The Importance of Prospecting

Every entrepreneur seems to believe that every consumer or business needs our product or service. As a result, when we look for new customers, called prospecting, we tend to spread our energy around without really focusing in on who is our unique customer and how to find them. In this lesson we show you the importance of prospecting and provide some techniques for doing it effectively.

The Importance of Prospecting

As you will learn in other lectures, the sales process depends on creating a "pipeline" of opportunities. For every potential customer you add to the pipeline, you can assume that one or two will become paying customers. That means you need to have ten potential customers (sometimes called prospects) in the pipeline at any one time to get one customer. So building the pipeline - as it is called in the sales world - is not a nice to have, it is essential. You can't have 3 potential customers and expect three sales. You need ten to get one. So spending time building the pipeline, or prospecting, has to be a function to which you allocate time each week.

Tips for Effective Prospecting

Entrepreneurs waste a lot of time prospecting in the wrong places. Here are some techniques for making your efforts more efficient and effective:

  • Don't Just Follow the Crowd. If you are offering event services, many people will tell you to go where the rest of the event world goes, such as a trade show or Linked In group. You may want to do that, but why would you only go where all your competition is? Can you find another place where event planners hang out where they wouldn't be faced with all your competition.
  • General Networking is Overrated. Entrepreneurs will go to groups, such as meetup groups, that have no connection at all to the product or service they are offering. There is nothing wrong with being social, and talking to other entrepreneurs, however, when you choose your networking time, try to hone in on groups or meetings that are a little more focused.
  • Find Where Your Customers Are - Even if They Don't Go There Looking for Your Service. If you offer counseling services for divorced women, could you find places where divorced women in your area hang out even if they aren't looking for counseling. This will require creativity but if you find it, you may be the only game in town.
  • Ask for Introductions - But The Right Ones. It is always helpful for friends, family and colleagues to make introductions. But ask for the right introductions. Too many times we ask for introductions that aren't really your target customer. It would be better to search a colleague's Linked In contacts for specific criteria and ask for that type of introduction.

Remember, our most precious asset is time and while you must do prospecting to keep the pipeline full, you must improve that skill so you can make the best of your precious time.