A Golden Nugget of New Business Development

This past year (2009) was tough for most businesses, and 2010 will be tough too. Current account lists have been trimmed (in both numbers and profitability) because of the global economic contraction, and the focus of most business has turned to new business development to drive revenue growth. In fact, the majority of sales job listings on careerbuilder.com and monster.com are for salespeople that can develop new business, rather than organically grow existing business. Because new business development is so important to so many, I thought I would post an article on what I consider to be one of the “golden nuggets” that sales executives should think of to help boost his/her sales organization’s new business productivity.

The golden nugget is your sales force’s ability to QUALIFY NEW PROSPECTS. To better understand the implications of good/bad qualification on new business development, I find it’s insightful to take a look at the sales funnel. There are two characteristics of the sales funnel that I find to be telling about new business development. The first is that as opportunities move down the sales funnel, they require an increasing investment of your company’s resources (time and money). The implication is that if you let an unqualified opportunity move down the funnel it will become very expensive (in time and money) very fast, and you will lose out on the opportunity to invest those resources in other opportunities. The second characteristic is that the greatest number of prospects sit within the first stage of your sales funnel (often called prospecting or initial contact). The average amount of time that your salespeople spend qualifying a prospect in the first stage has a HUGE impact on your sales force’s time. If your sales force reaches out to 100 prospects a week, an average qualification time of 30 minutes versus an hour can free your sales force of 3,000 hours per week; that’s equivalent to adding 75 full time employees per week.

So where does qualification fit into the sales funnel? Qualification is the process by which your salespeople identify the quality of the prospect, and determine if the prospect is worth pursuing. In the sales funnel this is reflected by the movement of a prospect either from the first stage (often called “initial contact”) to the second stage (often called “needs analysis”), or the elimination of the prospect from the sales funnel altogether. Qualification has a profound impact on both the number of expensive bad opportunities that leak into the advanced stages of your sales funnel, as well as the time your salespeople will spend trying to qualify prospects. If you could use 75 new salespeople, or would love to have invested more resources in a big opportunity that got away, here are a couple tips to help your sales force qualify opportunities efficiently and effectively:

–Define Qualification: Generally speaking, a qualified opportunity is one in which the salesperson has spoken with someone involved in the decision making process, has found that the target company has a need, and is certain that the target company has an interest/commitment to take action to meet that need. As I am sure you know, there are different degrees of quality and you will want to invest your resources accordingly. I generally find that there are roughly three characterizations that businesses gravitate to once a prospect is deemed to be over the quality threshold: 1) Good enough to let a salesperson invest their time. 2) Good enough to assign local resources (engineers, regional marketers, local sales managers) to the opportunity. 3) Good enough to assign corporate resources (regional sales VPs, directors of product management, C-level suite) to the opportunity.

–Create Qualification Questions: After you have defined what a qualified opportunity looks like, you will need to determine the key questions that your sales force must answer to determine the quality of the prospect. I’m a big believer in looking at my best employees for insight, and almost always find that the best new business development salespeople will have a good understanding of the questions they ask to determine if the prospect is worth putting more effort into. For example, a good qualification question I see elite salespeople answer is “Does your prospect have an assigned budget for the project/product/service?” That might give you insight as to whether the prospect has made a commitment to meet their need.

–Answer Qualification Questions: Once you’ve determined the right questions to ask, it’s time to ingrain these questions in your sales management, sales process, coaching priorities, and CRM software. The key here is to emphasize the importance of answering these questions in as many places as possible; this will help to create an environment (as opposed to a “flavor of the week” initiative) that exudes the importance of answering qualification questions. You can always just require that they answer them, but unless they see those questions as important they are likely to game the system.

–Training!: As a manager and a leader, whenever you set a strong direction for your people it is important to surround them with the resources they need to do accomplish their goals. Seek out an internal or external sales training group that specializes in helping salespeople qualify, and follow up with support: here are a few tips that will help you with sales training.

–Set Goals and Measure Results: As with anything, measuring progress towards your goals is crucial. If you aren’t sure about what goals you need, set-up your qualification infrastructure (steps above) and then start to gather data to help you set a baseline. Set up your goals so that they are consistent with the other goals for your sales force.

One important note: The reason why I see most companies struggle with qualification is that they over rely on one of the two different types of questions they make their sales force answer: objective and subjective. An objective question requires a black and white answer, such as “Is there an assigned budget for the project/product/service, and what is the amount?” Customers have never fit neatly into objective boxes because they are all unique, and a salesperson’s value often lies in their intuition. Holding back your investment in all prospects unless the answer to this question is “Yes” might be a mistake. A subjective question relies solely on the perspective of the salesperson, which often varies from salesperson to salesperson. Of a ten prospect account list, one salesperson might see five qualified prospects while another might see two. This makes it very hard to truly see the ripe opportunities that you should invest resources in winning. In order to be as accurate as possible, it is vital that you use a mix of both subjective and objective questions.

Five Ways A Business Development Consulting Firm Can Help Your Business

For a small business owner, it may be challenging to get his or her company off the ground. Therefore, it may be necessary to enlist the services of a business development consulting firm. A consulting firm can help a new company figure out ways to expand and thrive in the marketplace. Here are five specific ways that a consulting firm can help your business thrive.

1) Target Your Customers Effectively

Do you know who your customers are? If you do know who your customers are, do you know how to reach them? A good consulting firm will show you what your customers need to hear before making a purchasing decision. From there, your business can devise a marketing plan that will convince customers that they need what your company has to offer.

2) Build An Online Presence

The Internet is an amazing marketing tool when used correctly. With proper guidance, your company can build a solid online presence that can be leveraged to increase sales and increase visibility for your products or services.

3) Develop Your Brand

A good brand can sell products all by itself. Therefore, it is important that your company has a strong brand that customers can identify with. If your company wants to be known for great customer service, offering 24 hour service to handle returns could be something that your business could offer. Another good idea would be to have a call center that is open around the clock to address customer complaints and concerns.

4) Learn How To Interact With Other Businesses

Other businesses in your area may want to promote their products in your store. In exchange, these businesses may be willing to promote your products in their store. For example, your lawn mower supply company may want to partner with a hardware store or a landscaping business to create a dynamic marketing initiative. Your lawn mowers could be promoted in the hardware store while your company helps to promote your local landscaping company.

5) Understand Where Opportunities For Growth Are

There are always opportunities for your company to grow. Whether it is expanding into other markets, targeting new customers or creating new products, sales should never stay stagnant. A consulting firm will be able to point out these opportunities to you well before you have thought of them. This will enable you to be the first company in your industry to enter a new market or to create a new product that customers desperately need. Typically, the company that is first to offer a product or service is the company that is associated with that product or service even after competitors offer something similar. This makes it easier to maintain a larger portion of the market share.

When used correctly, a consulting firm can be your best friend. You will have someone who you can turn to when you need advice or at a loss for ideas. The best part is that most consulting firms are staffed by people who have experience in the business world. This experience can be used to give your company a leg up on the competition.

Business Development Advice from the Chair of the ABA Commission on Women

Pamela Roberts, Esq., a partner at Nelson Mullins Riley & Scarborough, has cracked the code to becoming a rainmaker: get active in a big national organization, focus on public service and let the referrals come in. Her story illustrates how any lawyer can do the same; and her questions at the end of the article can stimulate your own success story.

She is no ordinary lawyer. Roberts is the Chair of the ABA Commission on Women in the Profession, a prominent national position that gives her frequent exposure on the wide range of issues facing women lawyers. And she does it while being a mother of four, wife of another partner in her firm and full-time business litigator at a 400-lawyer firm.

Only 17% of women lawyers are equity partners, and most firms have just a lone woman rainmaker – statistics that Roberts finds distressing. “Becoming a rainmaker always been somewhat challenging. It’s so much more challenging for a woman,” she said.

But she herself is active in four local charities, which brought her referrals. She is a regular public speaker before audiences of clients, and she attends trade association meetings in the industries of her clients.

How does she do it all? “I gave up on sleep,” she joked. “Seriously, my husband and I made the decision that by having two people working full time, we have to pay for nannies and support help.” Help is essential, especially when one of your kids is on two traveling soccer teams.

Getting Business from the Bar (or other Organizations)

And so is focus. Roberts pursues activities and passions where she can build relationships. For her it’s been the American Bar Association, where she began more than a decade ago by working her way up the Litigation Section. Her husband gave her an early demonstration of networking.

“I was attending an ABA Litigation section meeting. My husband, who is also a lawyer and avid golfer, was with me and he went out for a round of golf. He came back to lunch with another couple: one, a potential client whom he had been golfing with, and his spouse, who was a litigator attending the ABA meeting. She and I had never spoken though it’s only a group of 200 people! Meanwhile, these two guys played one round of golf and had already exchanged business cards and followed up with notes to each other,” she said.

Roberts devoted herself to the ABA and today is a member of the ABA House of Delegates, the ruling legislative body. She served on the Board of Governors – the ABA’s board of directors – from 2002-2005, and is a former member of the commission on what is today named the Commission on Racial and Ethnic Diversity in the Profession. She was Chair of the Young Lawyers Division and served on the ABA’s Nominating Committee and Special Committee on Governance.

She was following a key rule of business development: to join an organization and become visible in it. “My continuing motive always has been the underlying work,” she said. “I’ve always been a believer in the public service aspect of the ABA.” At the same time she started seeing immediate business benefits, because South Carolina is a small state and lawyers around the country would refer local legal matters to her. “I’m not aggressive about business development in the ABA,” she said. “But certainly, yes, the ABA is a good arena to get referrals. Just like golf or trade association activity, once you’ve worked together with other lawyers you can build relationships.”

To achieve her success, she advises other lawyers: “You must treat bar association membership as you would treat a client: honor deadlines and respect other people’s time and input. It is not only rewarding, but you’ll succeed and will be around a long time and get the opportunities.”

Roberts uses several specific techniques to generate new business:

  • Speaking engagements. “A speech is absolutely a business development opportunity,” she said. “Sometimes it doesn’t even matter what you’re speaking on.” She said it impresses clients if they merely see their lawyer on a panel discussion at an industry event. “The ideal setting is when a client is in the audience and you’re speaking on something important that directly affects the client.”
  • Niche building. The bane of litigators is one-time engagements. Lawyers typically will work with a client on litigation for years, but when the case concludes, so does the relationship. To overcome this problem, Roberts built a niche practice to offer the same service to multiple clients. “I did a lot of securities fraud class action defense work. A lot of them were one-time cases. What I did was parlay my expertise so it worked for other clients. I can say to one client that I did this particular work for two others. That’s how you build a type of expertise into a niche practice,” she said.
  • Referrals from civic boards of directors. Roberts is on the board of the Trinity Housing Corporation, Claflin College, the local YMCA and the local children’s museum. “All four of them are outside the legal profession. They clearly introduced me to civic leaders and opportunities to talk about what our firm did. Those opportunities also led me to meet decision-makers of current clients. Board membership is a great way to solidify both the firm’s relationship and build my own expertise,” she said.

Rainmaking is the key to breaking the glass ceiling that stops women from moving up in law firms. See the other feature articles this month on the same theme. Lawyers who want to smash through the barrier should emulate Roberts’ example, starting with her

Business Development Strategies – 4 Stages You Need to Understand

Business Development Strategies are presented here as a measure of how businesses can grow and develop over time. In his book, “Fire, Aim, Ready”, Michael Masterson does a splendid job of explaining the problems, challenges and opportunities connected with each stage of business development.

Stage 1, Starting Out: You have just taken your business from an idea to actively running and developing a positive cash flow. ($0 – $1 million).

Main Problem: You really don’t know what you are doing.

Main Challenge: Making your first profitable sale.

Main Opportunity: Achieving a critical mass of customers.

Stage 2, The fast growth stage: Taking your business from the $1 million level to $2 million a year in profits. ($1 million to $10 million in revenue).

Main Problem: You are breaking even or may even be losing money.

Main Challenge: Creating many additional, profitable products quickly.

Main Opportunity: Increasing cash flow and becoming profitable. Being cost effective is key to profitability.

Stage 3, The adolescent stage: Take your business over the $10 million threshold with profits in the range of $2 million to $5 million. Revenue parameters are from $10 million to $50 million.

Main Problem: Your systems are strained and your customers are noticing.

Main Challenge: Turning chaos into order.

Main Opportunity: Learning how to establish useful protocols and manage processes and procedures.

Stage 4, The Stage of Maturity: Your business has now grown with revenues of $50 million to $100 million or higher.

Main Problem: Sales slow down or even stall.

Main Challenge: Becoming Entrepreneurial again.

Main Opportunity: Getting the business to run itself.

You may find that Business Development Strategies outlined herein may be relevant to you today. You may also find them to be more relevant at another time in your life. It is hoped that you will identify where your business is today and will make plans to deal with the challenges that lie ahead.