Time is money, and you’ll never understand how true this is until you make your living from selling.
Identifying and qualifying your best prospects is one of the most important factors in becoming a successful salesperson.
Because it determines where you spend your precious time.
Every product or service has characteristics that determine who your most qualified prospects will be.
Early in my career I sold newspaper advertising, waaaaay back when most people read a newspaper every day. This was before the internet changed the game.
In addition to being popular, newspapers offered a variety of advertising options affordable for any sized business.
There were inexpensive classified ads, or big display ads running in the news or sports sections. Ads could run in sections targeted to particular areas of the city, and there were printed inserts that could be targeted by zip code.
- Mass audience
- Broad or targeted geographic reach
- Affordable advertising options for every type of business
- Affordable or free production (production means creation) of ads
These characteristics determined it was efficient for me to call on just about any retail business.
If a business wanted the general public to buy their goods or services, then it was justifiable for me to call on them.
I would go to any commercial building or strip mall and call on every business. And it worked great, I won awards and routinely led the sales department in opening new accounts.
In the newspaper business, the pay was OK, but regardless of how many millions of dollars of advertising I sold, my earnings were capped.
This drove me nuts, proper incentives are the heartbeat of any successful selling organization, and if you cap good salespeople they will leave for greener pastures.
I was ready to test my selling skills in a higher stakes game, one that paid me only when I sold, and placed no limits on what I could earn.
This for me was radio advertising. It paid 100% commission.
And even though I had great experience from my newspaper days, I was a rookie in the radio business, and I had to start from scratch. This meant no salary, no existing accounts, and very little guidance.
In order to eat, I had to sell.
My first year was extremely tough, I took a $40,000 pay cut and almost had to declare personal bankruptcy.
But I still loved it, because I was learning about radio and helping business owners with their marketing. And now I was in show business! Well, kind of.
Newspaper Prospects are not Radio Prospects
Newspapers (most of them) are about journalism, ethics and news.
Radio stations (most of them) are about entertainment. The ones I worked for had shock jocks, Rock n’ Roll, and sports.
But enjoying my work and getting paid were two very different things. I quickly discovered it wasn’t efficient for me to call on every business like I did at the newspaper.
My radio stations had their own set of characteristics that determined who was a qualified prospect.
- The 3 stations I represented appealed to men ages 25-54
- To be on the radio, you have to produce a radio commercial, and it’s a barrier because it costs money and takes time
- Listeners are very loyal to their stations, programs and favorite DJ
- Radio can be affordable because it’s a targeted media
I discovered the best way to find qualified prospects was to listen to other radio stations. This may seem obvious, but you would be surprised how many salespeople in this business spin their wheels elsewhere.
Existing radio advertisers are already sold on radio, and they already have commercials produced.
Another qualified target were business owners who were fans of our stations, because they love to hear their own ads and support their favorite programs.
Radio Advertisers are not TV Advertisers
After selling radio for a few years I noticed how much money was being spent on TV advertising. TV stations also paid their salespeople on straight commission, and the earnings potential was much greater.
In Indianapolis where I worked, the 4 major broadcast stations (ABC/CBS/FOX/NBC) took in more advertising revenue than all of the radio stations combined. Fewer salespeople, more money, straight commission, you do the math!
Based on my selling success in newspaper and radio I landed a job with the local CBS station. And I quickly realized my former radio clients were not good prospects for television advertising.
Why? Primarily due to cost.
It costs more time and money to create a television commercial than it does a radio commercial. Also broadcast TV airtime is more expensive for a variety of reasons.
And most business owners, especially those who advertise on the radio, have an underlying assumption that the cost of TV is prohibitive. Blame the Super Bowl and the hype surrounding how much those commercials sell for.
I had to qualify a new set of potential prospects for television advertising.
Local Broadcast Television Characteristics:
- Like big newspapers, broadcast networks like CBS reach a large audience over a wide geographic area
- TV costs more than newspapers because there is the no way to geographically target ads
- The cost of producing a commercial on TV is more expensive than radio because you are dealing with video in addition to audio
- The cost of broadcast TV airtime is generally more expensive than individual radio stations because the audience is larger
Like radio, it was more efficient to target other TV advertisers because they already had commercials produced.
Also, broadcast TV was often purchased on behalf of clients by advertising agencies, so advertising agencies would become targets as well.
I determined I would only call on businesses who could serve a large geographic area like auto dealers, HVAC companies, grocery stores, and department stores.
Also, I determined it would take $10,000 per month minimum to run an effective schedule on our station. Doing the math, that equates to $120k per year. A business would need to gross $5M or more per year to afford an advertising spend of that size.
Why? We knew that most retail businesses spend between 3 – 5% of their gross sales on advertising. In a $5M business, that equates to about $150,000 allocated to advertising.
You might ask, how did you determine sales volume and find these types of businesses?
There are many tools out there to find your prospects and gather intelligence. LinkedIn, Zoom Info, Google, company websites, trade journals, and more. I won’t go into all of them here because it’s already been done.
But there is one source of information I find many salespeople have never heard of, and that’s too bad because it might be a better resource than anything else.
Reference USA is operated by Infogroup, the leading source of business and residential data in the United States.
And Infogroup sells access to their vast database to Libraries, who use it as a tool to recruit members. And if you are a member of a library and have a library card, this amazing resource is available to you for free.
You can find information on:
- 24 million U.S. businesses
- 1.5 million Canadian businesses
- 675,000 doctors and 180,000 dentists
- 50,000 new U.S. businesses (added weekly)
- 89 million residents (U.S. Standard White Pages)
- 12 million households (Canadian White Pages)
- 235 million consumers
- 300,000 U.S. new movers and 100,000 new homeowners (added weekly)
Business Information Includes:
- Company name
- Phone number
- Complete address
- Key executive name
- SIC Codes
- Employee size
- Sales volume
- Business expenditures
- Geo-codes for mapping
- Fax and toll-free numbers
- Website addresses
- Franchise and brand information
- Headline news
- Email addresses
- Business credit rating scores
Residential Information Includes:
- Median household income
- Median home value
- Percentage of owner-occupied housing
No matter what you sell, it’s worth taking the time to identify the characteristics of your product or service that will lead you to complete a profile of your ideal customers.
The profile will usually be a combination of the following:
- Type of industry or business sector using your product or service
- Gross Sales volume
- # of employees
- Who’s making the economic decision to buy your product or service. Is the CEO? Or is it a VP or director? Or do they hire professional buyers like advertising agencies or consultants? It could be multiple people.
Without this you are flying blind, and wasting time, and therefore wasting your own money.