by Catherine Brown, President

Last month Amy Keuper wrote about the importance of keeping different “buckets” of data when you have a business-to-business, accounts-based approach in sales. Amy reminded us that there are different standard choices that most companies use when categorizing the way they think about a potential client.

The first two categories that most companies should use are suspects and prospects. A company name that you may like to pursue but about which you know little is a “suspect.” A suspect becomes a “prospect” when they meet some basic definitions for your company’s qualification process, such as:

1. You have confirmed the names of the right people to pursue;
2. You know these right people can afford your product or service;
3. You’ve spoken with a right person at the company and they haven’t asked you to get lost yet.

The way people define “prospect” varies, but every company has suspects and prospects, and it’s important to define what these terms mean for your specific organization. Why? Because your costs of gaining new clients can decrease considerably when you learn how to fill your sales pipeline with the suspects who are most likely to convert to prospects. Suspects come from a variety of sources: industry lists you’ve purchased, hits from your website, cold calling efforts…any number of places. Your goal in data management should be to determine what suspects are converting to prospects. Then your goal can become to convert as many prospects as possible to clients.

Example: If you purchase a list of company names from your industry’s primary trade association to be your suspects and, after marketing to these prospects in a variety of ways, only 1 company in 99 is a prospect after 6 months, this is bad news because even the best sales person can’t convert every prospect into a paying client. In this scenario, you would need to have many HUNDREDS of prospects to gain even 1 new client.

With a good Customer Relationship Management system, it’s easy to know how many suspects convert to prospects. For many companies, a reasonable goal is to see 25% of your suspects become prospects that move through your sales process. Then, if 25% of your prospects become paying customers, you can build a sales and marketing plan to determine how to fill your suspect and prospect pipeline. A simple illustration:

• 200 suspects (25% convert to next stage)
• 50 prospects (25% you win)
• Approximately 12 new clients (6% of your suspects became clients)

Once you know these basic numbers, you can determine your costs and determine the least expensive, most effective ways to fill your pipeline with the best suspects possible. Whether your suspects cost you $.50 each or $50 each, everyone has the same need: to know their real numbers and true costs so they can sell more effectively.