Acquiring minds

Determine how your prospective buyer will display interest, build desire and take steps to do business with you. Clarify your understanding of a prospect’s behavior until you have it down cold. Then, by examining your previous successes with your best customers, a pattern will emerge.

From the first time you target a prospect, exactly what happens as you proceed to close them? When do you use direct mail, advertising, telemarketing and face-to-face selling? Is there a best way for your business to do this, or is it always a random act?

Identify the three most likely sequences that result in closing business. Once you have these scenarios down, take time to understand how you qualify your prospects. Remember that time is valuable, and all prospects are not created equal.

With this wealth of raw data, now it is time to bring structure to the picture. Using the funnel below, define each stage of the funnel for your business — from your suspect to your closed customer.

• A suspect is every company in your entire target market.
• A prospect is an identifiable decision maker in a company.
• A qualified prospect is a decision maker who has time, need, authority and money for your product or service.
• A developed prospect is someone you send a proposal, quote or sample.

To start, divide your average sale from a first time buyer into your new customer sales goal. This gives you the number of first time buyers you must land. Then, move up the funnel and decide how many prospects you need at each step.

If you need to qualify 10 prospects for each buyer you close, then plan to do so. Similarly, if you need to contact 1,000 suspects to identify a qualified prospect, then identify enough names and dedicate the resources to do the job.

Now that you know how many new customers you need to meet your goal, decide what your prospects are worth to you.

• Divide the number of prospects it takes to close a sale into the value of the sale. For example, if a sale is worth $1,000 and you need 10 prospects to close one sale, then a prospect generates $100 of revenue.
• If you must spend $100 to create those 10 prospects, then each prospect costs $10.
• By subtracting the cost of a prospect, $10, from the revenue of a prospect $100, you have $90, the real value of a prospect.

This exercise is critical as it gives you a benchmark of what to invest in a prospect and what to expect in return. You now have a budget and confidence to spend just enough to obtain your new customers.

With financial guidelines for finding new customers in place, choose your tactics. Pick your sales, marketing and customer service activities for each step of the funnel. You may want to use face-to-face sales to close business, but may choose to emphasize direct mail over telemarketing or advertising to qualify prospects. Evaluate your activities, tools and programs based on how cost effectively they deliver the number of prospects you need. Your choices will be easier and less risky than ever, because they will be based on meeting your goals you have set.