Why B2B Sales Prospecting is Vital to Your Business
You only have to watch an episode of Dragons Den to see a business person pitching the Dragons with their new shiny business idea, only to have it pulled apart to realise a very simple fact.
A business isn’t a business until it has customers!
It never ceases to amaze me how people ask for these high levels of investment for a tiny percentage of their business, hence creating a potentially huge valuation of their business when in reality, they’ve “bet the ranch” to design and build their prototypes….
Yet barely made anything in revenue!
Ok, perhaps their Mum and their mates have told them it’s a sure fire winner and reassured them of the famous Del Boy saying…
“This time next year we’ll be millionaires!”
It’s pie in the sky!
Is it just me, but after I don’t know how many series, but it’s a lot, people still attempt to gain investment on Dragons Den yet still don’t know any of their numbers and can’t differentiate between sales, gross profit and net profit!!
Right I need to be careful here as my kids will start telling me I’m a grumpy old man and should stop going off on a rant!!
But seriously, until a business has made regular sales, at a profit I hasten to add… then up to that point it’s really just a hobby and a series of ideas!!
If you are reading this and you are from a more established, successful business, with a proven track record I am sure you will concur with these thoughts and sometimes people starting out in business should perhaps go back to basics first and define whether or not they have products or services that anyone wants before they go on TV and ask for money that makes their “non-business” worth a theoretical £gazillion!!!!
How To Grow an Established Business
If you are in that position, like many of our clients, where you sell Business to Business, you have a proven track record and use a consultative sales process to sell high value products and services then the challenge is how you take your business to the next level.
The first mistake many company directors make is to make the decision to hire more sales people.
Firstly, please remember that sales people don’t (annoyingly!) always equate to more sales!
The primary thing you are doing immediately is increasing your overhead significantly.
According to REED, the average UK sales person salary is £36,833
If you build in the true overheads and cost of employment, you are talking about at least £80,000 – £100,000 per annum, per employee.
Of course some newly hired sales people can bring some clients with them and may hit the ground running but in my experience both in my own business as well as working with many entrepreneurs, the reality of the transition from previous employer to your business means inevitably, all good plans don’t always come to fruition!
The sales persons promise of brand new clients for your business do not always happen, once the previous employer decides to up their game and fight with any tactics necessary to retain the business… or of course to at least stop you from getting it even at the risk of both parties losing out when the clients decide to not want to be central to a distasteful bun fight with legal threats and such like kicking off!
Contracts, non-compete clauses, price wars… you name it, I’ve seen it all going on and nobody really wins.
Now your sales person has to go out and find new business.
This may not be their core skillset as B2B sales prospecting is a whole different ballgame to closing business and looking after existing accounts and all the comforts that brings to a sales person’s life!
You start putting the pressure on your sales team to start cold calling and networking and some of them look at you (often behind your back!) like you’ve asked them to commit some heinous crime!
Often, quality sales people hate sales prospecting, are terrible at it… sometimes deliberately, other times sub consciously as it has a perception of what junior sales reps do when they start out
!If you can make them do it, the problem is as soon as they build any sales pipeline they use that as an excuse not to do it!
Now… I am certainly not trying to stain the character of every successful sales person out there!
It is definitely not rare to have great people who are more than capable of creating real opportunities and initiating every aspect of the sales process.
My question to you is, if these people are costing you a minimum of 80,000 smackers do you want them hitting the phones and being told to go forth and multiply for about 92% of their working day?!
What is the Best Use of Your Sales Team?
A phrase I use a lot of the time when describing the function of your sales team is…
…Round Pegs, Square Holes.
Do you really want your highest paid resource doing what is for the vast majority of the time, a waste of their skillset?
Or would it be better to have those people focussed on what they are best at… closing new deals and ensuring those clients are looked after and you maximise the sales potential in all those key accounts?
If you build a strong sales pipeline for those people…basically teeing up opportunities with Ideal Prospects, letting them loose on converting those opportunities into Ideal Clients.. then your potential for growth is significantly higher?
Here’s Where People Go Wrong…
The first mistake here is not understanding the concept.
Sales prospecting should be a specific function in the front end of your sales process. The mistake we see many people make is to hire “cheap labour” to do what is in theory THE most important aspect of the sales process.
If you hire some interns, buy a list of “suspects”, write a script and set them to work….
Well unless you have a unique proposition and an incredibly hungry market place, then to be honest in my experience working with people who have tried this, then it’s going to be like pushing water uphill!!
The initial excitement of putting that team in place can quickly dissipate when the realisation that this is harder than it looks kicks in!!
Systems, Systems, Systems!
If you have systems and processes in other areas of your business then why not apply the same approach to your B2B Sales Prospecting?
I would bet that some of your systems you have developed yourself over a period of time, trial and error to get to a stage where you are happy they are effective.
Other systems may have been implemented with specialist help such as from your accountant or specialist accounting systems consultants.
Then why do so many make fundamental mistakes when the most important function of find new Ideal Clients comes to mind?
If business is going pretty well, be careful to not let complacency set in.
Think of this when deciding whether Sales Prospecting should be top of your agenda at every end of month meeting.
You may have some great clients now, but unless you have the systems and processes to replace them if you lose them, trouble could be just around the corner!
Here are some scary stats about your client base:-
- · 1% may die (oh.. a bit dramatic!!)
- · 3% move on (i.e. leave the job)
- · 5% develop new relationships
- · 9% are drawn to your competitors
- · 14% are unhappy (but don’t tell you!)
- · 68% are indifferent (so are prone to the above!)
As a business owner or also, someone of responsibility, being in control is a reassuring as well as to be honest, a simple and reassuring position to be in.
Effective B2B Sales Prospecting Puts You in Control!
If you focus on developing either a dedicated sales prospecting team… OR outsource to a specialist B2B Sales Prospecting Agency you will be able to scale up your sales pipeline according to the demands of your new business goals.
But… Ensure you use PROVEN methodologies to acquire a strong sales pipeline in the most effective way possible.
I am sure you wouldn’t hire a newbie bookkeeper to start doing your accounts without adhering to some strict guidelines on how you operate and ensuring a systemised approach is used, because you KNOW that is what works!
Why would you hire a team of sales prospectors on the same basis?
Old School Cold Calling Does NOT Work!
Ok let’s be slightly less confrontational here.
Cold calling can possibly work but is it the most effective methodology?
When is the last time you took a cold call?
I personally never take them.
Literally never. I can’t remember the last time I did.
I am not saying nobody ever takes a cold call but the chances of getting through to your Ideal Prospects via a cold call is getting harder and harder.
Gatekeepers are there to stop it from happening.
Remote working and the use of mobile phones for business instead of landlines mean people can just divert to voicemail and cherry pick the calls they want to return.
More often than not… this is not designed to help them make more calls to sales people who are trying to sell them stuff!!!
The Reality is Just 2% of Cold Calls are Effective.
If in other areas of your business, 98% of the activity was worthless you would eradicate it in a second right?!
So using a proven process to get results makes sense right?
Ok, it can be relatively inexpensive to hire a traditional Telemarketing Agency to hit the ground running to just start making calls.
But really… isn’t this just taking some action (ok that is at least something) but if it’s ineffective it’s just throwing good money after bad?!
My recommendation has two options.
Either hire people internally who have skills and methodology with a proven sales prospecting process (NOT just cold calling!).
Or… Hire a B2B Sales Development Agency to use a methodology that gets results.
I can’t avoid the mini pitch here… sorry 😉
At Marketing Republic, we use a process called the OUTREACH Formula… we developed this from using a process called Cold Calling 2.0 developed by Aaron Ross at Salesforce where he helped created $100million of recurring revenue.
He co-wrote a book called Predictsble Revenue with Marylou Tyler… Here is my interview I did with Marylou for her podcast
I adopted the approach Aaron took and have since built a team providing outsource B2B Business Development with an international client base and running campaigns in 23 countries.
We have created £multi-millions of sales pipeline for our clients.
Our process works!
If you want to know more about the process and how we work with clients who sell B2B, with high value propositions (£4 figures upwards), then here is some more information about our process and you can apply for a Free Strategy Call to speak with my team to see how this can work for your business!