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Does your business have a prospecting plan?

Inside Business

Posted: June 11, 2008 3:16 p.m.
Updated: August 12, 2008 5:02 a.m.
 
I read with interest an article on the front page of The Signal on Monday. Several local business owners were interviewed and quoted about declining sales revenue, a reduction in customer buying and the impact of increasing costs on their businesses.

My question to anyone facing slowing or declining sales is to ask, "What is your prospecting plan to turn things around for your business?"

Far too many owners take the reactive position of sitting and waiting for clients to come to them. The retail industry is among the worst offenders, filling a store with merchandise and then expecting people to find the place, come in and spend money just because the store is there. When sales do not materialize as hoped, blame the high cost of gas, increasing property taxes, rising insurance premiums and customers cutting back on purchases. Deflecting the blame is easier than looking in the mirror.

By doing more of the same, the business will get more of the same. The alternative is to treat a slowing economy as an opportunity. This is a time to revise strategies that are not working and to do things differently. It's a chance to take a new look at how to get more clients.

What does it take for this to happen? Two things: First, a change in mindset from being a victim of the economy and second, being proactive and taking and accepting personal responsibility for what needs to be done in the business to make things better.

The fastest and easiest way to increase sales is to ramp up marketing and sales efforts to the existing base of clients. A strong relationship should exist with these clients, and they should be open to doing more business. If a strong relationship does not exist, the question to be asked is "why not?" The cost of gaining a new client is at least seven times more expensive than keeping an existing one, so do what it takes to keep clients.

If your business does not have a loyalty program, now is the time to consider starting one. There are many examples of loyalty programs to use as a model for creating one. All of them have a single goal in mind: to retain loyal clients.

That same base of clients can yield another critical piece of information essential for growing revenue. What is needed is an understanding of how current clients were acquired. Put another way, what marketing methods turned those prospects into loyal clients?

Ideally, any business trying to grow should develop a prospecting plan. Every business should have at least three, and not more than five, different prospecting activities to gain new clients. This will increase the possibility that the activities will work but each activity will have to be tracked for effectiveness.

Start with the list of current clients and analyze how they became clients. Chances are there are at least two and as many as five marketing methods to be yielded from that assessment. If more are needed, look first to the competition to find out what is working for them. Second, look to other industries for ideas and concepts.

Larger businesses usually have more money and tend to spend it on mass advertising. Smaller businesses have the ability to be more nimble and can experiment with different methods of marketing to determine what works. Doing an e-mail blast to those that have opted in to receive messages of interest could strengthen a relationship with a local business where trust and friendship already exists. Getting that same e-mail from a large business might be considered as spamming.

In order to be successful at prospecting, four things need to take place. While it would be nice to delegate these, the truth is that the top executive is probably best suited to handle them. The side benefit to this is that it forces the top executive to work on the business and not in the business.

The first is that time needs to be set aside for prospecting. It cannot be an afterthought; it cannot be the last thing on the daily list of things to do. It needs to be done when the top executive is fresh of mind. If the business needs more business, the time has to be scheduled, honored and kept. The more time is scheduled, the better.

The second is that distractions cannot be allowed. This means not playing around on the computer, turning off the cell phone, not being interrupted. The person doing the prospecting has to be focused on that single activity during the committed time.

The third is to develop a prospecting calendar. Each activity should be listed on a master calendar. Each day should have specific activities listed and budgets assigned. Not every activity needs to have a dollar cost; picking up the phone and calling a client costs little. Sending an e-mail blast to those who have given permission to learn about something new being offered costs nothing.

The fourth is to stick with it. Prospecting takes time. According to research conducted on prospecting, 89.8 percent of all sales efforts are ended at the fourth contact with a prospect.

Prospecting is a marathon, not a sprint. Either you are in business for the long haul or you are not. Either you want your business to be a success or you don't. If you do want to be a success and you want to be in business for more than a short while, make the commitment to prospecting.

Kenneth W. Keller is president of Renaissance Executive Forums, bringing business owners together in facilitated peer advisory boards. His column represents his own views and not necessarily those of The Signal.

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