The foundation of growth for most businesses lies in continually acquiring new customers. Acquiring a customer is often a lengthy process involving various activities and methods, such as identifying potential customer needs or reaching out to them with the right message; for example, through cold emailing.
At the end of this journey lies the coveted offer finalization. But what activities take place at the beginning when the potential customer is not even aware of your existence?
This is where prospecting—the focus of this article—comes in.
What is Prospecting?
Prospecting, also known as customer search, is the initial stage of the sales cycle. During prospecting, a salesperson seeks contacts that, through ongoing efforts, can potentially transform into leads or potential customers.
A prospect is a potential customer who fits the profile of an ideal customer but has yet to be made aware of your existence. This means that prospecting is, in a sense, about building a customer base—raising awareness about your presence in the market.
Effective Prospecting Step-By-Step
Step 1: Define the UVP (Unique Value Proposition) and Connect It to Potential Customers.
A good starting point for finding potential customers is defining the unique value of the product/service you want to offer them. By understanding what sets your offering apart, you’ll also understand who would benefit the most from these unique features, whose problems your product or service can solve.
Keep in mind that “quality” and “innovation” are not good differentiators:
Step 2: Narrow Down the Potential Customers to Those Who Will Benefit the Most from Your Value Proposition.
You’ll be wasting time if you direct prospecting efforts, like cold emailing or cold calling, to too broad an audience. You need a filter to screen customers who don’t fit your defined profile.
Once you’ve identified your unique selling points and who will benefit most from them, you can further narrow down your list of companies to contact. For example, if historical data shows that you excel at projects for
- e-commerce companies,
- with 15-30 employees,
- in the early stages of development,
- and selling unique handmade products,
then focusing your prospecting efforts on such companies significantly increases your chances of success.
You can also prospect by industry, such as “We’re currently running a prospecting campaign targeting e-commerce companies selling construction accessories.” This way, you can use materials and case studies relevant to the client’s industry.
Step 3: Screen Your List of Potential Customers and Determine Who to Contact on the Client’s Side.
If you plan to conduct prospecting based on an existing database, such as from an automation tool, trade shows, or purchased from someone, remove contacts that do not meet your criteria before reaching out to potential customers. Sticking to the above e-commerce example, exclusion criteria could include being too small, not at the right stage of development, or inactive.
If you’re building a database from scratch, consider your established criteria from the beginning.
Around this time, it’s essential to identify the best person to contact on the client’s side. Sometimes this isn’t obvious. For instance, salespeople often reach out directly to the department or person in charge. However, they don’t always make the final business decision, such as implementing a new tool. Sometimes, department heads may want to avoid cooperating because implementing a new system would require changing processes and training the team in a brand-new system, which might even automate their work to the point where they realize they can operate with fewer staff members.
Understanding the problems you solve and who within the potential client’s organization has those problems is key to effective prospecting.
Step 4: Reach Out to Potential Customers.
There are several options to consider:
- Cold calling
- Cold emailing
- Performance marketing
- Social media activities/social selling
- Participation in industry events, conferences, etc.
From our perspective, a two-pronged approach works best. It’s easier to contact a potential customer who has already seen your advertisements – you’re not entirely unknown to them.
Common Mistakes in Customer Prospecting
Mistake 1: Not Having a Prospecting Plan.
Sending mass messages from salespeople without first thinking about what real problems your product solves, who has those problems, and who to contact is a waste of time and money. Haphazardly using cold emailing can also harm your reputation as a spammer.
Mistake 2: Not Making a Lasting Impression.
Sometimes sales teams spend too much time researching a potential customer before making contact. While it’s essential (we’ve been talking about it throughout the article!), you should be cautious not to overdo it and fall into the trap of “over-researching” a client’s company. This can delay contact and result in reaching out to fewer people than if you approached the research more dynamically.
The more mass-market your service, the more massive your prospecting should be. If only 100 companies in your market would benefit from working with you, it’s worth spending more time making a perfect first impression. However, if you offer a product or service targeting a much larger audience, your prospecting should be more extensive.
Don’t get discouraged. It’s sometimes challenging to determine the return on prospecting efforts. A potential client you reached out to may respond months later through a different medium (such as a form on your website) because they now feel the need to solve a particular problem and they remembered that someone from your company had previously contacted them about a solution. Patience is key.
- Begin your prospecting by identifying the unique value of your service/product.
- When directing your prospecting efforts, don’t waste time with cold mailing or cold calling to too broad an audience. Target your product or service to companies similar to those you have historically worked with most successfully.
- Choosing the right person to contact is also crucial.
- Prospecting requires scale to be effective. The more mass-market your service, the more massive your prospecting efforts should be.
- Don’t get discouraged. Sometimes it’s challenging to determine the return on prospecting efforts. A client you sent a message to could respond many months later through a completely different medium because that’s when they feel the need to solve a particular problem in their company. Patience is key.