Every company wants to be Lana Turner: to have its greatness recognized while doing nothing more aggressive than sitting at a soda fountain. And yes, some potential customers will proactively call a startup or register on its website and convert to paying customers. But far more often, the entrepreneur makes the overture. Inexperienced salespeople may blanche at the word "prospecting." But prospect they must.
Reaching the right people in a targeted company involves two activities: lead generation and qualification. Lead generation is the process of finding names and contact information for individual buyers. The entrepreneur will naturally start with friends-of-friends and associates-of-associates, known as "hot prospects." Hot prospects are the most likely to listen, give feedback, and even buy because of the trust embedded in networks. That said, the entrepreneur should resist the lure of network connections outside her predetermined market. If she's targeted academic laboratories for her chemical-heating instruments, she should not approach Uncle Myron about buying some for his restaurant's steam tables.
The entrepreneur must also seek out total strangers who fit the target profile. Why expend precious hours chasing cold leads when there are enough hot prospects to keep you warm? Because the hard work of cold calling makes entrepreneurs stronger and smarter. While taking a prospect from ice cold to client, founders learn about the tightness of their messaging, about their product, about targeting, about the sales process, and about their own strengths and weaknesses.
Once the entrepreneur has a prospect on the phone, she will want to launch into a discussion of features and benefits. But first she must make sure she's not wasting time with a prospect that shows genuine interest but will never buy anything. Ascertaining whether a prospect can and should buy a product is known as qualifying.
Qualifying prospects is a bit like speed dating. Rather than fully engaging with every prospect, entrepreneurs advance quickly through the preliminaries to see whether a future is possible. Some prospects will need excessive customization. Some will grind too hard on price. Some simply won't have the budget. In such circumstances entrepreneurs must sigh and smile and walk away. A "disqualified" lead now is better than a slowly dying lead that burns through two or ten meetings, only to leave the entrepreneur holding an empty bag.
While the entrepreneur is evaluating the prospect's seriousness, she should also assess how long the sales process will take. A sale dragged out too long can be worse than no sale at all. Good questions to ask early in the first conversation include
- How does your decision process work for a product/service like this?
- What kind of time frame are you on to get to a decision?
- Who else would be involved in this process?
- Why was the budget for this approved now?
- How could this effort get derailed?
The answers tell the entrepreneur whether this person is the decision-maker, has the money, and is driven by some urgency. If the answers are no, she should ask for an introduction to the decision maker or move on to the next prospect. If yes, then she should proceed to the next step: making the match.