Solving My Prospect List Puzzle
No wonder we don’t like making them. No wonder we’re reluctant to rely on them. No wonder we’ll change them for new ones at the end of the month, and ignore what went on before.
Too often the prospect list shows our aspiration rather than expectation. That’s fine for motivation, but crap for managing a business. It creates a problem for every small business owner or manager.
We all have to rely on prospect lists, and so need to solve the puzzle – why prospect lists always turn out wrong, no matter how right we were at the time.
The first step to solving the prospect list puzzle is recognising technology is part of the problem. Our list in a spreadsheet, or on the white board, or stickie note, is one dimensional, whereas prospects are individual opportunities, each of which exists in multi dimensions.
Every prospect list is a like a Rubik’s Cube. Here’s the way to understand it. Let’s look at the different dimensions of each deal:
Our first dimension is the one we all recognise now – a sale of $100, but that’s not money in the bank. The other dimensions affect the probability we’ll win it, either more likely, or less, depending.
Our target customer might be a long standing and satisfied client who never argues with the price, and recommends us at every turn. Or somebody else’s, just looking to keep the incumbent vendor honest. Each possibility, and many more in between will impact on our probability.
Maybe our product or service is so strong in a particular market we always win (let me know if you have one), or perhaps we lose out in most cases. How the product we’re selling performs in the market will impact our probability.
Every market is price sensitive at some point. Does a higher, or lower, price make it more or less likely we’ll close this deal?
When the customer needs it tomorrow and we have it on the shelf, the chances are good we’ll get the deal. On the other hand if the need is 6 months away there’s more time for the competition to come into play. There’s also more chance the deal will just melt away, and never happen, for anybody.
No wonder it’s complicated. Every deal now exists in 5 dimensions, and each of those can be estimated on a sliding scale, somewhere between hero and zero. What’s it worth on the prospect list? Should we spend time and money chasing it, or will our resource be more productive elsewhere?
Understand this complexity and you’ll know why your spreadsheet prospect list is worse than useless. The technology simply won’t let you calculate each dimension accurately, even if you have the time, inclination and information you need.
Amateur sales managers ask their reps to assign each deal a %age probability, and then multiply the expected value by it.
- Example – Estimate this deal will close at $10,000 and think it’s 50% probability. The calculation results in a weighted value of $5,000, and usually a disappointed sales manager.
They might as well not bother. The answer is meaningless.
- Opportunity is qualified – 20%
- Submitted a proposal – 20%
- Preferred vendor, subject to terms – 20%
- Agreed terms and a date for delivery – 20%
- Customer has signed the order – 20%
They aren’t relying on guesses. They’re measuring progress against a proven process.
Spreadsheets Don’t Work
Or at least I can’t make them work the way I need, to calculate my prospect list this way.
That’s why we built the Front Office Box Prospect List to work the way it does, with milestones, and dates, and colour coding to illustrate progress and risk. Watch the video to see how we do it, and a bunch of other critical sales management tasks.
Your Front Office Box
You can solve your prospect list puzzles with Front Office Box too. Register your account today, and get started on a better way to manage your sales.