If you've ever wondered why your agency spends so much time and money to land so few accounts, this has been written just for you.
We have all heard the term, qualified prospects in reference to potential customers, but what does ‘qualified' really mean? A qualified prospect (my term of choice for ‘prospect'. He's buying from you – the only variable is time) is one that fits the parameters of your target market and whose place in the buying cycle has been ascertained. In other words, you have determined how close he is to buying. Coveted late-stage buyers absorb a lot of your agency's business development resources in the form of meetings, proposals, and other work required to get the deal done and land the account, but without proper qualification of the prospect most people as optimists tend to assume he is closer to buying than he really is. This leads to far too many resources being applied too early in the buying cycle.
Reduce your business development workload by using the following four questions to qualify your prospects and determine how close they are to buying:
1. NEED EQUALS SUPPLY
Does this company have a current or imminent need with which we can help?
If the answer here is no, then congratulations, you have qualified your prospect. He is a long way from buying. No is an answer you can do something with. A no is better than no answer at all. You have identified that he is early in the buying cycle. He's still buying; he's just off in the distance. You won't ignore him, but you certainly won't treat him the way you would someone who is ready to buy now.
If the answer is yes, even better; move on to decision makers.
2. DECISION MAKERS
What is the decision making process for hiring an agency? Who are the decision makers, and is the person I am dealing with one of them?
The common mistake of applying more business development resources than necessary often begins with selling into an organization at too low a level or at the wrong entry point into the organization, or the neglecting of other decision makers to court just one. If you don't know how decisions are made or who makes them then your likelihood of closing the account before it gets to a competitive pitch is slim.
I once had a prospect that I courted for almost three years. He repeatedly expressed interest in our agency and I repeatedly bought him lunch for his expression of interest. After he left the prospect company I found out that the decision-making responsibility for the assignment I was pursuing did not even rest in his department, let alone with him! But I repeatedly rewarded him for not setting me straight. His disclosure would have put an end to the free lunches. Poor qualification on decision makers, and using reward too early in the buying cycle were the mistakes that cost me in this case.
Find out who the decision makers are and how the decision-making process works.
When do they need to have a solution in place?
A prospect that admits that he has a marketing challenge that your agency might be qualified to assist with but who lacks intent to act to address his challenge is one who is still a long way from buying. Do not mistake information gathering for intent to act. Tire kickers are plentiful, and more often than not, interest does not immediately graduate to intent. Prospects can be stuck in information gathering mode forever without ever forming an intent to solve their problem. Recognizing a problem exists and deciding to take action to address the problem are two completely different places in the buying cycle separated by an important indicator: intent to act. This intent is what separates early stage buyers from late stage buyers. Assuming or misdiagnosing this intent is one of the costliest and most common business development mistakes.
Once your prospect has truly formed the intent to act, he will act quickly. The question of timeframe is an important one because those with a legitimate intent to act usually have a timeline to do so within six months. Behavioral psychologists know that intent to act outside of six months is no real intent at all. Without a timeline within this six-month window, there is usually no intent to buy. Hint: look for the triggering event to back up the timeline: a tradeshow, product launch, annual general meeting, or close of a budget year.
Are funds currently allocated?
The first question here is not, How much, but, Has money been set aside? A prospect with intent to act and resources allocated to the project is a prospect who is ready to buy. These are the prospects who merit proposals. If your prospect has intent but has not allocated funds, then your objective is to help him set a budget before you present your proposal. Give him a budget range and get approval on that range. Then deliver a proposal for a solution within that range.
The price contained in your proposal should never be an obstacle to getting the account. Remove this obstacle prior to presenting the proposal by ensuring that funds are allocated and the price for at least one option within your proposed solution is within the range agreed upon. Proposals are presented to decision makers who are ready to buy. Period. Do not present a proposal just because your prospect requested one. It is common for early-stage prospects with interest but no intent to ask for proposals. These are the proposals that never get acted upon. These are the opportunities that appear to slowly slip away, but the opportunity was never really there to begin with. No timeline, and no budget assigned, equals no proposal.
Following these guidelines to qualifying your prospects and submitting proposals should help you to close more accounts with less work.