Generating Sales Leads
Selling begins by locating potential customers. A potential customer or “prospect” is first identified as a sales lead, which simply means the salesperson has obtained information to suggest that someone exhibits key characteristics that lend them to being a prospect. For certain sales positions, locating leads may not be a major task undertaken by the sales force as these activities are handled by others in company. For instance, salespeople may receive a list of sales leads based on inquiries through a company’s website.
However, for a large percentage of salespeople lead generation consumes a significant portion of their everyday work. For salespeople actively involved in generating leads, they are continually on the lookout for potential new business. In fact, for salespeople whose chief role is that of order getter, there is virtually no chance of being successful unless they can consistently generate sales leads.
Sales Leads can come from many sources including:
- Prospect Initiated – Includes leads obtained when prospects initiate contact such as when they fill out a website form, enter a trade show booth or respond to an advertisement.
- Profile Fitting – Uses market research tools, such as company profiles, to locate leads based on customers that fit a particular profile likely to be a match for a company’s products. The profile is often based on the profile of previous customers.
- Market Monitoring – Through this approach leads are obtained by monitoring media outlets, such as news articles, Internet forums and corporate press releases.
- Canvassing – Here leads are gathered by cold-calling (i.e., contacting someone without pre-notification) including in-person, by telephone or by email.
- Data Mining – This technique uses sophisticated software to evaluate information (e.g., in a corporate database) previously gathered by a company in hopes of locating prospects.
- Personal and Professional Contacts – A common method for locating sales leads uses referrals. Such referrals may come at no cost to the salesperson or, to encourage referrals, salespeople may offer payment for referrals. Non-paying methods including asking acquaintances (e.g., friends, business associates) and networking (e.g., joining local or professional groups and associations). Paid methods may include payment to others who direct leads that eventually turn into customers including using Internet affiliate programs (i.e., paid for website referrals).
- Promotions – The method uses free gifts to encourage prospect to provide contact information or attend a sales meeting. For example, offering free software for signing up for a demonstration of another product.
Not all sales leads hold the potential for becoming sales prospects. There are many reasons for this including:
- Cannot be Contacted – Some prospects may fit the criteria for being a prospect but gaining time to meet with them may be very difficult (e.g., high-level executives).
- Need Already Satisfied – Prospects may have already purchased a similar product offered by a competitor and, thus, may not have the need for additional products.
- Lack Financial Capacity – Just because someone has a need for a product does not mean they can afford it. Lack of financial capacity is a major reason why sales leads do not become prospects.
- May Not Be Key Decision Maker – Prospects may lack the authority to approve the purchase.
- May Not Meet Requirements to Purchase – Prospects may not meet the requirements for purchasing the product (e.g., lack other products needed for seller’s product to work properly).