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This Document Contains Chapters 4 to 5 Chapter Four — Communication Skills Learning Objectives 4-1 Explain the importance of collaborative, two-way communication in trust-based selling. 4-2 Explain the primary types of questions and how they are applied in selling. 4-3 Illustrate the diverse roles and uses of strategic questioning in trust-based selling. 4-4 Identify and describe the SPIN and ADAPT systems for effective questioning in a sales dialogue. 4-5 Discuss the four sequential steps for effective active listening. 4-6 Describe and interpret the different forms of verbal and nonverbal communication. Chapter Outline Introduction-93 4-1 Sales Communication as a Collaborative Process-94 Verbal Communication: Questioning-94 4-2 Types of Questions Classified by Amount and Specificity of Information Desired-96 Open-End Questions-96 Closed-End Questions-96 Dichotomous/Multiple-Choice Questions-97 Types of Questions Classified by Strategic Purpose-97 Probing Questions-97 Evaluative Questions-97 Tactical Questions-97 Reactive Questions-98 4-3 Strategic Application of Questioning in Trust-Based Selling-99 4-4 SPIN Questioning System-100 ADAPT Questioning System-100 4-5 Verbal Communication: Listening-104 Using Different Types of Listening-106 Active Listening-107 4-6 Interpreting the Different Forms of Verbal and Nonverbal Communication-109 Verbal Communication: Giving Information-109 Understanding the Superiority of Pictures Over Words-110 Impacting of Grammar and Logical Sequencing-110 Nonverbal Communication-111 Facial Expressions-111 Eye Movements-111 Placement and Movements of Hands, Arms, Head, and Legs-112 Body Posture and Orientation-112 Proxemics-112 Variations in Vocal Characteristics-113 Using Nonverbal Clusters-113 Chapter 4 Case-116 Chapter 4 Role Play-117 Exercises Developing Professional Selling Knowledge 1. Explain why talking with buyers rather than talking at buyers is critical to success in selling. Today, success in selling requires building mutually beneficial relationships with customers. Building these mutually beneficial relationships requires that the salesperson identify the needs of the customer, which can be done only through interactive discussion (i.e., talking with the buyer) and sharing of information. In addition, talking with buyers rather than at buyers helps to build trust, which is critical for building successful relationships. 2. Discuss how salespeople use effective questioning to maintain subtle control over the buyer–seller communication dialogue. Salespeople can maintain subtle control over the buyer–seller communication dialogue by using effective questioning to guide the course and depth of the conversation. Salespeople can use questions to shift the conversation to an appropriate topic, control the depth of conversation on the topic, and redirect the conversation when the topic’s usefulness diminishes. Salespeople can also use questions to gain, regain, and then hold the buyer’s attention. Finally, salespeople can use questions to control the progression of the sales call, moving the customer from the introduction stage all the way through the commitment stage. 3. Distinguish between open-end and closed-end questions, and describe how each of these question formats might best be used in the trust-based selling process. Open-end questions encourage free response rather than limiting the buyer’s options to one or two words. Closed-end questions limit the buyer’s response to one or two words. These questions usually ask the buyer to respond with either “yes” or “no.” Generally, salespeople use open-end questions early in the sales call, especially during the need’s discovery phase. These questions encourage the buyer to respond freely and allow the salesperson to better understand the unique situation of the buyer. Salespeople use closed-end questions throughout the sales call, although they probably use them relatively more toward the end of the sales call. Generally, salespeople use closed-end questions to clarify or confirm understanding of ideas/information discussed during the sales call. Salespeople also use closed-end questions when seeking the buyer’s commitment (i.e., asking for the order). 4. Explain the difference in the uses of probing, evaluative, tactical, and reactive questions in trust-based selling. Probing questions are used to dig below the surface and uncover detailed information. They are especially useful during need discovery and objection handling. Evaluative questions help the salesperson uncover the buyer’s feelings and attitudes. They may be either open-end or closed-end. Tactical questions help the salesperson control the flow and direction of the conversation. Salespeople use these questions to redirect the focus of the conversation when the present topic is of little value or otherwise non-productive. Salespeople use reactive questions when responding to information provided by the buyer. Typically, salespeople use these questions to get the buyer to elaborate on something he or she has just said. 5. Explain the superiority of using verbal communication skills to create mental pictures compared to simply using words in sales dialogue with buyers. Salespeople need to communicate effectively and efficiently given the relatively short amount of time they will spend with the buyers. Mental pictures convey meaning more efficiently and enhance understanding relative to dialogue without mental pictures. Moreover, studies in cognitive psychology have long supported the contention that pictures are more memorable than words. To increase the impact of creating mental pictures, salespeople should incorporate (where appropriate) relevant visual aids that support the idea conveyed in the mental picture. 6. Identify and explain each of the individual steps involved in the SPIN sequence of questioning. Develop two example questions for each step. SPIN is a progressive questioning technique that is designed to uncover needs of the buyer that the salesperson can fill with his or her market offer. Situation questions are fact-finding questions that ask the buyer to provide information about his or her background and/or existing situation. “Who are your current suppliers?” and “What methods of advertising do you use currently?” are examples of situation questions. Problem questions probe the buyer for specific difficulties or areas of dissatisfaction. “Have you ever had any problems with your current suppliers?” and “What problems have you experienced with your current methods of advertising?” are examples of problem questions. Implication questions ask the buyer to consider the ramifications of the problems uncovered from problem questions. These questions help motivate the buyer to want to solve the problems. “How is your business affected when your suppliers are late with deliveries?” and “What is the effect of ineffective advertising on your profitability?” are examples of implication questions. Need-payoff questions focus the buyer’s attention on the benefits of solving the problem. As with implication questions, these questions help motivate the buyer to want to solve the problem. “How would your business be affected if your suppliers were never late with deliveries?” and “What impact would effective advertising have on your bottom-line area?” are examples of need-payoff questions. 7. Identify and explain each of the individual steps involved in the ADAPT sequence of questioning. Develop two example questions for each step. Like SPIN, ADAPT is a progressive questioning technique designed to uncover needs that the salesperson can fill with his or her market offer. Assessment questions are designed to elicit factual information about the customer’s current situation. “With how many suppliers do you currently work?” and “Do you own or lease your cleaning equipment?” are examples of assessment questions. Discovery questions flow from information gained from the assessment questions and seek to uncover problems or dissatisfactions (that the salesperson can positively address) that the buyer is experiencing. “How well are your current suppliers performing?” and “Have you ever had any trouble getting your leased equipment serviced?” are examples of discovery questions. Activation questions are designed to motivate the buyer to want to solve the problem or dissatisfaction discussed in the previous stage. These questions ask the buyer to consider the ramifications of the problem. “How do the problems you’re currently experiencing with your suppliers affect your production efficiency?” and “Do you ever experience down time while waiting for your leased equipment to be serviced?” are examples of activation questions. Projection questions ask the buyer to describe what life would be like if the problem(s) or dissatisfaction(s) were eliminated. These questions are also designed to motivate the buyer to want to solve the problem. “If your suppliers were always on time and orders were always accurate, how would your production efficiency be enhanced?” and “If downtime were eliminated, how would your productivity be affected?” are examples of projection questions. Transition questions are designed to help the salesperson make a smooth transition from need discovery to the presentation of a solution. “Would you be interested in hearing about how you can eliminate the problems you’re currently experiencing with your suppliers?” and “Are you interested in learning how you can lease your equipment and still eliminate downtime?” are examples of transition questions. 8. Discuss how the four sequential elements of sensing, interpreting, evaluating, and responding (SIER) combine to create what is referred to as active listening. Active listening is the cognitive process of actively sensing, interpreting, evaluating, and responding to the verbal and nonverbal messages of present or potential customers. In other words, it means concentrating on identifying the message the buyer is trying to convey through both verbal and nonverbal communication. Sensing is the process of receiving the verbal and nonverbal messages sent by the buyer. It requires the salesperson to both hear what the buyer is vocalizing and see how the buyer is vocalizing the message (i.e., body language). Interpreting is the process of drawing meaning from the message (both verbal and nonverbal). Salespeople must make sure to consider the buyer’s experiences, knowledge, and attitudes when deriving meaning. Evaluating is the process of determining the extent to which the salesperson agrees with what the buyer is communicating. Salespeople should wait until the buyer has finished communicating his or her message and until they are sure they understand the message before evaluating it. Finally, responding is the process of providing the buyer with feedback, verbal and/or nonverbal, related to the message. The salesperson should use responses to communicate understanding, encourage elaboration, and control the flow of the conversation. 9. Explain what is meant by “nonverbal clusters” and why they are important to salespeople. Nonverbal communication is often broken down into individual components when explaining corresponding meaning. However, nonverbal communication rarely consists of a single piece of nonverbal communication. Rather, nonverbal communication usually consists of several pieces of nonverbal communication. While each of these pieces of nonverbal communication has its own meaning, collectively the pieces may combine to form a unique meaning. The term nonverbal clusters refer to this combination of several pieces of nonverbal communication. It is important for salespeople to be able to identify and read nonverbal clusters so that they’re better able to capture what the buyer is conveying through the set of nonverbal communication pieces (i.e., nonverbal clusters). 10. What is meant by proxemics? Why is it important for salespeople to understand the concept of proxemics? Proxemics refers to the physical distance between the buyer and seller while engaging in face-to-face communication. The physical distance between the salesperson and the buyer is a form of nonverbal communication and affects the comfort level of the buyer. A buyer who feels a salesperson is standing too close may be uncomfortable and feel that the salesperson is being pushy or aggressive. In contrast, a buyer who feels the salesperson is standing too far away may perceive the salesperson as uninterested and not customer oriented. Salespeople should understand the concept of proxemics so they can better and more effectively communicate with their customers. Group Activity Have the class divide into groups of three to five. Next, present the class with one of the phrases listed below. Allow the groups five minutes to list as many different meanings as possible from the phrase. Remind them that they can use verbal and nonverbal variations to convey different meanings. Then, ask each group to articulate the phrase with a meaning that has not already been offered by another group. The group should tell the class the meaning it hopes to convey, and then attempt to convey it. Let the class or the instructor decide whether they were successful. The last group to come up with a unique meaning gets a point and gets to have the first try at the next phrase. Phrases – Hello – Goodbye – Are you a smart guy? – Bring me the pizza – I like you – I said I didn’t steal the money Experiential Exercises Developing Effective Listening Skills Objective: Your students will practice the concentration, discrimination, and comprehension necessary for effective listening. Time Required: 15 to 20 minutes in class and 10 to 15 minutes individually outside of class Teaching Tip: Students should first complete the outside of class activity and then come together as a class for a discussion of their experiences. Instruct students that the next time they are involved in conversation with another party, to listen carefully to what the other party is saying and to NOT respond until they have completed these three actions: 1. Paraphrase what they heard the other person say. 2. Ask for confirmation that their paraphrasing is correct. 3. Receive a positive confirmation that their paraphrasing is correct. Following the positive confirmation, the student may continue the conversation by responding and making appropriate remarks. Using the elements of the SEIR model of active listening discussed in the text, have the students observe the different levels of active listening they are using: sensing, evaluating, interpreting, and responding (SEIR) and come to class prepared to discuss these differences. Video Exercise Communication Skills Scene 1B, Meet the Seasoned Pro, run time 2:49 minutes The ability to ask the correct questions is one of the most important skills that a salesperson must develop. Preparation and well thought out questions will allow the salesperson to elicit the information that they need while providing an ease of exchange of information between the buyer and the seller. In this scene, Jim has established an important level of trust with Mark, and uses that relationship to elicit information and move the sales process toward resolution. Ask your students: 1. Explain why talking with buyers is a more effective technique than talking at buyers. Talking with buyers is more effective because it allows for a collaborative interaction between the buyer and the seller. This collaborative interaction helps both buyers and sellers better understand the needs, and serves to build trust between the two. In this clip, Mark appears to be talking with the customer early on, asking assessment, discovery, and activation questions. However, he prematurely proposes a solution and, consequently, learns there are cost concerns; this is more characteristic of talking at the buyer. 2. Identify the SPIN and ADAPT questioning techniques used by Jim in this sales call. Below is a list of the sales-related questions, along with their respective classification based on SPIN and ADAPT, that Jim asks during the sales call clip. •So, how are things going at Player One? (Situation, Assessment) •Any tech issues keeping you awake at night? (Problem, Discovery) •How would a breach impact your operations? Give me a snapshot of a worst-case scenario. (Implication, Activation) •Any other worries? (Problem, Discovery) •You’ve been happy with our security over the past five years, right? (Problem, Discovery) Students should note that the clip does not include any Need Pay-off, Projection, or Transition questions. Chapter Four Case Island View Tech Solutions and Quarter & Associates Background This case involves a salesperson representing the institutional sales division of Island View Tech Solutions, a leading reseller of technology hardware and software, and Dalton Genge, Director of Technology for Quarter & Associates, a prominent, St. John’s -based law firm specializing in corporate litigation. Quarter & Associates is preparing to move to larger facilities and want to update their computer technology in the new facilities. Corner Brook-based Island View Tech Solutions has established itself as a major competitor in the technology marketplace specializing in value-added systems solutions for business institutions and government entities nationwide. This past year, Island View Tech Solutions has added sales and distribution centres in Burlington, Ontario, Halifax, Nova Scotia, and St. John’s, Newfoundland. Current Situation As an integral part of their move to new and larger facilities, Quarter & Associates want to replace their computers and information technology systems including laptop/desktop combinations for each of their 21 attorneys, desktop systems for their 10 staff members, along with archive and e-mail servers. Island View Tech Solutions specializes in this type of systems selling and uses their network of hardware and software providers in combination with their own in-house engineering, programming, and systems group to consistently provide higher value solutions than the competition. In preparation for an initial meeting with Dalton Genge, the Island View Tech Solutions sales representative is outlining his/her information needs and developing a draft set of needs discovery questions. These needs discovery questions will be the focus of the meeting with Dalton Genge and will enable Island View Tech Solutions to better identify and confirm the actual needs, desires, and expectations of Quarter & Associates in relation to new and expanded computer and information technology capabilities. Questions 1. What information does the Island View Tech Solutions salesperson need in order to fully understand the technology needs of Quarter & Associates? Basic information should include things like: •The preferred operating system •Number of laptop and desktop computers needed •Need for online access to company information systems •Type of software needed •Storage space needed (varies depending upon amount of video and storage intensive media used by the firm) •Training needs •Other characteristics that inform the amount of RAM needed, the type of video card needed, and so forth. To fully understand the technology needs of Quarter & Associates, the Island View Tech Solutions salesperson needs the following information: 1. Current System Assessment: Details on the current hardware and software being used, including any issues or limitations they are experiencing. 2. Usage Requirements: Specific usage needs for attorneys and staff, including any specialized software applications and performance expectations. 3. Integration Needs: Requirements for integrating new systems with existing applications and infrastructure, including data migration and compatibility concerns. 4. Security and Compliance: Security standards and compliance requirements for data protection, especially given the sensitive nature of legal work. 5. Budget and Timeline: Budget constraints and timeline for the technology update to ensure the solution fits within their financial and scheduling parameters. 2. Following the ADAPT methodology for needs discovery questioning, develop a series of salesperson questions and anticipated buyer responses that might apply to this selling situation. However, the answers should reflect an understanding of the ADAPT questioning sequence. Below is an example for one need. Assessment Questions: Seller: How do your attorneys currently access the corporate databases? Buyer: Over the firm’s LAN. Seller: Do the attorney’s ever work from home or a location other than the firm. Buyer: Yes, often. Discovery Questions: Seller: What challenges do your attorneys face while working at home or away from the office? Buyer: They often complain about not having remote access to the firm’s information system. This makes it difficult for them to be as productive away from the office as they could be. Seller: How often does that problem occur? Buyer: Fairly often. I’d say two or three times a week each. Activation Questions: Seller: You indicated it affects their productivity, how so? Buyer: Our attorneys will often begin working on a project off-site. They progress as far as they can until needing access to information contained in our information systems. They then have to both stop what they are doing and come into the office, or put the work on hold until they get back to the office the next day. In either case, their rhythm and momentum are broken and that adversely affects productivity. Projection Questions: Seller: How would your attorneys respond if you installed a system that would give them secure access to the firm’s information system from anywhere in the world? Buyer: I’m sure they could complete projects sooner, and perhaps be able to take on more clients/projects. Seller: Is that something they would like? Buyer: Yes, they are paid by the billable hour and the number of clients with which they work. More clients mean greater compensation, and that’s something I know they will like. Transition Questions: Seller: Are you interested in hearing about how our information systems will give your attorneys that sort of secure access? Buyer: Yes. Role Play Situation: Review the above Island View Tech Solutions-Quarter & Associates case and the ADAPT questions you developed in response to the questions associated with this case. Characters: Yourself, salesperson for Tech Solutions; Dalton Genge , Director of Technology for Quarter & Associates Scene: Location—Dalton Genge office at Quarter & Associates; Action—As a salesperson for Island View Tech Solutions, you are making an initial sales call to Dalton Genge for the purpose of identifying and detailing the specific needs and expectations Quarter & Associates has for new and expanded computers and information technology. Role plays this needs discovery sales call and demonstrate how you might utilize SPIN or ADAPT questioning sequences to identify the technology needs. Chapter 4 Role Play Port Wireless Inc. Background Port Wireless Inc. specializes in providing wireless information technology for businesses having 10 to 500 employees and needs for wireless communication, information processing, and digital data transmittal. The company offers a full range of services, ranging from the one-time design of applications for smart phones and digital devices to the design and building of full enterprise systems. As a business development specialist for Port Wireless Inc., you are making an initial sales call to Wally Stevens, technology manager for Island Claims & Adjusters, LLC. As a preferred provider for inspection and adjusting insurance claims across Atlantic Canada, Island serves as an outsource provider of claims and adjusting services to many of the top 25 property and casualty insurance companies and has experienced rapid growth over the past five years. The company currently employs 65 people: 50 adjusters out in the field, 10 assistants located at company headquarters in Summerside, PEI, and 5 administrative and executive staff members. The purpose of this initial call is to assess Island Claims’ current use and needs for wireless communication and data services. According to the initial information you gained from a short phone conversation with Stevens, Island Claims is currently using a variety of different smart phones on Sprint’s cellular and data service. However, they are exploring the combination of custom designed apps with the new iPad 4 for use by their adjusters in the field. This combination would enable adjusters to complete and submit data forms complete with pictures and eliminate the added processing required in their current use of paper-based forms and records. During the phone conversation, Stevens mentioned that some of the benefits are obvious; nevertheless, they have concerns about the custom apps and transitioning to a fully digital system. Role Play Location—Wally Stevens’s office at Island Claims & Adjusters; Action—Role plays this needs discovery sales call and demonstrate how you might utilize SPIN or ADAPT questioning sequences to identify the needs and concerns of the prospect. Chapter 4 Continuing Case Sharpening the Selling Tools Background Brenda Smith is working in the office this morning preparing for tomorrow’s sales call with Gage Waits, managing partner, and Tanisha Autry, operations manager, at Energy-Based Funds LLC. Energy-Based Funds is a major investment banking organization specializing in managing and marketing a variety of energy-based mutual funds. The company operates throughout Canada and employs 175 people with offices occupying the top three floors of a major office building in the heart of the financial district. For the past several years, Energy-Based Funds has been leasing and purchasing office equipment from Altima Systems, one of Brenda’s biggest competitors. Brenda has been working her network in order to get a chance to begin a sales dialogue with Energy-Based Funds and she finally has an appointment with the main players on the purchasing team: Gage and Tanisha. Brenda knows that planning is a key part of success in selling and is diligently working on her strategy and plans in preparation for tomorrow’s sales call with Gage and Tanisha at Energy-Based Funds. According to the Sales Call Plan that Brenda is developing, the purpose of this initial meeting is twofold: (1) to discover more about Energy-Based Funds’ current operations, future plans, and the nature of their use of and needs for copiers; and (2) to begin acquainting Gage and Tanisha with NCC and the value they can provide Energy-Based Funds. At this point in her sales call plan, Brenda is considering the different pieces of information she needs to get from the dialogue and what questions she might use to elicit that information from Gage and Tanisha. Questions 1. Based on the purpose of probing questions explained in your text, explain how Brenda should utilize probing types of questions in her initial sales dialogue with Gage and Tanisha at Energy-Based Funds. Consider the types of information Brenda needs and develop several illustrative examples of probing questions Brenda might use. Brenda needs to use probing questions to learn as much or she can about Energy-Based Funds LLC’s (EBF) current operations, future plans, and the nature of their use and needs for copiers. She also needs to ask probing questions to better understand the relationship between the EBF and Altima Systems, EBF’s current copier supplier company. The purpose of these questions is to start determining the extent of the potential fit between the products she carries and EBF’s needs, and to identify areas of opportunity resulting from potential EBF’s needs. Below are some sample probing questions. •How is the organization structured? •How many different copiers are you using throughout the organization? •For what sorts of work/projects do your employees use the copiers? Do their needs vary across departments? How? •Are the copiers joined to the company computer network? •What challenges are you experiencing with your current supplier? 2. Evaluative questions are also effective in sales conversations. Explain the purpose of evaluative questions and how Brenda might effectively utilize them in this initial sales call. Provide several illustrative examples of evaluative questions Brenda could use. Evaluative questions are used to gain confirmation and to uncover attitudes, opinions, and preferences the prospect holds. Unlike fact-oriented questions, these questions are designed uncover the prospect’s perceptions and feelings regarding existing and desired circumstances as well as potential solutions. •In your opinion, how well is your current supplier meeting your needs? •How do you feel about the durability and functionality of your current copiers? •Do you see the value of having a relationship with a copier company that can help you streamline your processes and reduce your expenses? •What characteristics are you looking for in the ideal copier? Why? 3. The ADAPT questioning system is a logic-based sequence of questions designed for effective fact-finding and gaining information about a buyer’s situation. Develop a series of ADAPT questions that Brenda might use in her sales call to develop the information she needs regarding Energy-Based Funds, their operations, and their needs for copiers. Below is a sample set of ADAPT questions uncovering a need for copiers that allow for wireless network connectivity. Assessment: How do your employees get their work to the copier for copying? How far away, on average, are your employees from the closest copier? Discovery: Do your employees ever complain about having to wait for access to the copier or their proximity to the copier? What are their complaints? Activation: How has the waiting time and time spent going back and forth to the copier affected their productivity? Projection: How would your employees react to having wireless access to any copier in your company, if given access control? Transition: Are you interested in discussing how our wireless copiers can help your employees increase their productivity and reduce their complaints? 4. What recommendations would you provide Brenda regarding nonverbal communication and how she might use it for more effective communication in this sales call? First, Brenda needs to realize that nonverbal communication often conveys more meaning than verbal communication. Brenda needs to pay attention not only to the nonverbal communication coming from her customers but, perhaps more importantly, to her own nonverbal communication. Brenda needs to be aware of how her eye movements, the way she is sitting or standing, her gestures, and her proxemics affect her communication with her customers. In addition, she needs to consider how her speech rate, frequency, intensity and loudness can affect communication. Accordingly, Brenda should spend some time learning how to manage her nonverbal communication so that she may use it to enhance her verbal communication. Ultimately, Brenda needs to make sure that her nonverbal communication projects interest, confidence, enthusiasm, and a customer orientation. Chapter Five — Strategic Prospecting and Preparing for Sales Dialogue Learning Objectives 5-1 Discuss why prospecting is an important and challenging task for salespeople. 5-2 Explain strategic prospecting and each stage in the strategic prospecting process. 5-3 Describe the major prospecting methods and give examples of each method. 5-4 Explain the important components of a strategic prospecting plan. 5-5 Discuss the types of information salespeople need to prepare for sales dialogue. Chapter Outline Introduction-119 5-1 The Importance and Challenges of Prospecting-120 5-2 The Strategic Prospecting Process-120 Generating Sales Leads-121 Determining Sales Prospects-122 Prioritizing Sales Prospects-122 Preparing for Sales Dialogue-123 5-3 Prospecting Methods-123 Cold Canvassing-123 Networking-123 Company Sources-125 Published Sources-127 5-4 Developing a Strategic Prospecting Plan-128 5-5 Gathering Prospect Information to Prepare for Sales Dialogue-130 Obtaining Information on the Buyer-130 Gathering Information on the Prospect’s Organization-131 Sources of Information-131 Determining Other Buyers’ Influences-134 Chapter 5 Case-136 Chapter 5 Role Play-137 Exercises Developing Professional Selling Knowledge 1. Why is prospecting an important activity for salespeople? Prospecting is an important activity because it is the primary means of growing revenue and guarding against the effects of customer turnover. While it’s possible to increase revenue by raising prices, in most cases the most effective way to increase revenue and grow market share is to acquire new customers. Next, given that customer turnover is inevitable, prospecting allows salespeople to keep new customers coming in to replace those that are lost. While it is possible and even desirable to grow business with existing customers, it is unlikely that such growth could ever be great enough to make up for business lost to turnover. 2. What should be the objectives of strategic prospecting? The primary objective of strategic prospecting is to identify, qualify, and prioritize sales opportunities. Strategic prospecting should involve the use of criteria that help the salesperson separate prospects who are more likely to buy from prospects who are less likely to buy. In addition, strategic prospecting should have continuous improvement as a secondary objective. In other words, the salesperson should always be looking for ways to improve the prospecting process. 3. Why is prospecting difficult for some salespeople? Prospecting is difficult for some salespeople because it is a process filled with rejection. This is problematic to some salespeople for a couple of reasons. First, many salespeople fear (or at least don’t like) rejection. Second, because it is filled with rejection, many salespeople may feel that prospecting is an inefficient use of their time. In either (or both) case(s) salespeople will find prospecting difficult because they will not allocate resources necessary for making this process more effective. 4. What are the disadvantages of cold canvassing prospecting methods? The primary disadvantages of prospecting are that it is inefficient and can have a detrimental impact on the image of the salesperson. Cold canvassing is inefficient because of the low success rate. Salespeople engaged in cold canvassing generally know little to nothing about the prospects, and therefore do not have time to qualify them before calling them. The result is that salespeople may spend a great deal of time calling on prospects who do not meet the qualifying criteria. Cold canvassing can be detrimental to the image of salespeople because cold calls are unannounced. The potential prospects may feel as though the salesperson is inconsiderate because he or she did not call to make an appointment. In addition, the potential prospects may perceive the salesperson as unorganized because the salesperson has little to no information about the buyer and did not make an appointment. 5. What are the basic criteria used to qualify leads as sales prospects? Qualified sales prospects are leads who •Can benefit from the sales offering •Have the financial wherewithal to make the purchase, whether it is with cash, credit, or barter capacity •Plays an important role in the purchase decision process 6. What approaches can be used to prioritize sales prospects? One approach is to create an ideal customer profile and then prioritize prospects based on their relative match to the ideal. A second approach is to identify one or more criteria with which to evaluate and rank prospects. When prioritizing, salespeople may choose to rank prospects individually or in groups (e.g., A, B, and C categories of prospects). 7. What are the major components of a strategic prospecting plan? The major components of a strategic prospecting plan are •A method for establishing and tracking goals •A system for allocating an appropriate amount of time to prospecting •A method of tracking leads and prospects through the sales pipeline, and the relative costs associated with acquiring the leads •A method for evaluating the prospecting process •A method for keeping the salesperson’s knowledge (competitor, customers, product) up-to-date 8. What types of information should salespeople gather to prepare for sales dialogue? The salesperson should collect information about the prospect and the prospect’s organization. With respect to the prospect, the salesperson should at least know (and how to pronounce correctly) the prospect’s name and the prospect’s title. As the sales process progresses, the salesperson can learn additional information about the prospect (e.g., hobbies, interests, and so forth), including the prospect’s risk tolerance. The salesperson should also gather information about the prospect’s organization, including the type of organization, the industry, the marketing channels in which it operates, their competitors, and their customers. 9. How can salespeople use electronic networking as a prospecting method? Salespeople can use electronic or social networking to enhance prospecting in a variety of ways. First, social networking sites (e.g., LinkedIn and Plaxo) can help salespeople identify prospects, either directly or through referrals. Second, salespeople can use social networking to learn about the prospect and the prospect’s organization, either from the prospect’s social networking page, or from other members of the social network who are familiar with the prospect. 10. What company sources can be used for prospecting? Many organizations provide a variety of ways to help salespeople generate leads and identify sales prospects. Those sources include company records, advertising inquiries, inbound telemarketing, outbound telemarketing, trade shows, and seminars. Group Activity Divide the class into groups of three to five. Each group has been hired as a consultant by a new company to develop a strategic prospecting strategy. The company brews and bottles a specialty tea beverage. The tea is rich in vitamins, anti-aging nutrients, and natural anti-carcinogens. The tea is expensive to brew and has a suggested retail price of $3.00 per 16 oz. bottle. The company is located in your town. It can produce 5,000 bottles per day and does not sell the tea directly to consumers. The strategic prospecting strategy should include •How leads will be generated •How leads will be qualified •How sales prospects will be prioritized •How information to prepare for sales dialogue will be obtained •How the strategic prospecting strategy will be tracked and evaluated Experiential Exercises The Effectiveness of Different Prospecting Methods Objective: To help your students understand the advantages and disadvantages of different prospecting methods. Time Required: 30 to 40 minutes Teaching Tip: This exercise can be assigned during the previous class session. At the beginning of this class session, allow about 15 minutes for students, individually or in groups, to compile the advantages and disadvantages of cold canvassing, networking, company sources, and published sources prospecting methods. Then, call on students individually or by groups to present their results. You should summarize these on a blackboard or flip chart. Conclude the exercise with a summary, followed by a discussion of how different prospecting methods might be used together to capitalize on the strengths of each method. Developing a Strategic Prospecting Strategy for Getting a Job Objective: To help your students understand the strategic prospecting process by applying it to a situation of interest to them. Time Required: 30 to 40 minutes Teaching Tip: This exercise is best done by each student individually. Each student should indicate the type of job they would like to obtain upon graduation. Then, give each student about 15 minutes to address the following questions: 1. What prospecting methods would be used to identify potential job leads? To identify potential job leads, students can use networking (connecting with alumni and industry contacts), company sources (applying directly through company websites and job portals), and published sources (exploring job listings on sites like LinkedIn, Indeed, and industry-specific job boards). 2. How would these leads be qualified as job prospects? Students can qualify job prospects by assessing factors such as job requirements matching their skills and qualifications, company culture alignment, geographic location, salary expectations, and growth opportunities within the organization. 3. How would these job prospects be prioritized? Students can prioritize job prospects based on factors such as the relevance of the job to their career goals, the reputation and stability of the company, potential for growth and advancement, alignment with personal values and interests, and geographical location. 4. What types of information would the student gather prior to contacting the best job prospects? Prior to contacting the best job prospects, students should gather information such as company background and culture, job requirements and qualifications, key contacts within the organization, recent news or developments related to the company, and any mutual connections or networking opportunities. After students have addressed these questions, call on individual students to present their answers to each question. Conclude the exercise with a synthesis and summary of the discussion. Video Exercise Strategic Prospecting and Preparing for Sales Dialogue Scene 1A, Meet the Eager Beaver, run time 2:42 minutes Prospecting is vital to increasing the potential customer base for organizations. As you watch this segment, reflect on how Lisa’s organization prospects for new customers and the process that happened before this first sales call. Ask your students: 1. Comment on the information that Lisa has collected on this potential customer before this first meeting. In addition to knowing the customer’s name, Lisa learned a couple of key pieces of information prior to the meeting. First, she learned that the company is developing a new interactive racing game to be released during the holiday season. This information is useful because the new product release carries with it the need for additional security. Lisa also learned that the company is planning an expansion. Again, this information suggests a need for additional security. Finally, Lisa determined the name of the security system provider that Mark’s company is currently using. This allowed her the opportunity to conduct a preliminary analysis of how her product compares with the product Mark is currently using. 2. Would it be appropriate for Lisa to ask for a referral after this first call? Why or why not? Some students may believe it’s okay to ask for a referral after this call. However, Mark doesn’t really know Lisa, and she hasn’t had the opportunity to demonstrate any real ability to add value. Consequently, Mark is unlikely to provide Lisa any referrals and would likely perceive her asking as inappropriate. No, it wouldn't be appropriate for Lisa to ask for a referral after the first call with the Eager Beaver. Asking for a referral typically comes after establishing a solid rapport and providing value to the potential customer over time. Since this is the first interaction, Lisa should focus on building rapport, understanding the prospect's needs, and demonstrating how her organization can provide solutions before considering asking for a referral. Chapter 5 Case Developing a Strategic Prospecting Plan Background Colleen King graduated from the Memorial University and was hired as a sales representative for the Connector Company. The Connector Company is a transportation broker that links companies needing products shipped with trucking firms to carry the shipments. After an initial training program, Colleen was given a couple of existing company customers and a small list of leads to get her started. She began by serving the shipment needs of the existing customers. This gave her some confidence, but she realized that, for her to be successful, she must begin prospecting and try to identify the best sales opportunities. The Connector Company provides an ongoing list of leads that can be accessed by all salespeople. Once a salesperson contact one of these leads, no other salesperson can contact them. Colleen started her prospecting by contacting these leads. Current Situation Colleen has been calling a number of leads each day, but has not been very successful in generating much business. She feels like she is wasting much of her time on leads that are not good sales opportunities. The leads provided by her company are not qualified in any way and the training program she attended focused on cold calling as the basic prospecting method. Colleen took a professional selling class in college and remembered that the chapter on prospecting emphasized the need to follow the strategic prospecting process to identify the best sales opportunities. She found her professional selling textbook, went to the chapter on prospecting, and decided to create a strategic prospecting plan. Students’ answers to the following questions will differ. Example answers are provided. 1. What methods should Colleen use to generate sales leads beyond those provided by her company? Colleen should consider using a combination of methods to generate sales leads beyond those provided by her company. These could include networking events, industry conferences, online platforms such as LinkedIn, referrals from existing customers, and targeted advertising campaigns. By diversifying her prospecting methods, Colleen can cast a wider net and increase her chances of identifying high-quality sales opportunities. 2. How should Colleen qualify the leads provided by her company and those she generates herself? What is the profile of an ideal prospect? Colleen should qualify leads by assessing their needs, budget, decision-making authority, and timeline. She can use criteria such as the size of the company, frequency of shipping needs, types of products shipped, and current shipping arrangements. An ideal prospect for the Connector Company would be a business with regular and substantial shipping needs, a budget that aligns with the company's pricing, and decision-makers who are open to exploring new shipping solutions. 3. How should Colleen prioritize her qualified prospects? Colleen should prioritize her qualified prospects based on their potential value to the company, urgency of their needs, and likelihood of conversion. High-priority prospects are those with a significant volume of shipping needs, immediate requirements, and a high degree of interest or dissatisfaction with their current shipping arrangements. She can use a scoring system to rank leads and focus her efforts on those with the highest scores. 4. What information should Colleen collect to prepare for sales dialogue with a prospect? Colleen should collect information on the prospect's shipping volume, frequency, and types of goods shipped. She should also understand their current shipping processes, challenges, and pain points. Additionally, knowing the prospect's decision-making hierarchy, budget constraints, and any past interactions with the Connector Company or competitors will help her tailor her sales approach. 5. Colleen used LinkedIn during university and wanted to employ it in her strategic prospecting process. How can she best use LinkedIn? Colleen can best use LinkedIn by leveraging its search and networking capabilities to identify potential leads and decision-makers within target companies. She can join industry-specific groups, participate in discussions, and share valuable content to establish her expertise. Additionally, she can use LinkedIn Sales Navigator to track leads, send personalized connection requests, and follow up with prospects. Building a professional profile and actively engaging with her network can enhance her visibility and credibility, leading to more effective prospecting. Role Play Situation: Read case and prepare a strategic prospecting plan. Characters: Colleen and her sales manager. Scene: Colleen has implemented her strategic prospecting plan and been very successful. She has been the top seller in her office for the past two months. Her sales manager is impressed and he asks her what she is doing to be so successful. She indicates that her success is due to spending most of her time with the best sales opportunities. He wants to talk to her about her strategic prospecting plan and sets up a meeting. Location—Sales manager’s office; Action—Role plays the meeting between Colleen and her sales manager. The sales manager should ask many questions and Colleen will respond to these questions. The use of LinkedIn has been valuable to Colleen and no other salespeople at the Connector Company are using LinkedIn, so make sure the role of LinkedIn is included in the role play. Chapter 5 Role Play Prospecting and Gaining Prospect Information Background Preston Adams has just completed the sales training program for the Office Equipment Division of Xerox. Adams has been assigned a territory in New Brunswick that includes the metro areas of Fredericton, Saint John, and Moncton. The company once commanded a significant market share in these markets. However, because of a problem with a previous salesperson in these markets three years ago, Xerox has not been directly working this particular region of central New Brunswick. Although a large number of Xerox machines are still in use across this territory, it has been a while since a salesperson has called on any accounts. As with any geographic area, a lot of changes have likely occurred, with existing companies moving or even going out of business and new companies opening up. Current Situation Adams’s sales manager, Eric Waits, is coming in two weeks to spend three days in the field with Adams calling on prospective accounts. Adams is working to develop a list of leads that he can qualify and then contact to set up the sales calls he will be making with his manager. Role Play Situation: Read the role play. Characters: Preston Adams, salesperson for Xerox Business Machines Division; Jerri Spencer, office manager with purchasing responsibilities for Moncton-based McKelvey and Walters, Attorneys-at-Law. Scene: Location—Preston Adams’s office at Xerox Business Machines Division; Action—In the course of Preston’s prospecting activities, Spencer and the McKelvey and Walters law firm have come up as a strong prospect for Xerox’s new line of professional copiers. McKelvey and Walters operate a large office in Moncton that occupies most of two floors in the Planter’s Bank Building and a branch office in Saint John. They were previously a customer of Xerox, but the information that Preston has obtained indicates that they are using an unspecified variety of different brands of copiers. Role plays the phone conversation between Adams and Spencer as Adams introduces himself and his company to Spencer, gathers needed information to better qualify the prospect, and asks for an appointment for an initial sales call. Chapter 5 Continuing Case Fishing for New Customers Brenda Smith has been very successful at getting existing customers to upgrade or purchase new copiers during the past two months. She is, however, disappointed in her efforts to get new customers. In order to add more new customers, Brenda has been spending a great deal of time prospecting. These efforts have produced a large number of leads. Once she generates a lead, she contacts the firm and tries to set up an appointment. Unfortunately, most of these leads are not interested in talking about copiers and are not willing to schedule a meeting with her. This has been so frustrating that she decided to make several cold calls this week to see if this would be a good way to get to meet with prospective customers. The cold calls were also not very successful and were extremely time consuming. Brenda did finally get a few leads to agree to meet with her, but these appointments were not very productive. The leads were typically satisfied with the copiers they were using and were not interested in learning about NCC copiers. Jin Tan, her sales manager, accompanied her on a recent sales call to a lead. After the sales call, Jin expressed her disappointment that they had really wasted their time with this meeting. Jin then asked Brenda about her prospecting process, because it was clear that she was not identifying and spending her time with the best sales opportunities. Her approach was not working well and was taking a lot of time. If she continued doing the same things, Brenda was not likely to generate many new customers and might lose some existing customers because she was spending too much of her time prospecting. Brenda realizes that she must improve her prospecting process, but is not sure exactly how to proceed. Questions 1. What is Brenda doing wrong? What would you recommend Brenda do to improve her prospecting efforts? First, Brenda needs to develop a strategic prospecting plan that incorporates the elements discussed in the text. Next, she needs to assess her lead generation methods and qualifying criteria. It’s likely that she is not getting good leads, and it is also likely that she is not doing a good job qualifying leads. Finally, I would recommend Brenda work on generating referrals from her current satisfied customer base. Using referrals is much more effective and efficient than cold calling. 2. Explain the strategic prospecting process to Brenda and discuss how she can implement it. Strategic Prospecting Process for Brenda 1. Set Clear Objectives: Define specific goals for prospecting, such as the number of qualified leads to generate each week or month. This will help Brenda focus her efforts and measure success. 2. Identify Ideal Customer Profile: Brenda should create a profile of her ideal customer, considering factors such as company size, industry, current copier usage, and pain points. This will help her target the right prospects more effectively. 3. Gather Information: Use various sources to gather information about potential leads. Brenda can leverage company databases, online directories, LinkedIn, industry publications, and networking events to identify prospects that fit her ideal customer profile. 4. Qualify Leads: Assess each lead to determine if they meet the criteria of an ideal prospect. Brenda should evaluate their need for new copiers, decision-making authority, budget, and readiness to purchase. This step ensures she spends time on leads with the highest potential. 5. Prioritize Leads: Rank the qualified leads based on their potential value and likelihood of conversion. Brenda can use a scoring system to prioritize leads, focusing on those with the highest scores first. 6. Develop a Prospecting Plan: Create a structured plan outlining how to approach and engage with prospects. Brenda should use a mix of prospecting methods, including referrals, networking, social selling, and content marketing, rather than relying solely on cold calling. 7. Prepare for Initial Contact: Before reaching out to prospects, Brenda should research each lead thoroughly to understand their business, challenges, and current copier situation. This preparation will enable her to tailor her approach and demonstrate value. 8. Reach Out with a Value Proposition: Contact prospects with a clear and compelling value proposition that addresses their specific needs. Brenda should focus on how NCC copiers can solve their problems, improve efficiency, or reduce costs. 9. Follow Up and Nurture Leads: Consistently follow up with leads who show interest but are not ready to buy immediately. Brenda can use emails, calls, and content marketing to nurture these leads and keep NCC top-of-mind until they are ready to make a decision. 10. Review and Adjust: Regularly review the effectiveness of her prospecting efforts and adjust the strategy as needed. Brenda should track her progress, analyze which methods yield the best results, and refine her approach to continuously improve her prospecting process. By implementing this strategic prospecting process, Brenda can more efficiently identify and engage with high-potential leads, increasing her chances of converting them into new customers. 3. What secondary lead sources would you recommend Brenda use to identify the best attorneys, architects, accountants, and medical professionals as prospects? There are a variety of secondary lead sources available to Brenda. The first is the phone book (yellow pages). This will give her a list of the various attorneys, architects, accountants, and medical professionals along with basic contact information. She could also use Hoover’s, the NAICS Website, and other Web-based lead search tools such as SalesGenie.com. 4. What specific types of information should Brenda obtain before contacting a qualified prospect? At the very least, Brenda should know the name and title of the lead she is hoping to contact. She should learn something about the prospect’s organization, including markets they serve, competitors, and any current external forces that may be affecting their business. She can use this information to help gain access to the lead. Solution Manual for SELL Thomas N. Ingram, Raymound W. (Buddy) LaForge, Ramon A. Avila, Charles H. Schwepker, Michael R. Williams, Kirby Shannahan 9780176622107
