What is Prospecting?
Prospecting is the first step in the sales process, which consists of identifying potential customers, aka prospects. The goal of prospecting is to develop a database of likely customers and then systematically communicate with them in the hopes of converting them from potential customer to current customer.
Historical Reference
The original use of the term “prospector” refers to the efforts of individuals to find gold by visually scanning creek beds and rock formations. When flecks of gold were spotted, the prospectors would spend time sifting through dirt to find the valuable nuggets and flecks that were left behind when dirt was washed away.
That’s what modern day sales prospectors do – sift through large lists of potential customers to try and uncover those who are interested and ready to buy.
Steps in the Sales Process
Unless someone has previously done business with you, it’s a guess as to whether they might be interested in your products or services. They are potential customers at that point, falling into one of two categories: suspects or prospects. The difference between the two groups is:
Suspects - Individuals or companies you believe may have a need for your products or services but who may not be aware of your business or its offerings. You suspect they could become customers, but you’re not sure. To find out, you need to increase their awareness of and familiarity with your business. Once they are aware, it’s time to determine if they might buy in the future.
Prospects - Prospects are suspects you have made contact with and who have confirmed that they might be interested in buying from you at some point. For example, the owner of a 10-year-old car with 200,000 miles could be a hot prospect for your auto dealership, as long as they are aware of it. Or the husband of a woman whose 40th birthday is fast approaching could be a prospect for your jewelry store, as long as he knows where it is and is invited to come shop – perhaps with some incentives offered.
A customer is a prospect who has spent money with you.
Prospecting Tactics
To make contact with sales suspects – buyers who may or may not be potential customers for your business – there are a number of popular tools and tactics you can use, including:
- Phone calls – designed to initiate a discussion with the individual who answers the phone
- Automated voicemail messages – designed to try and persuade the listener to take action to get more information, such as by visiting a website or making a phone call
- Email – designed to share information and entice the recipient to take an action that will identify them as a prospect
- Direct mail – sent in the mail as flyers, postcards, or catalogs, for example, designed to share information that may entice you to consider buying
The primary goal of these marketing efforts is to qualify a recipient as a prospect, or someone who may have a need for your business’ products or services, or not. Knowing that someone does not anticipate having a need for your offerings – and is not a prospect - helps you refine your prospect database so you can focus your marketing dollars on those people most likely to turn into customers.
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What is Sales Prospecting?
Sales prospecting, the first step in the sales cycle, is a strategic process of identifying and connecting with potential buyers known as prospects. The goal is for a sales rep to develop a database of qualified leads to reach out to, with the aim of entering them into a sales funnel and eventually converting them into revenue-generating buyers.
There are many sales prospecting techniques, including cold calling, direct mail, attending networking events, and connecting on platforms like LinkedIn. Just like sifting through a minefield for gold is no easy feat, sales prospecting can be a difficult process if you don’t know where to start.
As the sales process continues to evolve and conversations grow even more buyer-focused, sales reps have developed effective methods to navigate the sales pipeline. Having a good sales prospecting process makes it much easier to develop effective frameworks that can be used repeatedly—with a higher chance of closing the deal with your prospects.
Sales Leads vs Sales Prospects
Before you enter the prospecting funnel, it's important to understand the differences between leads and prospects.
LeadsPotential customers who have shown interest in your product or serve through an action like signing up for a free demo, subscribing to a blog, or visiting your website. They might be a good fit down the road, but conversations with leads tend to be one-sided—don't expect them to get in touch or respond to our emails.
Qualified leads who align with your ideal buyer, have the necessary budget, and are more receptive to an open line of communication. Even if a prospect has little or no interaction with your company, they can be classified as a potential customer—especially when you utilize our prospecting tips and tricks below.
Despite these differences, your goal ultimately remains the same: Foster leads and prospects from the moment you start prospecting until you close the deal.
What Are the Benefits of Sales Prospecting?
Prospecting is an essential first step of the sales success journey that opens a world of new possibilities for both sales professionals and their potential leads. It allows
sales reps to increase sales by providing their product or service to suitable customers seeking to overcome specific challenges.
Successful prospecting can result in the following:
Catered targeting
Prospecting gives you complete control over lead generation, allowing you to analyze which sources and channels perform best. It also helps you fine-tune your lead prospecting to select and collect
th6ose with the highest potential to become customers. Tools like LinkedIn Sales Navigator offer advanced search filters, like industry, role, company, and specific keywords, that can help you customize your lead list
More customers
With a good sales prospecting strategy, you’re bound to attract more potential customers to convert into buyers. Having more leads
in your buyer pool allows your sales representatives to stay busy working with new and existing customers. It also helps diversify the risks of lost sales—in case you lose a customer, you’ll have more in waiting.
Increased revenue and ROI
More customers lead to more revenue, as each new prospect you find and
convert to a buyer increases sales in your business. This growth helps companies grow over time while also helping to offset risks of increased operations and costs of goods from inflation.
Insights gathering
Finding prospects doesn’t always lead to immediate sales, but as you reach out to more and see how they respond, you’ll start noticing patterns in their
behaviors. Conducting market research can be a useful way to determine why customers enter the market to buy certain products and how to best sell. These insights can help sales reps target and contact specific prospects while enhancing their long-term strategies.
Better conversion
Utilizing your time thoughtfully when targeting leads can result in improved
conversion rate. Cold outbound prospecting can even show a higher conversion rate than warm lead prospecting, but only when carefully selected. So, it’s important to be mindful of your targeting—that is, focusing on quality over quantity. That’s where LinkedIn Sales Navigator comes in to help you discover qualified leads and prospects specially customized for you.
In 2021, the average Sales Navigator user made 3.6x more connections to decision makers than the average non-user (January 2022).
Now that we’ve covered the meaning and importance of prospecting, let’s dive deeper into the sales prospecting process, along with some tips and techniques.
Sales Prospecting: Getting Started
Whether you’re new to sales or looking to improve your existing methods, the most daunting question to answer as you begin prospecting is “Where do I start?”
Before platforms like LinkedIn and tools like LinkedIn Sales Navigator existed, cold calling was a go-to method of connecting with a high volume of potential customers to begin building relationships. Modern technology allows sales reps to take a more personalized approach—and today’s customer practically demands it.
There are plenty of ways to begin prospecting, and each will vary in effectiveness depending on your audience, the environment, and what you’re selling. Since people tend to be more selective of who they give their time to, it’s important to stick to the first step of any sales prospecting journey: Knowing your audience.
To be an effective salesperson, you must first understand who you’re selling to. While finding qualified leads can be time consuming, it’s essential in today’s sales environment to personalize your approach as much as possible.
The best way to begin is by doing your research.
This can mean everything from scouring the company’s website, reaching out on LinkedIn and other social media sites, and even some good old-fashioned calls or emails. After utilizing tools like LinkedIn Sales Navigator to narrow down your list of prospects, ask yourself: what is their background; how do they fit into the company; and how does your opportunity align with their business goals?
Make note of the company's mission and value statement to see how your product or service can benefit their business. Social media sites can give you a lens into your prospect’s interests and hobbies outside of work, which makes connecting with them even easier. Larger companies will have public investor reports with invaluable information, while small-to-medium companies typically announce their latest endeavors through press releases. You can even stay up-to-date on your prospect’s business ventures by setting up Google alerts.
Once you’ve gotten to know your prospects better, warm up your calls or emails by sharing how you came across them, and leverage any free resources or trial offers to increase your chance of getting a response.
This front-end legwork can help ensure that when your prospect becomes a sales lead, you know what points to hit in your sales pitch and that you’ve connected with the right person.
Sales Prospecting Strategies
Let’s say you connect with the owner of a brand-new bakery that you can offer flour to at wholesale prices. You’re more likely to have a better chance at making that sale than if you connected with a restaurant owner who specializes in gluten-free breads. Since they’re likely pricing different suppliers and talking with a myriad of salespeople, it’s important to stand out.
A customer of this caliber is likely to be considered a high-value prospect and warrants as many as five touch points every other business day. This is because the sooner you can establish a relationship with this prospect and position yourself as a knowledgeable, go-to person for any questions, the sooner you can make them a customer. Use tools like LinkedIn Sales Navigator to keep track of your prospects and touchpoints so you never miss an opportunity.
Here are a few things to keep in mind when identifying potential customers:
Use your best judgment.
Prioritize your time based on not only who’s most likely to become a customer, but also who you have an easy rapport with.Customization is key.
Create a personalized pitch for each prospect by scoping out their interests and other characteristics to weave into your initial message. They’re far more likely to become a customer if they feel like they know you.Help, don’t sell.
Your product or service exists to make your customer’s life easier, so tell them how. Take care in explaining your offer, its value, how your opportunity is aligned with their business goals, and why your offer is the best one.
Sales Prospecting Tips
Now that you’ve gotten started, we’ve outlined proven prospecting tips and tricks for you to utilize. As you read through this list, we recommend keeping these questions in mind:
Does your prospect coincide with your established customer persona?
Do they have a clear business goal or challenge that aligns with the product or service you’re offering?
Are they able to make decisions or connect with a decision maker?
Do you have any mutual connections or shared interests?
How often you connect with those on your prospecting list will depend on a number of factors, and these tips can help you determine what process works best for you and your business.
1. Familiarize yourself with their company.
What is their mission statement? How can your product or service help?
2. Review their career page.
What stands out as a potential connection?
3. Leverage LinkedIn Sales Navigator to target the right buyers, understand key insights, and engage with personalized outreach.
Key features include:
CRM integration
Advanced lead and company search
Lead recommendations
Real-time sales updates
Notes and tags
See who’s viewed your profile
InMail messages
Smart Link presentation
- TeamLink
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4. Find the best form of communication.
Lock in the right channel or have a healthy mix of phone and email communication to help turn a
prospect into a lead.
5. Follow up.
Whether you closed a deal or not, staying in touch can help you improve your own outbound prospecting process without closing any doors for good.
As a salesperson, you’re helping to make your customers’ lives better. Prospecting is all about finding the right people to help. The more you lean into that mindset, the more successful your prospecting journey will be.
See how LinkedIn Sales Navigator can make prospecting easier