/services?’ does not always work. What you are doing is asking your client to make a judgment as to whether he knows someone who is ready to buy your product or service or not. In many cases, it may not be possible for him to know. A better way of getting new leads is by asking if he belongs to any professional organization, social clubs, community association etc. If the client is in an office building with other offices, ask if he knows anyone else in the building. The logic behind this technique is very simple; most of us surround ourselves with individuals who have similar interests, needs, preferences and pastimes. By asking for referrals in this way, your client only has to give you names and not make any judgments.

The best time to ask for referrals is immediately after the sale is made. At this point the customer’s enthusiasm, satisfaction and confidence in you is at the highest point. Because referrals are so important in selling, staying in contact with old clients is essential. Call them from time to time to see how they are doing; stop in to see them occasionally; send them birthday or seasonal greeting card and let them know you always remember them.

Networking. This is a method whereby you become your own center of influence. You ask your friends, relatives, neighbors, associates, lawyers, auto mechanic, religious leaders, athletes, influential personalities etc., and get from them names of the potential buyers for your product or services. You never know where the next lead or prospect will come from. Smart salespeople maximize their contacts through networking by joining social organizations that bring them in close contacts with the potential buyers. These salespeople increase their exposure in these organizations by becoming active members. Whatever you do, wherever you go, be sure your business cards are readily available.

Trading Leads. An excellent method of prospecting is to set up a system whereby you are able to trade leads with other salespeople who sell in the same market as you do. Perhaps a printing salesperson who sees thirty people a week might be an excellent source for getting new prospects. Another example would be the person who sells vacuum cleaners would be a valuable source of leads for salespersons who sells appliances. By analyzing who your prospects are, you can list all the other products or services they might need. After this list is complete, you can then try to set up a trading network between you and other salespeople.

Lists. Smart salespeople know the value of lists of businesses and people in their day-to-day prospecting. These lists are readily available through local chamber of commerce, newspaper, professional organizations, trade associations, export promotion bureau, social clubs etc.

Business Directories. There are certain directories that list businesses by industry. Take time to learn how to effectively use these sources, and it will pay great dividends for you in time and money. The following list of directories can provide you with valuable leads:

- Trade Directories. These are directories that allow you to prospect in a specific industry. These trade-wise directories list all the important details about a particular organization. They include company size, type of business, sales volume and key persons with titles. Jamal’s Yellow Pages is an excellent example of a trade-wise directory.

- Specialized Directories. There are directories that list individuals according to profession. For example, the Lahore Bar Association Directory lists attorneys; Pakistan Medical Association Directory lists doctors in the Punjab province.

It would be virtually impossible to list all of the sources that you can go to. There is an enormous amount of resource material available that can be invaluable to the salesperson who is willing to seek it out. Business and Industrial directories can guide you in finding the sales leads.

Prospecting by Telephone. The telephone is a very helping sales tool. It enables salespeople to prospect not only in their own city but around the country also. A lot of salespeople do not take the advantage of the telephone. Successful salespeople know that telephone is an effective tool in seeking and reaching prospects. There are some basics in using the telephone as a sales lead generator. When using the telephone, be conscious of how you sound and the words that you use. A prospect you are calling for the first time only has your voice and does not have the advantage of seeing you, your product, brochures or other sales aids. So, if he hears a voice that is low, boring, monotonous, or has poor diction, he most likely will cut the conversation short.

Sound enthusiastic when speaking to a prospect. Enunciate clearly and choose your words carefully trying to paint a clear mental picture of opportunity to your prospect. This is a time for you to get to know the prospect; therefore, nake sure to keep his interest on the telephone.

– For telephone prospecting to be effective, you must have a set time each day when you will make your calls. If you are not disciplined in your telemarketing, it will become a hit-or-miss situation for you and will be a waste of time for you.

– The important thing is to get the name of the right person for you to contact as well as the secretary’s name. When calling back, it is sometimes helpful to get through to the person you want to speak to by having the secretary’s name. For example, ‘ Hello Sara, is Mr. Ali in?’ This gives the impression that you know the secretary as well as Mr. Ali. In some cases, even though she does not recognize your voice, she will put through, not admitting that she forgot who you are. This might give you an edge in getting to Mr. Ali.

Canvassing. Canvassing can be an effective tool in prospecting for leads. This technique is best used when you are finished with a sales call and you are in an office building with time before your next scheduled appointment. Walk into other offices that you think can use what you are selling and introduce yourself. You might get an opportunity to speak with a prospect. At least, you can find out who the prospect is, leave your business card and let him know that you will follow up with a telephone call.

Direct Mail. Another way of getting and qualifying leads is to use the mail for sending brochures, letters or samples with a note attached stating that you will be calling for an appointment. The negative side to this approach is that people in business often call it ‘ junk mail.’ However, here is how you can make yourself different from others:

– Hand write the name and address of the prospect on the envelope. Successful salespeople often hand write a personal letter on plain paper without a letterhead. This method will at least get the prospect to read the first few lines to find out who you are. If you are smart in your approach, you will get him to read the entire letter and not dismiss it as another piece of junk mail.

– To be successful, you must follow-up your direct mail campaign with a phone call. This will increase your chances of getting an appointment and will serve as a vital part of your prospect qualification process. If you get the appointment, there may be a need for your product. Remember that direct mail should be used to supplement your prospecting method and should never be used as a stand alone method to gain new leads.

Special promotions. A good place to get prospects is at trade shows and exhibitions. These are usually industry-sponsored and potential prospects attend them. They give best opportunities to follow-up the prospects you meet, face- to-face at the show. Consumer shows are different. These are not usually industry-sponsored and are usually open to the public. They can be auto shows, home- improvement shows, book fair etc. However, if you are selling a product or service that is consumer-oriented, these shows will be the best place to meet prospects. They draw a lot of people and where there are people, there are prospects. Pick the ones that will benefit you best.

Newspapers can be used for prospecting. They give you very valuable information about people and their companies. They report on who has been hired, promoted and who is moving into the area. They also run employment ads that might mean the company is expanding.

Employee turnover. If a salesperson leaves your company, the prospect list he leaves behind might be a helpful tool for your prospecting effort. Ask the sales manager if you can go through the list and contact those prospects who may be helpful to you. If the prospect you call from this list tells you that they were not happy with the company, product or service, you can tell him that is the reason you have been given the account so that you could provide him with the best service possible.

Old customers. Most product and services have a life cycle and it is your job to determine when your prospect will be in the market again. If you sell products with a predictable life cycle such as automobiles or air travel, you can build up an active client base and periodically you have another group of prospects. If the product or service you sell has a long life cycle or is one-time sale, you can become the client’s sole supplier by keeping in touch with him. When other people ask him where they can get a particular item or service, it will be you he remembers. If there have been any improvemnts on the product or service, inform your customers. You might get them to upgrade. They are already qualified buyers and it is human nature to want the newest and the best, especially if the new product can save them money and time.

Testimonials can benefit many promotional activities including the use of brochures, direct mail, ads, press releases. A testimonial is a statement by a satisfied client sppreciating you and your services. A typical testimonial might state: “Thanks for the excellent job you did on our sales training program. It was creatively executed and after just one month, we have realized an 18% increase in sales across the board. I thank you, my sales people and our president thanks you.” Some people believe that the best testimonial is one that has not been solicited. This occurs when a satisfied client writes a letter thanking you for a job well done, with no prompting on your part.

2. Qualifying the Prospects

To be successful in prospecting you must first identify or qualify your prospects. One way is to ask yourself where you can find the maximum number of qualified prospects in the minimum period of time. Your answer should guide you to the right direction. For example, the person who must use a cleaning agent for dentures is someone who wears dentures. One obvious source for this market would be the dentists in your area. If you are interested in brand loyalty, give samples of your product to the dentists who in turn will give them to their patients who are your prospects. The fact that the dentist is giving the samples out adds to the credibility of your product. Detail salespeople for pharmaceutical firms have been doing this for years.

To be successful in qualifying prospects, you have to ask yourself a number of questions. The salesperson who asks enough right questions of the right people in the right places will always have plenty of qualified prospects. The first three qualifying questions: Who?, Where? Why? will show you how to find quality prospects.

“What?” is designed to help you target your presentation and
“When?” can save you time and maximize your energies in the qualification process.
Finally, the “How?” questions. They are perhaps the most crucial of all the questions because many of their answers will evolve from the other five questions. Here are the questions:

1. Who? A few excellent “who” questions you might consider using in order to convert “suspects” into highly qualified prospects are:

– Who has the most obvious need for your products or services?

– Who are the ideal prospects? Don’t limit yourself to existing customers. Describe in detail on a piece of paper who your ideal prospects are.

– Who has the money to buy your products or services immediately?

– Who has the most urgent need to buy your products?

– Who has influence on the prospects you are able to identify?

2. Where? By asking enough “where” questions, you should be able to qualify prospects beyond your current client list.

– Where do your ideal prospects live, work, socialize, worship or play?

– Where can you find useful mailing lists of people who fit your ideal prospect profile?

– Where can you find directories from which you can form your own lists?

– Where could you go to contact new prospects?

3. Why? By using the “why” questions, you can set up priorities so as not to waste your time in qualifying prospects.

– Why would the prospect be likely to buy your product or service?

– Why would the prospect resist buying your product or service?

– Why might this time be good (or bad) to approach the prospect?

– Why would this person be likely to set up an appointment with you?

4. What? These questions, if properly used can boost your qualifying average.

– What will the prospect find most beneficial about your product or service?

– What information could you present, or what questions could you ask would most likely get the prospect to talk about his needs?

– What more do you need to know about the prospect?

– What information should you gather about the prospect before you meet with him?

– What is the single biggest problem the prospect has?

5. When? This question is about timing. Do not try to set up an appointment for your convenience.

– When is the best time to contact a prospect ? An important hint, if he is a busy executive, is never on a Monday morning!

– When is the most productive time from the prospect’s viewpoint?

– When is the prospect most likely to give you the time you need?

– When should you contact the prospect again if your first efforts were not successful?

6. How? You will not be able to ask many meaningful “How?” questions if you have not fully explored the other five.

– How can you be sure that you are doing a good enough job of follow-up prospecting? (Look at the Who? questions again.)

– How can you use your prospecting time more productively? (The “Where?” questions can help you here.)

– How can you sharpen your prospecting and qualifying skills? (Hint: Search for creative ways to put your products and services to good use. Look at the “Why?” questions.)

– How can you best approach your prospects? (“Think about the “What?” questions – What will they want to hear?)

– How can you make more time for meaningful prospecting and qualifying the leads you generate? (The “When?” questions will give you a good indication of effective time management.)

3. Finding the Leads

A salesperson without leads or people to talk to is like a fish out of water. Neither can survive very long. Yet, a common problem among salespeople is a lack of sufficient leads. The million dollar question in selling is “where do the leads come from?” There are four ways to get qualified leads.

• Although rare, your product or service may be so good that it virtually sells itself. This very often happens when your company sells a one-of-a-kind product that becomes popular in which case your job of getting prospects becomes easier.

• The company you are working for has a program that will produce leads through media, direct mail or print advertising. (National or international companies like Encyclopedia Britannica is a good example of company produced leads.) The salesperson still has to qualify the buyers, but the leads are there.

• A third way to get leads is through your network of friends and colleagues. Some industries base a portion of their sales projections on the tendency that new salesmen will sell to many people they know. These companies constantly hire based on this trend. These companies also know that many salespeople will fail once they exhaust this circle of possibilities.

• The last way is getting leads on your own. This separates the achievers from the under-achievers. Street smart salespeople learn not to count on the first three sources of acquiring leads. They have learned that they themselves are the greatest source for their own leads. The rest of this section will focus on where to look to find your own leads.

After you find people who need or want to buy your product or service, then you must establish that the prospect has the authority to buy and the ability to pay. This is possibly the most important point in prospecting and qualifying, and it cannot be stressed enough. It makes no sense at all to waste time on anyone who might want what you are selling but has neither the authority to buy or the money to pay for what you are selling. So four steps in qualifying a lead or prospect are:

• Finding the people who need or want your product or service.

• Establishing that the prospect has the ability to pay for your product or service.

• Making sure that the prospect has the authority to make the purchase.

• Determining approachability. In order for a prospect to buy from you, he must be accessible to you. For example, The Prime Minister of Pakistan might be a good prospect for a new line of health-care products but if you cannot reach him, you cannot sell to him.

The End Result

The end result for any salesperson is getting the prospect to buy what is being sold. If the prospect has the need, the authority to buy and the money to do so, they are good prospects. You can find good prospects in many of the ways outlined in this module. However, it will take the time and effort on your part to be successful.

Don’t cut down on your chances by relying on one method of prospecting. Go out and make it happen for yourself by employing every method possible. Also, be creative and perfect your own method of prospecting. A man who was selling vacation property once set up a booth at a Flea Market. The booth had photographs of vacant land and on the counter of the booth he had a pile of dirt with a small “For Sale” sign in the dirt. His colleagues thought he was crazy. But when he started to sell vacation lots at a very brisk rate, they soon followed suit and set up booths of their own at other Flea Markets.

Self-Evaluation

Following questions are designed to stimulate your thinking as an effective prospector. Read these questions and answer them sincerely. Study your answers and improve your success in sales:

1. What percentage of your day is devoted to prospecting?

2. What methods do you use to prospect for new customers?

3. What method or methods generate the most prospects for you?

4. Do you depend on one method only? If yes, Why?

5. What method do you think could be more effective with your product or service?

6. What is the life cycle of your product or service?

7. Have you been successful in getting prospects from your clients ? If not, why not?

8. Have you developed a well-scripted telephone presentation? If not, why not?

20 COMMENTS

  1. wow–this is a pretty comprehensive post. What has always worked best it to have the prospect reply to me
    from a newspaper ad
    from an internet ad
    from a direct mailer

    That way, I am always in the power postion as the prospect is requesting something of me (information or research offered) rather than what most sales people do, request something of the prospect (his money)

  2. wow–this is a pretty comprehensive post. What has always worked best it to have the prospect reply to me
    from a newspaper ad
    from an internet ad
    from a direct mailer

    That way, I am always in the power postion as the prospect is requesting something of me (information or research offered) rather than what most sales people do, request something of the prospect (his money)

  3. There are some points on discussed that I have used with success.

    Seems like I only tapped in to a small fraction of this article but will sure be implementing them tomorrow.

  4. There are some points on discussed that I have used with success.

    Seems like I only tapped in to a small fraction of this article but will sure be implementing them tomorrow.

  5. I am thankful for the info I have learned from you. What can I say but thanks a lot anyway. more power to you.
    salvador

  6. I am thankful for the info I have learned from you. What can I say but thanks a lot anyway. more power to you.
    salvador

  7. A lot of great information here!

    You may want to try SalesFuel (http://www.salesfuel.com) as another way to find and qualify prospects. It is an “all-in-one” sales lead and prospecting solution that combines data from 30+ million companies with social networking, sales trigger events and a built-in CRM.

  8. Dear Hasan,

    Excellent article. As a salesperson, i have made notes from this article and will definitely try to implement them. Thank you.

    Praveen D’Souza

  9. Nice breakdown of very helpful and practical information that has helped me add to my overall sales strategy. Thanks a bunch!

  10. There are 20 selling days in the month. 5 days you could do no wrong and sales fall in your lap. Five days you can do no right and you do the very same thing and no person is getting. It is the 10 days between that you have to manage and be above facility average. You cannot control few days ago’ sales, simply your perspective.

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