While you might be able to rely a great deal on your current customers to maintain your profits for now, if you neglect your prospecting duties, it won't be long before you are struggling to keep your business afloat.
Customers fly the proverbial coop for all kinds of reasons. Sometimes, it's your fault. You offer poor customer service; they find better deals elsewhere, or your products are faulty. However, oftentimes, customer attrition is a natural process and is out of your control. The customer’s circumstances, needs or finances change, and so they walk away. Regardless of the reasons, you will lose customers year-in and year-out. Because of this natural ebb and flow, it’s important that you devote a great deal of your time to searching for new potential customers, or in other words, prospecting.
So how do you go about surfacing new buyers?
- Do the math. Take a look at how many customers you lose (on average) on a weekly, monthly or annual basis. How many new prospects must you convert to buyers to replace customers who defect? How many new deals do you need to close to exceed your profits from last year? When you have a concrete number—accepting that you may need to adjust it—you'll know how many potential prospects to keep in the pipeline. From there, you can set goals for cultivating that pipeline. For example, you might need to call five new prospects per day in order to convert one to a customer.
- Make prospecting part of your schedule. You have to do it, and it can be one of those tasks that slip through the cracks if you don't add it to your daily to-do list. Aim to spend two hours a day prospecting, including pulling names, qualifying prospects and making cold calls. That kind of effort will keep your pipeline full of potential customers.
- Create a bank of prospects. Too many companies decide to beat their current marketing lists to death via email promotions and phone solicitations. Before that stops working for you—and it will—start prospecting a fresh source of new names you can contact. Ask for referrals from current customers and people in your network. Offer a free email newsletter, complimentary downloads or product giveaways for which people must register. Hold contests or product giveaways through your social media sites, requiring that people enter on your website. Ask for contact information from people you meet at trade shows and industry events. Or even consider purchasing or renting customer lead lists, although be careful when doing so, as these lists can often be more trouble than they are worth.
- Establish benchmarks for qualifying customers. Not every customer will need or want your services. Other customers might want them but aren't able to afford them. Spend some time figuring out what criteria your prospects need to meet in order for you to continue pursuing them. Examples: pain points, budget, size and technical capabilities.
- Write a qualifying script. During initial conversations with customers, you have a few seconds to introduce yourself and to quickly surmise whether your products are a good fit for them. A well-written script will ensure that you cover your bases without turning off customers. In addition to writing a couple of lines that introduce yourself and your company, draft several open-ended questions that you will ask to learn if a prospect has a need for your offerings, holds purchasing power within his or her organization and possesses the budget to cover the cost. If your business is run completely online, this initial interaction may occur on a landing page of your website; to improve the effectiveness of your landing page, check out a service like Unbounce or Optimizely.
- Get the timing right. If you receive a referral, or if customers register for one of your freebies, contact them within 48 hours. You want to reach out to them while the referral is still fresh in the prospect’s mind or very shortly after they have commented on some of your content.
- Hold an initial qualifying call (for client businesses only). Using your script, call to qualify customers. If customers aren't a good a fit for your products or services, thank them for their time, and ask them to contact you directly if their needs or circumstances change. While you can't waste your time pursuing leads that won't result in revenue, it is important to end those discussions on a high note rather than rush customers off the phone. They could become clients later.
- Move on to the sales process. If you do qualify a prospect, begin the sales cycle, which starts with you building a relationship with the customer. Discover their needs, and find solutions for them.
Also, remember that the internet makes it very easy for customers to do their own research, so a sales pitch doesn't have the same power it might have had 10 years ago. People glean information from everything, from your organization's reputation with the Better Business Bureau, to reviews about you on "Yelp" and other social media sites. These days, you have to focus more on building a relationship with a customer than on the pitch alone.