What Is Sales Prospecting?
Sales prospecting is an outbound strategy for generating new business by identifying potential customers with the highest probability of successful conversion. A sales prospect differs from a sales lead in that an outbound prospect has been qualified — meaning flagged for a relatively high probability of success — and an inbound lead has not.
What Does Prospecting in Sales Consist Of?
To some extent this might sound like semantic tail chasing: Do you have any leads on new prospects? Do you have any prospects for new leads? But, in practice, the difference between sales prospecting and lead generation is both distinct and important.
Here’s why. Imagine that you’ve built a business selling sophisticated inventory management software that is ideal for brands with annual revenues of $5 million or more. But experience has also shown that your solution is not cost-effective for smaller organizations, resulting in a high degree of churn among that cohort. Your website could generate a substantial number of inbound leads, but your sales team might need to spend a prohibitive amount of time and effort separating the low-probability leads from the high.
If, on the other hand, you could identify relevant organizations with $5 million in annual revenues that were either not using inventory management software or using a competing brand, you would have what amounted to a list of pre-qualified leads. You could then begin a sales prospecting effort by reaching out to those organizations through phone calls, emails, SMS messages or other means
Sales prospecting, in short, is proactive rather than reactive.
Putting Sales Prospecting Theory Into Practice
Developing and executing a viable sales prospecting strategy can be challenging. One reason for this is that the traditional “sales funnel” metaphor doesn’t adequately depict the reality of a more abstract, digital world. Rarely is today’s customer journey a linear path with discrete steps. As Harvard Business Review puts it, many B2B organizations “are incapable of dealing with the reality that buying is now continuous and dynamic — an ongoing movie, not a selfie or snapshot in a funnel.”
In fact, Ad Age went so far as to declare that the sales funnel was dead — a contention that MarketingWeek countered with a piece titled, “If You Think the Sales Funnel Is Dead, You’ve Mistaken Tactics for Strategy.”
And that was back in 2016. The digital world has only grown more complex since then with a pandemic and worldwide economic upheaval further complicating things. But the COVID-19 pandemic starkly illustrated the first of three key lessons in sales prospecting:
1. Make Prospecting an Ongoing Part of Your Overall Sales Strategy
Prospecting is something you should do all the time, not just periodically. If you wait until your sales pipeline runs dry before you start prospecting, it could be too late. And the last thing you should do during lean times is cut back on prospecting in a misguided attempt to save money. Citing a McKinsey & Co. study indicating that 50% of B2B buyers had frozen their purchases during the COVID-19 pandemic, Harvard Business Review offered a glass-is-half-full interpretation, noting that 50% of B2B buyers “are not holding off on purchases, meaning deals in their markets are still moving forward.” Your sales prospecting efforts should continue moving forward during difficult times as well.
2. Focus on Solving Customers’ Problems, Not on Selling
This is actually just a classic bit of sales psychology reimagined in a modern context: Put yourself in your prospect’s shoes, and ask yourself which approach would be more likely to resonate: “Can I interest you in buying this?” or “I have something that could make your life much easier. Would you like to hear about it?”
As Connie Kadansky, a sales performance coach, recently told Forbes, “Selling is solving peoples’ problems for a profit.” And, in many cases, because of the pandemic, “Now more than ever, you are positioned to provide desperately needed solutions to your clients and prospects.” Sales prospecting is simply a matter of identifying the companies that could benefit from your product the most and then contacting them.
Let’s put you back in charge of sales at that inventory management software firm we mentioned earlier. If you could identify a prospect that was struggling with supply chain issues because of COVID-19 and your software could help them overcome those issues, you could actually be providing them with a method to save their business
Done the right way, sales prospecting enables you to operate from a position of strength. If you’ve got a good product or service to sell, the right prospect will not only be willing to buy — they’ll be eager. Finding them is worth the effort.
3. Explore AI for Sales Prospecting
Finding those sales prospects also promises to get easier in the near future for B2B professionals who learn to leverage artificial intelligence (AI). Lev Barinskiy, founder and CEO of SmartFinancial insurance, told Forbes that his firm uses AI to “identify other buyers similar to existing clients who are having success with our program.”
“Using technology to repeat your successes is really what using AI strategically is all about,” he added.
In a recent research report from Harvard Business Review Analytic Services, 66% of respondents said they believe they will need to incorporate AI into their sales processes in order to compete effectively. Those who already employ AI were asked to list what they use it for from a choice of 13 options with the ability to pick multiple options. “Identifying target customers/prospects” came out on top with 49% of respondents reporting that they already use AI for that purpose. Other selections included “forecasting results” (36%), “improving buyer’s journey” (35%) and “optimizing pricing” (21%).
As a sales director at a software integration company said in the report, “AI in my type of role is truly becoming a critical need. Those who do it better will be more successful.”
And savvy B2B professionals recognize that AI and sales prospecting could be the most critical combination of all for achieving that success.
Moving Ahead With Confidence
With a clear understanding of the difference between sales prospects and sales leads and why it’s important to maintain an ongoing sales prospecting strategy, organizations can evaluate new technologies and techniques with a singular goal: to keep a steady stream of prospects in the pipeline.