- Millennium
Marketing Research®
- Tom Schori DBA Millennium Marketing Research®, 808 Ironwood, Normal IL 61761, 309-532-8466
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It all begins (and ends!) with prospecting.By Thomas R. Schori, Ph.D., and Michael L. Garee, Principals, Millennium Marketing Research, 808 E. Ironwood, Normal, IL 61761-5239. Tel. 309-532-8466 - Having spent a fair amount of our professional lives in the corporate world, over the year we've made a few key observations. Here's one of them. Many executives in organizations that assume "push" rather than "pull"" strategies appear to have lost track of the fact that their salespeople are the ones who put revenue in the corporate coffers. Instead, salespeople are often treated in deed, if not in fact, as though they were nothing more than uneducated louts! The reality of the matter is, if no one were selling the products or services produced by organizations, the corporate "weenies" would have no jobs, let alone, "perks." Just one word appropriately describes this strange phenomenon¾dumb! Let’s look at the selling process, which as any marketer worth his/her salt knows, looks like this:
All the stages of the selling process are important. But a sale can't be close without first having cultivated a relationship with a prospect. Thus, the foundation on which the sales process must be built is prospecting. Or, another way of putting it, everything begins (and ends) with prospecting. There are essentially two types of prospecting:
Business-to-consumer prospecting. A decade ago, when colleagues told us that they were besieged by telephone solicitors trying to sell them one thing or another, we wondered why weren’t also besieged. Not to worry. We, too, now receive the calls. Mainly long distance telephone companies and credit card companies. While their calls could be effective, they aren't. If they’d simply (and graciously) take "no" for an answer, they might find that on the very next call to the same consumer (or the one after that, etc.) the consumer might actually say "yes." But unfortunately for them, they don't take "no" for an answer. But we've discussed telephone prospecting in previous columns. Instead, let’s look at a couple other sales situations where a "push" strategy is believed to be essential, situations with which we’re all very familiar, viz., insurance sales and automobile sales. Insurance sales. Most people are familiar with the traditional auto insurance companies like State Farm, Allstate, Farmers, Nationwide, American Family. While they’re primarily thought of as providers of auto insurance, they also sell life insurance. Since their agents’ commissions are about 10% of new business auto premium and about 100% of first-year life premium, it is clear that they’re paid to prospect and, thus, to be active order-getters. But do they prospect, or are they simply order-takers? For the most part, as it turns out, they don’t prospect. They simply wait for business to come to them, particularly auto insurance business. That is, they are for the most part nothing more then order-takers. In the vast majority of the cases, State Farm’s new auto insurance customers are the result of the customers’ efforts, not of the agents’ effort. Thus, probably 98% of the time, the State Farm agent is simply a passive order-taker, when it comes to new auto insurance sales. And, since fewer than 15% of the life policies State Farm’s auto customers actually purchase are purchased from State Farm, it certainly would appear that they aren’t doing a lot of prospecting for life, either. Instead of prospecting, they’re simply waiting for the potential customer to contact them, much like the service personnel at a McDonald's counter. If salespeople are to be active sales-getters, then that’s precisely what they should be doing¾ aggressively prospecting for business. And, it's not all that hard. The State Farm agent, for example, only needs to know what constitutes State Farm’s target market for auto insurance. Then, he or she should be constantly contacting people within that target market, by phone, by mail, through personal contacts, etc., and asking them for their auto insurance business. If 30% of an agent’s new auto business does not result from prospecting efforts, the agent simply isn’t doing his or her job. Likewise, that same agent should be regularly contacting each and every current auto insurance customer and asking them about their life insurance needs. Doing so would result in the agent getting much more than the current (and deplorable) 15% of the customers’ total life insurance purchases. Automobile Sales. Like insurance agents, automobile salespeople do little in the way of prospecting. Instead, they simply wait until someone arrives at the dealership looking for a car. Instead of standing around waiting for the next person to enter the dealership, how many more sales would they make if they spent their "down time" actively prospecting? Many! To maximize their effectiveness (and, by the way, their income), they should spend any "down time" contacting (by phone, mail, etc.) past customers and other individuals within what constitutes that dealership's target market. Furthermore, anytime they come into contact with people outside the dealership, they should always introduce themselves with something like this: "Hi. I'm Joe American. I sell cars at Sam National Chrysler/BMW. When you’re ready to buy your next car, I’d appreciate the chance to show you what we have to offer." Business-to-business Prospecting. Most of us have also had some familiarity with business-to-business prospecting, or lack thereof. We certainly have, both as a prospect and as a prospector. As prospects (and good ones at that), over the years we’ve purchased literally millions of dollars of services from marketing research companies. Now, as Millennium Marketing, we aggressively prospect among what constitutes our target market. Marketing research companies. Having purchased a lot marketing research services, we make this simple observation about the companies providing such services. They do little or no prospecting. In all these many years in which we have been buying marketing research services, we’ve probably had no more than a dozen prospecting contacts, in total. Some years ago, an executive of a well-known marketing research company told us that he wondered why his company wasn’t growing. When probed about how his company was viewed in its target market, his response was that they didn’t know what they represented to their market. While that was a startling admission, the fact of the matter probably was that they simply were not actively prospecting. Though, to have gotten to where they were, one has to believe that at one time they must have prospected with a vengeance! Our company, Millennium Marketing. When we started this little business of ours, we had no illusions. We had no customers, no prospects, and no awareness. We knew that we were going into competition with well-established marketing research companies, companies that had been in business for many years and that were generating millions of dollars of revenue. To be successful, we knew that we had to do two things. First, we had to offer something the market needed, but which no one else was providing. We had that in our Optimal Brand Positioning Model. The OBPM permits us to identify exactly (not about, not approximately, but exactly) that upon which a business must focus to greatly grow share. Second, we knew we had to relentlessly prospect¾something that from our very first day in business we’ve persistently and aggressively done. Quite unlike the State Farm agent for whom only 2% of new auto insurance business results from prospecting efforts, 98% of our business, thus far, has resulted from our active prospecting efforts. And, as time goes on, it is our firm intention never to let that percentage drop below 50%. Whether one is involved in business-to-consumer selling or in business-to-business selling, the number of closed sales will always be higher when effective, sustained prospecting is part of the equation. |