Sales Process and Prospecting

It's a Process: Seven Steps to Successful Selling

Learning Objective

1. Explain the role of the seven steps of the selling process.

You may have been surprised if someone told you that movie scripts, regardless of the genre, all follow the same basic formula - the same sequence of events - almost down to the minute: after three minutes, the central question of the movie is introduced; after twenty-seven more minutes, the main character will set off on a new path; fifteen minutes more, and something symbolic will happen; and so on. It's hard to believe that The Fast and the Furious would follow the same formula as The Notebook, but once you know what to look for, you'll see that the structure holds up. Clearly, Hollywood has come to learn that this particular structure is the secret to keeping the audience's attention, earning positive reviews, and selling movies.

In the same way, almost all selling - regardless of the product that's being sold - follows a particular sequence of steps. It's a simple but logical framework that has been the accepted model for almost a hundred years. Salespeople have adapted the specifics of the process as culture and technology have changed, but the fact that they've followed the same basic model has for so long testifies to its effectiveness. The selling process is generally divided into seven steps that, once you understand them, will empower you to sell virtually anything you want and satisfy your customers:

1. Prospect and qualify

2. Preapproach

3. Approach

4. Presentation

5. Overcome objections

6. Close the sale

7. Follow-up

Each step of the seven-step process is covered thoroughly in this and the next six chapters so that you can learn the details of each step and how to apply them in various selling situations.

Figure 7.1 Seven-Step Selling Process.

When the Seven-Step Selling Process Is Used

The sales process is adaptive, which means that each situation may be different and salespeople have to adapt and understand what is important to each customer and where each is in the buying process. But in order for a salesperson to use adaptive selling, he or she must thoroughly understand the steps in the selling process and how each works to can use them effectively.

The Evolving Role of Technology in the Selling Process

While the basics of the selling process have remained the same over the years, the methods of communication and the way people interact are quickly evolving with the use of the interactive capabilities on the Internet by customers and salespeople alike. Each step now includes much more collaboration between customers and salespeople (and even between customers) with the use of social networking, consumer reviews, wikis, and other community-based tools. This technology allows salespeople to learn more about their customers at each step, and therefore provide more relevant and powerful solutions to customers at each stage of the buying process.

Business-to-Consumer (B2C) Sales

Let's say you want to buy a gym membership. Maybe you received a promotional offer in the mail, your friends on Facebook have had good things to say about a particular gym, or you picked this club because it's close to home. Whatever the reason, you wander in and ask to speak to the membership director who seems to know a lot about the club and what you might be looking for. After some small talk about the fact that you both live in the same apartment complex, he tells you about the gym's amenities and gives you a tour of the facility. Then, you sit down to discuss pricing options and payment plans. If you have any questions or concerns (i.e., "I noticed there are only three tennis courts. Is there usually a long wait to use one?" or "Why aren't there any kickboxing classes on your class schedule?"), the membership director will attempt to address those. Maybe he will tell you there is occasionally a wait to use the tennis courts at peak times, but you can reserve a spot up to a week in advance, in which case you can get right in. Or maybe he'll say that while they don't have kickboxing classes, they offer Zumba, which is a fun aerobic alternative.

If you're satisfied with his responses, and the price and product meet your needs, you will probably decide to sign a contract. Once you've signed, someone from the club will probably follow up with a call in a few weeks to see if you're satisfied with your experience at their gym, or you may get an e-mail from them with a membership satisfaction survey or a text message about an upcoming event.

The example above is an actual selling situation. Although you may not have realized it while you were reading it, the situation follows the seven-step selling process.

Whether you're buying a gym membership or a car, cell phone service or a new computer, the situation may be different, but the steps in the selling process will follow the same pattern.

Business-to-Business (B2B) Sales

The process isn't only limited to business-to-consumer sales; it's also the process that IBM will use to sell servers to a corporation, that Accenture will use to sell consulting services to a technology company, or that the Coffee Brewers Company will use to sell espresso machines to coffee shops. Imagine you run a chic new restaurant. You get a call from a salesperson who compliments you on the roasted chicken she had at your restaurant last weekend. After some conversation, she asks if you're satisfied with your commercial ovens. You have been having some problems with them and have been doing some casual research online. You know that her company is rated as one of the best oven manufacturers, so you tell her: the ovens are over ten years old, they take a long time to heat up, and they sometimes cook things unevenly.

"Many older ovens have this problem," she says. "Would you be interested in learning about the state-of-the-art commercial ovens our company sells?"

Since you need a solution for your current ovens, you agree to set up an appointment with the salesperson. When the she arrives, you are impressed that she knows so much about your business. She visited your restaurant, reviewed your menu, spoke with some of the wait staff, read reviews on the city magazine Web site, and even had some conversations with some of your patrons on Chef's Blog. She explains that the ovens she sells heat up quickly and use energy more efficiently. She gives you an estimate of your annual savings on energy costs if you switched over to her product line.

You're interested, but you're concerned that the ovens might not cook food evenly. Ovens are a big expense - what happens if you aren't satisfied with the product? The salesperson says you can lease an oven for a trial period at no obligation, and she shows you reviews from other customers on her company's Web site and on some restaurant industry blogs. You feel like this might help you solve your problem, so you agree to lease the machine for four months.

After two months, the salesperson calls to ask if you've been satisfied with the product so far, and she offers you a discount if you sign a contract to purchase two ovens in the next ten days. Since you have been happy with the leased oven and checked out the company's service record online from other current customers, you make the purchase.

As in the gym membership example above, this B2B selling situation follows the seven-step framework. Now, take a minute to review this selling situation in the box below to see exactly how the steps are implemented.

The Seven Steps of Selling

Compare the B2B and B2C examples you just read about. Do you notice a pattern? Although the products and customers were quite different, both salespeople adapted to the situation and the customer's needs, but followed the same seven steps to successfully complete their sales. In fact, you've probably used a version of these seven steps yourself before without even realizing it. Take a look at some real-world selling examples below and how of each of the steps is used.

Step 1: Prospecting and Qualifying

Before planning a sale, a salesperson conducts research to identify the people or companies that might be interested in her product. In the B2B example, before the salesperson called the company, she had to find the company's information somewhere - probably in a local business directory. This step is called prospecting, and it's the foundational step for the rest of the sales process. A lead is a potential buyer. A prospect is a lead that is qualified or determined to be ready, willing, and able to buy. The prospecting and qualifying step relates to the needs awareness step in the buying process described in Chapter 6. In other words, in a perfect world, you are identifying customers who are in the process of or have already identified a need.

Undoubtedly, when the salesperson called the target customer to discuss his ovens (in the example, you were the customer), she asked some questions to qualify him as a prospect, or determine whether he has the desire and ability to buy the product or service. This is the other component to step one. What happens if the customer is not interested in the salesperson's product, or he's interested but his business is struggling financially and doesn't have the resources for a big purchase? Perhaps he is only an employee, not the manager, and he doesn't have the authority to make the purchasing decision. In this case, he is no longer a prospect, and the salesperson will move on to another lead. Salespeople qualify their prospects so they can focus their sales efforts on the people who are most likely to buy. After all, spending an hour discussing the capabilities of your company's ovens with a lead that is about to go out of business would be a waste of time. It's much more fruitful to invest your time with a qualified prospect, one who has the desire or ability to buy the product or service.

Step 2: Preapproach

The preapproach is the "doing your homework" part of the process. A good salesperson researches his prospect, familiarizing himself with the customer's needs and learning all the relevant background info he can about the individual or business. Remember that in the B2B example, the salesperson knew important information about the restaurant beforehand. She came prepared with a specific idea as to how her service could help the prospect and gave a tailored presentation.

Step 3: Approach

First impressions (e.g., the first few minutes of a sales call) are crucial to building the client's trust. If you've ever asked someone on a first date (yes, this is a selling situation), chances are you didn't call the person and start the conversation off with the question, "Hey, do you want to go out on Saturday night?" Such an abrupt method would turn most people away, and you probably would not score the date you were hoping for. Similarly, as a professional salesperson, you would almost never make a pitch right away; instead, you'd work to establish a rapport with the customer first. This usually involves introductions, making some small talk, asking a few warm-up questions, and generally explaining who you are and whom you represent. This is called the approach.

Step 4: Presentation

There's a good deal of preparation involved before a salesperson ever makes her pitch or presentation, but the presentation is where the research pays off and her idea for the prospect comes alive. By the time she presents her product, she will understand her customer's needs well enough to be sure she's offering a solution the customer could use. If you're a real estate agent selling a house and your customers are an older, retired couple, you won't take them to see a house with many bedrooms, several flights of stairs to climb, and a huge yard to keep up - nor will you show them around a trendy loft in a busy part of town. The presentation should be tailored to the customer, explaining how the product meets that person or company's needs. It might involve a tour (as in this real estate example), a product demonstration, videos, PowerPoint presentations, or letting the customer actually look at or interact with the product. At this point, the customer is using the information that is being shared as part of his evaluation of possible solutions.

Step 5: Handling Objections

After you've made your sales presentation, it's natural for your customer to have some hesitations or concerns called objections. Good salespeople look at objections as opportunities to further understand and respond to customers' needs. For instance, maybe you're trying to convince a friend to come camping with you.

"I'd like to go" your friend says, "but I've got a big project I need to finish at work, and I was planning to spend some time at the office this weekend".

"That's no problem," you tell him. "I'm free next weekend, too. Why don't we plan to go then, once your project's out of the way?"

Step 6: Closing the Sale

Eventually, if your customer is convinced your product will meet her needs, you close by agreeing on the terms of the sale and finishing up the transaction. This is the point where the potential gym member signs her membership agreement, the restaurant owner decides to purchase the ovens, or your friend says, "Sure, let's go camping next weekend!" Sometimes a salesperson has to make several trial closes during a sales call, addressing further objections before the customer is ready to buy. It may turn out, even at this stage in the process, that the product doesn't actually meet the customer's needs. The important - and sometimes challenging - part of closing is that the seller has to actually ask if the potential customer is willing to make the purchase.  When the close is successful, this step clearly aligns with the purchase step in the buying process.

Step 7: Following Up

OK, so you've completed a landscaping job for your customer or sold him a car or installed the software that meets his needs. While it might seem like you've accomplished your goal, the customer relationship has only begun. The follow-up is an important part of assuring customer satisfaction, retaining customers, and prospecting for new customers. This might mean sending a thank-you note, calling the customer to make sure a product was received in satisfactory condition, or checking in to make sure a service is meeting the customer's expectations. This is the follow-up e-mail you get from Netflix every time you return a movie by mail. It's Amazon's invitation to "rate your transaction" after you receive your Amazon order. Follow-up also includes logistical details like signing contracts, setting up delivery or installation dates, and drawing up a timeline. From the buyer's perspective, the follow-up is the implementation step in the buying process. Good follow-up helps ensure additional sales, customer referrals, and positive reviews and actually leads you back to the first step in the selling process because it provides the opportunity to learn about new needs for this customer or new customers through referrals.

Key Takeaways

• The seven-step selling process refers to the sequence of steps salespeople follow each time they make a sale. The process gives you the power to successfully sell almost anything.

• The first step of the selling process, prospecting and qualifying, involves searching for potential customers and deciding whether they have the ability and desire to make a purchase. The people and organizations that meet these criteria are qualified prospects.

• Before making a sales call, it is important to "do your homework" by researching your customer and planning what you are going to say; this is the preapproach.

• The approach is your chance to make a first impression by introducing yourself, explaining the purpose of your call or visit, and establishing a rapport with your prospect.

• Your research and preparation pays off during the presentation, when you propose your sales solution to your prospect.

• Your prospect will naturally have objections, which you should look at as opportunities to better understand and respond to his or her needs.

• Once you overcome objections, you close the sale by agreeing on the terms and finalizing the transaction.

• The sales process doesn't end with the close; follow-up (i.e., ensuring customer satisfaction and working out the logistics of delivery, installation, and timelines) is essential to retaining existing customers and finding new ones.

Exercises

1. Think of a personal interaction in which you sold someone on an idea (e.g., a vacation, a choice of movies, or a date). Explain how the seven steps applied to this particular situation.

2. Consider the last major purchase you made. Did the salesperson use the seven steps? In what ways could he or she have done a better job? What eventually sold you on the product?

3. Imagine you are trying to sell season tickets to your local ballpark. After you present the product to your prospects, a middle-aged married couple, they tell you they are very interested but are concerned they might be out of town on some of the weekends when there are home games, and they don't want their tickets to go to waste. What solutions could you offer to overcome their objections?

4. Discuss the difference between a prospect and a customer.

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Source: Kimberly Richmond, https://ncmc.pubpub.org/pub/powerch7/release/3?readingCollection=2243cc90
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 License.

Prospecting: A Vital Role in the Selling Process

Learning Objective

1. Understand the role prospecting plays in the selling process.

Imagine you decide to build a house from the ground up. After designing your ideal house, of course it would be nice if you could snap your fingers and get to the fun part: watching the finishing touches come together. But before the walls go up you have to make detailed plans and measurements, find your materials and negotiate with contractors, and lay the foundation. All these things require patience, time, and effort, but these steps are absolutely necessary for the project to move forward.

Planning and laying a foundation is a little like prospecting and qualifying. Finding leads (or people who might be prospects) is the most vital part of the selling process - you can't make a sale without identifying the people to whom you'll be selling. In other words, without prospecting, nothing else can happen. Yet, unlike laying a foundation, prospecting doesn't happen just once; it's a constant process. Businesses lose some customers every year for a variety of reasons: customers may no longer need the product or service, have the financial means to purchase the product or service, or live or do business in the area, or the business may no longer be open. So if you haven't been building your prospect list, you won't have new customers to replace the ones you lose. More than this, finding new prospects is the only way you can increase your sales and expand your business.

The Value of a Lead

Think of the last time you went to the store to make a major purchase and you started by browsing the products. A salesperson probably approached you with the standard "Can I help you?" and you may have responded with the equally standard "No, thanks. I'm just looking". Chances are good that the salesperson left you alone after that, very likely assuming you weren't genuinely interested in making a purchase. Most people - salespeople and customers alike - are surprised to learn that over two-thirds of shoppers who give the "just looking" response end up purchasing the product within a week. In other words, these customers are valuable leads, and all too often their business goes to a competitor.

Let's say you are planning to buy a new refrigerator. That's generally not the kind of purchase you make on the spot; you will probably go to a number of stores to compare products and prices first. If you tell the salesperson at the second store that you're just looking, you may then go to a third store and decide you're ready to buy. As a customer, if the vendors seem more or less equal, you will base your purchasing decision on price, product features, convenience, or a combination of these things. But imagine the salesperson at the second store who took the time to determine your specific needs, wrote down your contact information, and followed up with you. It's very likely she would make a sale. Her products might be quite similar to her competitors', but if she goes out of her way to provide you with a solution, you have a reason to buy from her over someone else.

Now let's change hats. What does knowing this information mean for you as a salesperson? Most importantly, it means that you should never write off a lead until you are certain he can't be qualified as a prospect. If you work in a showroom that sells only high-end cars like Lexus or BMW and a potential customer walks in wearing torn jeans and a T-shirt, you might be tempted to mentally disqualify him, assuming he won't have the money to buy such expensive cars. But appearances are often misleading, and you won't know whether or not your lead is actually qualified until you ask some specific, qualifying questions. When you realize that a lead is the only thing you can turn into a sale, you also realize just how valuable every lead is.

This is true for both B2C and B2B sales, wherein 30 percent to 50 percent of companies that see and respond to business-specific ads end up purchasing the product or service about which they've inquired within one or two years. This percentage is nothing to sneeze at. Yet, according to businesses, only about 1 percent to 5 percent of the ad-related inquiries they get from businesses translate into sales. That's a big gap. In other words, a lot of valuable leads can slip through your fingers if you don't follow up and qualify them.

The Sales Funnel

If you talked to a guidance counselor when you were applying to colleges, he probably told you to consider several and then apply to a number of schools (more than just two or three) even though you would only end up choosing one school in the end. This is because not all the schools that you apply to end up being a good fit. Sometimes you aren't accepted, sometimes you are accepted but don't get an ideal financial package, and sometimes as you learn more about a school you decide it isn't the right one for you. Whatever the reason, you start out by considering many schools and generally end up deciding between a few.

The same can be said of the selling process. In fact, the process is often compared to a funnel. You start out with many leads, and after gathering more information, you come up with a smaller list of qualified prospects. As you communicate with these potential customers and work toward a solution, some will turn out to be more likely to buy than others. It's common sense to assume that you will have more leads than you have buyers since not all leads turn into customers. The concept of the sales funnel is a helpful way to visualize the process of finding and qualifying your customers and effectively illustrates the value of identifying a large pool of potential prospects. If you don't bother to find more than a handful of leads, you limit your chances of ever closing a sale no matter how much effort you put into your sales presentation. It's a common temptation that most people want the results without having to put in the foundational work of finding and contacting prospects.

Figure 7.4 Traditional Sales Funnel

But wait a minute, you might think, "Isn't it hugely inefficient to spend time and effort communicating with so many prospects with the expectation that only a handful of those will turn out to be buyers?" This is also true, which is why qualifying and prioritizing your prospects is such an important part of the sales process. Technological tools like collaborative communities and other online resources can help you identify, qualify, and prioritize prospects. But you might wonder how do you decide which prospects you should invest your time in pursuing. To begin with, you should create a profile of your ideal buyer.

Create a Profile of Your Ideal Buyer

• What particular qualities and characteristics will define this individual or company?

• What specific problems would this buyer have that your product could solve?

• In what ways should the buyer be compatible with you or your organization?

For instance, if your company sells expensive, high-quality kitchen utensils, the average college student won't fit your ideal profile. While a young adult living away from home for the first time might have something in common with your ideal customer, the college student likely won't have the budget or desire to go out and get the top-of-the-line products.

Your ideal customer profile will help you prioritize and target your efforts because it provides a model against which you can measure your leads to determine whether a potential customer is worth pursuing. If you focus your energy on prospecting and qualifying, which is learning more about your target prospects, you will save valuable time and resources, which you can then devote to giving your customers a more satisfying experience. Effective prospecting and qualifying empower you to invest in the opportunities that count.

Video Clip

Prioritizing Leads

Understand how to use the sales funnel to maximize leads.

How to Create a Truly Effective Sales Funnel

Now that you understand the concept of prospecting and why it's important, you'll find the next sections helpful as they will provide you with tools to help you find prospects and qualify prospects.

Key Takeaways

• Prospecting is the most vital part of the selling process. Without prospects, you won't be able to make sales, and without constantly searching for new prospects, you won't be able to replace the customers you lose and grow your business.

• A lead, or prospect, is the only thing you can turn into a sale, so it's important to follow up with your leads. Don't write someone off without legitimately qualifying him.

• The concept of the sales funnel illustrates the value of generating a large pool of leads because many of your prospects won't qualify or will drop out during the selling process.

• You should begin searching for leads by building an ideal customer profile to help you target your search efforts.

Exercises

1. Describe the ideal customer for the following products or services:

   • iPod Touch

   • Ferrari sports car

   • GEICO car insurance

   • Unnamed Publisher textbooks

2. Discuss the sales funnel and why leads are important to the selling process.

3. Discuss the difference between a prospect and a customer.

4. If someone goes into a Best Buy store and looks at the home theater systems, is he a lead or a prospect? Why?

5. Visit a local jeweler and shop for a watch. What questions does the salesperson ask to qualify you as a prospect?