Not Having a Positive Prospecting Culture is Damaging Your Business, Creating Stress and Uncertainty
The Impact of Poor Prospecting
It’s a very common issue among sales teams who have multiple focuses and are driven by sales results which are best achieved by face to face appointments. How do we keep a consistent flow of new prospects into the funnel and nurture them until we can close the deal?
The biggest barrier to maintaining a robust new business pipeline is not having a culture of prospecting among your company and the sales team. In other words, prospecting is not seen as a consistent, habitual activity but more as an activity that takes place when sales are drying up or targets are being missed.
In this article we will discuss the problems this can cause and the reasons why prospecting rarely gets the focus and attention it needs.
What Problems Does This Cause?
Boom / Bust
Firstly, a lack of a consistent pipeline of new opportunities often leads to a boom / bust sales flow. Starting at the bottom of the curve, where we have no customers, we are furiously prospecting to build enough prospects and book sufficient appointments to fill our diaries and present the sales opportunities we need.
Then our focus switches from filling the pipeline to attending the appointments and closing deals. Great! We’ve made some sales and now we are working on onboarding our new customer and servicing their needs. The money is coming in, targets are being met and everyone is happy!
But, this switch of focus has led to a serious downturn in our pipeline, meaning that our attention has to turn back to prospecting, to drive that curve of new business up again. We lurch from feast to famine on a timeline that is usually equivalent to the sales cycle of our product and customers.
The boom / bust behaviour described above leads itself into ‘Panic Prospecting’. The sales person or management realises that new business is tailing off, maybe some existing customers have left and there is a big hole in your future business that will damage you unless you do something now! So, let’s hit the phones! Get out and knock on doors! We need more prospects, urgently!
If your sales cycle is long, then even more panic is introduced because of the lead time from contact to sale.
Effective prospecting can never been done in ‘panic mode’. Building an effective prospect list, researching the prospect and deciding on the right method of introduction all take time and effort. Sales people who are under this kind of pressure will never prospect effectively leading to wasted data, lost opportunities and disappearing morale.
Losing Opportunities to Your Competitors
If your competition has a culture of effective prospecting, they are probably already talking to your target market, because it is their habit to consistently fill their pipeline and to fully understand who is in their market and what their needs may be.
This means that, when you go into panic prospecting mode and start trying to talk to your prospect market, you will get more push back, not only because your target will have an incumbent supplier but they are also being courted by your competitors who have taken time to get to know them. What chance do you have of breaking down those relationships and getting in front of the customer?
Missed Sales Targets
It goes without saying that a poor pipeline will lead to missed sales targets. It is natural that existing customers may drift away, either tempted by a competitor, changed their business model or shut up shop. Your current customer spend is always likely to decrease in time. If you are not consistently looking to top up your client portfolio with well prospected new clients, the challenge to hit targets will get bigger and bigger. And this has other implications…….
Your profits are decreasing as existing customers naturally decrease. The new customers you do bring on take time to onboard and develop their spend with you. Costs are always increasing and, as a result, you lose profit. All of which could be so easily avoided with the right prospecting culture.
Demoralised Sales Staff
I have seen sales people stressed to breaking point as they try desperately to fill the pipeline that they have neglected in favour of existing customers and those sales appointments that they do have. Balancing the time between service customers and prospecting is very difficult. Add to that the pressure brought on them by management who are seeing missed sales targets, boom / bust results and a decreasing customer base, then you have one stressed out sales person. Regardless of their prospecting technique, as stressed sales person will NEVER prospect as effectively as one who has a clear, defined approach which delivers results and prospects in a calm, productive manner.
And if we think the sales team are stressed in this scenario, then the management must be even more stressed. Do you find yourself getting frustrated with the ups and downs of sales targets being hit one month, missed the next? With sales people complaining they don’t have time to prospect? With shareholders complaining about the lack of new sales and diminishing profit?
I have met many sales managers and directors who continuously battle all of these stressful elements, often without actually solving the problem for the long term.
Growth is Restricted
So, the downturn in profits and missed sales targets will eventually lead to the restriction of growth. Businesses need to grow in order to keep moving forward and to do that, they often need to invest. If profits are being hit and cashflow is effected by the lack of a robust pipeline, then investment will decrease and growth will grind to a halt.
Why Do Sales People Not Prospect Consistently and Effectively?
There are a number of reasons why prospecting does not become the culture of a sales business. In my experience, it is often a combination of most or all of these reasons, to differing degrees but mainly, it comes down to process, structure and accountability.
Managing your time between prospecting and servicing appointments and existing customers is one of the biggest difficulties in ensuring you have a reliable pipeline. Sales people tell me that they are under pressure to have a maximum number of appointments in their diary, so much so, that prospecting is ditched in favour of seeing more customers and often, not for the right reason.