December 14, 2020
Today IBM employs over 370,000 people in more than 170 countries but did you know it was all started by a cold-caller?
Thomas Watson believed in rigorous outbound sales. What worked for him can work for you—you can be that salesperson worth ten others who puts your business on the map. But only if you’re thoughtful in your approach.
You see, sales prospecting is one of the most misrepresented and misunderstood aspects of the sales profession. Prospectors are portrayed in the media as swindlers and scammers. That’s how prospects often see you. It's why many hang up instantly, and why sales prospecting has grown more difficult. It’s also why it's so important to unlearn those stereotypes and forget all the sales prospecting techniques you see in movies like The Wolf of Wall Street. Instead, embrace the timeless fundamentals that can help you conquer any territory and build the basis of a business like IBM.
In this guide, I explain what sales prospecting is, why it’s important, who should do it, and a sales prospecting method to quickly book new meetings.
Prospecting definition: What is sales prospecting? Sales prospecting is the process of finding and reaching out to prospective buyers to schedule a meeting. It’s the first step in the sales cycle and the most critical. Prospecting is the one skill that sets exceptional salespeople apart—when you know how to generate your own meetings, you’re the captain of your own ship.
The importance of prospecting cannot be overstated. Without salespeople reaching out, building relationships, and coaxing prospects along their buying journey, most deals wouldn’t get done. Eighty percent of people who fill out a form don’t end up booking a call—often, simply because they got busy and forgot. And most potential customers don’t even know to be looking for a solution, wouldn’t recognize it if they saw it, and can’t see upon first glance how it’d work for them.
Before the modern era, sales prospecting is how everything was sold, including household appliances. Thomas Watson, who would go on to found IBM, got his start selling pianos out of the back of a horse-drawn wagon—bringing them to people who’d never otherwise have access. In some ways, sales hasn’t changed. Salespeople are guides.
For all these reasons and more, there must be a salesperson to prospect, initiate conversation, and help people evaluate.
There are two kinds of prospecting: inbound and outbound. With inbound prospecting, the salesperson receives a list from marketing—often with the names of people who filled out a form. With outbound, the salesperson generates their own list and picks their targets. Inbound is sometimes likened to farming. Outbound is likened to hunting.
All things being equal, most salespeople prefer inbound leads. They reached out to you, so it’s a warm conversation, and they probably intend to buy. The issue is that there are never enough of them and the deals tend to be smaller. Said one sales director I talked to for this article, “We launched an outbound program because we wanted to reach companies with a higher contract value, and that’s not who was finding us.”
Compared to inbound, outbound prospecting gives you more control. If you’ve heard of account-based marketing, or “ABM,” that’s essentially what this is: You pick companies who you know would be great customers and focus all your energy on just those accounts.
Most sales organizations practice a mix of inbound and outbound—you’ll take what comes inbound and supplement with outbound prospecting.
The most senior person possible. It’s a bit like social media—the best person to run it is the head of marketing. Nobody has a better grasp of the brand message or is better able to distill it into 140 characters. Yet the Twitter account often gets delegated to the intern who says things that aren’t very interesting and sometimes, wrong.
Sales reps get a bad rap in the media partly because sales organizations are forever trying to ‘farm out’ the procedural tasks like dialing and list building to the most junior people on the team. When junior sales reps don’t fully understand the businesses they’re calling, they have low connect rates and aren’t very convincing. It creates a cycle where they’re constantly being hung up on, chewed out, and demotivated—not to mention, they exhaust their list.