Episode #008 of the Podcast: Classify or persevere? The Winning Sales Strategy!

• [00:01:16] Introduction to the topic
• [00:01:25] Segmentation
• [00:02:36] Hot calling
• [00:03:20] An "A, B, C, D" classification
• [00:04:20] Before or after a call?
• [00:05:01] Objective criteria
• [00:05:45] Examples
• [00:07:29] The importance of keeping an eye on your initial objectives and criteria!
• [00:07:55] Not interested
• [00:08:29] A question of timing
• [00:09:18] Companies that are not worthwhile
• [00:10:04] A company that is already a client?
• [00:10:24] When to say "stop"
• [00:11:24] The most common mistakes
• [00:12:31] Classification happens after actual contact
• [00:13:14] What analyses to carry out, and based on what other data?
• [00:14:12] Suspect vs prospect: the difference
• [00:15:41] Classification in appointment setting
• [00:18:05] The most recurrent needs in the "challenge" category?
• [00:19:46] Podcast wrap-up

Mr Performance: Hello and welcome to this new episode of the "Performance, Harmonie & Commercial" podcast, produced by "PHCom" in the "transforma bxl" studio in Brussels with technical support from "The Podcast Factory Org"

Mrs Harmonie: The "Performance, Harmonie & Commercial" podcast is aimed at marketing and sales managers, as well as company executives who take on sales responsibilities.

Mr Performance: Every month, we share good practices in finding new clients for companies operating in "business to business".

Mrs Harmonie: You can find every episode on the PHCom.be website, P.H.C.O.M, and also on all the main podcast platforms.

Mr Performance: You can support this podcast and boost its visibility by sharing it as widely as possible: with a like, a comment, a share!

Mrs Harmonie: The voicemail is still active so you can leave us a message, and we'll be delighted to reply.

Mr Performance: You can also book a meeting directly with Nadia or Stéphane by going to PHCom.Be

Mrs Harmonie: See you soon...

Mr Performance: Hello Mrs Harmonie.

Mrs Harmonie: Well hello Mr Performance, it's been a while!

Mr Performance: It's been a very long time, lovely to be back with you.

Mrs Harmonie: Same here, honestly, it feels good!

Mr Performance: So today we're going to talk about: classification and segmentation of a prospect base.

Mrs Harmonie: OK, OK, that's a lot of words, what does it actually mean?

Mr Performance: Let's start with segmentation. Segmenting a prospect base means dividing a target market into sub-groups according to certain characteristics. We already talked about it in the last podcasts, so let's go a little deeper.

Mrs Harmonie: A little reminder won't hurt, I think.

Mr Performance: Exactly. Segments are about classifying a database containing companies into groups of companies. In fact, the idea of a segment is to be able to build a specific script for particular products or services. In short, the idea of a segment is to be able to set up a communication approach that is fully adapted to it, and of course you'll get different results. That's actually the point of segmenting: being able to analyse the statistics and the results, and from there make decisions about each segment taken separately.

Mrs Harmonie: OK, OK, hold on, I'm thinking. So if I understand correctly, the key takeaway from what you're explaining is that segmenting means approaching part of the market in a differentiated way and tracking the results to steer what comes next.

Mr Performance: Exactly.

Mrs Harmonie: We've already talked about "Hot Calling". So is "Hot Calling" the same thing?

Mr Performance: Yes and no, as they say in Brittany, don't they? "Hot Calling" is the first step in a way of prospecting that consists of saying "I'm going to approach this person, let's prepare this call. What am I going to say to him?". With segments, well, it's a target group of companies, so it means defining a script for that group of companies. Which doesn't stop you doing "Hot Calling" afterwards.

Mrs Harmonie: OK, but so that's for segments?

Mr Performance: Not to be confused with an "A, B, C, D" classification. So, first step: segments. Second step: the "A, B, C, D" classification of the companies that belong to a given segment.

Mrs Harmonie: Explain all that to me again a little, because it's going off in all directions.

Mr Performance: An example always makes it easier! A company that sells catering, OK? It decides to target hotels, and then it also says to itself "I'll also target companies with more than 100 people". "Oh, I'll also target companies that give their employees lots of benefits in kind". Right, OK, that makes three different segments. Now, a company can belong to several segments: I can have a hotel with more than 100 people that gives its employees lots of benefits in kind.

Mrs Harmonie: Yes, makes sense.

Mr Performance: Now, when I approach it, I'll obviously have a tailored pitch, as I've just explained, but above all I'll be able to say "This company is really interesting". And that's where we talk about an "A, B, C, D" classification. "A" is the most interesting company, "D" is not interesting at all, you certainly shouldn't put any effort into it. With an "A", you can go for it, you can put in all the effort you want, you tell yourself it's a top company.

Mrs Harmonie: OK, but at what point do you apply this "A, B, C, D" classification, then? Before or after a call?

Mr Performance: Well, generally you classify "A, B, C, D" after a call, that is, once you have a set of information that lets you classify it "A, B, C" or "D". But you can also do it beforehand, telling yourself "This company looks really interesting on paper"; the "on paper" is what makes all the difference. So you can give an "A" classification to a company you've never approached, because you think it's really interesting, but what will count is, after approaching it, after speaking to the right person, is it really, really, really interesting?

Mrs Harmonie: If I understand correctly, it's really, really important to use criteria that are truly objective, and so to ask lots of questions to find out where things stand?

Mr Performance: Exactly. So before a call, instinctively you think "possible"; after a call, let's put the objective criteria in place. And in fact, the objective criteria will depend on each individual. Is it linked to high purchasing potential? Is it linked to a potential purchase in the short, medium or long term? Is it a purchase volume? Is it a company's ability to make a decision very quickly? It's all about defining the profile of the company that interests you most.

Mrs Harmonie: OK, let's make it a bit more complex. Let's take an example, and you'll explain it to me in more depth. If we take a company that is interested but isn't especially an interesting company, it won't be an "A", then.

Mr Performance: Exactly.

Mrs Harmonie: So a company that buys from a competitor could be a company classified "A".

Mr Performance: Indeed.

Mrs Harmonie: Because it remains interesting for the company.

Mr Performance: Quite right.

Mrs Harmonie: OK. Another example: the number of people working in the offices, or in one of the company's workshops, for example; it stays an "A"

Mr Performance: Same thing: if you're the one who decided it, why not? Now, it could very well be "Look, five people working in a department, that interests me". Whereas someone else will say "Well no, a department needs at least 100 people working in it". It's up to you to define that at the outset.

Mrs Harmonie: OK.

Mr Performance: Any other examples?

Mrs Harmonie: Turnover, for example, that has been increasing over the last three years: A, (Mr Performance: Same thing) B?

Mr Performance: Or "C" or "D", for that matter; indeed, you're the one who defines it. If you tell yourself "I want to approach growing companies", it's a good indicator. But conversely, you can tell yourself "Now I'm going to approach companies that are shrinking, because I have something to offer them".

Mrs Harmonie: So in fact, it will depend on each person and their perception?

Mr Performance: No, not at all, it's not a question of perception. These are precisely objective, objectifiable, objectified criteria that let you classify "A, B, C, D", because you defined them beforehand. A small digression: that's exactly what quality is, meaning conformity with expectations. If you're expecting to find a company with five people in a department, and you find one, that's quality, it's an "A". If there are ten people, you think "That's better", but no, we defined at the outset that it was five.

Mrs Harmonie: So it's important to always keep a close eye on your initial objectives and criteria!

Mr Performance: Exactly.

Mrs Harmonie: One last little example for the road?

Mr Performance: Go ahead.

Mrs Harmonie: The prospect who tells me he's really interested. What about him?

Mr Performance: Perfect! But is he interesting? Does he match the type of company that interests me? Yes or no?

Mrs Harmonie: OK, so an interesting prospect who isn't interested?

Mr Performance: Remains interesting.

Mrs Harmonie: And what about the ones who aren't interested, then? Where do we classify them? How do we define them?

Mr Performance: Several questions, indeed. A company that isn't interested, or rather a person who isn't interested, because in fact it's no longer about the company, it's about a person. You could very well have a department director who says he's not interested in your services, while the director of another department could be interested. It's never the company that isn't interested, it's a person who isn't interested. There can be lots of reasons why he isn't interested. Because he tells you so, simply because he didn't want to listen to you: "No, I'm not interested, thanks, goodbye". OK, that always hurts.

Mrs Harmonie: It can simply be a question of timing, too.

Mr Performance: It can be a question of timing: not today, but in September it might interest me. Today, I'm not interested. OK, we note it as "Not interested". With people who aren't interested, there can be lots of scenarios; you can even have someone who isn't interested because he has his secretary say so, which isn't very rich information. He may not be interested because he replies to a slightly spammy email saying "No thanks, I'm not interested", and in fact we don't know why. So with someone who isn't interested, the question is always: why? What's going on? Maybe he didn't understand properly, maybe there's a misunderstanding, maybe it's not for today, maybe it's for tomorrow, maybe he isn't the one in charge of it, but someone else is. There can be lots of reasons, so someone isn't interested, fine, but why?

Mrs Harmonie: OK. And as for companies that aren't worthwhile, what's the difference, then?

Mr Performance: Well, "not worthwhile" is generally the "D" classification in "A, B, C, D". Because, for example, it's a company that doesn't make decisions locally; all decisions on this subject are taken in the United States, which doesn't stop you from following up in the United States. It may be a company that doesn't have enough turnover, or is loss-making, or doesn't use this type of product; all of that, again, has to be defined at the outset. Careful: a company that uses another product is obviously among the interesting companies, since the proof is that they use the product!

Mrs Harmonie: It could also be a company that is already a client, in fact?

Mr Performance: Well, yes and no. There we go, our Breton friend is back, isn't he? A company that is already a client could be set to "stop", because ultimately it's interesting, but from a prospecting point of view there's no point in pursuing it. So let's set it to "stop".

Mrs Harmonie: Speaking of this famous "stop", it's true that I work at "PHCom", and I often see it in our records when we handle prospects for clients. When do we set "Stop"?

Mr Performance: Well, it's often at the start, on the file, telling yourself "This company doesn't interest me, it's not worth going after. On paper, it's not interesting" or "I've had a bad experience with this company in the past" or "I have another client who is a competitor of this company, so I can't approach this one". These are all good reasons that can lead to a "stop" upfront, so beforehand! You can also have stops after contacts, where you say "I've tried to reach him ten times, or 100 times, impossible to get hold of him, what do we do? Do we keep putting in effort? No, stop! We call it a day". We don't have enough information to say "It's not worthwhile", we don't have information to say "He's not interested", but we cut our losses.

Mrs Harmonie: When it becomes a waste of time, so to speak, when we've spent too much time failing to reach the person, we can treat it as a stop.

Mr Performance: Yes

Mrs Harmonie: What are the most common mistakes people make with these classifications?

Mr Performance: Very often, you tell yourself "Ah, this one, this persona told me I'm really interested, so I'll put him in class A". But in fact you don't have the information to say that the company is actually interesting, or I don't have the info, I haven't received any information, I haven't received all the information, and I classify it a bit haphazardly: that's often the problem of "I assume". I tell myself this company is good, but after actual contact, you need to have the information to say "It's really interesting". It's worth reviewing your classification over time. Your needs, as a prospecting company, can change and you can tell yourself "Ah, in the end, this type of company interests me more than that one", and at that point you need to review the entire database, because the idea of the "A, B, C or D" classification is the effort you want to put in. On a company classified "A", you can put in effort; on a company classified "C", well, you'll put in less effort to go after it, to open the door, to try to win it as a client.

Mrs Harmonie: So, to recap, the "A, B, C, D" classification is done after actual contact, meaning that you've been able to speak with people at the company.

Mr Performance: Indeed, 100% of your actual contacts should be able to be classified "A, B, C, D". That's another mistake too, telling yourself "Well no, in the end only 30% of my companies are classified A, B, C, D. So I'm not able to manage my prospect base properly". It really is the shift from suspect company to prospect company. I've prospected it, I've been able to speak with someone, he's given me information, they finally know I exist: it becomes a prospect.

Mrs Harmonie: OK, so we have the segments, we have the classes, but what analyses will need to be done, and what other data will we base them on?

Mr Performance: Very good. Well, the analysis is done from several angles: by segment, I have an "A, B, C, D" classification, I have more "A" companies in such-and-such a segment, but I also have more doors opened, more appointments booked, more offers made, more sales closed. In that segment, what results am I getting? In another segment, same thing. Across all my companies classified "A", am I getting good results? Am I selling more, or am I selling more to smaller companies that were less interesting on paper? As a reminder, "A, B, C, D" is the effort I want to put in to get into the company. So if, in a segment, I have lots of companies classified "A", and I have lots of doors opened, and I have lots of sales, keep going with that segment, you've found your market!

Mrs Harmonie: OK, you were talking about suspects and prospects. I think it's worth specifying the difference between the two so that it's clear, because it's not that obvious!

Mr Performance: So, suspect: as long as you haven't been able to speak with the right person in a company, it remains a suspect; they don't even know you exist, you hope this company is interesting. Prospect: I've finally been able to speak with the right person. Now, there are in a way several types of prospects. I can have a prospected company that isn't interested; we'll call that a "Cold Prospect". The company I've prospected, I've spoken with it, I've spoken with one or more people in the company and in the end I realise it's not worthwhile: it's a "Bad Prospect". And then, well, I have all the prospects I need to follow up where I haven't had an appointment yet: "Prospects to follow up". And finally, I have the good scenario: the company is interesting, it's in classes "A, B, C", he's interested enough to open his door, I have an appointment, wonderful, I have a "Hot Prospect". So from there, indeed, I can evaluate my performance rate by segment very precisely. So in summary, we have segments, we have classes, we have statuses: Suspect, Prospects, Bad Prospects, Hot Prospects, etc. We can do the analyses, we can feed the database again based on the results, and we can even go further still.

Mrs Harmonie: If I understand correctly, at PHCom we love analysing, classifying, segmenting, etc. But is there also a classification in appointment setting?

Mr Performance: Indeed: as soon as an appointment is booked, what type of appointment is it? Is it a presentation, challenge or competition appointment? Let me explain. Presentation appointment: the company is classified "A", is really interesting, he's not interested? No matter. It's not the right time? No matter! He needs to know a little more about you than just the name of your company. He needs to know, he needs to identify what your products and services are, what your added value is, what your "USPs", your "Unique Selling Propositions", are, and so, for that company, it's worth having a presentation appointment. Second type of appointment: challenge. I've identified a problem, a wish; the prospect I had on the phone when I prospected him, or when I exchanged emails with him, told me "I want to meet you because I can't manage to do this, or because I'd like to do that, or because it's a topic on the agenda but we don't know exactly how to tackle it". Those are challenges: we've identified a problem, we've identified a need. The third type of appointment that can be booked is a competition appointment: the company is, as luck would have it, looking for a supplier just like your company. Automatically, well, you're in competition with the others. Now, obviously, for a salesperson who gets a presentation appointment, the objective is to move on to the next stage. Where are the problems? Where are the needs? What are the challenges? If an appointment is booked where the challenge has already been identified during prospecting, the salesperson's role will be quite different: he'll have to explore that need in depth, show that we can meet that need, and therefore submit an offer.

Mrs Harmonie: Armed with the information he already has?

Mr Performance: Armed with the information he already has, that's what will allow him to go further. But the salesperson must be able to approach them in completely different ways: first, the presentation appointment; second, the challenge appointment. And if he has a competition appointment, again, it's totally different: he has to position himself against the other competitors already in place. The objective being to submit an offer under good conditions, and to sell as usual.

Mrs Harmonie: So you've explained the difference between the three types of appointment. To recap: presentation, challenge and competition. But the challenge one intrigues me a little. What are the most recurrent needs in this challenge category?

Mr Performance: Well, the classic needs can be linked to the person, to the company, or to legislative opportunities. For example, today people are talking about the "AI Act": to what extent is a company that already uses "AI" in its business able to comply with it? In the past we talked about "GDPR": there's a legal obligation, are you already compliant with it? These are still challenges. More classically, the challenge is "I have to", for example, "For PHCom, win new clients". That's a challenge for me, well, perfect, I have a challenge appointment. Or a company that provides language training hears "Yes, I have to send people to the United States, but the way they speak English doesn't allow them to negotiate properly". Thank you, I'm on my way, I have a challenge appointment, or even a competition one. The challenge is: the need has been identified, so what type of need is it? As I said, linked to the company, to a legal opportunity, and then there's the person: "Yes, I'm interested in seeing what you do". That's not a challenge, that's a presentation. "Yes, I'm interested in finding a solution for this particular issue": wonderful, I have a challenge appointment. There you go, I hope the difference between presentation, challenge and competition appointments is clear. The "A, B, C, D" classification of companies is just as clear, and so is segmentation. Thank you very much for your attention.

Mrs Harmonie: Dear listeners, thank you for listening, we hope you've enjoyed your time with us. Subscribe to the podcast, like, comment and share. And above all, don't forget to leave a voice message if you have any questions at all. As a reminder, there's a link in our podcast description.