How To Qualify Leads and Prospects

How To Qualify Leads And Prospects

How to find good-quality sales leads? Qualifying leads and prospects is an important first step for anyone's sales process. You need to know where to go for leads, how to get them, what to say when you've got them, and finally, how to get them to buy.

What You Should Know Before Getting Started

The Plan

Getting to the Buyers
Qualifying the Leads
Finding the Leads

The End Result

Assessment

Resources

What To Expect

Qualifying leads and prospects is an important first step for anyone's sales process. To be effective in selling you must get off to a good start and become as productive as possible in identifying qualified leads. This Business Builder will lead you through a step-by-step process of where to go for leads, how to get them, what to say when you've got them, and finally, how to get them to buy.

What You Should Know Before Getting Started [top]

Qualifying leads and prospects plays a very significant role in selling. Without a solid prospect list, it will be difficult to build a lucrative sales territory. Finding the right prospects is one of the most critical phases of a salesperson's work. If a salesperson is not vigilant, he or she could be robbed of potential customers by aggressive competitors or by such routine events as relocation, retirement, death, bankruptcy or turn-over. Sales prospecting has been compared to panning for gold. Just as a prospector looks for another "mother lode" using his pick and pan, the sales prospector must be willing to search for qualified prospects using his sales tools. Unfortunately, sales prospecting is even harder than panning for gold, but if you know where to look, and how to look your prospecting could be very profitable for you.

In every marketplace there are sales nuggets to discover. If you are selling a rare or antique automobile, there is a buyer or buyers out there who would pay the price to own such a gem if they only knew about it. Out of every 100 prospects, there are probably ten who are qualified to buy. This means that they have the authority and the funds necessary to buy. Of those ten, there are probably only three who have the immediate need to buy. How do you find those three buyers? That's the trick. Wouldn't it be great if you could sell to those three buyers first and then try to convince the rest?

Case StudyCharles R. Whitlock tells the story of a saleswoman who worked for a business newspaper in a major city. Each week the editorial staff covered a specific market segment in their editorial material. For example, one week they concentrated on banks. The next week they covered business products companies. The third week they would cover the computer industry, etc. The saleswoman, knowing the editorial schedule, contacted all of the banks two months before the start of each editorial segment and sold the advantages of paid advertising in the banking editorial section of the newspaper. The newspaper, in a way did her prospecting for her. However, it was the saleswoman who went out to qualify those leads and found out who in the banking marketplace was interested and able to buy the advertising in the newspaper.
Case StudyAnother effective prospector was the printing salesman who sold customized letterheads, business cards and brochures. He offered good printing capabilities at competitive prices. He discovered quickly that he had a lot of competition, some of which had been around for a long time and were firmly entrenched in the marketplace. Undaunted, he decided to target new businesses since they would have the need for his services, and he would be on even footing with the competition. For his prospect list, he checked the newspaper and sought out the listing of new businesses that had recently incorporated or registered as fictitious names. He was the first salesperson knocking on their doors, bringing with him many suggestions on how they could obtain quality products while keeping their printing prices down. Every prospect became a strong potential customer. This technique worked so well for him, that he obtained lists of new corporate filings from the state's Corporate Commissioner's office and contacted the chambers of commerce in his area for a list of new members. In the old days, he might find four out of ten who would need his services. Of those, maybe two were in a position to buy and, maybe one would have the authority and the funds. With his new method, he found eight out of ten to be prospects and six out of those eight became sales.

The Plan [top]

To be successful in sales, you must have a plan to reach those prospects who are qualified to buy from you. The plan must include:

Getting to the Buyers
Qualifying the Prospects
Finding the Leads

A. Getting To The Buyers

Knowing how to prospect is another key to successful selling. There are a number of ways to get the leads you need. These have been tested and proven by a number of salespeople.

Referrals

Successful sales people know the value of a prospect who has been referred by an existing client happy with your product or service. This prospect is easier to sell than a new lead who knows very little about your company. Qualifying this prospect should be much easier than a lead obtained from a cold call. Using your client base should be an excellent way of obtaining new prospects.

There is a skill in obtaining a referral. Asking the question, "Do you know of anyone who can use my product (or service)?" will not always work. What you are doing is asking your client to make a judgment as to whether he knows someone who is ready to buy your product or service, in essence to qualify a lead. In many cases, it may not be possible for him to know. A better way of getting new leads is by asking if he belongs to any business organizations, clubs, charities, etc. If the client is in an office building with other tenants, ask if they know anyone else in the building. The theory behind this is simply that most of us surround ourselves with individuals who have similar interests, earning power, preferences and needs. By asking for referrals in this manner, your client only has to give you names and not make any judgments.

The best time to ask for referrals is immediately after the sale is made. At this point the customer's enthusiasm and satisfaction is at the highest point. Because referrals are so important in selling, staying in contact with old clients is essential. Send them birthday or holiday cards. Call them from time to time to see how they are doing. Stop in to see them "when you are in the area." Let them know you haven't forgotten them and always be ready for the referral.

Networking

This is a method whereby you become your own best bird-dog. You get the word out about what you do to as many people in your "sphere of influence" as possible. This could be your barber, attorney, auto mechanic, clergy, etc. Remember, you never know where that next lead or prospect will come from. Street smart salespeople maximize their contacts through networking by joining organizations that will put them in contact with potential clients. These salespeople increase their exposure in these organizations by becoming active members. This may include volunteer work, special committees, or doing pro-bono work with high visibility. Whatever you do, wherever you go, be sure your business cards are readily available.

Trading Leads

An excellent method of prospecting is to set up a system whereby you are able to trade leads with other salespeople who sell in the same market as you do. Perhaps a printing salesperson who sees forty people a week might be an excellent source for the machinery lubricants you are selling. Another example would be the person who sells home improvement supplies would be a valuable source of leads for an individual who sells appliances. By analyzing who your prospects are, you can list all the other products or services they might utilize. After this list is completed, you can then try to set up a trading network between you and the other salespeople.

Lists

Smart salespeople know the value of lists of businesses and people in their day-to-day prospecting. These lists are readily available through many sources as well as local libraries and professional list brokers.

Business Directories

Libraries with a strong business section would be a good place to find directories that list businesses by industry. Take the time to learn how to effectively use these sources, and it will pay great dividends for you in time and money. The following list of directories can provide you with valuable leads:

Reverse Directories These are cross-reference directories which allow you to prospect in a specific geographical area. These publications list the telephone numbers in order of street, house number, town, country or the phone number itself. The Cole Directory is an excellent example of a cross-reference directory.
Sic Or Naics Classification Directory The Standard Industrial Classification (SIC) and successor North American Industry Classification System (NAICS) code numbers are government -assigned. Each type of business has a separate SIC and NAICS number. Related businesses have similar numbers so that you can scan through one of the many directories that use them and look under only the numbers that apply to users of your product or service. This not only will provide you with an excellent list but in addition will give you an insight on related businesses and industries that you might want to prospect.
Corporate Directories These directories give excellent analyses of corporations. They can include company size, type of business, sales volume and principals with titles. Dun and Bradstreet's Million Dollar Directory lists over 160,000 businesses with a net worth of more than $500,000. Ward's Business Directory lists private and public companies throughout the United States with annual sales of $5,000,000 or more.
Specialized Directories There are directories that list individuals according to profession. For example, the Martindale Hubbell Law Directory lists attorneys according to state. The American Medical Directory lists physicians in the United States.

It would be virtually impossible to list all of the sources that you can go to. There is an enormous amount of resource material available that can be invaluable to the salesperson who is willing to seek it out. The first reference book that you might want to purchase is Directories In Print. It's a guide to approximately 10,000 business and industrial directories which should be able to point you in the right direction in finding sales leads. In the event that you cannot find the directory that will fit your needs, don't lose sight of the list brokers who can provide you with virtually any list you might need.

Prospecting By Telephone

The telephone is the greatest sales tool ever invented. It enables salespeople to prospect not only in their own town but around the world as well. It is amazing that many salespeople do not take advantage of the telephone. Some salespeople will not take a sales job if using the telephone plays an integral part in prospecting. Successful salespeople know the telephone is an effective tool in reaching prospects. There are some basics in using the telephone as a sales lead generator that will maximize your telephone prospecting techniques.

When using the telephone, be conscious of how you sound and the words that you will use. A prospect you are calling for the first time only has your voice and how you come across on the telephone to make a judgment about you. The prospect does not have the advantage of seeing you, your product, brochures or other sales aids. So, if he hears a voice that is low, monotonous, or has poor diction, he most likely will cut the conversation short.
Sound enthusiastic when speaking to a prospect. Enunciate clearly and choose your words carefully trying to paint a clear mental picture of opportunity to your prospect. This is a time for you to get to know the prospect so be sure to keep his interest on the telephone.
Never ad-lib telephone presentations. Each conversation should be scripted to a degree. It should include a question or two that will engage the prospect in a short conversation. Remember, the word "convert" comes from "conversation." With your conversation, you have a better chance of converting the phone call into an appointment. Also, you should be prepared to answer any objections that might come up during the conversation. Ask the questions which will qualify the prospect as being in a position to buy. If he isn't, don't waste too much time on him.
An important point to remember is that you are usually calling the prospect to get an appointment. You are not trying to sell your product or service over the telephone. If a prospect asks for information that could lead you to sell, then you might want to consider this response, "That's why I'm calling to set up an appointment to cover these types of things."
If a prospect asks you about pricing information and you give it, your chances of getting an appointment will suffer dramatically since the prospect will be making a judgment solely on price. When they ask you to send a brochure, for the most part this is a kiss-off and a waste of time.

Arthur Rogen wrote a clever reply to the request for a brochure. The salesperson said, "George, our brochure is 5'11" and weighs 185 pounds; what day is better for you, Monday or Wednesday. I'll come by and drop it off."

If you can control coming off as a smart aleck, this approach can be very effective.
For telephone prospecting to be effective, you must have a set time each day when you will make your calls. If you are not disciplined in your telemarketing, it will become a hit-or-miss situation for you and will be at best, a waste of time for you.
The important thing is to get the name of the right person for you to contact as well as the secretary's name. When calling back, it is sometimes helpful to get through to the person you want to speak to by having the secretary's name.

For Example, "Hello Jane, is Mr. Greer in?" This gives the impression that you know her as well as Mr. Greer. In some instances, even though she doesn't recognize your voice she will put through, not wanting to admit she has forgotten who you are. This might give you an edge in getting to Mr. Greer.

Canvassing

Canvassing can be an effective tool in prospecting for leads. This technique is best used when you are finished with a sales call and you are in an office building with time before your next scheduled appointment. Walk into other offices which you think can use what you are selling and introduce yourself. You might get an opportunity to speak with a prospect. At least, you can find out who the prospect is, leave your business card and indicate that you will be following up with a telephone call.

Direct Mail

Another way of getting and qualifying leads is to use the mail for sending brochures, letters or samples with a note attached stating that you will be calling for an appointment. The negative side to this approach is that people in business are inundated with all sorts of direct mail pieces, quite often dubbed, "junk mail." However, here's how you can make yours different:

Hand write the name and address of the prospect on the envelope. Use a real stamp and not a postage machine. Prospects are not so inclined to throw out unopened pieces of mail without opening it if it is handwritten.
Successful salespeople often hand write a personal letter on plain stationery without a letterhead. This tactic will at least get the prospect to read the first few lines to find out who you are. If you are clever in your approach, you will get him to read the entire letter and not dismiss it as another piece of junk mail. Think about it. How many times do you get unsolicited mail and look at the return address, window envelope, and postage meter stamp and throw it away without opening it? Your prospect will do the same thing.
To be successful, you must follow-up your direct mail campaign with a telephone call. This will increase your chances of getting an appointment and will serve as a vital part of your prospect qualification process. If you get the appointment there may be a need for what you are selling.

Remember This Important PointDirect mail should be used to supplement your prospecting method and should never be used as a stand alone method to gain new leads.

Special Promotions

A good place to get prospects is at trade shows and sales conventions. These are usually industry-sponsored and potential prospects will attend. The shows give great opportunities to follow-up the prospects you meet, face-to-face at the show. Consumer shows are different. These are not usually industry-sponsored and are usually open to the public. They can be antique shows, auto shows, home-improvement shows, etc. However, if you are selling a product or service that's consumer-oriented, what better place could you go to meet prospects? They draw a lot of people and where there are people, there are prospects. Pick the ones that will benefit you best.

Newspapers

They will give you valuable information about people and their companies. They report on who has been hired, promoted and who is moving into the area. They also run employment ads which might mean the company is expanding.

Employee Turnover

If a salesperson leaves your company, for whatever reason, the lists they leave behind might be a helpful tool for your prospecting effort. Ask the sales manager if you can go through the list and cull out the prospects that will be helpful to you. If the prospect you call from this list tells you that they were not happy with the company, product or service, you can tell him that's the reason you have been given the account so that you could provide him with the best service possible.

Old Customers

Most products and services have a life cycle and it's your job to determine when your prospect will be in the market again. If you sell products with a predictable life cycle such as automobiles, you can build up an active client base so that every two to four years, you have another group of prospects. If the product or service you sell has a long life cycle or have infrequent or one-time sales, you can be considered the client's sole supplier by keeping in touch with him and asking how the purchase is holding up. When other people ask him where they can get a particular item or service, it will be you he remembers. If there have been technical advances on the product or service, inform your customers. You might get them to upgrade. They are already qualified buyers and it's human nature to want the newest and the best, especially if the new product can save them money and time.

Testimonials

A typical testimonial might state: "Thanks for the excellent job you did on our sales training program. It was creatively executed and after just one month, we have realized an 18% increase in sales across the board. I thank you, my sales people and our president thanks you." Some people believe that the best testimonial is one that has not been solicited. This occurs when a satisfied client writes a letter thanking you for a job well done, with no prompting on your part.

B. Qualifying The Prospects

To be successful in prospecting you must first identify or qualify your prospects. One way is to ask yourself where you can find the greatest number of qualified prospects in the shortest period of time. Your answer should point you in the right direction.

For example, the person who must use a cleaning agent for dentures is someone who wears dentures. One obvious source for this market would be the dentists in your area. If you are interested in brand loyalty, give samples of your product to the dentists who in turn will give them to their patients who are your prospects. The fact that the dentist is giving the samples out adds to the credibility of your product. Detail salespeople for pharmaceutical firms have been doing this for years.

To be successful in qualifying prospects, you have to ask yourself a number of questions. The salesperson who asks enough right questions of the right people in the right places will always have plenty of qualified prospects. The first three qualifying questions "Who?," "Where?" "Why?" will show you how to find quality prospects. "What?" is designed to help you target your presentation and "When?" can save you time and maximize your energies in the qualification process. Finally, the "How?" questions. They are perhaps the most crucial of all the questions because many of their answers will evolve from the other five questions. Here are the questions:

Who?

A few excellent "who" questions you might consider using in order to convert "suspects" into highly qualified prospects are:

Who has the most obvious need for your products or services?
Who are the ideal prospects? Don't limit yourself to existing customers.

Describe In Detail On A Piece Of Paper Who Your Ideal Prospects Are.

Who has the money to buy your products or services immediately?
Who has the most urgent need to buy your products?
Who has influence on the prospects you are able to identify?

Where?

By asking enough "where" questions, you should be able to qualify prospects beyond your current client list.

Where do your ideal prospects live, work, socialize, worship or play?
Where can you find useful mailing lists of people who fit your ideal prospect profile?
Where can you find directories from which you can form your own lists?
Where could you go to contact new prospects?

Why?

By using the "why" questions, you can set up priorities so as not to waste your time in qualifying prospects.

Why would the prospect be likely to buy your product or service?
Why would the prospect resist buying your product or service?
Why might this time be good (or bad) to approach the prospect?
Why would this person be likely to set up an appointment with you?

What?

These questions, if properly used can boost your qualifying average.

What will the prospect find most beneficial about your product or service?
What information could you present, or what questions could you ask would most likely get the prospect to talk about his needs?
What more do you need to know about the prospect?
What information should you gather about the prospect before you meet with him?
What is the single biggest problem the prospect has?

When?

This question is about timing. Don't try to set up an appointment for your convenience.

When is the best time to contact a prospect? An important hint, if he or she is a busy executive, is never on a Monday morning!
When is the most productive time from the prospect's viewpoint?
When is the prospect most likely to give you the time you need?
When should you contact the prospect again if your first efforts were not successful?

How?

You will not be able to ask many meaningful "How?" questions if you have not fully explored the other five.

How can you be sure that you are doing a good enough job of follow-up prospecting? (Look at the Who? questions again.)
How can you use your prospecting time more productively? (The "Where?" questions can help you here.)
How can you sharpen your prospecting and qualifying skills? (Hint: Search for creative ways to put your products and services to good use. Look at the "Why?" questions.)
How can you best approach your prospects? ("Think about the "What?" questions What will they want to hear?)
How can you make more time for meaningful prospecting and qualifying the leads you generate? ( The "When?" questions will give you a good indication of effective time management.)

C. Finding The Leads

A salesperson without leads or people to talk to is like a fish out of water. Neither can survive very long. Yet, a common problem among salespeople is a lack of sufficient leads. The million dollar question in selling is "where do the leads come from?" There are four ways to get qualified leads.

Although rare, your product or service may be so good that it virtually sells itself. This very often happens when your company sells a one-of-a-kind product that becomes popular in which case your job of getting prospects becomes easier.
The company you are working for has a program that will produce leads through media, direct mail or print advertising. (National or international companies like Encyclopedia Britannica is a good example of company produced leads.) The salesperson still has to qualify the buyers, but the leads are there.
A third way to get leads is through your network of friends and colleagues. Some industries base a portion of their sales projections on the tendency that new salesmen will sell to many people they know. These companies constantly hire based on this trend. These companies also know that many salespeople will fail once they exhaust this circle of possibilities.
The last way is getting leads on your own. This separates the achievers from the under-achievers. Street smart salespeople learn not to count on the first three sources of acquiring leads. They have learned that they themselves are the greatest source for their own leads. The rest of this section will focus on where to look to find your own leads.

After you find people who need or want to buy your product or service, then you must establish that the prospect has the authority to buy and the ability to pay. This is possibly the most important point in prospecting and qualifying, and it cannot be stressed enough. It makes no sense at all to waste time on anyone who might want what you are selling but has neither the authority to buy or the money to pay for what you are selling. So four steps in qualifying a lead or prospect are:

Finding the people who need or want your product or service.
Establishing that the prospect has the ability to pay for your product or service. You can do this by asking: Has your company purchased ________ in the past?" "Does your company have a budget for __________?"
Making sure that the prospect has the authority to make the purchase. You can do this by asking; "Are you the person who makes the ultimate decision on buying ______?"
Determining accessibility. In order for a prospect to be able to buy from you, he must be accessible to you. For example, The President of the United States might be a great prospect for a new line of golf clubs you are selling but if you can't reach him, you can't sell to him.

The End Result [top]

The end result for any salesperson is getting the prospect to buy what is being sold. If the prospect has the need, the authority to buy and the money to do so, they are good prospects. You can find good prospects in many of the ways outlined in this Business Builder. However, it will take the time and effort on your part to be successful.

Don't cut down on your chances by relying on one method of prospecting. Go out and make it happen for yourself by employing every method possible. Also, be creative and perfect your own method of prospecting.

Case StudyFor example: A man who was selling vacation property once set up a booth at a Flea Market. The booth had photographs of vacant land and on the counter of the booth he had a pile of dirt with a small "For Sale" sign in the dirt. His colleagues thought he was crazy. But when he started to sell vacation lots at a very brisk rate, they soon followed suit and set up booths of their own at other Flea Markets.

Assessment [top]

The following questions are designed to get you thinking as an effective prospector. Read the questions and answer them. Study your answers and improve your success in sales:

What percentage of your day is devoted to prospecting? ________

What methods do you use to prospect for new customers?

What method or methods produce the most prospects for you?

Do you depend on one method only? If yes, Why?

What method do you think could be more effective with your product or service?

What is the life cycle of your product or service?

Have you been successful in getting prospects from your clients? If not, why not?

Have you developed a well scripted telephone presentation? If not, why not?

The successful salespeople are the ones who use prospecting as an effective tool. It is not for the "weak at-heart." It can take its toll on the salesperson who cannot handle rejection. However, selling is reversing the "no" and making it a "yes." A truly effective salesperson learns from every "no" he gets and uses it to help him with his next sale.

Once Thomas Edison was asked about the failures he encountered when conducting his many experiments, he answered, "I did not fail a thousand times; I learned a thousand ways it wouldn't work." The smart salespeople who are so motivated do not base their efforts on the number of times they have failed but on the number of times they were successful.

Resources [top]

Books

High-Efficiency Selling: How Superior Salespeople Get That Way by Stephan Schiffman. (Wiley, 1997).

Million Dollar Prospecting Techniques. (Wiley, 1999).

Just Sell It!: Selling Skills for Small Business Owners by Ted Tate. (Wiley, 1996).

AMA Handbook for Successful Selling by Bob Kimball. (American Marketing Association/NTC Business Books, 1994). Chapter 4: "Identifying and Developing Prospects."

Selling Your Services: Proven Strategies for Getting Clients to Hire You (Or Your Firm) by Robert W. Bly. (Henry Holt, 1991). Chapter 1: "Techniques for Generating Sales Leads" and Chapter 4: "Techniques for Prequalifying Your Prospects."

Sources For Trade Show Information

Festival Network Online

JustSell.com

Meetings & Conventions Online

Trade Show News Network (TSNN.com)

About The WriterFelice Philip Verrecchia is an award-winning freelance writer/producer/director living in Southern Chester County, Pennsylvania. In addition to a busy writing schedule, he is completing the requirements for a Ph.D. in Transpersonal Psychology.