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.

Back to Basics: Understand the Full Cycle of Business Development to Get More Contracts

My 7-year-old daughter, when working on a puzzle, knows to glance at the whole picture first, before starting to assemble the pieces. So, her process is to study the picture, and then find a corner piece to which she then starts adding pieces.

We, as adults, sometimes forget to take a step back and look at the whole picture first when we solve our own puzzles: how to grow our company, how to get a contract, or how to bring in revenue. This is why an important tip for winning government contracts is to step back and take a few minutes to ponder the full life-cycle of business development. This way we can be better at putting the pieces together.

The several steps below shows a typical business development life-cycle for a government contracting company.

Step 1: Strategic business development planning is the corner piece of the puzzle. It is necessary because it becomes your beacon when you start looking at a universe of opportunities. Businesses often fall into a trap of working without a plan, or writing the plan once, and then leaving it to collect virtual (and physical) dust while they are engaged in the routine day-to-day operations. The trick here is to stick to the plan that you keep up to date, and avoid jumping at every opportunity that may have nothing to do with the plan but seems attractive at the moment.

Step 2: Market research is the next step. It goes hand-in-hand with your strategic business development plan and makes the whole planning process somewhat iterative. In order for you to plan, you need to know which vertical markets you are going to go into, and who are your ideal customers. This leads you to more detailed research, which then feeds your planning process.

Step 3: Pipeline development is the natural outcome of your market research. Now that you know which agencies and which areas you are going to explore, you will need to zoom in further and develop a list of opportunities that you are then going to narrow down further and further as you learn more about them. These opportunities will be in the near term with a request for proposal coming out in 1-6 months, the mid-term – with an opportunity expected to open up in the next 6 months to 1 year, and long term – 1-5 years out. Some of the large and important opportunities may then make it into your strategic plan – and you may start calling them strategic bids or must-win opportunities. Marketing to the federal government is related to the overall effort of attracting customers to your company, and creating awareness of your brand and offers.

Step 4: Opportunity identification narrows down the list to the select few pursuits that you decide to dedicate a significant effort to pursue. Each of these individual opportunities then enters the capture phase.

Step 5: Capture management. Capture (yes, it’s what it’s called in the professional business development circles) often is the longest step in the business development life-cycle. It has to do with positioning yourself pre-proposal for a specific opportunity. A proposal usually has a short deadline, whereas capture may take years. It doesn’t necessarily mean years of someone doing it full time. It means years of deliberate activities all leading you up to the victory. For example, I once ran a capture effort for 2.5 years for a billion dollar plus pursuit, but only spent $50,000 on my time and the time of an entire team of specialists during the first two years. It was not until the last 6 months of the capture effort that we had to focus a lot and start spending more money.

Step 6: Proposal management. Proposal management (or proposal preparation) is essentially just that: managing the development of a winning proposal document to deliver it by the deadline. It is an iterative process that usually involves multiple contributors and a set of reviews to check quality and progress. Here are some of the most important characteristics of a winning proposal, majority of which stem from a well-run capture effort:

– Matching the solution with the customer’s wishes and vision through a solid capture effort.
– Great process that gets you to the deadline without undue stress and allows you sufficient time to polish your document.
– Targeted features and benefits, with a clear value proposition.

Step 7: BD during implementation. The reason contract delivery is part of the business development life cycle is simple: once you have a government contract, the ground is ripe for adding scope (what is called “an up-sell” in sales).

Your people who work on the project with the customer are your eyes and ears if you train them correctly in the capture process. They can find out about the need for additional work, and inform your business developer. Your business developer will pay a visit to the government representative, learning more about the requirements. They can then use this information to submit a white paper or an unsolicited proposal. This may result in adding scope to your existing contract.

Your staff on the ground can also tell your business developers about other requirements they may be hearing about that may not yield themselves to adding scope. These are new additions to your pipeline – but these additions are infinitely more valuable than others because you get to hear about them early, they are from an existing customer that bought from you before and therefore trusts you more, and you already have a relationship.

During implementation, you also generate past performance track record that you can leverage in your next proposal. On the other hand, if you don’t do well, then you get to tarnish your record with the government very quickly – and this record proliferates from this customer to other government agencies through various past performance databases. It is important that once you have won a contract, you do a great job. Do whatever it takes to deliver and please your customer.

So, now you have the big picture, and know how all the pieces of the business development puzzle are supposed to fit together.

Watching a Business Develop Around You Is a Gift

Are you wasting time getting your business off the ground? The time we spending on building a business is never wasted. Entrepreneurs are consistent in their business efforts. So why does it take some of us longer to see the results? Is there something we’ve missed? No, it is not a race, you will see others there before you and that’s okay. Be happy for them, ask them how they did it. They are happy to share and you maybe surprised at what they tell you.

Everyone can start with the same opportunity, the way you approach it is different. Some of us have a wider learn curve then others. Training is your part of the equation. You have to take what you have learned and act on it. Learning is not a waste of time unless, you think it is. If you feel that it is,your letting your emotions over ride your thinking process. You have to stop giving your emotions power over your decisions. If you are having a negative emotional reaction, it is because your not getting what you want without doing the work that it takes to get there. If you are busy worrying about someone else you will never see what you have in front of you.

People that feel like they are wasting their time are busy complaining. They are not doing what they need to do to get the results they want. They are still hoping that someone will come in and do it for them. Building a business is work. When you feel discouraged, you are not feeling the rewards for your efforts. What are you thinking, you can’t complain and have a positive out look at the same time. Whining is a negative act fuel by emotions. If your personal business development is lacking momentum you are the only one who can change it.

Adding a new training task to your list that will benefit you and make it easier. You can start building up your tool box with positive acts. Volunteer or go out and do an act of random kindness if you want to feel good about something. Only you can move forward, I can’t push you or hold your hand to success. You are the secret to the success of your business or your career. Fitting in to the role as a success person developes as you act on the training and the informed decisions you make. Exercising positive thinking because if you are only putting your toe in to test the water, you may never get in. What I learn today I can use to help someone do what I do. It is part of my business model.

Be too busy to dwell on negativity. Everyone is different so their challenges are different, Waiting for your light bulb moment will keep you in limbo. Everyone that sticks to the training long enough is going to see results. When your moment happens you will be ready because you invested on it. People, you have to carry out the training or it will not work. Entrepreneurs do not get paid for time. They get paid for results. Entrepreneurs really are too busy to worry about your negativity, they focus on whats important.

Watching a business develop around you is a gift. You will see it if you stay positive through the experience, you are the secret to your success so don’t give up. When my business changed, it was when I realised that I am the business. I have to take this to the next level and treat this like a business not a hobby. I am responsible for the decision I made. Most entrepreneurs can tell you when things stared turning around for them. Now when an opportunity comes they are ready. The reason they can do this is because they are positive thinkers that are successful because the took advantage of the opportunity in front of them. They look at it with an open mind and then zoom in on the facts taking emotion out of the decision-making.

Training your mind to take action is the way an entrepreneur’s mind works. You can teach your mind to leave emotion out of your decision-making. You start by training it to take action on facts, so it doesn’t react to emotion. You want it, doesn’t mean you need it. Take some time, up to a day if you need it to make decisions. Give your brain time to wrap around it. Listen to your gut as the facts unfold and you will make the right decision. A business mind will zoom in and out putting their focus on what is the best decision for the business and the people the business supports. Leave the emotions at the door and look at all the ways you can make a positive impact versus a negative one. Celebrate small milestones as much as the big ones, because they keep your momentum growing. Be positive take one day at a time and keep the future where you can see it.

How to Take the Pressure Out of Business Development

One of the main reasons why salespeople fail in sales is their lack of attention to business development. Business development is integral to sales success yet many salespeople I have spoken to avoid or put minimal effort into prospecting activities. This in my opinion borders on sales call reluctance.

What is business development?

• Business development is about developing new business with both potential and existing clients
• A sale rarely happens on the first meeting. It requires multiple and varying touch points such as the phone, social media and email over a period of time
• Business development needs to be consistently implemented to maximize new sales opportunities and to create sales growth.

Creating new sales opportunities

The less you know about a potential client the more difficult it is to succeed in getting a meeting. Your targeted clients can be divided into:

• No Information – you know nothing about the organization and have no contacts
• Limited Information – you have some information about the organization but haven’t developed any contacts.

Strategies to connect with potential clients you have never contacted

• Use social media to gain information that you could use
• Phone direct once you have developed your value statement
• Use 6 degrees of separation – who knows who within your circle of influence who knows the potential client?

The ‘cold’ call

The term ‘cold’ has been used in sales for decades and conjures false thoughts and feelings. There is nothing cold about contacting a prospective client for the first time. It’s new but not cold so could I suggest you replace ‘cold’ with ‘new?’ Words impact on how we feel.

Words impact on how we feel

Salespeople often struggle and can become mentally immobilized when calling a potential client because:

• They put too much pressure on themselves to make the appointment
• They become self-centered instead of focusing on the client
• They become fearful of saying the wrong thing
• They have a push instead of a pull mindset
• They start selling when the client isn’t in the process of buying
• They use words and phrases commonly used by most salespeople
• They try to take short cuts.

Salespeople often start by talking about themselves and their company. For example, “The reason for calling is I’d like to set up an appointment to introduce myself and tell you about our new product/service”.

The attention needs to be on what is in it for the potential client. This is done by stating value from their perspective and can be measured. A value statement can be tangible and/or intangible that lets the potential client know what they can expect when using your product/service. Intangible value is not easy to measure, for example lower risk, sense of well-being and trust. Measures can be expressed as a percentage, timeframe, or in financial terms.

Measures can be expressed as a percentage, timeframe, or in financial terms.

For example, “We completed a project recently with a company of your size and reduced their overheads by 20% without losing one employee. Would you be interested in how we did this?”

Words that communicate value are and not limited to:

Improve, increase, reduce, downtime, productivity, operating cost, turnaround, maximize, minimize, downtime, save, eliminate, enhance, cut, gain and profit.

Success in business development requires persistence and consistency using a variety of touch points whilst focusing on stating value from the client’s perspective. This will provide you with the greatest opportunity to secure an initial meaningful conversation and a meeting.