How much time do you, or your team, waste prospecting and uncovering prospects that never turn into clients? How much time has your organization spent prospecting over the last 90 days?
Now, consider how much of that time was spent on prospects that have not and will not turn into clients. This is “The Prospecting Black Hole.” And it's a big number.
Consider a business that lands 25% of deals that reach the proposal stage. Now let’s say this same business typically needs to target 20 prospects to get to 1 proposal. The math is easy. They need to go after 80 prospects to sign one new client.
79 out of 80 prospects will not turn into clients. In this scenario, 98.75% of prospecting time is spent on targets that won't end up buying. It’s essentially wasted time. You won’t recover it. It's gone, disappeared forever into The Prospecting Black Hole.
The lost productivity is massive. But, we can reduce the impact of the Black Hole in a number of ways. One of the best strategies is to minimize the expense associated with prospecting in the first place.
Segmenting your department will boost productivity, and align expenses more rationally with the work being performed. Look at it this way; should a $150k salesperson be spending time on $40k research person type work?
No. That’s silly.
Salespeople should not be spending their time poking around on LinkedIn. Most of them aren’t good at it, and it’s simply a terrible use of their time. Did you hire them to perform market research or to build relationships and close deals?
Hiring a full-time prospector will allocate your costs rationally, and it will allow your sales team to focus on more high-level activities.
There are plenty of tools to help improve efficiency in prospecting. Software that can cut literally hours out of every day spent prospecting. In a lot of ways, this software can not only handle a lot of your prospecting, it can also provide you with data to prepare for an eventual call.
Wouldn’t it be useful to know that the prospect you’re getting ready to call loves the St. Louis Blues and just posted a picture of his fishing trip on Twitter?
There are a number of apps that can quickly feed you this data. If you’re not using one of them, you’re missing out on valuable insights about your prospects that can give you the edge in developing relationships quickly.
Without this kind of information, you’ll be less likely to build rapport, more likely to start pitching too soon and quick to spoil the lot.
Approach people from a networking perspective, and you'll dramatically boost your chances of having a successful first contact.
Utilize implicit referrals based on things/people you have in common and your success rate will go way up. Do you and your prospect have a connection in common on LinkedIn? Did you go to the same school? Are you part of the same association(s)?
Leverage these commonalities to get your foot in the door and build rapport.
On the other hand, you can just attack people with your sales pitch...and be happy to get an extremely low response. (Disclaimer: You will waste tons of good prospects by doing this.)
Speaking of wasting prospects, what about those 79 out of 80 that don’t end up becoming clients?
Regardless of your approach (phone, email, in person, whatever), a majority of prospects you reach out to will not be in the market for what you do right now.
If you don't have a Plan B ready for these prospects, you are missing out on long term opportunities.
If you’re executing a well-rounded marketing program, you can get a large percentage of these “lost prospects” out of the Black Hole and into a permission based system that keeps them open to future opportunities.
This Plan B can include:
Achieving that, your prospecting and sales efforts aren’t just a sales function. They’re feeding new prospects back into the marketing funnel.
While The Prospecting Black Hole can probably never be completely eliminated, you can definitely curtail its effect. And, by integrating forward-thinking marketing into the process, you can even turn it into a valuable asset.
Josh Turner is the founder of LinkedSelling, a B2B lead generation firm. His company designs and manages campaigns to systematically build relationships with cold prospects and convert them into warm leads. Learn more about Josh and sign up for his weekly newsletter on lead generation resources at LinkedSelling.com.
Image via http://www.flickr.com/photos/mafue/
Speaking of prospecting, looking for tips on how to prospect like the pros? Be sure to download the free ebook below.