People would rather do business with those they know and trust.
Prospecting is a lost art. It has to be taught, nurtured and perfected. Yet in most businesses today, it’s rare that anyone teaches salespeople how to prospect.
Some exceptions are brokerage, insurance and recruitment firms. These businesses teach their people how to call, network and prospect around the clock.
They never leave you alone and often seem like pests. That’s one form of prospecting, although perhaps not the most effective.
Even with all the activity from the Internet, phone calls, email and other activities that build traffic, salespeople remain in the business of building relationships. People would rather do business with those they know and trust.
At any given time, virtually everyone is selling and prospecting for something. And, just like the squeaky wheel that gets the grease, salespeople who consistently talk about their job reap the benefits.
Statistics show that customers, who come into a dealership through a referral cultivated by a salesperson, purchase a vehicle 60% of the time. Relationship building increases the quality of the customer and the potential to close.
That’s the true value of prospecting. On the other hand, if a customer comes through the door because of an ad or their own research, that percentage drops to 12% to 15%. Why wouldn’t salespeople prospect for relationships? Which situation would you rather be in?
The math is simple and powerful. If a salesperson gave out three business cards every business day, at the end of a month this individual would have passed out about 78 cards, after meeting and talking to 78 new opportunities, referral sources and leads. Multiply that by a full year and the salesperson will have reached 936 people.
Where do salespeople find these “three people?” Salespeople interact with slews of people every day. They can find them everywhere! They are at the doctor, pharmacy, grocery, school meetings, clubs, athletic facilities, church and so on. They are family members and guests who come to holiday gatherings.
The New York Times reported the average American knows about 600 people. So, a salesperson attending a Thanksgiving celebration with 20 other guests has the potential to indirectly reach 12,000 people.
If even a quarter of those are legitimate leads, then each salesperson already knows 3,000 opportunities. These people only become opportunities, however if the salespeople network by telling them what they do and providing their contact information.
Even if that number is reduced by two-thirds for various reasons, there are still 4,000 potential contacts from a single evening. Everyone knows someone somewhere, somehow.
Relationship building never stops. It has to happen every day. The more people a salesperson gets in front of each day, the higher the percentage of sales. It’s about building relationships and expanding reach and awareness. Done repeatedly, it will pay off.
Unfortunately, when sales are good most salespeople and managers get comfortable and only focus on the business in front of them. They don’t think about the future until it’s too late. They start to prospect when they urgently need new opportunities.
While it is human nature to focus on the business at hand, especially during peak sales periods, there is never a day when salespeople are too busy to prospect. When prospecting becomes part of the everyday process, every customer, every contact and every sale – even if the prospect didn’t buy – has the potential to provide new leads or referrals.
An average salesperson in a dealership talks face-to-face with two customers each day while at work – that’s about 600 people each year. Every day the salesperson has the opportunity to ask these two people for a referral to friends, colleagues, relatives.
If those people provide the salesperson with even one referral, it’s an increase of 300 new opportunities each year. If half of these people make an appointment and come to the showroom, and 60% of those purchase a vehicle, the salesperson gains 90 additional sales.
Prospecting for relationships is a fine art that must be practiced every day. Done properly, it delivers higher sales, increased productivity, greater profits, and an exceptional customer service experience. Relationships built on trust and confidence makes buying from you easier for every prospect you cultivate.
Richard F. Libin is the author of the book, “Who Stopped the Sale?” (www.whostoppedthesale.com) and president of Automotive Profit Builders, a firm with 46 years of experience working with both sales and service on customer satisfaction and maximizing gross profits through personnel development and technology. He is at firstname.lastname@example.org or 508-626-9200 or www.apb.cc.