What is Prospecting: definition and techniques
Prospecting is the process of identifying potential customers, finding them, and creating a base of leads with the goal of further communicating and converting them into paying customers.
Prospecting is sometimes defined as lead generation. However, while lead generation includes both inbound and outbound approaches, prospecting deals with outbound only. In the sales funnel, prospecting, as well as lead generation, represents the first stage.
Importance of quality prospecting
Prospecting is an active search for leads. This opens up new possibilities compared to attracting leads, but also introduces new difficulties. To improve the results of prospecting, you need to have a clear idea of who your target audience and buyer persona are.
When you don’t take shortcuts, quality prospecting can help with the following:
✔ Better targeting
Prospecting gives you full control over lead collection and lead sources, letting you analyze which sources and channels perform best. Prospecting also helps you focus on and pick the leads that are most likely to become your customers, so you can fine-tune your search to collect prospects with the highest potential LTV (based on current customer base analysis).
✔ Improved conversion rate
When you take your time with targeting, conversion rate reflects that. Cold (outbound) leads can even show higher conversion rates than warm leads, but only when carefully picked. So once again – pay attention to your targeting. Quality over quantity.
✔ Higher ROI
If you invest in a high-quality affordable prospecting tool, you will see your prospecting ROI rise. How important is such lead gen optimization? 40% of sales reps state that lead generation optimization is their top priority for better prospecting.
✔ Quicker replacement of churned customers
Churn is normal. But to grow revenue, you need to make sure your customer base is growing, not shrinking. Prospecting will help fill your sales funnel with a consistent flow of fresh leads that will compensate for the churn and grow your base. And don’t forget about onboarding when do address that churn.
How to do prospecting
A lot of work goes into quality prospecting. But overall, it can be divided into 2 major steps:
Step 1. Identify
Before you proceed with any kind of lead generation, analyze your best customers and define your target audience. Create the perfect buyer persona to help in further lead search. Knowing your buyer persona’s needs, desires, and pain points, you’ll be able to develop a strategy of how to find and convert them. To start, answer the following:
- Who are your happiest customers?
- Who likes your product the most (e.g. CMOs, sales reps, tech enthusiasts, etc.)?
- What industries are using your software/service?
- What is the average income of your best users?
- What are their pain points that you help solve?
Check out these 11 buyer persona questions to see examples of buyer persona profiles and more tips.
Step 2. Prospect
Prospecting is an active search for leads. In general, you have three main prospecting options: purchased lists, lead generation directories, and email finders.
- Purchased lists: these are lists of email addresses that you can buy from third parties and use them for your marketing. However, these are not just unreliable (as you never know where the email addresses were taken from and whether they are valid), they are also extremely costly and might be breaching your country’s email marketing laws.
- Lead directories: a perfect solution for B2B, these directories make it easy to find qualified and segmented leads for your particular niche and industry, with detailed contacts most often provided by the lead itself. Some of the most famous directories are Yelp, Yellow Pages, and Angie’s List. Here’s our list of top 20 B2B directories for lead generation.
- Email finder: with 80% of buyers choosing email as the means of communication with sales reps, a good email finder is essentially all you need to organize your prospecting. They are much more affordable and efficient than any other option. And, of course, no one knows what kind of leads you need better than you, and with this tool you’ll be able to take total control. Check out our comparison of the best email finder tools on the market.
Make sure to also check out our guide to lead generation to find out about other lead gen strategies, including content marketing, SEO, PPC, and social media.
How to approach prospects
When you’re satisfied with your prospecting efforts, your next step will be contacting them with the intention to convert. For this, remember a couple of tips:
- Personalize and segment: personalization is the key component in your communication, and it’s not only about mentioning the prospects’ names but also addressing their problems and pain points. Use our guide on segmentation and personalization for more actionable tips and examples.
- Help first, sell second: no one wants to talk to a sales rep who’s only got their eyes on the conversion. If you want to convert better and faster, address the lead’s pain points and needs first, and then show how your solution can help in solving them. This will help you build a strong relationship with the lead.
- Try a more casual approach: just like in real life, casual language lets the lead relax and open up easier. Start with a simple conversation, don’t be pushy and do not force a sale.
- Automate outreach as much as you can: to save time and effort, use automation tools like CRMs, email drip campaigns, lead generation and enrichment tools, and integrations etc. This saves you time that you can spend on closing deals and addressing other issues.
- Be supportive: your dialogue with the lead shouldn’t read as a sales pitch. Instead, frame it as help in resolving their problem.
In the end
Prospecting is the first and key step in the sales funnel – without good leads, your sales copy or conversion techniques don’t matter. Choose a prospecting technique and lead sources that work best for your niche and deliver the best-converting leads.