What does a sales person have to understand about their prospects?
Know your market, your product offering, and your customer.
You should not be selling contracts meant for a 100k-people company to a 1k-company. Your budget and your sales techniques should match with the customer and their needs.
Rick Jordan, for example, only sells to 20+ people company because those are his best customer. They already understand the pain his product is curing. If he tried to sell to a smaller company that has never seen the need, it would just waste a lot of time for both.