What is Lead Prospecting
In B2B marketing, the classic sales funnel starts with identifying people that might some day be customers for your business. These Leads are then reviewed and, if they fit a target buyer Persona, become Prospects. Prospects then convert to Customers when they make a purchase.
Lead Prospecting is where every sale starts by finding people that might one day become customers.
Why You Use it
If you are growing your business, the larger the number of Leads you can collect, the more sales you should make long term. Provided of course that the leads are a fit for your business.
Lead Prospecting Vs Sales prospecting
Some people make a distinction between lead prospecting and sales prospecting. I think this is a needless splitting of hairs. Lead Prospecting and Sales Prospecting are the same thing. Lead Prospecting is probably a better name for it though, because it focused you on thinking about the process of finding people that will eventually become customers.
What is the difference between a Lead and a Prospect
In the five B2B Sales Stages the difference between a Lead and a Prospect is quite clear. A lead is someone who has a potential need that your company can fulfil. A Prospect is a Lead who also acknowledges that have the need and have an immediate desire to resolve that need.
The 7 Lead Prospecting Approaches
There are many approaches, which you decide on depends on how many leads you want to capture, in what time-frame and the budget you have available.
The 7 most common lead prospecting approaches are:
Outbound or Searching
This is the most similar to the image of a gold prospector. Panning for the lead prospects that fit your target customer in the gravel of the entire market.
Common approaches include:
1. Cold calling
One of the oldest and most feared (by leads and sales people) of the prospecting approaches.
At its most basic it is simply dialling numbers from a phone book (yellow pages or white pages) of potential prospects. The rejection rate is high and it’s quite inefficient but it does generate leads.
In a business to business context you can fine tune the basic cold call approach using an information source such as LinkedIn to identify higher probability leads. Using a person’s profile information allows you to focus more on those more directly in your target market and increase your hit rate.
Networking can also be effective, especially if the group(s) you join are focused the lead prospecting directly.
Take care, though, that you join a group that deals in the type of leads that your business desires. Some group focus mostly on small business or consumer leads while others focus on corporates.
If you join the wrong group you’ll spend a lot of time spinning your wheels.
4. Referral Generation
Referrals occur when an existing customer introduces you to a lead that might be a good customer. Often, these days, the referral will be via email with a so called, cross introduction.
Referrals can be powerful because implicit in the referral is a recommendation and transfer of trust from the person providing the referral.
Advertising works to drive lead prospecting, but it does have it’s drawbacks. John Wanamaker (1838-1922), the pioneer of modern department stores is once reported to have said:
Half the money I spend on advertising is wasted; the trouble is I don’t know which half
This is mostly still true in many forms of advertising: TV, outdoor billboards, etc. However, on-line marketing, where there is substantial growth (20% just last year) is able to be targeted and measured much more accurately.
The ability to measure online advertising so accurately is one of the reasons for its outstanding growth rate.
The key downside of advertising is that once you stop investing in placing advertisements, you stop collecting leads.
6. Trade shows
Exhibiting your wares at a trade show can still be a very effective form of lead prospecting for certain industries.
Success is however, heavily dependent on running the process effectively.
I can personally attest to large volumes of wasted time and money when a good process to pre and post connect with attendees is not followed. The actual trade show is the simplest part of the whole process.
7. Inbound Marketing (Inbound Prospecting or Inbound Marketing)
If Outbound Lead Prospecting is like gold prospecting, Inbound Lead Prospecting is like fishing.
You create information (content) that your ideal lead will find enticing. Then, in exchange for their contact details, you provide them valuable information.
The information is most often distributed electronically via a company, or other, website.
I don’t want to over-emphasise the fishing/bait/hooked analogy here because it can have negative connotations.
The truth of great Inbound Marketing is that everyone benefits and no-one is hooked and landed. The content and offer that you provide must be valuable, in and of themselves, to the person downloading them.
The value swap is explicit: their contact details and permission to contact them in the future for content that is value to them in their life or business.
In general, Inbound Marketing takes longer to build, but once built can continue generating lead for ever with little intervention.
As an approach Inbound Marketing has some outstanding benefits:
- Leads self select so you tend capture leads when they are in the market to make a purchase, meaning that they are generally shorter sales cycle times.
- It has almost infinite leverage, for example, cold calling requires one person to make one call. Any tweak you make, e.g. auto diallers, is only an efficiency improvement — at the end of the day you still need one person to make one call. Inbound marketing on the other hand can be scaled almost infinitely because it does not require human intervention on the lead prospecting side.
- Automation can be used to nurture leads that are captured until they show signs of purchase intent and only then handed to a sales person for action.
Three Best Practices
Whichever approach you use these best practices will be critical to your success.
1. Target the Right Leads: The Role of Personas
The role of Buyer Personas in the process is vital. Not matter which of the approaches you take, you need to target the right persona for your business or you will waste valuable sales time and effort.
A persona is
A semi-fictional representation of your ideal customer based on market research and real data about your existing customers.
Let me provide a simple example of why personas are so important: if you’re a plumber and you try cold calling as your lead prospecting approach, you will be much more successful using the white pages from your own town than from a town 500km away.
Getting leads in a town 500km away is worthless because they will never turn into customers. So one element of the Plumbers Buyer Persona would be location: lives within 20km of our office.
This is a simple example but it scales to every business.
Before you start prospecting, or more likely, before you invest more time and effort into it you should create accurate buyer personas. This process will ensure that you are much more effective in your endeavours.
2. Help Your Lead Prospects Through the Buyer’s Journey
While some may be ready to purchase immediately, many of the leads you capture in prospecting will at different stages of the buyer’s journey.
You need to assist those buyers not ready to purchase through the Buyers Journey.
The three steps of the buyer’s journey are as follows:
Awareness (Problem Identification)
This is where the buyer identifies that they have a problem that needs solving.
Let’s say you’re planning a trip to Sydney, Australia. You’ve already booked a hotel in the main downtown district and you’re wondering how you will get from the airport to the hotel.
The problem identification stage of the journey would be: how far is it from the airport to the hotel. Can I just walk or do I need to find transport.
A quick Google Maps search tells you it’s about 15km from the airport to the hotel. So, walking is probably not going to be appropriate.
Consideration (Search for Solutions)
The next step in the buyer journey, is searching for a solution to the problem that has been identified.
So in our example we’re going to be searching for alternative transport solutions. You might:
- call the hotel for a recommendation
- search to see if Uber operates in Sydney (it does),
- See if taxi’s operate in Sydney (they do)
- Check for a train line and whether stations are close to the airport and hotel (there is).
Decision (search for Purchase)
Lastly, your buyer needs to make a decision on what they will actually purchase.
After, looking at all the options you decide that a train is a great way to get to your hotel (and it really is) so you’ll search for the price of tickets and how to purchase them.
As your lead prospect journeys through these stages of their journey, if you want the final sale, you need to be there to help and guide them.
The more you can guide them through these stages, the more they will trust you and the more likely you will be to make the final sale.
PRO TIP: you might have noticed the questions buyers ask change as they move through each stage of the journey. Knowing the first questions they ask might indicate what they are eventually going to buy. Also, listening to the questions might help you identify where they are in the process.
- Awareness: “How far is the airport from the hotel?”
- Consideration: “What transport options can take me over that distance?”
- Decision: “Where do I buy a train ticket?”
3. Automate Where You Can
As we’ve seen, while some may be ready to purchase immediately, many of the leads you capture in your prospecting will need support to move through to the final Decision state.
Automating as much of the follow-up in the early stages of the buyer’s journey allows your sales staff to focus on the prospects ready to purchase, while also keeping in touch with prospects earlier in the lead process.
Many CRM and marketing platforms are available to assist in this process.