Prospecting: Uncover and Develop New Business

Looking at sunshine through the blinds

Guest post by John Naples, Encore Consulting Group

WHEN I FIRST STARTED in sales, one of the first skills I learned was how to uncover new selling opportunities. I was part of a sales organization that placed high value on cold calling, and expected the salesperson to master appointment setting both over the telephone and by in-person cold calls. My district sales manager threw me to the lions the first week I returned from training. He told me to canvass my territory and make 30 calls per day. To “hit my numbers,” he said, I had to contact at least 500 new prospective clients each month. As a 22-year-old entry-level salesperson, I was both daunted and challenged by this ominous goal.

My first call went really well. I dialed the phone number and the receptionist answered. She said, “Good morning, Pacific Industries. How may I direct your call?” I completely froze and hung up the phone! My second call went even better. This time, I said, “Hello” and hung up the phone. I was off to a great start!

Over the years I’ve done less cold calling, since I’ve focused on networking, writing, and market-driven lead generation. However, the lessons I learned that first year are still incredibly useful. I learned how to assert myself, stay on message, and get to the point. Most importantly, I learned how to convey my offer in a value-centered manner, and I gained great confidence.

In this blog post we’ll look at tactical approaches that will make you feel more confident and equipped to conquer new territory. We’ll discover how to get your prospective client to take a closer look at your offer, and how to engage your target.

The Cold Calling Camps

There are two camps on the subject of cold calling. The first believes that cold calling is antiquated, irrelevant, and unnecessary. These mavericks view cold calling as counterproductive and ineffective. They recommend doing away with it altogether.

The second camp believes cold calling is an essential part of new business development. These traditionalists view cold calling as a productive, effective means of developing new business.

So who’s right? As much as I dislike fence walking, I believe they’re both right – to a certain extent. First of all, you can’t do away with cold calling altogether. Many sales organizations find this method of acquiring clients to be cost-effective and highly productive. A salesperson’s ability to penetrate new accounts by using the telephone has been proven to yield a consistent flow of new leads and clients. Cold calling is still a great way to

  • investigate potential accounts;
  • identify key decision-makers;
  • determine which products and/or services match the client;
  • qualify prospective accounts;
  • evaluate the upside potential of an account;
  • keep sales and marketing costs down; and
  • determine whether an in-person meeting is warranted from a cost standpoint (travel).

Those who believe in traditional cold calling quantify and measure the results of phone calls in great detail. They can tell you how many calls are required to reach one person, the number of calls necessary to identify one qualified buyer, and the number of calls needed to set one appointment. Armed with these numbers they can tell their salespeople, “If you make 20 quality phone calls every day, you’ll reach or exceed your monthly sales objective (quota).” Activity and results are tangible, verifiable, and easy to track. However, cold calling can also be very counterproductive for a number of reasons:

  • Buyers hide behind voice mail and rarely answer their phone.
  • Technology (laptop computers, smart phones, etc.) makes it easier for buyers to be away from their office.
  • It is easy for a buyer to terminate a phone call.
  • Some buyers view cold calls as intrusive, because they are unsolicited. Those who embrace the “never cold call” stance recommend other forms of lead generation such as networking, referrals, direct mail, print ads, search ads, banner ads, and joint alliances. One thing is certain: If you embrace both methods in your new business development strategy, you’ll have more business than if you simply choose one over the other.

The Warm Call

Consider a warm call instead of a cold call. Warm calling is a method I’ve used for over 15 years. It takes the sting out of cold calling and produces a steady stream of new clients. Here are the steps involved in warm calling:

  1. Develop your ideal target organization (ITO) lists. Your ITOs are organizations that fit your ideal criteria for a client. If you’re in the custom container business, for example, your ITOs might be spice manufacturing firms that use a minimum of 500,000 5oz. clear containers each quarter. Secure key information about each, such as address, website, annual sales, and core business. There are a variety of cost-effective resources online, like Hoovers, Dunn & Bradstreet, and InfoUSA, to help you identify and list organizations that meet your criteria.
  2. Identify the key decision-maker(s). Determine who makes the buying decisions. Sometimes it’s one person; other times it’s many different people. I typically contact the appropriate department (or division), tell them why I’m calling, and secure the name. Bypass receptionists, since they are trained to derail your efforts. Most of the time someone within a department will give you the person’s name, but not always. Some companies think it’s a matter of national security and refuse to give out contact names. You may have to dig deeper or find an internal advocate. Hint: Salespeople who sell for your ITO are great sources for securing buyers’ names.
  3. Send an introductory letter. Once you have selected your ITO and know the key decision-maker, send a letter introducing your products and/or services. Remember to keep it centered on outcomes and results. Include a one-page overview of your value proposition that outlines its key benefits and advantages.
  4. Follow up with a phone call. After about three days, give your prospective client a call. Remind him or her of the letter you sent, and ask a few key qualifying questions to determine if you should take the conversation further. If you get forwarded to voice mail, leave a message that outlines the benefits of your offer. The goal of the phone call is to qualify and take the conversation to the next step (demonstration, proposal, appointment, etc.).

People often ask me how many voice mail messages they should leave, and how often they should call. I don’t leave more than two messages when I’m trying to reach a prospective client. After that, I attempt to reach my prospect in person and don’t leave a message. You have to find the balance between persistence and being a pest.

Create Justification for the Next Step

When you do contact prospective clients, most of them will be thinking, “Is this salesperson worth more of my time?” or “Does he or she have something of value to me?” Keeping these questions in mind, you have to create justification for your prospective buyer to take a closer look at your offer. You want him or her to take the next step—whether it’s setting an appointment, requesting a demonstration, or inviting a proposal.

Provide a credible reason or justification for your prospect to invest additional time in hearing what you have to say. Make the reason so compelling that she would be nuts not to take a closer look.

Compelling messages have the following characteristics:

  1. They appeal to buyers’ emotional agendas. Compelling messages hit right where it hurts—usually in a very sensitive spot. The deeper the pain, the better the opportunity.
  2. They are short and concise. When you’re discussing your offer, get to the point. Avoid being longwinded. Brevity makes more impact.
  3. They are benefit-centered. People ultimately buy benefits, not features. Therefore, focus your new business development efforts on the benefits of your offer.

Remember: The onus is always on the salesperson to provide justification for the client to take a closer look. You have to create the desire. You have to engage your client with something compelling and intriguing.

Emphasize the Financial Benefits

If you can’t articulate the financial impact of your offer to prospective clients, you may have a tough time getting their attention. If you can convey both hard and soft dollar benefits to your prospective clients, your likelihood of getting a hearing is much greater.

Hard Dollar vs. Soft Dollar BenefitsHard Dollar Benefits:                          Soft Dollar Benefits:

$5,000 in shipping costs                         Increased productivity

20 percent discount on hotel costs        Improved efficiency

Two free months of service                     Time savings/quicker turnaround

If you can communicate how you can improve productivity (soft dollars), it will resonate with your buyers, particularly if they are short-handed. You might say, “We have solutions designed to streamline workloads and maximize productivity.” If your buyer has just had layoffs, for example, there’s a good possibility that he will be interested in streamlining.

You have to be careful with the “we can save you money” verbiage, though. Salespeople often overuse it and buyers hear it too often. That’s why using third-party stories is more effective. Clients are more likely to have an open mind if others in their industry or niche have benefited from your products or services. If you can give specific examples of how other firms have benefited, you will catch their attention. You might try something like “When we worked with Qualcomm, we were successful in reducing labor costs and improving production output.”

Here are a few questions to ask yourself as you convey the financial benefits to prospective clients:

  • Have I quantified the financial impact of my solution?
  • Have I made the financial advantages crystal clear and measurable?
  • Am I using effective visual aids (brochures, case studies, spreadsheets, etc.)?
  • Are my financial case studies straightforward and simple?

Structure Your Messages and Alter Your Approach

As you begin to tailor your new business development efforts for a prospective client, look at his pain areas again and structure your message in a way that touches each of these pressure points Here are three steps to restructuring your message for prospective clients: List your prospective client’s pain points. This might include recent company news, reduced revenue, or declining morale.

Determine how your offer remedies these pain points. Match a pain point with your solution. For example, if reduced revenue is the pain, how does your solution improve revenue? If there is a spending freeze, perhaps a solution for maximizing productivity is the remedy.

Create a compelling benefit statement (CBS). A CBS is a statement that conveys the benefits in your offer in a high-impact, value-centered manner. Every salesperson should have a clear CBS for developing new business on the phone or in person. Here are the characteristics of a CBS:

  • It focuses on the benefits, outcomes , or results of your offer. It answers the questions “How does my offer help my prospective client?” and “What does my offer produce for my prospective client?” If you sell accounting software, for example, the benefit or results might be greater productivity (time) and fewer accounting errors (money).
  • It is to the point. Your CBS should take less than 15 seconds to convey. Avoid being verbose.
  • It should be communicated with enthusiasm and conviction. Be proud of your offer and the benefits it brings to your buyers. Be confident when you speak about your value proposition. Truly believe in what you’re offering!
  • It is tailored to the prospective client you’re pursuing. Your CBS will change, because all of your clients don’t have the same challenges. Tweak your message to fit each buyer’s priorities and agenda.

Effective Compelling Benefit Statements

Below are some examples of effective CBSs. Notice how each has been carefully tailored to fit a specific situation and set of challenges. In each case, you would first introduce yourself and your organization, and then convey the CBS.

  1. “Bob, the reason I’m calling is that we’ve recently been able to increase productivity and reduce costs for Verizon Wireless by improving workflow and lowering labor costs. I would like to set up a 20-minute meeting with you to discuss our new ideas. How does your schedule look next week?”
  2. “Susan, I’m calling to set up a 20-minute appointment to talk with you about how we can increase your marketing results and reduce printing costs. How does your schedule look next week?”
  3. “Brandon, we just rolled out a new hydraulic lift that can reduce labor by 25 to 30 percent and shelf space by 50 percent. I would like to visit for a few minutes and show you the new lift. When would be a suitable time next week?”

At the end of each CBS it’s important to invite your prospective client to take action, using open-ended questions such as “When would be a suitable time?” or “How does your schedule look?” Here’s how the entire conversation might sound:

“Hi Bonnie, this is Ken Johnson from Gateway Enterprises. The purpose of my call is to set up a 20-minute appointment with you to introduce our new industrial trash compactor. The new RX500 can reduce waste costs by 35 to40 percent and significantly reduce labor costs. How does your schedule look next Tuesday afternoon?”

Take time to create your CBS. Invite a team member to join you in designing it and write down the results. Practice and role-play until you feel comfortable delivering it. You want your CBS to be conversational, not robotic. Use a relaxed pace and tone. Try several versions to determine which one works best.

The Value of Conceptual Selling

Many firms use conceptual selling to communicate their CBS. With the conceptual sell you’re conveying an idea rather than the actual product or service. The focus of the conversation is on the outcome or benefit of the offer, not on the offer itself. So instead of coming out and saying “I sell dictation equipment,” you would say “I enable attorneys to process their thoughts, organize their caseloads, and save considerable time.”

The conceptual sell also helps drive curiosity. By focusing on the idea rather than the actual product, you keep your prospective client guessing. Heck, it may even intrigue them if it’s benefit-centered. For example, let’s say you sell energy-saving light bulbs. You can take two approaches to selling your bulbs. You can call a prospective client and say, “I sell light bulbs.” Or you can call and say, “We have energy-saving solutions that can reduce utility and supply costs.” It’s easy for a buyer to say “no” to light bulbs. It’s much tougher to say “no” to reducing costs and saving on utilities. Notice that you’ve never actually told the client what you offer; you’ve just outlined its benefits. That’s because buyers are less concerned with what you sell and more concerned about how they can benefit.

Some people feel conceptual selling is misleading and that a salesperson is obligated to focus on the product or service. My response to these people is simple: Isn’t it in the buyer’s best interest for the salesperson to convey the benefit of the offer? After all, that’s what she’s really buying, isn’t it?

The Phone Call

I have always believed that salespeople can be just as effective on the telephone as they can be in person. In my 23 years in sales, I have used the telephone to make contact with thousands of organizations large and small. As a corporate trainer, I don’t meet 90 percent of my clients until I present the training session, and I have secured over 80 projects in the past three years using the telephone alone. When I was in the real estate consulting niche, I acquired over 1,700 properties using the telephone. Not once did I meet the client. Obviously, this makes me a big proponent of using the telephone to penetrate and develop new business.

Here are nine essentials that will help you to be more effective on the telephone. Some of these are basic, but important enough that a reminder is in order.

  1. Your smile will shine through to your caller. Plus, you’ll find that your attitude is brighter when you smile.
  2. Sit up. Good posture produces better tonal quality.
  3. Slow down. People find a relaxed pace more inviting.
  4. Keep it short and sweet. Avoid the keynote address. Short sentences are better.
  5. Plan and organize your calling effort. Set a daily and a weekly goal. Group your sales calls into manageable groups. Say, for example, that you have 25 phone calls to make today. Making 12 calls at 9:00 a.m. and the remaining calls at 11:00 a.m. will help you improve the quality of the phone calls. You’ll be sharp on every call.
  6. Size up your prospect. What type of temperament are you dealing with? Mirror your prospective client’s intensity, volume, and pace.
  7. Stand up. Your energy, conviction, and vocal quality will improve.
  8. Shut up. If your prospective client speaks, listen intently. Use silence to your advantage. It is particularly effective just after you make a strong point. Make your point and then don’t say a word. Allow it to marinate in your buyer’s mind.
  9. Start early. Over 70 percent of all salespeople don’t make their first phone call to prospective clients until after 10:00 a.m. Many decision makers arrive at work before 8:00 a.m. (and leave after 5:00 p.m.).

Sell the Appointment, Not the Offer

One of the biggest mistakes salespeople make is to try to sell over the phone rather than to secure an in-person appointment. I realize, of course, that there are telesales groups in which salespeople are expected to sell on the telephone. In territorial or complex sales, however, where an in-person meeting gives you a better advantage, a phone conversation is the wrong time and place to convince a prospective client why he or she should buy. Save that for the appointment.

There are three advantages to selling in person rather than on the telephone:

  1. 1. Selling in person gives you a better opportunity to build trust, rapport, and credibility. The old school called this “rubbing elbows.” The new school calls it “connecting.” Either way, it’s much easier to make a strong connection with a prospective client if you’re sitting across from him. Selling is all about making a personal, human connection.
  2. Selling in person gives you an opportunity to read your buyer. It’s tough to read someone’s true responses to your presentation over the phone. When     you’re in the room with a buyer, you can read his facial expressions and body language, and easily determine his level of interest in your offer. Your ability to read buying signals can give you a huge advantage, particularly when you’re trying to close the sale.
  3. Selling in person enables you to make a strong personal impression. Remember, your prospective clients buy you before they buy your product. You are the message, the offer, and the company. That’s one reason that high   credibility and trust are so critical.

Remember: Rather than selling your product or service on the telephone, sell a 20- to 30-minute appointment. Make getting the appointment the focal point of the phone call. I know that the temptation to offer details is huge, and that clients often want to engage you in conversation. When a buyer begins luring you to discuss the details of your offer, ask them, “Can I suggest we visit next week and cover some of these issues in person?” As you begin selling the appointment and getting in front of more buyers, you’ll see your sales results improve dramatically.

Overcome Objections and Roadblocks

Anyone who has been selling for even a short time knows that not every buyer is eager to meet with you and hear your offer. A large percentage of your phone calls will result in some type of pushback or objection. Buyers are taught to object and push back—they can’t help it. Some are rather robotic about it and you’ll hear a litany of negative responses:

  • “We’re not interested…”
  • “We’re happy with who we’re with …”
  • “We don’t need it…”
  • “We have a spending freeze…”
  • And my favorite: “We’re all set…”

At first glance, one might think the above responses are legitimate, particularly the fourth one. After all, if they have a spending freeze, they can’t spend the money, right? The fact is that all five responses are smokescreens, even the fourth. Here’s why: Buyers are told to say, “We have a spending freeze.” Stop and think a moment, however. Is it possible your offer could actually make money for your prospective client? Could it save him money? If so, won’t a quantifiable return on investment (ROI) justify the initial investment your offer requires? That is how you have to think about that objection. Otherwise, the buyer prevails and you walk away with your tail between your legs.

How do you respond to these smokescreens? Well, you have two choices. The first choice is to say “Thank you for your time,” terminate the phone call, and walk away defeated and frustrated by yet another “no.” After all, if they’re not interested or are happy with their current supplier, what can you do? Over 60 percent of all sales professionals choose this path. They either don’t think it’s worth the battle, or they lack the courage to take it one step further. Yet it is possible that you have a better, more cost-effective solution for that prospective client. She may simply need some nudging and some encouragement to have a more open mind and take a closer look.

The second option you have is to respond to the smokescreen with a substantive, compelling response. Your goal is to shift the client’s mindset and invite him or her to consider a new idea—that’s it! You’re not argumentative, pushy, or defensive. In fact, the more low-key and consultative you are, the better.

Here is a four-step process you can take to handle any smokescreen:

  1. Disarm them. When a smokescreen is tossed your way, the best thing you can do is remain calm and empathize. This will disarm your prospective client faster than anything else. Simply say “I understand” or “I can appreciate that” or “That’s fair.”
  2. Ask a thought-provoking question. Ask a question that will cause the client to reconsider his current situation and prompt him to have an open mind. Before you begin the call, write out a list of possible questions. They might start like this:
  • “How are you currently handling…?”
  • “Have you considered the value of…?”
  • “Are you familiar with…?”

The questions should have lots of punch and intrigue; they should make the prospective client think “Hmmm, I’m not familiar with that…” or “How does that work?” or “That’s interesting.”

  1. Introduce your unique, innovative solution. Here’s where you put on your selling shoes. Introduce at least one compelling benefit or advantage of your offer. The more unique and intriguing it is, the better. It should sound something like this:

“Our new software solutions can reduce shipping costs and improve profitability. Most of our clients are seeing a ROI in three to four months.”

“Our new sterling devices have reduced surgery time and patient complaints by 50 percent for Dr. Frank Taylor at Princeton Hospital.”

  1. Give a call to action. After you’ve provided a substantive response to the client’s smokescreen, suggest a meeting date and time. Go directly from your response to a suggested meeting time; don’t miss a beat. Say, “How does your schedule look late next week?” and then don’t say another word. Wait for them to respond. You’ll be tempted to say something if the client doesn’t respond immediately, but it’s important to let him or her speak first.

Another common smokescreen to watch for is “I am really busy; I don’t have the time.” When someone poses this roadblock, empathize and then request a tentative appointment three to four weeks out. If he or she balks, ask when an appropriate time would be to follow up. Pushing too hard can sometimes backfire and make it more difficult to get in the door next time. Giving someone space now can pay off huge dividends down the road.

When you’re dealing with prospective clients who are “happy with their current supplier,” ask them about a secondary source. For example, you might say, “I can appreciate that you are happy with your supplier, but what happens if they drop the ball or if their quality deteriorates? Do you have a secondary source to fall back on?” Another question you might pose is, “Are you open to looking at an alternative that can produce more value and potentially cost less?” Very few buyers will say ‘no’ to such a proposition.

Even if a prospective client is happy with her supplier or not interested, meet anyway. Things have a way of changing once you actually sit down. Buyers often have a more open mind and give you more consideration once they meet you face to face.

Other Client Acquisition Strategies

Perhaps your firm does not use the telephone for new business development. Perhaps you’re only responsible for existing clients, and you don’t have to prospect for new business since your sales growth and commission come from your client base. It’s also possible that you, or your marketing team, are generating leads through media such as print ads, banner ads, Google ads, joint alliances, partnerships, tradeshows, radio, television, billboards, sponsorships, and circulars. No matter how warm these leads are, you will still need to communicate the compelling value of your offer to your buyer and secure an appointment.

The Mental Game

Motivation is overrated; it comes and goes. Top sales producers know they can’t wait until they feel motivated before they do something. They rely on their commitment, discipline, and work ethic to keep them on track. They allow their goals to drive them. There will be days when you don’t feel like prospecting for new business. Don’t wait until you do. The feelings may never come. On days when you’re feeling sluggish or lethargic, set reasonable goals and get cranking. Actions precede feelings, not the other way around. Frankly, sometimes you simply have to force yourself to do what you know is right and effective. Get comfortable with being uncomfortable. As any good hitter in baseball knows, you have to work through your slumps.

Key Take-Aways

  1. Consider the warm call instead of a cold call.
  2. Create a compelling benefit statement (CBS)
  3. Provide justification for the next step.
  4. Emphasize the financial benefits of your offer. “The financial benefits of my offer include:”
  5. Consider conceptual selling.
  6. Sell the 20- to30-minute appointment.
  7. Overcome smokescreens. Use the four-step method.

Make it your goal to get in front of prospective clients rather than selling over the phone.