Sales prospecting: Definition, process and tips for success

Sometimes new customers fall into your lap thanks to word-of-mouth referrals or successful marketing. Other times, finding new customers requires intentionally connecting with people who might buy your product or service. That’s sales prospecting in a nutshell: reaching out to individuals in hopes of earning their business.

What is sales prospecting?

Sales prospecting is built on the belief that your ideal customers are out there — you just haven’t met them yet. It’s the first step in your sales funnel, which is the process of guiding potential customers from initial awareness of your business to making a purchase. The more prospects, or potential customers, you have, the more likely you’ll be to make a sale and grow your revenue.

Sales prospecting can take the form of an email, cold call, direct mail or social media. When done correctly, it can expand the size of your potential customer base and enhance your likelihood of earning new business.

The sales prospecting process

Many large corporations have entire teams dedicated to sales prospecting. That’s because it can take a lot of time and energy to do it well. For smaller businesses without a dedicated sales team, a streamlined process can help you make the most of your efforts. Try approaching your sales prospecting in five phases:

1. Know your ideal customer.
   Being clear about the qualities you want in a lead makes it easier to find people who are a good fit. Think about factors like job title, industry, business size and location. You can also use data about your current customers to identify patterns about who’s most likely to make a purchase.
2. Build a list of potential leads.
   Wondering how to find sales prospects? Use a variety of strategies to build a list of leads that align with your ideal customer, including:
   • Social media: Show up where your potential customers are already spending time. Depending on who you’re targeting, examples of social media platforms could include LinkedIn, Instagram or YouTube.
   • Networking: Reach out to your professional network to ask for referrals from people you already know. Local events and industry groups are other ways to connect with potential customers. If you have a business mentor, ask them to help spread the word or share tips.
   • Online directories: Local search platforms can help you find other businesses in your area that may be a good fit for your product or service.
3. Qualify your leads. Not every lead will be a good fit for your business. Ranking your leads before reaching out can help you work efficiently. Lead qualification, or the process of determining how likely someone is to make a purchase, can take many forms. Common frameworks include BANT (budget, authority, need and timeline) and CHAMP (challenges, authority, money and prioritization). A customer relationship management (CRM) program can help automate lead qualification.
4. Reach out. Personalized outreach is key to success. Whether you’re emailing, calling or using social media, put your customer insights to work to craft individualized messages for every lead. Be clear and concise about how you can provide value, and address each lead’s specific needs to show that you’ve done your research on their business. Avoid being pushy, and aim to be helpful by providing your prospect with useful information or resources.
5. Iterate and repeat. Keep track of what’s working and what needs improvement, then keep going. Try A/B testing your messaging and keeping track of metrics like open and click-through rates. Be persistent and continue to follow up with leads that showed engagement.

Inbound vs. outbound prospecting

There are two primary sales prospecting strategies: inbound and outbound. Each serves a different purpose, so it’s best to use a mix of both.

Inbound sales prospecting

Inbound sales prospecting is similar to marketing. It involves creating content that entices buyers to reach out. For example, an HVAC specialist could send an email to their subscriber list with a free workbook about how to lower energy bills during extreme temperatures. If your business is active on social media, you could offer a free resource or giveaway to anyone who comments on your post. Inbound sales prospecting attracts higher-quality leads, or people who are more likely convert, but it requires a significant investment of time and energy.

Outbound sales prospecting

Outbound sales prospecting requires you to make the first move by directly reaching out to potential customers. Outbound sales prospects are “cold,” meaning that they’ve never interacted with your business before. For example, a new roofing business could mail fliers offering an overview of their services to every residential address within a five-mile radius. While outbound prospecting can result in faster lead generation than inbound, the tradeoff is that you’ll likely have lower conversion rates.

Sales prospecting tips

While sales prospecting might feel uncomfortable at first, the more you do it, the easier it will become. The following tips can lead to success:

• Make it personal: Small touches like a personalized subject line or mentioning the name of a prospect’s company can indicate that you’re serious about earning their business.
• Offer value: Lead with your prospect’s pain points rather than your own product. Tell them how you can solve a problem and make their life easier.
• Be engaging: Avoid overly formal language and jargon. A clear, conversational tone is more inviting.
• Stay consistent: Sales prospecting is an ongoing process. Set aside time in your schedule each week to focus on finding leads.
• Measure your success: Keep track of data around open rates, click-through rates and conversions so that you can understand what’s working and replicate it in the future. CRM software offers more robust tracking and analytics, but a simple spreadsheet also does the job.
• Adjust and refine: Don’t be afraid to think creatively and test new ideas. Continue to measure and document new approaches.
• Use the right tools: In addition to CRM software, consider using an email marketing tool, lead generation tool or social listening tool to add extra insights and analytics to your sales prospecting process.

FAQs: Effective sales prospecting

What is circle prospecting?

Circle prospecting is similar to sales prospecting, but it applies only to the real estate industry. Agents draw a “circle” around a geographic area and ask people who live within that circle whether they’re planning to move soon. While circle prospecting is specific to real estate, cold calling people in a defined area can be adapted to any industry.

What is prospecting in sales?

Sales prospecting describes the process of looking for new customers for your business. Think about the prospectors who panned for gold during the Gold Rush — they sorted through lots of sediment to find the occasional nugget. Similarly, in sales prospecting you sort through lots of potential customers to find people who want to buy your product or service.

How do you find sales prospects?

You can use inbound or outbound approaches to reach new potential customers. Try using a social media platform to identify people within your target demographic, reaching out to your professional network or using online directories to find B2B prospects in your area.

What’s the best way to keep track of sales prospects?

Staying organized is key to a successful sales prospecting process. The simplest method is to use a spreadsheet that tracks the name, business, industry and qualification for every lead, as well as their position in your sales funnel. CRM software can also help you track and analyze your prospects.

Grow your business with support

No matter how you choose to drum up business, you don’t need to do it alone. Take advantage of resources from Chase or reach out to a Chase business banker to learn more.