A widely held belief amongst business experts and owners is the idea that it costs considerably more to acquire new customers than retain old ones. That being said, acquisition efforts should never be written off. With the rise of online sales and intelligent sales tools, businesses need to find a balance between looking after existing customers and prospecting to find new ones.
What is prospecting?
We can define prospecting as the process of identifying and connecting with potential new customers for your business. The aim of prospecting is to find people who are going to be interested in your product or service and then actively convert those people into buyers through lead generation.
Importance of prospecting
Prospecting is important if your current marketing activity is not bringing in enough qualified leads to meet your financial objectives.
“Our business wouldn’t be where it is without a strong sales prospecting process,” says Ben Foster, founder of search agency SEO Works. “New leads are the lifeblood of the business, especially in a very competitive sector like ours.”
Prospecting can be done through multiple channels, such as email, LinkedIn message or telephone, but if budgets are small then it’s worth starting with one channel rather than spreading your efforts too thin, Foster adds.
“We know that the cost per lead from prospecting is higher, it’s more wasteful and prolonged in some ways," he says.
"But it’s about scale. Once you’ve really optimised a specific channel and your cost per lead there is getting too high, you can use prospecting to build new channels with a lower cost per lead.”
How to do prospecting effectively
The key steps in successful prospecting are:
- Research your target audience and the solution you can provide for their problem.
- Prioritise audiences if budgets are limited. Where can you offer most value?
- Prepare a personalised pitch for each prospect depending on the channel used.
- Track results as part of your Customer Lifetime Value (CLV) metrics to understand which approaches result in the most successful new customer acquisition.
The biggest mistake that companies make with prospecting is only doing it when their company needs new revenue. That’s too late, says Paul Owen, managing director of Sales Talent, a company that specialises in sales training.
Businesses should start prospecting before they think it’s needed to ensure a healthy pipeline that’s regularly replenished with new leads. “Having that constant replenishment gives you more chance of doing great numbers,” he says.
Second, Owen recommends investing time in building a prospecting strategy, and understanding that it takes time, resources and experience to get right. “Marathon running sounds easy if you say you just need to keep running for 26 miles, but we all recognise that the execution is harder than explaining the theory,” says Owen.
The best way to approach prospecting is to research the value a potential customer offers and what your financial objectives require, says Owen: “Get as focused as you possibly can on one or two ideal client profiles, gather data, and get in touch with them about the specific value you offer,” he says.
What are the different types of sales prospecting?
Cold calling
Although SEO Works is a digital agency, the company is investing in cold calling as a prospecting technique with some success.
“With cold calling, you look at the signals and the size of the business, and if you get the right person and speak to them, we’re able to open a conversation and start to build a funnel,” says Foster. “We might look at recent engagement with content on our website, but it could be that we’ve noticed on social media that someone has just changed jobs, and we think there might be an opportunity there.”
Social media marketing
Using social media for prospecting is increasingly popular because it’s relatively inexpensive and quick, says Owen. Social media marketing can take place on virtually any social channel where your customer spends time, and different platforms may be more suitable for certain businesses. An agency might opt to market on LinkedIn, for example, whereas a fashion brand may prefer to use Instagram.
LinkedIn can be a great platform to build a network of people that match your ideal client profile. Owen advises sales professionals to focus on posting content that will inform or inspire their ideal client, as well as encourage engagement. “You can mention that you’ve researched someone’s company and you notice they have this need, and if that’s correct, you might be able to help,” says Owen. “Provide examples of similar companies you’ve worked with and suggest a time to have a meeting.”
By using an American Express® Business Gold Card for online lead generation tools such as Facebook and LinkedIn, companies can benefit from a payment period of up to 54 days¹ as well as earning Membership Rewards® points on every purchase².
Email marketing
Email is another easy and inexpensive way to start prospecting, but it’s important to approach this platform intelligently if you don’t want your messages to be seen as spam.
The key to successful prospecting over email is to send personalised pitches that are tailored to the recipient. Keep messages personal and friendly and don’t send emails that are too long or detailed. “People tend to forget that prospecting is about just opening an introductory conversation,” says Owen.
Content marketing
One of the core ways that SEO Works identifies potential new customers is through content marketing and thought leadership. This means identifying the issues and pain points faced by your ideal customer and creating content that helps them to solve some of these issues.
“We do a combination of things like white papers, webinars, presentations at industry events and so on,” says Foster. "Things like that are great for top-of-funnel building because it’s about telling potential new customers that we understand and can help with their challenges before those people realise they want to buy from you.”
The company collects data from this content marketing that can be used to tailor and inform more direct prospecting activities such as cold calling. It can also be useful in informing paid search activity - such as advertising on Google - by providing insight into what customers might be looking for, and what specific issues they’re most interested in.
What are sales prospecting techniques?
Owen offers these five tips to improve your company’s sales prospecting techniques:
- Remember that prospecting is about opening an introductory conversation, not making a sale. Be realistic about what can be achieved and have a process ready for the next steps
- Focus on creating a conversation that shows you as a subject matter expert who understands (and asks smart questions about) your potential customer
- Prospecting can be very expensive, so don’t waste resources calling everyone in a scattergun approach
- Selling does require natural talent but it’s also difficult, so it’s important to invest in training to avoid wasting time and money
1. The maximum payment period on purchases is 54 calendar days and is obtained only if you spend on the first day of the new statement period and repay the balance in full on the due date. If you'd prefer a Card with no annual fee, rewards or other features, an alternative option is available – the Business Basic Card.
2. Membership Rewards points are earned on every full £1 spent and charged, per eligible transaction. Terms and conditions apply.
