How Many Prospects Are In-Market?

What is Business Development?

How many of your prospects are In-Market?
The rule of thumb is 3% are ready to buy.
Here's how to find the exact amount.

Active Prospecting Tactics directly engage prospects.

But, how do you know which ones to target?

The graphic below was popularized by Chet Holmes in 2008.

See link to his book, The Ultimate Sales Machine, in comments.

Holmes’ research showed that, at any point in time...

3% of prospects are in the Conversion phase
7% of prospects are in the Activation phase

Prospects in the Activation and Conversion Phases are “In-Market.”

The remaining 90% have no intent...

30% are "not thinking about it"
30% "don’t think they have a need"
30% are "absolutely not interested"

Holmes’ research is generic, not specific to every product category.

Here's how to calculate more accurate figures for your product...

1. Determine the Inter-Purchase Rate (IPR)

Survey how often prospects purchase a similar product.

EXAMPLE:
Americans buy a new car an average of every 6 years.

2. Divide the number of all Potential Buyers by IPR

This equals the number of annual car buyers.

EXAMPLE:
330 million Americans divided by 6 years = 55M buyers

3. Divide number of Annual Car Buyers by Sales Cycle Time

Prospects may not be In-Market the entire year.

The average US consumer takes 3 months to research and buy.

EXAMPLE:
Divide 55 million annual buyers by 4 = 13.8M are In-Market.
So, only 4% of car buyers are In-Market, at any given time.

Prospectors ideally target prospects in the Activation Phase.

These are the most efficient and effective prospects to target.

Prospectors can use my Nurture Intent Cycles of Engagement (NICE).

CAUTION:
Prospecting in the Conversion Phase is efficient since buyers have declared intent and are ready to purchase a product now.

However, it may not be effective since many of these prospects may already favor a competitor’s product by the time they declare intent.

For this reason, targeting prospects in the conversion phase is often called a “Blue Bird” opportunity.

WARNING:
Prospecting the bottom 90% is least efficient since they have zero intent.

This is the zone where Marketing and BD collaboration is critical for capturing prospect attention and making prospects Problem Aware.

Tony Gray, BDP
Author of the Business Development Body of Knowledge

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