As small business owners the one thing we all have in common is that we have limited time and limited resources. While we must all constantly be on the hunt for new customers, it is critically important to recognize who is worth chasing. Since your time is the most valuable thing you can give anyone, it is imperative to qualify your customers.
You should only meet with a prospect in person for three reasons; to get information, strengthen the relationship or close business. Every business owner is a salesperson and the best salespeople only spend time with companies that are ready to buy or are experiencing a pain point and are looking for brainstorming to solve their biggest problem. Now the latter is a potential slippery slope, sometimes prospects will just use you for information without any intention of doing business. Here’s how you keep that from happening. Give clients just enough information to demonstrate that you know how to solve their business challenge. Don’t give away all your knowledge, because you’ll never persuade them to do business with your company. But you could also look at it this way – just because you give them all the ingredients doesn’t make them a chef.
One of my small business clients called me recently asking what to do about a prospect that keeps breaking appointment without notice. Now hear this: If a prospective client can’t keep appointments, it means they are really unorganized or that they do not value your time and are probably going to be a nightmare to deal with if you do land a contract. Walk away after two failed appointments. Be careful not to show any annoyance or hostility to the prospect when you move on, they could come back when they get their act and budget together. If they keep trying to reschedule with you, simply say you are unavailable due to a huge new project, or give them a bid that you know far exceeds their budget.
In order to qualify a business opportunity, you must have your ACT together! ACT is an acronym for the three key steps in the sales process of any small business owner. This is how to qualify potential customers.
Ask for their budget. Schedule a conference call to get clarifying information. The phone screen is key to avoiding wasting time. Before you agree to your first appointment find out what the budget is for the project. You will also want to know how fast they expect you to jump in and get started. It’s common to hear one of these three responses: “We need you yesterday!”, “We have no idea, we are just gathering information.” or “Can you send me some information?” Respond with, “I would be happy to send you my marketing materials or a link to our testimonials online. But we really can’t move forward until we have some idea of what kind of budget you are working with. When you have a budget and timeline, we would be happy to meet with you and any other decision makers to discuss some options. We have capacity right now to jump on this project we just need to know from you that you’re ready to do business with us.”
Check Their Credibility. You should always use LinkedIn to check out who you are speaking with at a prospect company. You want to make sure they are not just fishing for information and you need to know what level they are inside their company. Try to get as much information as possible with probing questions such as: “I have several pieces of information I could send to you about my company. Can you please tell me a bit more about your existing vendor or your business challenge? If they say, “Just send me what you have,” you are probably not dealing with a decision maker. If they tell you about their business and the problem you will be solving, you probably have a strong advocate in this person and should move forward aggressively.
Test Their Process. In the final step you are going to test your new contact by asking about the purchasing process. Ask something such as, “Once you have the information, what is your timeline to making a decision on a vendor? How many other companies are you speaking with? What are the next steps?” Their response will give you insight into the seriousness of this business opportunity.
Everyone is under pressure to generate results in the post recession economy. Do not believe that all of your prospects are well intentioned. It’s a big mean world out there, and people will pick your brain for free ideas, pricing, or just because they have no idea about what they should be doing. Don’t get used! Use ACT to qualify your potential customers and your sales will significantly increase!
Have you had any good or bad experiences with prospective clients?
Melinda F. Emerson, known to many as SmallBizLady is America’s #1 small business expert. As CEO of Quintessence Multimedia, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing to fulfill her mission to end small business failure. She writes a weekly column on social media for The New York Times. Forbes Magazine named her #1 woman for entrepreneurs to follow on Twitter. She hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for emerging entrepreneurs. She also publishes a resource blog http://www.succeedasyourownboss.com Melinda is also the bestselling author of Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works.
Small Biz Lady, this is super timely as I am trying to fire myself with a client. I wish I had this earlier this year…sigh…
Hey Melinda,
That’s a pretty handy little acronym.
I use this all the time when I’m first engaging with potential coaching clients.
A: My coaching premiums are pretty much set. So instead of asking about budget, I ask about their time commitment… “How much free time do you have during the week? 10 hours? 15? 15 is the bare minimum it takes to launch a part-time acting career that pays.”
And if they can’t make that time commitment, I won’t work with them.
C: Instead of checking for credibility, I check for experience. If a potential client has ZERO experience (e.g: Carrying a spear in your community production of Hamlet), they’re probably not serious about launching a professional acting career.
T: When considering a potential client, I always ask this question: “What are three things you’ve done in the last 2 weeks to further your goals as an actor?”
This allows me to gauge their commitment level. If they’ve been hitting auditions, taking meetings, and networking, I know they’re committed. But if they’re sitting at home polishing their résumé and waiting for mountains to move, I know they’re NOT committed.
Thanks again, Melinda. Great insight!
-Adam
“Just because you give them all the ingredients doesn’t make them a chef.” – love that! Thanks for this post, I’m bookmarking this one.
This post came at just the right time. I feel like I waste so much time with prospective clients that are not very interested. It’t nice to have a process to follow. Thanks!
This is valuable information in qualifying customers and saving time to move on to the next one. Time is money.