Let’s get started…
What is the #1 marketing priority for you moving forward?
PROSPECT -> LEAD -> CLIENT
Well, let me rephrase.
The way MOST people approach their prospecting sucks.
The truth is that finding prospects shouldn’t be that difficult.
Prospective buyers are out there to be found.
But they are too often overlooked because salespeople either lack the tools to find them, an efficient strategy to locate them, or a misunderstanding of the prospecting function.
In today’s post, I’m going to break down the most common pitfalls made by entrepreneurs and salespeople when it comes to prospecting AND how you can set yourself (or your team) up for success.
My company routinely runs surveys of small business owners to find out what’s new, interesting, or important to the audience we serve.
One question that makes its way into just about every survey we conduct is a form of the question:
What is the #1 marketing priority for you moving forward?
And every year without fail for the last few years, the top answer is always about ‘Finding more prospects.’
So where’s the disconnect?
Let’s start with a real basic flowchart of a sales funnel.
PROSPECT -> LEAD -> CLIENT
You can complicate or get more granular from there, but in general, that sums up the 3 stages of a sales opportunity.
A prospect in this workflow would be a prospective buyer. This doesn’t mean at this stage they are ready to buy now. This doesn’t mean that they’ve necessarily requested more information. It means that they fit the criteria that tell you they are similar to the types of people or clients you serve.
A lead would be someone that has shown interest. Maybe in your case, they booked a call. Or fill out a form on your site. Or sign up for your webinar, etc.
A client… well I think we both know what that means.
This is a sales funnel at its simplest.
But it’s important to layout the following keys and to help you properly prioritize and make decisions about the actions you take. Understanding this simple flow is crucial to helping you avoid the pitfalls that destroy most prospecting efforts before they’ve really even begun.
I like to ask my clients the value of each prospect on their list.
And I’m surprised how often people are unsure of this.
They know what a new client is worth on average.
Some know then what each ‘Lead’ is worth to them based on their closing percentage.
But too often I see good businesses overlook the next step of determining what a new prospect is worth.
Without understanding this, you’ll never be able to set a benchmark or target for how much you can spend (either in time or budget) for each new prospect you add to your outreach list.
Some quick, back-of-the-napkin math can help you get an idea of where to begin.
Let’s say each new client you close is worth an average contractual value of $20,000.
And let’s say you’ve determined that of each lead you speak with, you are able to close 1 in 4 of them.
This would tell us that the value of each ‘Lead’ in your case is $5,000.
But what about each ‘Prospect’?
Remember that workflow: PROSPECT -> LEAD -> CLIENT
Of the people that you’ve added to your list, what percentage of them do you book into the ‘Lead’ step.
For many of our clients, they qualify a Lead as someone who has booked a sales appointment. If in your case, that qualification step differs, you can adjust as needed.
But let’s say you’ve determined that 10% of your prospects can easily turn into a lead. In your case, the number may be much higher. But as a starting point, I recommend clients be conservative if they are unsure of that percentage and that they should play with the percentage a bit to understand how this affects their sales funnel.
So…10% of prospects become leads.
In our example, this means that each prospect you add to your list is worth $500.
Because you know that 1 in 10 of those will book a call ($5000 value per lead) and 1 in 4 of those booked calls will turn into a client ($2000 average client value).
There are two main reasons I recommend this exercise (whether you have an established sales process or are newer).
The first reason is psychological. It is to turn what many sales professionals view negatively (prospecting) into a positive. Quit thinking of prospecting as a chore.
Think of the activity in terms of the outcome it can generate.
Finding prospects is key to any marketing strategy. So quit ignoring and turning what you may view as a negative into a positive can certainly help.
The second reason is practical.
Whether you are interested in running ads to build your list or are using LinkedIn to build a database of prospects, or a 3rd-party tool (like Seamless.ai, GetProspect, LeadFuze, etc.) knowing the value of every individual you add to your list makes decision-making, budgeting, and time management all much easier.
It’ll make it clear when you are spending too much time or money to find an individual.
I’m not advocating being lazy.
In fact, you should always start with creating a detailed list of the type of person who makes up a good prospect. Notice I reference who makes a good prospect at this point…not necessarily who makes a good client (more to come on this).
But instead remember the workflow we’ve been discussing: PROSPECT -> LEAD -> CLIENT
And know that not every Prospect will become a Lead. And not every Lead will become a Client.
Write that down. Remember it.
Sometimes it will be because the person you are reaching out to decides it’s not a fit. Other times because you determine through further conversation that it’s not a fit. And other times they are just unreachable.
And that’s okay. It’s part of business and sales.
Don’t let that discourage you. Let it inform your efforts along the way so that you take action on the things that will drive you forward, not keep you stuck in neutral.
So during your prospecting phase, spend time defining who makes a great prospect. What criteria can you search for them by?
We call this your Prospect Profile in our programs.
Then take it a few steps out.
What makes a great lead? You might be more specific here with the problems being faced. Typically you can’t search or find a prospect based on a pain point.
Consider if you’re a business coach who helps business owners struggling with high employee turnover.
Chances are your prospects aren’t advertising on their company website or social media profiles or anywhere publicly that their employees come and go all the time.
In a case like the above a Prospect Profile might be something like:
Your Lead profile might get more into pain points or problems they are trying to solve. The types of things they’d be interested in hearing solutions to.
And you could take it out a step further and define a Client Profile with more psychographic details of who makes a good client. (ie ‘Responsive to Coaching’, ‘Willingness to Change’, ‘Available Tuesday mornings for Group Coaching Calls’, etc). If it makes sense for your business and situation, I recommend working through the exercise of defining these three profiles separately.
Now, remember the things that make a good client or a good lead (in some cases) may not always be visible from the start.
But that’s okay!
Let your process play out, you and your prospects will have time to figure that out as they work through your sales funnel.
Too often I see people spin their wheels trying to identify perfect clients before they’ve even had a chance to speak with them?
This leads to much more time spent prospecting and frustration.
How can you determine if a potential client is ‘coachable’ before you’ve ever had the chance to speak to them?
Got a big, hairy goal for new clients this year?
Don’t just have that goal without a plan on how you’ll achieve it.
Do the work to understand how many people you need to speak with in order to close that many clients. And how many people you need to add to your list to book those calls.
But don’t just leave it at that.
Studies have shown that humans are terrible at staying on track without shortened timelines and deadlines.
You wouldn’t set a goal of running a marathon without a plan of how you’ll train to build up to being in shape.
So break down your regiment into weekly or monthly goals.
Something that will let you know how on track you are to reaching your plan.
This allows you to adjust your plan based on effectiveness.
Let’s say Month 1 I was 10% short of my goal for prospects to add to my list.
I can now adjust the plan for months 2-12 to spread out the effort evenly.
This will help you stick to your plan and ultimately reach your goals. It puts the numbers in black and white.
No emotion or feeling tied to it. Just the truth and an opportunity to adjust to make it up.
While the framework we’ve mentioned today is simple: PROSPECT -> LEAD -> CLIENT, don’t make the mistake of trying to shortcut the shortcut.
LEAD -> CLIENT ignores the critical place of where your leads will come from. It relies on wait-and-see tactics that aren’t reliable.
Or maybe you are thinking of the bigger dream, just a funnel of CLIENT.
It’s easy to fall into that line of thinking. ‘I do great work. And the people that need me will find me and sign up.’
But in actuality without a reliable system for generating leads, your business is at risk. It’s why over 80% of businesses report consistently struggling with cashflow. Don’t leave it to chance.
Prospects are step 1 in the process. They are the gas to your car.
Without them, you won’t move forward.
So take the time to put prospecting on your calendar.
Put it in your calendar and prioritize it.
A mistake I see with a lot of goal-setting in the business world is that it’s numbers only.
‘We have a revenue goal of 25% increase this year.’
But it discounts all the work that leads up to that.
Let’s look at the Marathon example again.
If I were planning to run a Marathon at the end of 2021.
If I stick to the plan, increase my training each week, and then on race day I roll my ankle on mile 24…
Sure, I’m likely to be a bit frustrated or upset.
But getting off the sidelines and to Mile 24 in the first place is a big accomplishment. It shouldn’t be disregarded as if the effort wasn’t worth it.
It’s been noted that celebrating small victories along the way positively impacts performance and motivation.
If your only gauge of victory is the end goal, chances are like most things in life you’ll hit a roadblock that slows you down and leads to discouragement and lack of motivation and the entire plan fails.
But if you can build in regular celebrations of small victories that put you on the path to your big goals you’ll create better outcomes.
To sum up a study of employee motivation and engagement by The Harvard Business Review, “Capturing small wins on MEANINGFUL PROJECTS every day enhances motivation and results.”
NOW GO & GET IT!
If you’d like help with anything marketing related, FEEL FREE to reach out to me for a complimentary consultation!