How to Build a Prospect Database

taking notes
Prospecting.

Closing a sale feels terrific, but there's just one problem – every time you close a sale you lose one of your best prospects! That means, if you want to KEEP closing sales, you need to keep prospecting as well. And since not every prospect will buy from you, you need to find several more prospects for each sale you close.

First Things First

The first step in building and maintaining a solid group of prospects is defining what a "good" prospect looks like.

Regardless of what you're selling, a "good" prospect is someone who will buy fairly quickly and who will make more than a minimal purchase from you. Depending on your specific situations, you may have other requirements in addition to these basic ones. For instance, if you sell B2B, you might add that a "good" prospect is one with a single point of contact with clear buying authority.

How you define "buy fairly quickly" and "minimal purchase" will also depend on your type of selling. If you're selling big-ticket items with complex requirements, a year-long sales cycle might actually be quite short by your standards. Similarly, a "minimal purchase" could be anywhere from a few dollars to millions. You'll need to look at your past sales to set your own standards for selling cycle time and size of purchase.

Focus, Focus, Focus

Once you've determined your minimum standards, you'll need to decide specifically which kind of "good" prospects you'll want to specialize in.

While your natural impulse may be to try to sell to as wide a group as possible, this approach will usually end in disaster. Even if your product is theoretically a fit for everyone, there's no way to come up with a selling style that will appeal to every possible prospect. You're much better off choosing one or two small groups of prospects and then fine-tuning your sales approach to appeal to them.

For example, if you focus on one or two different industries as prospects, you'll be able to learn the basics about those industries, get an idea of what people in those industries typically worry about and what their goals often are, and you'll be able to present yourself as a helpful adviser rather than a clueless salesperson.

Focusing on a narrow type of prospect will also help you build your reputation within that group, and will assist greatly with networking – the smaller the pool of prospects and the more they have in common, the more likely it is that they will all know each other and exchange information. So if you impress a few prospects in that group, you'll find it much easier to approach others.

Study Your Prospects

Once you've chosen a group or two, you can start studying them – both to collect the aforementioned background information you'll need to become an expert, and also to find the best way to connect with prospects in these groups. Salespeople are often compared to hunters, and in this case it's a particularly apt analogy: just as a hunter would study his prey's habits to find where it ate, slept, and drank in order to set an ambush, you'll need to find where your potential prospects gather so that you can make contact with them.

Is there a LinkedIn group dedicated to that industry? How about a magazine or newsletter? Are there popular events, such as trade shows? These are all good starting places for your campaign to reach these prospects.

As you collect information on prospects, save every scrap of data in a dedicated database. If you've chosen your prospect groups well, nearly every member of that group will be a "good" prospect. That means they're all worth a lot of effort on your part to secure them. If a prospect isn't interested in buying right now, he may well be interested a month or a year from now. The more information you save now, the easier it will be for you to reconnect with him when he's ready to buy.