Business Development Basics

Posted by Kym Heffernan on Feb 11, 2020 11:13:13 AM

Integrated Sales and Marketing activities have always been an important part of business development. You cannot have a successful Marketing Strategy without a great sales process backing it up. However, “sales” is not about selling.

Most professionals are experts in their own trade, but are not taught about Sales. They think it’s beneath them, cheesy even, when it comes to selling.  

In our most recent podcast, we interviewed an expert in Business Development. Alistair Marshall from Professional Services BD who explains why the Expert Model is the way to go.

A lot of his work involves working with individuals and groups around up-skilling, that is, giving the people confidence and strategies to go out there and talk to people face to face.

The pillars around which these teachings are built are what we call the Expert Model which encourages people to demonstrate their expertise.

There is a platform and system that you need to follow to demonstrate this expertise and there are 5 steps that will help you get there.

1- Sales Strategy and Planning

a. Ideal Customers

If you think that every person out there is essentially a potential client, then every business out there is your competition. You don’t want to be a small fish in a big pond because nobody hires a generalist anymore.

People want experts. Keeping this in mind, you need to decide what your idea client looks like and focus on becoming an expert for these clients. You cannot possibly be the right fit for everyone out there. If you spend your marketing dollars on everyone it becomes dangerous, complicated and expensive. This is where, for example, law firms really struggle. They try and offer full service offerings but they need to realise that they cannot be everything to everybody.

Which is why the best way to plan your marketing is to use the 80/20 rule.

This is where you analyse where 80% of your profits are coming from. You will probably conclude that it comes from 20% of your clients. You need to then work out what your ideal client looks like based on these stats. What do they have in common, which industry are they in and what type of work do they do. This will give you a clearer picture on what your customer looks like.

b. Customer Value

 Another important point in the Expert Model is how to calculate what your ideal customer is worth to you. And this is where we talk about “Lifetime Value”. Most firms have an annual budget to invest in new customers. For example, let’s say that amount is $10,000. Once that $10,000 is spent, the finance team may turn around and say that the money is gone, we don’t have any more to spend.

Let’s now look at this another way. Start by looking at the profile of your idea client. That client may be giving us $50,000 a year and stay with us for 3 years on average. That is a total of $150,000. The dollar figure or percentage to really focus on is how much is a business willing to invest in starting and then nurturing the relationship with that client. If you allocate 10% of the lifetime value on building a relationship with this client, then you are spending $15,000 for $150,000.

c. Spend Budget Wisely 

The Expert Model says that most of Marketing is around speaking, writing and networking. These don’t require large sums of money. In fact, the most expensive things in marketing and advertising are actually the things that don’t win business. 

d. The 5-5-5 Rule

Too many times, a business development manager is handed a list of 100 – 200 prospects and has been asked to go and make relationships from that list. That’s far too many people and BD’s struggle to get their head around it. This is where the 5-5-5 rule is handy.

  • 5 x Existing Clients: Dedicate time to 5 existing clients. If you spend more time with them, you will get the opportunity to cross-sell other services to them or refer people to them. and encourage cross-selling to get more work. Your biggest asset are your existing clients and customers.
  • 5 x Prospective Clients: Commit to spending a couple of hours a week on 5 prospective clients which match your ideal client avatar. A great example here is Dentists. They want to become the go-to dentist in New South Wales. How does that happen? You need to work out what the ideal client looks like and work your way from there.
  • 5 x Referrals: The third part focuses on referral partners. These are people who you do not necessarily invoice, but you work with them in getting new referrals. For example, if you are a dentist, it is likely you have an X-Ray machine. If your target market is dentists, then maybe the best strategy is to build relationships with the suppliers who supply the X-Ray machines.

e. Learn about your ideal clients’ business

If you want to be an expert in your industry, read books on your ideal clients’ services. If you want to be an expert in accountancy in the dental industry, learn about the dental industry. This gives you a clear understanding of your ideal client.

2. Dedicated Time and Resources

The second step focuses more on the time and resources you dedicate to finding a new client.

“…but I don’t have time, I’ve always got so much on!”

Does this sound familiar?

a. Face-to-face meetings 

There are many business owners who simply prioritise other tasks over client time. Getting together, face to face with a client is very important in business development, but many professionals put that at the bottom of their list.

Put two hours aside per week and dedicate that to client fulfilment. A tip would be to avoid Mondays and Fridays because usually there are too many distractions. So, on Tuesday, Wednesday and Thursday, get out from behind your desk and build relationships with people face to face.

b. Blogging

Another very important task to dedicate your time and resources to is “being found”. If you want to be found, you need to spend time optimising your blogs and writing articles that revolve around your expertise. When this is done well, people make more progress in 3-6 months than they have in 3-6 years.

3. Measurement and KPI’s

a. Measure Activity

When you talk about a business’ financial position it depends on two things, operations x marketing. Basically, it is how good you are at what you do multiplied by how good you are at what marketing you do.

When asking a professional firm to mark themselves out of 10 for financials, most people will say 6 or 7. But when they are asked about how good they are at what they do, the answer is usually 9 or 10.

If you want more money in the bank, you don’t need to get better at what you do, you are already there. The activity you need to focus on is getting better at telling people what you are good at. This is Marketing. This is your story.

Going back to research, people say they spend about 250 hours a year (roughly an hour a day) on marketing. But scratching under the surface, you discover only 30% of that was face to face.

70% was sitting behind a desk, writing blogs and posting on Social Media platforms like Facebook and LinkedIn. These are equally important, but more focus needs to be placed on face to face meetings.

So, one of the things you can measure in your business is how many external meetings you can do in a week.

Based on the 5-5-5 rule, you need to organise 15 meetings a week to double your profit. Most professionals don’t have time for that many. If you focus on 2-3 meetings a week (that’s 100-150 meetings a year) and focus on mastering your delivery, you will succeed.

Examples of activities that you can test and measure that are activity based:

  • How many meetings have you held
  • How many networking events have you gone to
  • How many blogs have you written
  • How many events have you spoken at

b. Measure Satisfaction:

Another very important measurement is referrals from your clients.  

When was the last time you asked your client for a referral?

The best time to ask for a referral from your client is when they are happy with your work and are giving you a 9 or 10 for the last piece of work you did.

c. Staff Satisfaction

Whilst getting a high performance score from your clients is important, it is equally important to ask your employees and staff to do a satisfaction score. A disgruntled and disengaged employee is toxic for your business. You want to make sure they are happy and performing at their best. Happy staff leads to good customer service and creates a business worth referring.

4. Skills Training:

Professional Services businesses have two challenges, visibility and credibility.

Visibility:

Visibility can be achieved if you are constantly posting online, writing blogs and sharing valuable information to your audience. In the professional world, the focus should be on LinkedIn or Twitter.

Credibility:

Credibility is how you come across when you are actually face to face with people.

There are many who go to networking events and chat to people about business. But when it’s time to close the deal, they do not know what to say or do. The opportunity stagnates and does not become billable work. This is a sales problem.

To up-skill, Alistair has developed a framework you need to look at. This is learning how to convert a face to face interaction into a sale. You can use this framework to suit and if you stick to the formula, it works really well, even for the biggest introvert.

There is also a big problem when you come face to face with a referrer. You need to do a better job at winning because they weren’t thinking of you to start with. They may already have someone who is selling them the service you offer. You need to be skilled at what to say and do to handle objections and win this new business.

Going through the referral process takes time. Sometimes it may take 6-12 months. Trust needs to be built.

5. Create a Sales Culture

You need to create a Sales or Business Development Culture for your business, not just a business as usual culture.

 “Culture eats Strategy for breakfast everyday” – a phrase you may have heard in the consultancy world.

Incentives for people successfully changing their attitude towards business development should be created and consequences for non-achievement should be put in place for a culture to thrive.

Coaching and training is important in every team. They need to be up-skilled and equipped with the best knowledge before they can go out and make the most of it, because the Professional Services market is competitive.

Professional Services firms are 80% people and 20% everything else. If you get the 80% wrong, it can create an uphill struggle.

In Summary:

The 5 steps in the Expert Model described by Alistair Marshall can help any Professional Services business with sales.

  • Working on implementing the right strategy and putting the plan in place.
  • Making sure you dedicate time and resources in face to face meetings and being found as an expert in your industry.
  • Measuring the right Key Performance Indicators in your business
  • Up-skilling and making sure you have the right skills training in place
  • Developing a Sales Culture for your business.

Not sure?

If you need to create a solid Sales and Marketing Strategy or need someone to cast an independent eye over your plans, we'd love to help to make this happen for your business.You can reach us on (02) 9125 0520 or visit our website. 

 

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Topics: Marketing Strategy, Professional Services, Sales Strategy, sales improvement, business development

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