Selling Today

Fourteenth Edition

Chapter 5
Developing and Qualifying
Prospects and Accounts

(PART A: IDENTIFYING
PROSPECTS)

(PART B: KEY ACCOUNT

MANAGEMENT)

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Learning Objectives (1 of 2)
1. Discuss the importance of developing a prospect
or account.
2. Identify and assess important sources of
prospects and accounts.
3. Describe criteria for qualifying prospects and
accounts.

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Learning Objectives (2 of 2)
4. Explain common methods of collecting and
organizing prospect and account information.
5. Describe the steps in managing the prospect or
account list.

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What is a salesperson’s main purpose?

“The main purpose of a salesperson is not to

make sales, but to create customers.”

Gerhard Gschwandtner, of Selling Power

• Do you agree or disagree?

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Prospecting
• Identifying and developing potential customers
– Prospecting in B2C
– Account or business development in B2B
• Who is a prospect?
– An individual or business who meets the qualification
criteria established by you or your company.

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PART A
PROSPECTS

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SOURCES OF PROSPECT
1. Existing customers.
- This is a highly effective method of generating prospects and yet tends to be under-used by
many. A wealth of new prospects can be obtained simply by asking satisfied customers if they
know of anyone who may have a need for the kinds of products or services being sold. Having
obtained the names of potential customers, the salesperson, if appropriate can ask the
customer if they may use the customer’s name as a reference. The use of reference selling in
industrial marketing can be highly successful since it reduces the perceived risk for a potential
buyer.
2.Trade directories.
A reliable trade directory such as Kompass or Dun & Bradstreet can prove useful in identifying
potential industrial buyers. The Kompass directory, for example, is organized by industry and
location and provides such as potentially useful information as:
a.Name, address and telephone number or companies
b.Names of board members
c.Size of firm, by turnover and number of employees
d.Type of products manufactured or distributed

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• 3.Enquiries
- Enquiries may arise as a natural consequence of conducting business. Satisfied
customers may, by word-of-mouth, create enquiries from ‘warm’ prospects. Many
companies stimulate enquiries, however, by advertising, direct mail and
exhibitions. This source of prospects is an important one and the salesperson
should respond promptly. The enquirer may have an urgent need seeking a
solution and may turn to the competition if faced with a delay.

• 4.The press and the internet

- Advertisements and articles can provide clues to potential new sources of
business. Internet is also a vast resource for identifying new potential customers.
For example, salespeople may use electronic versions of product directories to
identify companies that carry out certain types of operations and therefore may
need specific products or services. Other example, online database-used to
gather detailed data on industries together with information on trends for products
and industries.

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• 5.Cold canvassing/ cold calling
• As opposed to warm calling, where there is already an established
connection, cold calling is defined as making an unsolicited call to a
prospect. Because there is no established communication, the
prospect is not expecting the call.
• Suggest involve calling on potential new customers ‘cold’, ie, without
prior contact or even an appointment. Although widely used in some
forms of selling, such as ‘door-to-door’ or telephone selling. It can be
an ineffective and thus frustrating approach to generating sales.

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Figure 9.1 Account or Business Development
(ADR) Position Description (1 of 2)
POSITION DESCRIPTION ACCOUNT DEVELOPMENT REPRESENTATIVE
The Business Development Representative (BDR) engages with
accounts, targeting key, and influential contacts. The BDR will be
responsible for qualifying opportunities and staging initial sales meetings
for the field sales organization.
Primary Responsibilities
• Drive sales opportunities by staging introductory sales meetings, product
demonstrations, and on-site meetings for the field sales organization.
• Work an assigned enterprise account list; proactively identify revenue-
generating customers via e-mail campaigns and outbound phone calls.
• Perform pre-call planning including, but not limited to, researching
accounts, identifying key influencers and decision makers, formulating
initial sales plan of action, etc.

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Figure 9.1 Account or Business Development
(ADR) Position Description (2 of 2)
• Maintain and manage the SFDC database, including comprehensive
data entry, precise follow-up planning, lead and opportunity tracking,
pipeline reporting, etc.
• Collaborate with marketing, support, sales management, product
management, and account management to maintain an effective level
of prospecting activity and pipeline growth.
Required Skills/Experience
• Degree required
• Minimum 2 years B2B enterprise account development experience
• Strong communication skills; ability to establish rapport with customers
quickly
• Experience meeting/exceeding prospecting goals and account
development metrics
• Microsoft Office and Customer Relationship Management (CRM) skills
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Reasons for Customer Attrition
There are a number of reasons for customer attrition,
which is the inevitable loss of customers over a period
of time.
• One-time need or an extended time between
purchases
• Movement outside of territory
• Customer business failure or merger
• Loyal buyer or purchasing agent changed positions
• Sales are lost to the competition

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Figure 9.2 “Ferris Wheel” Model

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Prospecting and Account Development
Requires Planning
Three things to improve the quality of the
prospecting effort:
1. Increase the number of people or accounts who
board the Ferris wheel.
2. Improve the quality of the prospects who board the
Ferris wheel.
3. Shorten the sales cycle by quickly determining
which of the new prospects are qualified
prospects—qualified as to need, authority to buy,
ability to pay, and authority to purchase the product.

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Sources of Prospects and Accounts
• Referrals • Website
• Friends and family • Databases
• Directories • Cold calling
• Trade publications • Networking
• Trade shows • Educational seminars
• Direct-response • Non-sales prospecting
marketing

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Referrals
• A referral is a prospect that
has been recommended by a
current customer or by
someone who is familiar with
the product.

• When you build value into your

sales process, you increase
the odds that the customer will
give you a referral.

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Discussion Point
If you were starting a prospect list, how could you
use your own centers of influence to begin?

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Prospecting with Trade Shows and Special
Events

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Prospecting with Social Media
• Social media provide an excellent opportunity for
finding prospects and reaching out to them.
• Examples of social media tools:
– LinkedIn
– Twitter
– FollowerWonk
– TweetDeck
– HootSuite
– SproutSocial

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Figure 9.3 Networking Model

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PART B
KEY ACCOUNT MANAGEMENT

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Qualifying Prospects and Accounts
• Qualifying is the process of identifying prospects who
appear to have a need for your product and should be
contacted.
• Every salesperson needs to establish qualifying criteria
and this process involves finding answers to several basic
questions.
• Does the prospect or account…
– have a need for my product?
– have the authority to buy my product?
– have the financial resources to buy my product?
– have the willingness to buy my product?

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WHAT IS KEY ACCOUNT?
• A key account can be thought of as one of your
company's most valuable customers.
• These customers represent a disproportionate
percentage of your revenue, refer new prospects
to your company, give you credibility in their space
— or all of the above.

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KEY ACCOUNT MANAGEMENT
• a strategy used by suppliers to target and serve high-potential

• customers with complex needs by providing them with special treatment

in the areas of marketing, administration and service.

• It therefore involves the selection, establishment and maintenance of

close relationships with a firm’s most important customers

• Key account management is the process of building long-term

relationships with your company's most valuable accounts.

• These accounts make up the majority of the business' income. To turn

buyers into business partners, a key account manager (KAM) typically
provides dedicated resources, unique offers, and periodic meetings.

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MAIN FEATURES
• 1.Key account management involves special treatment of major customers that
is not offered to other accounts. This may involve preferential treatment in the
areas of pricing, products, services, distribution and information sharing.
Example: special pricing, customization of products, provision of special
services, customization of services, joint coordination of distribution and
workflow, information sharing and joint development of business processes and
new products.
• 2.It is associated with dedicated key account managers who typically serve
several key accounts. This may be placed in the suppliers’ headquarters, in the
local sales organization of the key account’s country, or in the premises of the
key account.
• 3.Key account management requires a multifunctional effort involving, in
addition to sales, such groups as engineering, marketing, finance, information
technology, research and development and logistics. Such cross-functional
selling teams have the ability to increase an organization’s competitive
advantage and are employed by such companies as Bayer, Procter & Gamble,
Xerox, and Kraft Foods.

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CRITERIA IN SELECTING KEY
ACCOUNT MANAGEMENT
1. accounts that have growth prospects through their ability to build sales and
market share in their existing markets
2. accounts with growth prospects through their position as major players in small
or medium-sized but expanding markets;
3.customers that are willing to be partners in innovation by allowing joint new
product development with a supplier and/or will allow a supplier to test new
products in their production processes;
4.customers that are early adopters of new products and so aid the diffusion of
such products in the marketplace;
5.highly prestigious accounts that improve the image and reputation of the
supplier and can be used in reference selling by the salesforce;
6.accounts that are important to and currently served by competitors that the
supplier has decided to attack;
7.accounts that provide a high contribution to the supplier’s profits.

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DECIDING WHETHER TO USE KAM

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Table 9.1 Distinctions between transactional selling and key account management

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Table 9.2 Tasks performed and skills required by key account management

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Traditional (bow-tie) buyer–seller relationship: communication is between
Figure 9.1
salesperson and buyer
Source: Adapted from Shipley, D. and Palmer, R. (1997) ‘Selling to and managing key accounts’ in Jobber, D. (1997) The CIM Handbook of Selling and Sales Strategy, Butterworth-
Heinemann, Oxford, p. 95. Copyright © 1997, reprinted with permission from Elsevier.

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Key account (diamond) based relationship: key account manager co-
Figure 9.2
ordinates communication which is direct between functions
Source: Adapted from Shipley, D. and Palmer, R. (1997) ‘Selling to and managing key accounts’ in Jobber, D. (1997) The CIM Handbook of Selling and Sales Strategy, Butterworth-
Heinemann, Oxford, p. 95. Copyright © 1997, reprinted with permission from Elsevier.

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GLOBAL ACCOUNT MANAGEMENT

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Table 9.3 Roles and competencies required of a global account manager
Sources: Based on Millman, T. (1999) ‘From national account management to global account management in business-to-business markets’, Fachzeitschrift für Marketing THEXIS, 16
(4), pp. 2–9; Millman, T. and Wilson, K. (1999) ‘Developing global account management competencies’, Proceedings of the 15th Annual IMP Conference, University College Dublin,
September.

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BUILDING RELATIONSHIPS WITH KEY
ACCOUNT

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Figure 9.4 Key account planning system

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KEY ACCOUNT INFORMATION AND PLANNING SYSTEM

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Table 9.4 Handling relationships with key accounts

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Table 9.5 A key account information system

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Table 9.6 KAM key success factors
Source: Reprinted from Abratt, R. and Kelly, P.M. (2002) ‘Customer–supplier partnerships: perceptions of a successful key account management program’, Industrial Marketing
Management, 31, pp. 467 – 76 . Copyright © 2002 with permission from Elsevier.

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Collecting and Organizing Account and
Prospect Information
Figure 9.4 The CRM Account Report

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Sales Intelligence
• Sales intelligence is necessary when the sale is
complex and requires a long closing cycle.
• Sales intelligence goes beyond sales data to
include insights about a prospects’…
– Marketplace
– Firm
– Competitors
– The prospects themselves

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Managing the Account Base (1 of 2)
• Account analysis enables salespeople to
estimate the sales potential for each prospect.
Figure 9.5 The Account Base
NewNet Systems, San Jose Market Prospect/Account/Contact List
Lee Bizon, Account Executive Casey Arnold, Sales Manager

Account Contact Phone E-Mail

Able Technologies, Inc. Mr. Bradley J. Able 254-555-1000 [email protected]

Aeroflot Airlines Mr. John Poltava 214-555-6113 jpolt21@aeroflot

Southern Motors Mr. Dwayne Ortega 972-555-4094 [email protected]

Bryan Enterprises Mr. Bill Bryan 214-555-4567 [email protected]

Computer Products Ms. Joanna Barkley 713-555-2345 [email protected]

Computerized Labs Mr. Sam Pearlman 713-555-5454 [email protected]

Designers Associates Dr. Simon Sayers 972-555-6866 [email protected]

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Managing the Account Base (2 of 2)
Ellis Enterprises Mr. Timothy P. Ellis 214-555-1234 [email protected]

Engineering Software Inc. Mr. Ian Cortez 214-555-8979 [email protected]

General Contractors Mr. Brian Allan 214-555-2947 [email protected]

International Studios Mr. Robert G. Kelly 214-555-3456 [email protected]

Johnson and Associates Mr. Ralph Johnson 817-555-3212 [email protected]

Lakeside Clinic Dr. Jeff Gray 214-555-6600 [email protected]

Landers Engineering Ms. Colleen Landers 817-555-6121 [email protected]

Media Conglomerate Mr. Joe Romera 214-555-9090 [email protected]

Mercy Hospital Ms. Kerri Mathers 214-555-1880 [email protected]

Modern Designs Ms. Cheryl Castro 214-555-1098 [email protected]

Murray D'Zines Ms. Karen Murray 817-555-1111 [email protected]

Piccadilly Studio Ms. Judith Albright 214-555-3084 [email protected]

Quality Builders Ms. Sherry Britton 817-555-6886 [email protected]

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Figure 9.6 The Portfolio Model

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Figure 9.7 CRM Sales Funnel

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Figure 9.8 Pipeline Dashboards

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Review (1 of 2)
1. Discuss the importance of developing a prospect
or account.
2. Identify and assess important sources of
prospects and accounts.
3. Describe criteria for qualifying prospects and
accounts.

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Review (2 of 2)
4. Explain common methods of collecting and
organizing prospect and account information.
5. Describe the steps in managing the prospect or
account list.

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