Prospects are Everywhere

Quick Summary: Focus on serving one segment instead of the total imaginable market.

Abstract:

When developing new products, the tendency is to envision serving the total imaginable market, believing that prospects are everywhere.  The reality is that it takes a long time to get everywhere and “universal” approaches aren’t.  Building outward, similar to following the ripples in a pond, (serving local prospects first and then expanding) is a far better approach. When in-person, one on one sales representation is required.

For many companies, as the title of this article says, prospects are everywhere.  This is indeed true for Internet sales to consumers or cloud-based software products for businesses.  Those technologies have had an undeniably large impact.  Virtually every product and service is now available for purchase online. If not already available, they will be shortly or most nonconforming companies will go out of business. Even with the proliferation of online offerings, many products and services still require the on-site presence of sales and/or service personnel.  Efficiently serving those prospects remains a significant challenge; especially for new or small companies that do not already have a local or regional presence.  So, the issue is not that prospects are everywhere; instead, the issue is, can you be everywhere in order to serve those prospects?

The answer to the “can you be everywhere” question is straightforward; all that it takes is enough time, resources, and money.  Of course, enough time, resources, and money are always the issue!  Unless you are offering a standard, “me too” product that potential prospects clearly understand and you are able to offer with some obvious and overwhelmingly attractive attributes, you will have to develop some level of awareness and presence with your prospects.  Advertising in some combination of media outlets, using a number of techniques, can be very effective, but needs to be targeted to areas and customers that you can indeed serve. This article, however, will only focus on the situations in which the physical presence of a sales rep is required.

As a graphic example of the time, resource, and money constraints that commonly occur, consider what your natural reaction is when a prospect calls. Your response of, “We will be there tomorrow,” is not uncommon.  However, if the prospect is far way, the cost of the next day airfare could consume the entire gross margin of the sale.  Mr. Murphy seems to predict that the hottest prospects will always be cross-country while local prospects remain dormant!   The issue is further complicated by two facts:  1) the key decision-maker rarely attends the first meeting and 2) new sales are rarely closed on the first call.  The corresponding additional future sales calls may be made with lower airfares and some, but not all, may be able to be avoided with webinars, video, or audio conferencing.  Avoiding this scenario is easy to describe, but hard to do.  It involves re-thinking the “prospects are everywhere” plan and focusing only on “prospects that are here.”  Focus on the local market that is within driving distance. Of course this will only work if there are valid prospects in the local market.  Trying to sell surf boards in Utah or whole house air conditioning in Alaska probably are not good test cases for selling to local prospects.

Initially focusing on local markets, referred to as an epicenter model, not only saves the precious time, resources, and money crunch, but also allows more prospect contact and can leverage your familiarity with the local market.  For out of local market activities follow the advice of Sun Tzu, the brilliant Chinese strategist from 500 BCE, who wrote the classic book, The Art of War, and said, “Hire Local Guides.”  In this context, local refers to either a region or market segment.  Using individuals that are intimately familiar with prospects and their likes, dislikes, and constraints can avoid costly, sometimes non-recoverable errors.  Many of us have heard of the innocent, but fatal blunders made by companies as they begin to approach new foreign markets.  Although much less publicized and obvious, the lack of understanding of local, domestic differences and market differences can be equally problematic.

Further defining the epicenter model, think of it as a pond with still water and start by throwing a small pebble in it to minimize the ripple.  Avoid a big splash or throwing in a handful of pebbles to make a big ripple.  This approach is in stark contrast to the standard approach of making a major new product announcement.  Focus on learning from a few initial prospects, not just selling to them.  Take those lessons to heart and increase your local efforts, making successively larger ripples.  This strategy is at odds with the desire to make a big splash in all ponds simultaneously with a major launch.  Although the major launch approach may seem like an excellent way to quickly climb the revenue curve, it is generally disastrous.  If the launch’s first impression to the market is positive and they respond, will you be able to support them all simultaneously?  Few new or smaller companies can succeed with this approach except, perhaps, for bakeries where customers expect to pull a number and patiently wait until it is their turn to be served. 

When considering serving the US market, follow a proven model: the National Football League.  Headquarter your team players in the NFL cities plus LA and minus Green Bay!  There is a reason the NFL is in these cities; that is where the people and businesses are!  Except for the states in the Plains and Rocky Mountain regions, most prospects can be reached with auto trips, which are far less expensive and provide far more flexibility that air travel.  Before considering building your own NFL city team, carefully consider the costs associated with finding, recruiting, hiring, training, and providing facilities for the remote team members.  Also, consider the time lag between incurring all of the associated startup costs and when revenue (really cash from collections) will occur.

An alternative to building your own sales team that needs to be carefully considered is the use of indirect distribution through companies that already have local presence and are familiar with the local markets; essentially they will be hired “local guides.”  The article in this series “Distribution is the Only Thing that Matters,” and a number of the articles in Business Partners as Investors section in Chapter 4 discuss the advantages and disadvantages of the use of indirect distribution.  Although there are significant advantages to using channel partners, some of issues that are covered in other articles, and repeated below, that need to be considered are:

  • A tremendous amount of upfront and continuous work is required to support their sales activities.
  • Someone will still have to provide on-going local customer support after the sale.  Address this issue before you start.
  • You will not be able to exert the same level of control over the partners or their sales activities as you can exercise over your own team.
  • Channel conflict, in all likelihood, will arise.
  • The partners will never know your offering as well as you do.  This will be especially true in their ability to handle objections and provide competitive product differentiation.
  • Your priorities, goals, and focus will not be identically aligned with your partners and may diverge over time.
  • An existing channel partner will be very protective of their customers.  They will not risk that relationship if there is a slight chance that representing your product or service could jeopardize that relationship.
  • If a channel partner has a bad experience with you, they can easily “poison the well” for other prospects that they know.  Think of them as a jilted love with a long memory!

Overall, rather than thinking that prospects ARE everywhere, start by considering that prospects COULD BE everywhere, but we are going to start out HERE.  Scaling up is far less traumatic than scaling down or retrenching and, most probably, will save time, resources, and money in the long run.  Focus on external validation and positive referrals first.

 

Article Number : 5.020205   

A Handy Reference Guide for Executives and Managers at All Levels.

9 Volumes 36 Chapters ~500 Articles

Browse Select Read Download

 

 

The weight of your world does not have to be on your shoulders.
The articles in this site will help to lift that weight from your shoulders.
Pick an article similar to how you pick a route on a page of an atlas.
There is no need to look at other articles, just as you ignore other pages in an atlas.
It is easy to start a business but it is hard to run. Bumps and unexpected sharp turns in the road are always present.
Others have traveled the road before you; learn from them. This site may help.