What is Prospecting?
Prospecting is the first step in the sales process, which consists of identifying potential customers, aka prospects. The goal of prospecting is to develop a database of likely customers and then systematically communicate with them in the hopes of converting them from potential customer to current customer.
The original use of the term “prospector” refers to the efforts of individuals to find gold by visually scanning creek beds and rock formations. When flecks of gold were spotted, the prospectors would spend time sifting through dirt to find the valuable nuggets and flecks that were left behind when dirt was washed away.
That’s what modern day sales prospectors do – sift through large lists of potential customers to try and uncover those who are interested and ready to buy.
Steps in the Sales Process
Unless someone has previously done business with you, it’s a guess as to whether they might be interested in your products or services. They are potential customers at that point, falling into one of two categories: suspects or prospects. The difference between the two groups is:
Suspects - Individuals or companies you believe may have a need for your products or services but who may not be aware of your business or its offerings. You suspect they could become customers, but you’re not sure. To find out, you need to increase their awareness of and familiarity with your business. Once they are aware, it’s time to determine if they might buy in the future.
Prospects - Prospects are suspects you have made contact with and who have confirmed that they might be interested in buying from you at some point. For example, the owner of a 10-year-old car with 200,000 miles could be a hot prospect for your auto dealership, as long as they are aware of it. Or the husband of a woman whose 40th birthday is fast approaching could be a prospect for your jewelry store, as long as he knows where it is and is invited to come shop – perhaps with some incentives offered.
A customer is a prospect who has spent money with you.
To make contact with sales suspects – buyers who may or may not be potential customers for your business – there are a number of popular tools and tactics you can use, including:
- Phone calls – designed to initiate a discussion with the individual who answers the phone
- Automated voicemail messages – designed to try and persuade the listener to take action to get more information, such as by visiting a website or making a phone call
- Email – designed to share information and entice the recipient to take an action that will identify them as a prospect
- Direct mail – sent in the mail as flyers, postcards, or catalogs, for example, designed to share information that may entice you to consider buying
The primary goal of these marketing efforts is to qualify a recipient as a prospect, or someone who may have a need for your business’ products or services, or not. Knowing that someone does not anticipate having a need for your offerings – and is not a prospect - helps you refine your prospect database so you can focus your marketing dollars on those people most likely to turn into customers.