You receive a call from a “hot” potential customer that comes via referral or internet inquiry. It’s exciting, the sales prospect is highly engaged, and you mark it as a “high priority” lead in the CRM. What’s next? How do you know the prospect has real purchase intent?
Service companies often receive calls from interested prospective customers or referrals. Unfortunately, not all of these inquiries lead to genuine opportunities. When dealing with inquisitive sales prospects, the primary task is to qualify the opportunity to ensure you aren’t wasting time or giving away valuable information. Plus, there’s the risk of losing internal leadership credibility by chasing dead-ends deals.
It’s important to identify dead-end deals early and have the sales team focus on “real” opportunities. There are several early warning signs that usually indicate a dead-end deal. Look out for the following:
Named after the “Show Me State,” this occurs when a sales prospect continually requests more and more information, usually asking for examples of previous work. In the services world, this behavior suggests the prospect might be planning to handle the project internally and is seeking free advice. A suggested response to this situation is to propose a live meeting where you can present your work in person. This way, you provide them with what they asked for without giving away too much. Those who decline the in-person presentation often fall into one of three camps:
When a sales prospect never questions or challenges recommendations, it can indicate they either lack a clear understanding of their needs or are overly eager, hoping you’ll drop your guard. They tend to respond positively to every suggestion and express a strong desire to learn more so they can decide how to proceed without your company. It's easy to fall into the trap of thinking you’re sure to win, leading to the inadvertent disclosure of too much information. Make the prospect earn the information by asking to get the prospect’s boss or peers involved in the discussion.
An engaged sales prospect typically seeks to learn from the experiences of your previous clients. When a prospect asks for references but fails to follow through, it can suggest a lack of sincerity in their efforts to understand similar projects. Prospects may not hesitate to waste your sales’ or consultants' time, but they often respect their peers' time. Tell your prospect you can share references, but you must be included in the process of setting up the call. That way, you don’t waste your current customers’ time preparing for reference calls.
Overly chummy behavior from a sales prospect can be a sign of a fishing expedition. They have no intent to hire your company and may be attempting to reduce any guilt or cognitive dissonance associated with their deceptive behavior. Don’t get sucked in by the nice guys. Use the time with the prospect to understand their real pain points. Don’t be shy about asking why they wouldn’t do the work internally or select one of your competitors. If they don’t have a good answer, it may be time to walk away.
It's important to note that each of these red flags, when observed individually, doesn’t always indicate a dead-end prospect. However, when two or more of these warning signs are present in one prospect, it's a strong indication to proceed with caution. In such cases, sales teams may consider raising the red flag as a warning and suggest the prospect explore other options.
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