Know-How Exchange : Strategy

Gerald,

There's always a good reason to "prospect" to your customers. Credit card companies use the term "share of wallet". If you aren't getting it all, they can still be a prospect.


Michael

They would not be leads.

And it depends on the prospect question. What are you using this for?

In planning, and if its a new revenue stream, you target both existing and potential clients. For that, you could call them prospects. But, if say you were a manufacturer, and you just added a new sku to an existing line, I wouldn't call them a prospect.

In my opinion, you could call it "thingamabob" and it wouldn't matter as long as you're tracking it correctly and handling it with care.

The nomenclature is irrelevant. It's what you do that counts.

However, if you really need an answer to the question, and this is just my opinion/interpretation, I'd say that a new sales opportunity to an existing client is just that, an "opportunity." Terms like "lead" and "prospect" have to do with a potential buyer as opposed to that thing or service which they may or may not buy.

In other words, a person or business can be a lead, prospect, or customer (or client if that suits your business better). When you have some thing or service that you can hopefully sell to your lead, prospect, or customer, that potential transaction is called an "opportunity."

Just my $0.02. Insanely overvalued at that.

- Paul

I also believe that we sometimes fail once we start considering prospects customers. That label tends to let them drop off the map of business development. If you consider everyone you deal with every day as a prospect, you can't lose.

In reading the above posts: As Michael called it, there are two ways to develop clients. Vertically and horizontally. Vertically is an endless list of new clients. Horizontally is getting more from the clients you have. It takes a lot less to develop an existing client than to gain a new client. Again, there is nothing wrong with calling them prospects for a new revenue stream.

With a newbie, when I target a client, I call them suspect. They do not go to prospect until we have made contact and we have the next step defined in the sales cycle. They are not customers until they purchase. And as part of your sales cycle they are continually updated and followed up upon.

Sell Well and Prosper tm

Remember the word "lead" itself. Its a lead because this information has the potential to lead to a sale. The rest -- I wouldn't say there is no consensus. Part of developing a sales cycle is to have a consensus-- at least within their own organization, for the sake of planning and communication. However I do believe that depending on who you talk to, there are different viewpoints on the labels we use. Since you are developing your brochure on your sales expertise, call it as you would define it, and whatever you choose, be consistant with it and able to explain the reasoning.

A lead does not mean someone has expressed interest in your product. Lead groups exchange info about shared contacts -- their value is to bring info about a contact you didn't know about.

This is how I describe it. Suppose I'm selling chairs. I look out my window and every person and business I can see need a chair. Are they prospects? No. They are suspects. They cannot move into prospect until they are contacted and qualified in some way, I know who is making the buying decision and we have a next step.

Too many salespeople forget to bring people along in the cycle by not having a next logical step. Just as every call must have a reason, every contact must have a next step. They move into prospect this way until they become customers.

So many answers to your question here is just my opinion:

You can always consider an existing customer a lead or prospect for a new business The key difference with a "never before" - customer is that (hopefully) the existing customer already trusts you to some extent and that you know more about their needs (note: non-customers may also be lost customers, who left the company or customers who have not switched but simply did not need you for a while). Moreover, 'customer development', ie selling more to an existing customer, is at least as important as gaining a new customer, especially in downturns.

Not only is their confusion between companies, there is confusion within companies. For example, one salesperson might consider someone a prospect while another salesperson the same organization might consider that a lead or just a contact.

I know of sales managers who use different percentages to weight the forecasts of individual salespeople.

And it also seems to me that there may be additional distinctions depending on the size of a prospect or lead or whatever. For example, it is a very different situation to make repeated sales to the same person within an organization and you make to a new contact or new location within a large corporation.

I've personally found it more helpful to break down the analysis of prospects into specific and definable milestones. For example, has the prospects signed a nondisclosure agreement? Have you visited with the prospect? Has the prospect completed a trial? Have you identified the economic buyers? Is there an entrenched competitor?

In thinking about this, asking for concensus in this is like any other issue. Except for questions like "is the world round", I see very few issues that don't have various camps of belief-- faith, politics, should we cold call. I don't see it as confusing, just different camps. Cargil, who I like as a sales guru uses the terminology I use (I'm one of his licensed coaches). Gittmer, Sandler and others may use others. As I posted above, those in sales management define those terms within their company, audience to define the sales cycle and have good communication. Since its your article, be your own guru. Find the words you identify with, know why and run with it.

The point here is to build an organizational vocabulary. I can tell you mine, everyone else can tell you theres. I believe you have uncovered the value of building an organizational vocabulary.

I can say, hey guys I live in Iowa and saw an brown and white animal with four legs, short fur, a tail, a broad nose, weighing about 1100 lbs and making a mysterious mooooo sound. Or I can say, there's a cow in my back yard.

In business, I can say, this is an person who i think may have the need for our product but as of right now I have not had an opportunity to learn more about them. Or I can say suspect. Obviously, once the vocabluary is developed the conversation is shorter.

The problem is with common words there are hundreds of consultants who each preach their own vocabulary - and they sound pretty close. So when I say lead, you envision a prospect.

I have helped hundreds of companies who wanted to Target Accounts. Only problem is they had never taken the time to define "Target"

I think Roxanna's post is good, except-- the worst thing you can do to a suspect is "give them a brochure" to those not aware of your company. Good salespeople know that marketing collateral can hinder, not help a sale. You open the door to the objection "I know what you do and I will call someday like never". Or, the endless loop "gee I didn't get your brochure, can you send it again, again again..." (At dollars a pop, "no" I can't keep sending) Its a stall, vs an objection. That is why I call them suspects-- until you get to the point where you have the potential to solve a real problem-- they are not prospects. They do not go into the sales funnel too soon. And once they do-- they do not go out of the funnel till one of 3 things happen, go with you, another, or postpone. No other option. We do not lose our prospects either thru leaking or evaporation.

It's easy to get sucked into thinking this is all about semantics and nomenclature when in fact it's about a process.

I recommend fellow KHE'er Hugh Macfarlane's excellent book The Leaky Funnel which explains the problem and proposes a solid, workable process with feedback loops.

Hope that helps.

ChrisB