Prospecting is the process of initiating and developing new business by searching for potential customers, clients, or buyers for your products or services. The goal is to move these prospects through the flywheel until they convert to revenue-generating customers.
Why is sales prospecting important?
Prospecting allows you to connect and work with potential customers whose needs and interests align with your solution. It gives you perspective on a prospect’s pain points — ensuring that you’re getting in touch with contacts who will be receptive to your value proposition.
It’s extremely effective, too. Research from RAIN Group found that more than 7 out of 10 buyers want to hear from salespeople early on in the buying process. In fact, 82% of buyers accept meetings when a salesperson reaches out first.
Sales prospecting stat about buyers
Top-performing salespeople generate nearly 3X more sales meetings via prospecting than those who don’t prospect at all.
Sales prospecting stat about sales meetings
When you prospect successfully, you can schedule meetings with better-fit leads — ones with a legitimate need for or interest in your offering. Good-fit customers generally provide more long-term business.
They become particularly valuable customers, and they’re much less likely to churn shortly after closing a deal than their worse-fit counterparts. But how can you identify good-fit customers? Well, that typically starts by asking the right for more insight on that process, check out this article.
Prospects are often conflated with another type of contact: leads. As a salesperson, you need to be able to distinguish between the two. You and your team will be connecting with both when prospecting — and each one requires a different approach.
Though they might seem similar — for one, they both exist around the top of the sales funnel — but there are some important distinctions between the two. Let’s take a look at how they differ.
Lead vs. Prospect
Leads are potential customers who’ve expressed interest in your company through behaviors like visiting a website, subscribing to a blog, or signing up for a free trial.
Prospects are leads who have been researched further and qualified — meaning they have the qualities, potential needs, and interests that align with the solution you offer.
For instance, let’s say your business sells project management software for growing construction firms. If the owner of a mom-and-pop construction operation that recently scored a big contract with a fast food chain subscribes to your blog, you’d probably treat them as a prospect — not just a lead.
Depending on their qualifications and fit, a prospect (not a lead) can be classified as a potential customer even if they have had limited or no interaction with your company.
But for all of their differences, the endgame when interacting with prospects and leads is the same — to nurture them until they buy your product or service. That process begins the moment you start prospecting and doesn’t end until you close.