Business development: All in, all the time
In today’s fast-paced, competitive business landscape, one of the more common mistakes business leaders make is to treat business development as an afterthought by “accomplishing” it in their spare time. Unfortunately, this happens all too often, and in this scenario, securing business deals becomes accidental rather than deliberate. Such an approach uses up valuable time and resources.
Successful business development is a purposeful, full-time, company-wide cultural effort. Every member of the organization must understand the overall business development strategy and be committed to its success. Not only should the professionals dedicated to full-time business development roles be engaged, but employees at all levels, including senior leadership as well as administrative and support staff that have any interaction with customers or support those who do.
All individuals in the organization should understand the value their roles play in supporting the generation of new business as well as maintaining existing clients. It is important to have a plan in place that is well thought out and spells out the approach of the business development team and its supporting office members.
To grow a business each year, it is imperative to understand the conversion ratios of qualified opportunities to the closing of the sale. Arguably, the most important sales process metric to focus on is the close ratio of proposals to new business.
For example, if one’s close ratio on proposals is only 20 percent, then for every $1 million in new business, the company must secure $5 million of qualified opportunities in its pipeline. If the company’s average deal size is $1 million, then it only needs five deals per year in its pipeline to meet the target. However, if its average deal size is only $100,000, then it needs 50 qualified opportunities to meet its target, which requires considerably more work.
While this may seem like a rudimentary concept, it is surprising how often seasoned executives assume they will meet their targets for growth without understanding the amount needed in their pipeline at any given time. By understanding this simple metric, one can work backward to set targets for the number of meetings required each month in order to uncover enough opportunities to meet sales targets for the year. Focusing on the conversion ratio also provides an opportunity to analyze success factors for conversion and implement strategies to improve success at each step in the process.
Once a calculated plan is in place, leaders should ensure all employees understand the nuances of relationship building, thereby developing a culture of success at every level. All team members, from executives to administrative professionals, should learn how to present the organization when speaking to clients and prospects. Employees should be trained to continually seek opportunities to develop relationships with current and potential clients, and be recognized for their efforts. The training should include relationship development, teaching techniques to discern a client’s motivation and then tailoring interactions to the specific values of each client or prospect.
Leaders should also examine which team members are actively involved in the process. It is important that all accounts have lead representatives that can deliver in two areas: subject matter expertise and relationship development. Many organizations make the mistake of assuming that the subject matter expert will also be effective at relationship building simply because the client will be impressed by their technical capabilities.
To grow accounts, professionals must understand the manner in which a customer wants to build the relationship. Otherwise, they run the risk that the ability to sell to the client will be limited by the business development capabilities of the subject matter expert, who may not understand how to successfully grow relationships and cross-sell other products or services.
Similar to the standard business or marketing plans that companies traditionally develop, business leaders should also establish tactics for meeting their specified business development goals. It is crucial to establish this policy early and engrain these efforts into the office culture. By ensuring that all employees keep business development in mind, office leaders are well on their way toward winning more business and serving happy clients.