This guest blog post is from an Arketi friend and client, Gary Brooks at Cortera. Cortera has built the first ever B2B purchasing data database that provides companies with critical sales intelligence about what customers and prospects are buying.
One of the greatest challenges faced by B2B sales professionals is prospecting, cold calling, door knocking or determining which companies have a high propensity to buy their products and services. A good friend of mine is a very successful B-to-B sales rep with a track record of closing very large deals, but he despises prospecting and frequently says “I love selling, but I absolutely hate prospecting because it’s so time consuming and inefficient; it’s like looking for a needle in a haystack. What I need is a sales GPS which gives me turn-by-turn directions to only those companies who will buy my products.”
He also references his famous GTR (Grief-to-Revenue) ratio when discussing prospecting. He applies a subjective ratio to every sales opportunity he pursues. If a prospect’s propensity to buy his product is low, he knows the level of grief will be high and the revenue (and his commission) will be low. So his primary objective when prospecting is to find prospects with a high propensity to buy or those with GTR ratios in the 1:10 range.
My friend is not alone. A 2012 report by Aberdeen Group found that on average, salespeople in the companies studied spent the equivalent of 200 hours per year in non-productive time searching for customer data. Most B-to-B salespeople will tell you they’ve wasted countless hours talking and networking with people who have zero potential of ever becoming a customer. Some even know the potential is zero, but continue to play the networking game in hope these people are going to magically give them amazing referrals. This is one of the reasons why we’re seeing a significant decline in the effectiveness of B-to-B sales professionals: Because it’s increasingly difficult for these sales reps to determine which of the 27 million businesses in the U.S. have a propensity to buy their products or services.
The following three tips will help ease B-to-B reps pain and help them find prospects with a high GTR ratio.
- Learn Your Prospect’s Purchase Behavior: Use newly available B2B purchase behavior data-what companies buy and how their spending patterns change over time-to determine if they have a high propensity to buy products like yours. If they do, call them! If they don’t, move on.
- Build Purchase Behavior-Based Buyer Personas: Knowing your prospects’ purchasing behaviors-what they buy-will enable you to build purchase behavior-based profiles and easily find other companies that match the profile. Purchase behavior-based profiles use what companies buy as their foundation while other forms of persona development are based on less effective, demographic information.
- Add “Propensity to Buy” Fields to CRM: Add new purchase behavior-related fields to your CRM system, which enables you to gauge your prospects’ propensities to buy your products. A high, medium and low range would be a great start. You can also add a field for the amount the prospect is spending on your class of product and indicate if the spend is increasing or decreasing. This will enable you to sort you target companies by their propensity to buy.
At the end of the day, prospecting takes time and research. But if you have the right information to provide insight into the prospect’s purchase behavior and propensity to buy, then you just might be surprised at how much more efficient prospecting can actually be.
This post was first published in Target Marketing.