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Module 9: The Power of Preparation

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Researching Your Prospect

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Researching Your Prospect

Understanding Prospecting
When someone ultimately decides to do business with you, he is trusting you with one of the things that’s most important to him-his money.

Furthermore, he is trusting in you above all other people and companies to help him with his challenges. Consider that your company is using personal selling because customers want additional information or customization of the product in order to make a decision. People only buy from people they trust.[2] You have to earn that trust every day.

By the time you’re ready for the preapproach, you’ve already done some initial research as part of the qualifying process. With the preapproach, you take your research to the next level; you find out as much as you possibly can about the company or individual with whom you want to do business.

As marketing and strategy expert Noel Capon says, a thorough understanding of your prospect’s business processes and challenges gives you the crucial insights you’ll need to offer specific, workable solutions your customers can use. Gathering this information demonstrates personal commitment and boosts your credibility with your prospects. [3]

Whether you’re contacting new or existing customers, it’s important to have your specific call objectives in mind and to clearly map out the information you’ve already gathered.

You can keep this information organized using a planning worksheet that lists the key company statistics and includes a checklist detailing the purpose of the call: the solutions you plan to communicate, and any other goals you hope to achieve.

The Fundamentals
The first sales call (or calls) is often an extension of the qualifying process. Even if the company passes initial qualification, as you learn more you might find out that they aren’t your ideal customers after all. You might discover that your contact at the company is about to leave or change positions or you might realize that the company’s current situation isn’t one in which they’re willing or able to buy.

Demographics

Understanding the basics will help you ensure the company fits your ideal prospect profile and allow you to tailor your solution to fit the company’s particular situation. What kind of business is it? How large is the business? How many locations do they have? How many people work for them? Where is the home office located? How many years have they been in business?

Tracking company news

Tracking company news is another way to discover opportunities for sales. Has the company put out any recent press releases? (You can generally find these on the company Web site in the investor relations, press release, or press room section.) Has the company recently appeared in the news?

For example, McDonald’s announced that it was about to expand the market for premium coffee. That’s an opportunity to help your customers and prospects. For example, what if you suggested that your customers and prospects print an advertisement to announce a promotion called “Buy a cup of coffee every day for ten days and get a free cup of Joe!” This helps increase their sales, which ultimately increases your sales. Now that’s using company news to drive sales. [4]

Financial performance

Keeping up-to-date on the company’s financial performance will help you determine whether your prospect is currently able to buy, which might lead you to discover sales opportunities. All publicly held companies are required to post their quarterly earnings on their websites.

Generally there will be a link for “investors” or “investor relations” on the company home page that will take you to financial data, including a recording of the company’s quarterly earnings conference call. It’s a good idea to listen to these conference calls to learn important information about the company’s strategy and financial performance.

Company’s Customers
Are the company’s products used by businesses or individual consumers? If consumers, what age, education, and income level? If businesses, what size and kind of businesses?

Knowing the organization’s customer demographics will help you tailor your solution to the company. For instance, if you’re selling clothing designs, knowing that the company appeals to families and value-conscious customers, you might send them samples from your more reasonably priced clothing line, rather than your top-of-the-line products.

Size of customer base

In B2B sales, it’s important to know whether your prospect serves many customers or primarily works with a few large accounts. Microsoft, for example, sells its products to large corporations, but they also deal with individual consumers.

Some companies, on the other hand, work with a few large accounts, so their success is very dependent on the success of their key customers. If your prospect is a sporting goods manufacturer that only sells its products to Dick’s Sporting Goods, then Dick’s Sporting Goods’ financial performance will affect your prospect’s business.

What customers are saying about your prospect (Reviews)

You can learn a lot about a company by paying attention to its reputation with customers. If the business has a lousy customer service record, they might not treat their vendors well either. This is why it’s worthwhile to read customer reviews as part of your qualifying process.

For large companies, doing a Google search will often bring up customer reviews on the organization, or you can try a Web site like Epinions. For local companies, try searching your regional Better Business Bureau (BBB) to see if any customer complaints have been filed against the company.

Current Buying Situation
You have learned the different types of buys-straight, rebuy, modified rebuy. Knowing that information is extremely valuable during your preapproach research.

It’s also possible that your prospect is considering a strategic alliance with your company in which your organizations would make an agreement to share resources. For example, Pepsi has a strategic alliance with Frontier Airlines in which all the soft drinks it serves on board the airline will be Pepsi brand. [5] Knowing the type of purchase will help you position your solution to best fit the situation.

Competitor/Current Provider

If your prospect is already buying from another company, you’ll want to know who your competitor is. What do you know about this company and their products? Most important, what are your competitor’s strengths and weaknesses?

Consider the interior design firm that is about to make a rebuy. If you’ve done your research, you might be able to tell the firm, “I know your current supplier offers a high-quality paint product in a wide range of color choices. Our company offers a wide range of color choices, too. However, unlike your current provider, we also have a line of soy-based paints, which are better for the environment.” Knowing your prospect’s current supplier gives you the power to favorably position your product by highlighting the things that set you apart from the competition.

Current Pricing

If the information is available, find out what your prospect’s current supplier charges for their product or service. This information will give you the edge to competitively position your solution. If you charge less than your competitors, you can highlight your product as a cost-saving alternative. If your products cost more, you might consider offering a discount or other benefit to provide a better solution.

On the other hand, if your products are more expensive because they’re of a higher quality, you should emphasize that fact. For example, soy-based paint is generally more expensive than latex paint, but depending on your customer’s needs, the extra cost might be worth the benefits of a healthier, “greener” product.

The Contact Person
The basic and essential information to know about the contact person, is their title and role in the company. It will help you to personalize your communications and will give you a better sense of your business situation.

What role does this person have in the buying decision?
Are you dealing with an influencer in the organization? Does this contact person have the authority to make a buying decision, or is this person a gatekeeper, a person with whom you must talk in order to progress further to the decision maker?

Background

How long has this person been at the company, and what positions has he held? What roles has he had at other companies? This information will help you to adapt your communications and solutions to the individual.

For instance, you might find out that someone in your network knows the person you are planning to approach and she can provide an entry for you. You might also learn that the person you plan on calling on was previously a buyer at two other companies and usually likes to bring in his previous vendors. If that’s the case, you might adapt your approach.


Personal Information

Everyone likes to do business with people they like. Learning what you can about your contact’s family, hobbies, and interests demonstrates that you care about him as an individual and helps you build a relationship with your customer.

This is useful information to keep on hand for the opening of the sales call when you want to put your prospect at ease and convince him of your goodwill. And it’s good information to use as follow-up or just to keep in touch.

Essential problems

Knowing this information takes you right to the heart of the issue. Maybe your prospect is the marketing manager at the company and has recently been given the task of finding a new breakthrough idea for a promotional product. Or maybe your prospect owns a grocery chain and needs to increase her sales.

Learning the specific problems your contact faces in his role at the company is the only way you can adapt your solution to meet his needs. The best way to identify your prospect’s problem is by extensive research.

Motivation for buying

If your contact is already buying from another supplier, what reasons might he have to start buying from you instead? For instance, is he dissatisfied with the quality of his current provider’s service or the price of the product? If he is satisfied, what value can you bring that provides a reason for him to consider changing suppliers? On the other hand, if this is a first time purchase, what will drive his initial decision to buy?

Existing Customers
Your current customers are your best prospects.

While you might be excited about a new account, make sure you don’t spend so much time and energy on new prospects that you neglect the ones with whom you’ve already established a relationship. There’s no better place to increase your sales than with your existing customers. They know you and your product or service, you know them and their needs and challenges. So start by leveraging the information you already know about your customer’s business. This is the best way to expand your relationship.

For instance, if you have sold fitness equipment to a regional chain of health clubs and you know that it is important for them to minimize maintenance costs and down time, you could target the buyer as a prospect for the new line of weight machines with hydraulics.

You could also expand your research and determine how much money the club could save in a year based on the number of machines and include that as part of your presentation. This is establishing your value proposition, what you have to offer that your prospect or customer is willing to pay for.

If your customer is using some of your services in combination with your competitor’s services, this is also a sales opportunity: find out how satisfied your customer is with the competitor’s services and see if you can come up with a better solution.

“You’re currently using our hydraulic weight machines, but I see that you’re buying your exercise machines from this other company. Did you know that we offer treadmills and exercise bikes that come with free maintenance and product replacement guarantees?”If your customer has a contract with this competitor, finding out when the contract expires will help you time your sales call effectively. [6]

You can also consider moving into other departments of the organization: use your CRM system to track the organizational structure of the company and find the influencers in other departments.

Of course, you can ask your current contacts at the company for referrals of other prospective buyers within the company. [7] Maybe you know the company also has a communications department that puts out brochures, reports, and newsletters. You can scan your CRM database for the names of managers in the communications department and ask your contact if he could give you a good referral.

How can you partner with your customer in new ways that will benefit both companies? Are there additional services or products you offer that, used in combination with your customer’s current purchases, would create an even stronger solution?

For example, Linksys has its Linksys One program, which offers B2B customers high-speed wireless networks combined with an Internet telephone and software services. By combining one company’s software and hardware products and services, customers are able to streamline their work, creating a simpler, more efficient system. [8]

If you can demonstrate potential synergy with an existing customer—that is, collaboration that produces greater results than individual products, services, or parties you have an opportunity to expand your business with that customer.

Sources of Information
When you want to dig deeper with your research, you can often return to the same sources you used during the qualifying process and simply get more specific with the information you gather. In addition to these sources you’ve already used, consider another powerful resource: people.
If you’ve already formed a relationship with key people in your target company, you can ask them for referrals to influencers in other departments of the organization. Your contacts at an organization have inside knowledge and will usually be able to tell you whom to talk to if you want to make something happen.

If they’re satisfied with the service you’ve been providing, these contacts are often happy to give you the names of others who might be able to use your solutions.
Complementary salespeople can also be an excellent source of information about a possible prospect.

For example, if you are selling computer hardware you might find nuggets of information from the person who sells office furniture. You can help each other by sharing insights and information.

It might surprise you to know that competitive salespeople can also be a resource. If you’re a member of a professional organization, if you attend conferences or trade shows, or if you’re simply connected in your community, you’ll probably know competitive salespeople.

While your competitor isn’t going to give you the inside scoop on a prospect he’s currently pursuing, he might share some useful insights about companies or people he has worked with in the past.

Further sources for information

Online searches: information in online databases
Business directories: local business directories
Publicly available contracts: information that is part of public records
Trade journals: learning more about people and companies
Blogs, social networks: online resources can provide insight
Professional organizations: help build relationships with contacts

Sources of Information
So you’ve qualified your prospect and you have his or her information in your CRM system. It would be nice if that were all it took. But your CRM is only a way of tracking and organizing customer information; making an action plan, a specific plan of approach, for each customer is up to you. After qualifying, you might have some prospects with a clear need, and level of interest, while others seem uncertain. If you classify your prospects as hot, warm, and cold, you can prioritize by devoting the most energy to your top customers. [9]

No two customers are alike

This means that even though you’ve qualified prospects A and B and determined that they do have needs you think you can meet, those needs will be different, possibly drastically so.

It’s a good idea to begin your action plan by conducting a careful needs analysis-that is, what specific problems is this prospect facing and how can my product help solve those problems?

Think about the next steps in the sales process, based on the customer’s
specific needs:

How will you design your preapproach?
What details should be in your presentation?
When should you make your presentation?
How and when will you try to close?

Develop a timeline and plot out the steps. If you can envision the sale, you are already halfway there.

KEY TAKEAWAYS

The preapproach is a critical step that helps you earn your customer’s trust and sell adaptively; this is true whether you are meeting with a new customer-a target account-or an existing customer-one of your key accounts.

Before you make your sales call, you should know the objectives of the meeting. You should record these objectives, along with basic company information, on a precall planning worksheet.

Preapproach research includes information like company demographics, company news, and financial performance to help you discover sales opportunities.

Research the company’s customers, the current buying situation, and your contact person at the company to help you tailor your sales approach.

Research your existing customers to find opportunities for expanding the relationship and creating more sales.

Exercises
Assume you are selling payroll services to small businesses. Identify three pieces of information you would learn about your prospect during your preapproach research and identify the sources where you would find the information.

Imagine that you sell life insurance. Describe how customer demographics can help you with your preapproach research.

Bibliography
[1] Neil Rakham, The SPIN Selling Fieldbook (New York: McGraw-Hill, 1996), 39.


[2] C. J. Ng, “Customers Don’t Buy from People They Like, They Buy from Those They Trust,” EzineArticles, August 7, 2008, http://ezinearticles.com/?Customers- Dont-Buy-From-People-They-Like,-They-Buy-From-Those-They-Trust&id=1391175 (accessed July 15, 2009).


[3] Noel Capon, Key Account Management and Planning (New York: The Free Press, 2001), 142.


[4] Gerry Tabio, “Creative Solutions,” presentation at Greater Media Philadelphia Sales Meeting, Philadelphia, PA, May 14, 2009.


[5] “Frontier Airlines Partners with Pepsi,” Breaking Travel News, January 9, 2003,http://www.breakingtravelnews.com/article.php?story=40005018&query=inflight(accessed July 15, 2009).


[6] Marcel Sim, “Leveraging Your CRM System to Expand Your Client Relationships,” Get Entrepreneurial, August 12, 2008, http://www.getentrepreneurial.com/customer-service/leveraging_your_crm_system_to_expand_your_client_relationships.html(accessed July 15, 2009).
[7] Marcel Sim, “Leveraging Your CRM System to Expand Your Client Relationships,” Get Entrepreneurial, August 12, 2008, http://www.getentrepreneurial.com/customer-service/leveraging_your_crm_system_to_expand_your_client_relationships.html(accessed July 15, 2009).


[8] Shonan Noronha, “The Joy of Work,” Inc., August 1, 2007,http://www.inc.com/sourcebook/prup/20070801.html (accessed July 15, 2009).


[9] Derek Brown, “Growing and Managing Your Prospect Pipeline,” Coreconnex, February 2, 2009, http://www.coreconnex.com/2009/02/04/growing-and-managing-your-prospect-pipeline (accessed June 11, 2009).