It appears that in talking to many businesses, the most common challenge is how to acquire new business. Typically with new business development, this challenge can manifest as competency, cultural, skills or resource-related.
Many business claim they are servicing their existing clients very well and have “never” lost a client! That said, often the next statement made is one around the desire to acquire and grow new business, however many owners or sales/marketing managers cannot articulate, when asked, how they go about it. Often there is a look of uncertainty or a shrug of the shoulders, and the following responses are common:
- “We never lose a customer”
- “It’s difficult to find good sales people or traditional “hunters”
- “ We are busy enough with servicing our existing customers and growing within our client base”
- We don’t have good leads coming in from marketing
Even if customers are being comfortably retained, it is important to not become complacent as business and economic conditions can quickly change, potentially affecting customers’ situations and ability to maintain the relationship. While these circumstances are beyond your control, there are proactive steps to be taken to mitigate your risk as a business owner or manager.
Rather than putting all your eggs in one basket, relying on larger and/or existing clients for your revenue stream, new business development strategy is required to be continually developing and securing new business. Your sales opportunities and pipeline, and new customer acquisition should not be left to generate (or not) organically, rather they will flourish with the correct strategy and investment implemented across the business.
The risk of not acquiring new clients can mean an imbalanced revenue and cash-flow stream. I have seen this occur in many small businesses - in good times they are protected with their ‘safe’ existing customers, but in bad times, the risk or occurrence of a customer ending their contract can cause a large gap in cash flow. A lack of diversification of new business revenue streams can quickly place the business and employees in a dire situation.
Having worked for a SMB profiled business in initial growth mode, I know securing your first large client(s) is great but as your competitive market environment constantly changes, there is no room for being complacent once those contracts are secured and entering product/ service delivery.
From observation, some of the common reasons that Business Development proves challenging aligns to one or several of the following categories:
It’s hard to hire the right people unless there is willingness to invest in the right talent acquisition strategy and appropriate hire.
If you do hire Business Development Managers incorrectly, the cost of employment and time in the market to sell gets diminished to fall behind sales targets.
How to hire the right salesperson is a balance of understanding the right type of person suited to your culture.
So simply hiring someone from a Tier 1 organisation based on their experience may not suit if your organization is young, in start up or growth mode and/or more unstructured in culture in business approach.
Simply paying someone to bring in their rolodex of contacts doesn’t apply anymore. While there is still value in having contacts and existing relationships, this still carries risk to your brand and reputation if their inherent values do not align to what you can offer, and how you offer it.
Ideally someone who is motivated and hungry for success with the right energy and ability to still pick up the phone and establish rapport and relationships is still relevant despite the shift to the digital marketing focus for lead generation. Sales engagement is still face to face or over the phone that is effective.
The business development process requires consistency and understanding of what type of opportunities the business needs and prioritizes.
It also requires an understanding of what type of clients you are seeking and who is a good fit for your products and services. Often marketing campaigns and research with customer profiling can help with the segmentation process of where the sales teams engage for new business development.
We strongly advise achieving an agreement between sales and marketing on relevant details (leads, the nurture process and sales cycle and handovers), but even more important is for the business owner/director to support the sales engagement process and to ensure that expectations are realistic.
I am still a believer that fundamental traditional business development and marketing channels are still valid for referrals from existing businesses, networking events and also picking up the phone to make information prospecting warm calls when appropriate can generate new business pipeline and opportunities to uncover. This of course depends on what type of products and services suit which method of prospecting.
Do you have a CRM or still use spreadsheets to track client and prospect contacts for marketing and sales purposes? The CRM should be used to track and enter in all sales funnel activities for each sales stage from lead to sales/won.
A CRM should be used as a dedicated tool for sales and marketing tracking activities. A common part of this alignment is to consider an integrated sales and marketing automation systems with CRM included that may be cost effective to consider if you don’t have any current platform for your sales team.
Pick a system that suits your business processes and strategy first rather than the other way around. Sales teams need a “single source of truth” for everyone to access and see historic sales data, contract renewal dates, history and marketing activity as well as contact profile information.
Talking to small business owners, I often find that they use MYOB or other accounting/service delivery package, yet these are a static resource, not an active and interactive CRM that can be used to facilitate business development and growth.
Here, I’ve aimed to highlight that both small and larger businesses are finding it increasingly challenging to generate or develop new business in a competitive marketplace.
A holistic approach to thinking about the business commitment to people, process and systems in supporting new business growth is key. Marketing automation may help or hiring skilled resources and incenting them the right way could also be effective. The key is to acknowledge that the right investment will deliver the right ROI required rather than a “do nothing” or “do the same over and over approach”. A positive shift and change in mindset can reap significant results.
For further details on any of these points above with a confidential discussion on how we can assist you for new Business Development strategies, please contact us on firstname.lastname@example.org or register for free initial consultation.