Whether you are an entrepreneur building your business or a salesperson working towards making (or exceeding) budget, maintaining a “hot list” is an essential to success.
Simply put, a hot list contains the names of potential customers that you believe are going to become customers, and it includes an estimate of the amount of revenue each of them represents. When created with great honesty (because it is easy to give in to wishful thinking and optimism) it becomes a forecasting tool – a way to know that actions you are taking today are generating income for the future.
Many years ago when I owned Media Link Inc. and managed a sales team, we shared a hot list. It was on large pieces of paper on the wall in the sales department. During each day salespeople would hang up the phone, walk to the wall and write another hot lead on the paper. Everyone would participate in a short conversation about the company being added and why the salesperson thought they were going to purchase.
We followed the same strategy when a potential client had to be taken off the list – there was a discussion about why they didn’t buy and if there was anything the salesperson could have/should have done. In this way we were always learning from each other and perfecting our ability to forecast our sales success.
The most exciting part was when a company on the list became a customer. If memory serves, the salesperson walked to the wall, highlighted the client’s name and rang a bell. This notified everyone to share in the success and, of course, offer congratulations. (This system also created a bit of healthy competition between all of us which was a lot of fun!).
The success ratio of a hot list is different from that of your prospect list. When I talk about prospecting, I use the ratio 1 in 10 – that if you are calling potential customers looking for a sale, you should have 10 leads for every 1 you want to sell. Your individual ratio may be much better than this, but – all things being equal – 1 in 10 is a ratio that leads to success.
On a hot list, when you know how to identify buying signals, the ratio is 1 in 3. I have certainly worked with salespeople who had an uncanny ability to close 100% of the prospects they put on their list, but I think that’s rare. I’ve been trying to reach this perfection myself for at least 20 years without success. While I have at times achieved 1 in 2, for the most part one out of every three names I write on a hot list becomes a customer.
How do you know when to put a potential customer on your hot list? You need to listen and watch for buying signals. Some signals may be unique to specific products or services, but I think the ones listed below apply to everything from buying a house, choosing a trainer, buying advertising, jewellery and more:
- The prospect asks questions This indicates that they have not only been listening to your presentation, but they are thinking about what you’ve said, are curious about how it applies to their needs.
- They contact you without you “chasing” them. Any prospect who calls or emails without a lot of prompting from you and wants to talk about your product or service is interested!
- They freely discuss their budget and give you specific information. I’m not talking about the classic brush off “It’s not in my budget”, but someone who takes the time to explain how their budget works and how this applies to becoming your customer.
- They begin to include some personal information in your conversations. Remember, we all work with/buy from people we trust. And when we trust someone, we begin to share details of our personal lives. It might be about our children or our hobbies or our health, but a prospect that includes these details in your conversation is definitely considering working with you.
- They tell you who else is involved in the process. Again, I don’t mean the classic brush off “I have to discuss this with the team” but rather a statement like “Well Joan Smith and I would make this decision together and she and I have a meeting next Tuesday …”.
- They speak to you about buying in a straight-forward way, such as “I will check my budget this week and I’ll be able to let you know next Monday if we can proceed.”
- They are thoughtful during your conversations. This can be difficult to detect if you get nervous about extended silences. Often longer silences during conversations with prospects are when they are thinking, figuring out how they can purchase your product or service.
- They answer your questions with lots of detail. This is a prospect that wants you to know more about them so you can sell them a product or service that fits their needs.
When you hear buying signals, add the prospect to your hot list. Keep your hot list active and growing. If you don’t have one, or the one you have is empty, it means you could be facing a dry spell – a time of no new sales – in the next week, month or quarter.
I’ve only used a few examples of a multitude of buying signals. What are the ones you most easily recognize? Which ones make you feel the most confident that you’ve succeeded in gaining new business? It would be great if you shared these with all of us!
And one last thought:
In nature there are neither rewards nor punishments; there are consequences. -Robert Green Ingersoll, lawyer and orator (1833-1899)