What is a Prospective Customer and How Can I Convert Them?

Identifying the prospective customers most likely to benefit from your product or service is crucial for optimizing your sales process. 

When you identify leads based on reliable criteria, not only will they be more likely to convert into deals, but your conversion costs (time and money spent) will go down. And fewer leads means you can afford to spend more time on each lead. That in turn creates the potential for higher profit and growth.

This guide will help you fine-tune your focus on high-value prospective customers and improve conversions. We’ll show you how to earn their trust so you can convert them into paying customers with greater efficiency and confidence.

The Importance of Identifying Prospective Customers

Identifying prospective customers is the foundation of a successful sales strategy. By making sure you know who the right prospective customers are, you can make sure your sales team focuses its energy in the right place.

And if you do manage to target prospects more likely to need and value what you offer, you can do the following.

• Reduce time spent on unqualified leads.
• Increase conversion rates.
• Shorten the sales cycle.
• Improve customer satisfaction and retention.

Identifying the right prospective customers gives your sales reps a head start. If they already understand the prospective customer’s pain points, they can offer them exactly what they need. 

This is great not just in terms of that initial sale, but in cementing a long-term collaboration with that prospective customer.

How to Identify Prospective Customers

Finding the best prospective customers is tricky, but you can take the following steps to improve your chances.

Define your ideal customer profile

First, define your ideal customer profile. This will allow you to simplify sales by narrowing down your focus to the right prospective customers. Consider the following factors.

• Industry and company size.
• Job title and role in purchasing decisions.
• Pain points and challenges.
• Communication preferences (phone calls, video calls, and so on).

Use these insights to build buyer personas or fictionalized representations of the ideal person or organization you want as a customer. Each persona should feature demographic details, professional targets, and definable needs that your product or service will fill.

Next, deep dive into your current customer base. Identify consistent patterns among your happy customers.

• Which industries yield the highest conversion rates?
• What among their common problems do your solutions solve?
• How do they typically move through your sales funnel?

This analysis narrows down your target audience and informs your sales strategies. It helps your sales reps focus their energy on the prospective customers who closely match the ideal customer profile.

Just remember, though: your ideal customer profile might change.

Reconsider your ideal prospective customer profile periodically if there are changes in the market or compelling feedback from your sales team. By constantly refining your ideal customer profile, your sales effort will continue to reflect the needs of your best prospective customers. This will save time for your sales team and ultimately lead to a higher percentage of prospective customer conversions.

Use data and analytics

This is where the big power of data and analytics comes in. It can give you a heads-up about who your prospective customers are. And it can help you optimize your sales process using customer relationship management (CRM) and predictive analytics.

Using CRM systems effectively

A good CRM system supports data-driven sales strategies by doing the following.

• Tracks interactions with potential clients throughout the sales cycle.
• Stores key information like custom phone numbers and communication preferences.
• Analyzes patterns to identify bottlenecks in your sales process.
• Splits your target audience into groups based on various criteria.

To maximize your CRM’s potential you should do the following.

1. Make sure your information is accurate and consistent.
2. Train your sales reps to regularly update information.
3. Use tags and custom fields to capture industry-specific information.
4. Set up automated reports to monitor key performance indicators.

Using predictive analytics

To help you find the right prospective customers, predictive analytics uses historical data to produce future estimates and can help you do the following.

• Rate leads based on how likely they are to convert.
• Identify prospective customers who match your ideal customer profile.
• Predict which prospective customers are ready to make a purchasing decision.
• Optimize your B2B sales funnel by focusing on high-value opportunities.

To use predictive analytics you’ll need to do the following.

1. Collect and clean relevant information from your CRM and other sources.
2. Choose the right predictive models based on your sales goals.
3. Continuously refine your models with new information from your sales team.
4. Use the insights to prioritize leads and tailor your sales approach.

By using the right combination of CRM and predictive analytics, you can find more prospective customers and boost your sales team’s productivity, without compromising quality.

Optimize your social media and online presence

Optimizing your social media and overall online presence is an extremely effective way to connect with customers and provide them with a more resounding pitch. This is because you’ll approach customers where they already are, sharing and engaging with content.

LinkedIn is a goldmine for finding prospective customers. To use it properly you should do the following.

• Optimize your profile to showcase your expertise and value proposition.
• Use LinkedIn’s advanced search features to find prospective customers who match your ideal customer profile.
• Engage with potential clients’ content through thoughtful comments and shares.
• Join relevant industry groups to expand your network and visibility.
• Share valuable content that addresses your target audience’s pain points.

This will help you position yourself as a resource, provide you with market intelligence, and help you identify prospective customers considering a purchase at all stages of the purchasing funnel.

Use lead scoring

By assigning values to personal attributes and actions taken by prospective customers, you can maximize your sales funnel opportunities. This identification of your strongest leads is called lead scoring.

Developing a lead scoring system

Here’s how you can create an effective lead scoring model.

1. Identify ideal customer key characteristics based on your current customer base analysis.
2. Assign point values to demographic factors like industry, company size, and job titles.
3. Rate behavioral actions such as website visits, content downloads, and engagement with your emails or video calls.
4. Consider negative scoring for actions that indicate a lack of interest or suitability.

Work with your sales reps and your marketing team to refine your scoring criterion. They will know what qualities your best leads have.

Prioritizing high-value prospective customers

Here’s what you should do once your scoring system is in place.

1. Set thresholds for lead qualification (for example, marketing qualified leads vs. sales qualified leads).
2. Use your CRM to automatically categorize leads based on their scores.
3. Create tailored follow-up strategies for different score ranges.
4. Regularly review and adjust your lead scoring model based on actual sales outcomes.

With a lead-scoring system in place, your sales team can save time by focusing its efforts on the prospective customers most likely to convert. 

You’ll also be able to do a better job of nurturing and moving leads along your sales funnel with timely messaging and information.

Remember that lead scoring is an ongoing process, so keep driving improvement. You need to make sure your model stays in sync with your customer base by continuing to optimize it based on real outcomes (how many of your leads became happy customers).

Use referrals and networking

By using referrals and networking, you can improve your chances of identifying prospective customers. You can do this by tapping into your existing relationships to identify new customers who are more open to your offerings.

How you can build a referral program

• Develop a structured system to encourage and reward current customers for referrals.
• Educate your loyal customers about ideal referral candidates.
• Make it easy for customers to refer others, perhaps through a dedicated phone number or online form.
• Follow up promptly on referrals to maintain momentum.

You could even combine a referral program with targeted networking at industry events. This would help you fill your sales funnel with more prospective customers, as well as warm up cold leads with endorsements from people you know and trust.

Bonus points

To further improve your prospective customer identification, consider the following tips.

1. Align sales and marketing by developing targeted content and collaborating on nurturing leads.
2. Use AI-powered prospecting tools and data enrichment solutions to improve your efforts.
3. Measure success using key performance indicators like conversion rates and how quickly deals were made.
4. Use continuous improvement strategies, and regularly measure your results to refine your approach.

Combined, these tactics can significantly boost your ability to identify, engage and convert high-value prospective customers.

Conclusion

Identifying prospective customers is crucial if you want to optimize your sales process. 

By using this guide, you’ll have a better chance of finding your target prospective customers right at the start of your sales pipeline, fine-tuning your sales funnels to suit high-value prospects and improving your conversion rate.

Remember: you’ll need to refine and adapt your methods for finding prospective customers as market and customer needs change.

Frequently asked questions

How often should I update my ideal customer profile? 

You should review and update your profile at least every quarter, or more often if you notice a tipping point in your target market.

What’s the most important metric for measuring identifying prospective customer success? 

While this is business-specific, conversion rate is probably the most reliable indicator of the effectiveness of identifying prospective customers.

How can I encourage my sales team to use our CRM consistently?

Train them regularly, make learning as easy as you can, and, if possible, link their CRM usage to performance reviews or other rewards.

Is cold calling still an effective way of identifying prospective customers?

If it’s sufficiently narrowly targeted and personalized, cold calling can still work for identifying prospective customers, especially if you combine it with other methods.

Originally published Sep 04, 2024