Your phone rings. It's a prospective customer wanting information about your services and prices, requesting a bid or proposal. That's a good thing, right? Especially in this time of slow economic activity, shouldn't you feel lucky to have customers approaching you, inquiring about doing business with you?

Well, yes and no. Obviously, it's great to have potential customers knocking on your door. But not all prospects are going to convert to paying customers -- no matter how good your sales skills, how competitive your prices, or how outstanding the quality of your products or services. The sad truth is you can waste a lot of precious time and money answering inquiries and preparing bids or proposals for prospects who are not ready to buy or just plain "looky loos."

Figuring out how much time and energy to spend on prospective customers is a delicate and difficult balancing act. You need to spend enough time to make a sale to a genuine prospect, but you don't want to waste too much time on those who won't ever buy.

Realistically, you have to be responsive to all potential customers. But there are ways to limit the amount of time, money, and effort you spend on dead-end shoppers. Here's how:

  1. Have general information prepared and available. Most prospects will try to figure out whether a company is a good fit for them before taking up too much of their -- or your -- time. Let's say you sell and install floor tiles. Do you specialize in commercial or residential? Do you only serve a specific geographic area? Do you install counter tops as well as floors? That kind of information enables prospects to weed themselves out before calling you. Of course, a great and relatively inexpensive way to provide this information is on your Web site.
  2. Ask questions of the prospect. In professional salesperson terms, this is called "qualifying" the prospect. By asking a few simple, non-intrusive questions, you can get a much better sense of how serious the prospect is. Some questions to ask:

    What's the scope of the project?
    What's the timeframe for the work to be started and completed?
    How soon will you be making a decision on a vendor?
    How many bids are you getting?
    What other alternatives (not competitors) are you considering? (In the floor tile example, for instance, the question might be phrased such as "What other types of floor coverings are you looking at?"
    What are the most important considerations in your decision -- price, quality, convenience?

    Questions such as these give you a better sense of whether a prospect is ready to make a decision, whether they're likely to find you a good choice, and how much time to spend with them.
  3. Don't get star-struck. It's easy to get excited if you're approached by a large or well-known company or customer. Don't lose your judgment. Such customers often take up more of your time, take longer to make decisions, and expect highly competitive bids. Sure, it would be nice to have the biggest company in town or the star of the major league baseball team on your customer list, but is it worth it if you don't make a profit?
  4. Give prospects a reason to make a decision sooner rather than later. It's human nature to put off making choices until the last minute, but that often puts your business in a crunch. If you can, come up with truthful, positive ways to encourage customers to make a decision quickly -- "I've got an opening in my calendar in two weeks but then I'm booked til May," or, "I can get a discount on materials this month only."
  5. Be cautious of prospects who want TOO much information. Some prospects use proposals as a way of getting free consulting services. This is true of both small customers and Fortune 500 companies.
  6. Don't count your chickens before they hatch. It's easy to get excited about a prospect, especially if it's a big one. So, keep a lot of balls in the air, and remember, a deal is not a deal until the check clears.

Copyright Rhonda Abrams, 2003

Rhonda Abrams writes the nation's most widely-read small business column and is the author of The Successful Business Plan and The Successful Business Organizer . To receive her free business tips newsletter, register at