Everyone agrees with new business prospecting being a critical component of any sales territory.
However, even during tougher economic conditions the majority of sales people still tend to over-service their existing customers and do as little as possible to find new clients. What about you? How much new business prospecting have you been investing in lately?
My Uncle Russ was always a hero to me when I was in my early 20’s and was new to selling. He had retired in the early 1960’s from a successful career selling firebricks used to line industrial furnaces. As a new salesman for the IBM Corporation’s large computer division, I was just beginning to understand how selling and persuasion really worked, and Russ always seemed to have the answers to my many questions. In the early 70’s we would sit on his porch for hours talking about selling in general and my various issues and challenges as a new salesperson in particular. It seemed that selling firebricks and selling large computer systems was not that different after all.
One of Russ’s favorite questions was to ask me how much time I had recently spent “looking for new smokestacks.”
As a career salesman, Russ understood the critical importance of an ongoing new business prospecting system as the foundation to the growth and success of any sales territory. He also understood how an ongoing prospecting effort was meant to do more than just increase your sales…he knew it was also meant to help increase your selling energy.
Are you prospecting to increase your energy?
Russ spent hours helping me shape my philosophy and approach to selling. He was always telling me “…you won’t keep doing anything long-term…including selling…unless it stays fun and exciting!” He said that after 40 years of selling he realized that the more excited and interested he was in what he was doing the more success he seemed to have doing it.
He also helped me understand that only calling on the same customers, talking, and selling the same stuff year after year, could become boring and could strip away your energy and joy for your job…and for Russ…that’s where looking for smokestacks came in.
Russ continued to encourage me to invest a half day a week, or at least two days a month, just driving around new areas “looking for new smokestacks.” As a firebrick salesman, he knew that any new smokestack he could find likely contained some type of furnace at its base that would likely need new firebrick at some time in their future. When was the last time you took a few extra hours out of your selling week “looking for new smokestacks” that might lead to new customers for you?
At Russ’s urging, I started carving out a few hours each week to drive around a new area of town or a new industrial complex looking for companies I had not talked to yet. When I did find a new company, I would stop in to talk with the receptionist or guard.
With Russ’s coaching I learned to say to the receptionist or guard that I had not called on their company before but thought my products might be of value and interest to someone within their company. I then asked them for the name of who they felt I should be talking to so I could call them later to see if they were indeed interested in talking further about their need for what I sold.
Most of the time I was able to leave with the name and number of someone new to contact, but sometimes they would encourage me to call that person from their lobby so I could introduce myself and begin talking. My success following this system eventually led to my office promoting me to be in charge of all new business prospecting within our Cincinnati branch.
The Three Greatest Benefits of Ongoing Active Prospecting
Because of Russ’s guidance and expertise, I was able to experience personally the three greatest benefits of ongoing active prospecting…
Prospecting Benefit #1 - Increased revenues and commissions
The first and most obvious benefit of any type of new business prospecting is the expansion of your territory, sales volumes, and commissions. Several industry studies have confirmed the average “business-to-business” sales territory turns over, or loses, an average of 2 to 5 percent of their customers and revenues each year due to issues outside their control such as companies being purchased, going bankrupt, or moving their business out of your area.
Additionally, if you don’t have enough depth of coverage in an account you could also lose customers because your main contact got promoted or left their company. You might even have lost business due to being out-sold by your competitors.
The reality of selling is that any established sales territory will go through a natural shrinkage every year. Either you can try selling more stuff to your existing customers, the path chosen by most reps, or you can increase your prospecting so your total sales and customers continue to increase every year.
How many customers and how many sales did you lose last year, and what are you doing about it?
Prospecting Benefit #2 - Increased selling energy and excitement
The second benefit of new business prospecting is much less obvious compared to our first benefit of increasing your sales, but can be even more important to your long-term selling success.
This second benefit is the additional energy and excitement you can gain by occasionally doing something different and enjoyable. Everyone needs a break no matter what his or her job. There is new energy that can affect all aspects of your job that comes from starting a new business relationship, finding a new selling opportunity, or just getting to talk with a new contact about the value provided by you and your company. What can you do to add new and additional prospecting energy to your selling efforts?
Prospecting Benefit #3 - Strengthened negotiating skills
The third benefit to ongoing prospecting comes as a direct result of you prospecting and finding new customers; you will become a stronger and tougher negotiator with all of your customers.
There is a simple concept of negotiations that affects all sales professionals, the more unfulfilled opportunity you see in your sales territory the tougher a negotiator you will become with all customer discussions and negotiations.
Consider these two scenarios
In the first scenario, you are coming to the end of a tough business year and though you are close, you have still not made your sales quota and the bonuses that come with making your numbers for the year. You really have only one sale left to close that will make, or break you, making your numbers and bonuses for the year. As you are talking to your prospect they tell you, “you’re prices are way out of line…what are you going to do about your pricing to become more competitive?” If you lose this sale, you also lose your bonus and the recognition for the year. What would you do? Of course, most will cut their price to insure making the sale and their annual quota.
Now consider the second scenario. You are coming to the end of your year and it has been a spectacular sales year for you and your company. Things are so good you are having a hard time keeping up with all the new business opportunities and time demands from your other existing customers. Now that same prospect tells you “you’re prices are way out of line…what are you going to do about your pricing to become more competitive?” What would you do now? Bet you won’t cut your price!
This is the reality of negotiations for any sales professional. The more unfulfilled opportunities you see within your territory, the tougher, or stronger, a negotiator you will be. The third and mostly hidden benefit of an ongoing active prospecting process is that you become a stronger and more effective negotiator as you increase your new business selling opportunities and success, increasing your profit margins across your entire territory. What can you do to increase your prospecting efforts so you strengthen your skills as a negotiator?
What can you do this next week to carve out some time from your schedule to make a few new phone calls, stop by some new companies, or at least start looking for new smokestacks in your area?
Russ passed away years ago, but not before he was able to inspire in me his excitement for selling and his understanding of the science of our persuasive craft. I hope you have an Uncle Russ in your life, someone who after spending a lifetime in selling is equally excited about passing on his or her understanding, energy, and excitement for selling to you and your career. I also hope they inspire you to want to do more prospecting on some type of regular basis, so you too can increase your selling energy, improve your sales, and strengthen your ability to negotiate with your buyers.
We know you’re good, now the question is, are you ready to get even better and disciplined enough to increase your ongoing new business prospecting efforts so you too can find more joy and excitement in your career as a selling professional?