The best way to start your business with a bang next year is to have a great prospect list. You see, prospecting is the first step in the sales process, which consists of identifying potential customers. In fact, in sales, you are required to acquire new clients, and in order for you to do so, you must open new relationships.
Prospecting is the art of opening new relationships.
So the question is, how do you strategically create a prospect list based on what your business needs next year? Let me give you an idea:
It all starts with a goal in mind. How many clients do you want to have for the quarter? The first Half? The first year? I bet you already know this. Just make sure that when setting goals, it has to follow the S.M.A.R.T. principle. (specific, measurable, attainable, realistic, timebound)
An good prospect list will play a vital role in your business on 2017
The key to creating an effective prospect list is to understand your target market. Whether you are in a B2B or B2C category, it pays to know whose problem you want to solve and who really needs what you have to offer. Here are a few things to remember when segmenting your prospect list.
- Business Size
This is particularly important if your business operations expands nationwide and globally. But doesn’t necessarily mean it’s not useful when you’re not. It pays to know where your prospects are so you have an idea who to prioritize, which area you need to focus on, and of course, it also tells you the potential spend on reaching out to these targets.
Simplify your list by classifying them according to team size. For example, your definition of a small business or start up is a company with 1 to 10 employees, medium scale businesses are those with 11-50 employees and those with more than 50 you classify them as large or corporate businesses. Why is this important?
The size of a business or a company will allow you to gauge how much they may need your product or services. Even your close rate percentage for small businesses may relatively be higher and the percentage goes down as you move over to medium and large scale companies. Sometimes, it’s the other way around. When you understand this better, the more realistic your goals would be
There are more than a hundred industries based on this list.
I’m sure you don’t plan to create a list of prospects this extensive. If you want to, go ahead, although I do not recommend it. In order for your prospect list to be effective, simplify. Focus on the industries who may “need” your products or services first. Then move over to the next industries available once you’ve exhausted them.
See sample below:
Now let’s align your prospect list with your goals. How many deals do you want to closed? How many clients do you need to ensure your operations run smoothly? Are you looking to gain financially and align all these with your PNL (profits and losses). Let’s say you do…
Let’s do the math. I told you earlier that depending on what you offer, the size of a business matters. Your close rate depends on how much they need your products or services. In most cases, it is easier to reach out to the decision makers in small businesses as sometimes, the owners are actually working in the business themselves. Therefore, your chances to knock a deal with them are relatively higher compared to medium and large scale businesses where you will have to pass through a gate keeper first. Assuming that this is the case, you set your total goals of clients higher for small businesses than the other 2 segments.
How Big Should Your List Be?
Some would actually tell you to make your prospect list as big as possible. Add as many businesses onto the list as much as you can. But that’s not how I would advice you to do so. I suggest you start with a smaller list that is primarily focused on potential closed rate. Let’s look at the numbers:
- If you are closing deals at a rate of 30% or higher, that means you and your team are really really good.
- A 20% clip is a rather acceptable number for most business to business providers.
- When your close rate’s 15%, that’s either an emphasis on improvement on your sales strategies/pitch or you do not have a good prospect list.
And now, let’s look deeper. If your goal is to close 10 clients in the small business category, you build your prospect list based on your lowest percentage of closing the deal. Assuming it is 15%, therefore, you have to have a total of 60 prospects on your list. Same thing goes for your medium and large scale business categories.
This is how we recommend you do your prospect list this 2017. We’d like you to not just build a list but rather, be strategic… where your goals, your sales skills and even your processes can be gauged as you work on it. You’ll be able to see where your strong points are and where you still need to improvement. Trust me, even by creating a prospect list, it will give you an idea where your company or business would be next year.