Acquiring new customers

Health Warning – Selling still required!

It is now common that businesses of all sizes choose from a wide range of mechanisms to generate contacts who might have the potential to become new customers.

In a recent informal poll on the LinkedIn IoD group there were 41 unique responses to the question “What approach do you use to acquire new customers?”  The poll provided a range of options, most people ticked three or four and the scores were;

• 40  word of mouth referrals
• 34   face-to-face networking
• 14   public speaking
• 12   social media
• 10   website
•   8   PR/writing
•   2   Direct mail
•   2   e-mail marketing

It is of course a good thing that mainly as a result of technology we all now have so many options for the way we engage with our markets.  However, a common problem we see is a misinterpretation of what a contact made through, for example, networking, social media or website enquiry, actually means.

All too often what is simply a very early stage contact is seen as a hot prospect to become a new customer.  Of the various options outlined above face-to-face networking followed by social media carry the greatest risk of providing misleading messages.  The other party is polite, enthusiastic about what you are telling them and says how you must stay in touch.  They may even promise to introduce you to someone they have referred to but usually someone who remains unnamed.

Don’t delude yourself!  All of the above is a perfectly valid approach to creating initial contacts, step one in a sales prospecting cycle, but that is all it is; step one.  From this point onwards the hopeful supplier must deploy sales and selling strategies and techniques if the potential in that contact is to turn into an actual revenue generating opportunity.

Face to face selling is still very much alive!

Simply being active on social media, attending lots of networking events or rejoicing at the number of unique views of your website is not bankable.  To generate revenue that you can bank you need to sell – sorry; probably not what you hoped to hear but it is a fact – turning suspects into prospects and prospects into customers is only possible through a rigorous process of sales and selling.

And be careful what you say.  If you are the person hoping to gain a business opportunity from or via the other party then you will typically have only a limited time to get them sufficiently interested to agree to a longer meeting.  Even if they don’t actually ask, they will want to know an answer to “What do you do?” before they agree to meet you again or introduce you to someone they know.  The answer should not be a stream of the things you do or even your perception of the benefits or value you deliver; reading this may help you to understand why.  This also looked in some detail at this issue in your initial conversation.

I wish you happy hunting.

Advertisements

Who feeds your pipeline; hunters, farmers or browser/gatherers?

How do you balance new business hunting with account farming?

This is an age old dilemma that in some ways has been made worse by the now very common approach of separating the new business selling and account management roles to be undertaken by different people. To further complicate the matter these two roles frequently report into different managers. Add to that the discrete role of business development (canvassing and prospecting) and you have the potential for silo mentality.

When I started in sales I did the lot; new business canvassing and prospecting, new business selling and once the deal was secured I continued to be responsible for managing the customer; looking for more new business plus upgrades and add-ons to the original deal.

Don’t get me wrong; I am not suggesting a return to the days when one person did all three main sales and selling functions, but I am strongly recommending you invest time and effort ensuring the three functions operate as a fully integrated unit with a single purpose.

There has been a lot of debate in recent years about the benefits to be gained from having a joined up marketing and sales operation; a principle that I fully support. However, even greater benefits are there for the taking from a fully integrated sales and selling function; business development, new business selling and account management. Link this closely with all of your marketing activities and you are on the way to creating a really powerful go-to-market engine for your company. In the current marketplace when products and services can be copied easily and quickly it is often easier to create competitive advantage through your sales and marketing engagement process than it is through proposition refinement.

Here I am providing some insights to potential pitfalls and solutions you might consider for your own go-to-market operation.

The three key sales and selling functions

Business development (BD) – responsible for filtering the market potential down to well qualified suspects and prospects ready for the new business function to pick up. This function will be involved in tasks such as responding to in-bound enquiries and making outbound calls; of the three sales functions this is most closely aligned with the marketing function.

New business (NB) sometimes called the hunter role – this is a pure selling function and their responsibility is to take suspects and prospects, turn them into customers and secure deals for specific business opportunities. A key input for them comes from the business development function and the primary output is new customer projects.

Account management (AM) sometimes called the farmer role – responsible for taking new customers and managing the implementation of the project. Typically this function will continue to be responsible for the relationship with the customer from this point onwards and as such should be responsible for identifying and closing add-on, extension and also further new business opportunities. Over time they become the trusted delivery partner and the customer will potentially become a good source of referrals and introductions.

Things to consider when creating your go-to-market operation

The split role model; perhaps the most common model, where BD is free standing or combined with marketing, with NB and AM as separate functions or in some cases a combined single role. The BD, NB and AM roles are usually managed by two or even three different managers. There are many benefits to be gained from this split role model and the most obvious are:

• The BD, NB and AM roles require slightly different, but related, skill sets so having separate functions facilitates specialisation in the three disciplines.
• Separating the functions enables 100% focus on each of the three key sales and selling disciplines. When the roles are undertaken by a single person there is always scope for conflict when multiple, equally important, tasks are begging for attention at the same time.
• The skills required to hunt effectively are less well suited to the patient nurturing required to maintain and grow the customer relationship and hence an argument in favour of splitting the NB and AM roles. Customers typically appreciate the need for ‘hunting’ techniques while a deal is being done but then may prefer to see a more consultative approach to the account management phase of the relationship.

They say there is no gain without pain and the key issues that can arise with the split role model are:

• With the roles being undertaken by separate functions there is an inevitable need for hand-over; leads generated by BD passed to NB and deals that have been concluded involve customer relationships being handed over from NB to AM. As in a relay race the point of handover is a key point where the race can be won or lost.
  Having one single fully integrated sales and selling process will help to ensure handovers deliver wins. Companies frequently outsource the BD function, increasing the importance of fully integrated processes with careful handover procedures.
• Customers may be confused as they are passed from BD to NB then to AM. They may also be concerned that they are being moved about your organisation for your convenience rather than their service.
  It is important that you explain your engagement model early in the relationship building process in terms of the benefit the customer will gain from, for example, having the right specialists for each stage of the relationship life cycle. This message needs to be reinforced throughout the engagement process especially when different customer personnel are involved at different stages.
• It is common that the AM does not originate from a sales background, especially when the AM role is the responsibility of the delivery function. Typically the delivery project manager will become the AM for the customer. The key problem that arises with this, from the point of view of the supplier, is that a project manager who also has the commercial skills to function as a sales person is a rare beast. Even if you have people with both skill sets they will suffer; torn between time spent delivering and selling, but worse still they will struggle to get the relationship with the customer balanced so that they can switch easily from consideration for the project needs to the selling role.
  Ensure your AMs have training in sales skills and that they are managed, monitored and rewarded for sales achievement as well as delivery success.A related issue is that your AM will be primarily focused on delivery, with farming the account as a secondary responsibility. The risk you run is that your competitors, who want to steal your customers, will be matching your farmer with their hunter – is this a fair fight? This situation is at its worst when the AM approaches selling with a browser/gatherer mentality when it demands the proactive farmer, planting seeds and harvesting crops.
  As above you must ensure your AMs have training in sales skills. In addition it is important that your sales managers have as part of their responsibility the support of delivery AMs, particularly coaching them when they are in selling mode.
• Having separate managers for the three sales functions can create conflict especially when performance is below expectations. The resultant blame game and excuses detract from the required commitment to work together to resolve the problem.
  The three sales and selling functions and their managers need to have a single set of objectives to ensure all are pulling in the same direction. A common incentive scheme based on shared objectives will help to achieve the required togetherness. It becomes crucial to have objectives aligned to company goals and targets to create the right atmosphere for cooperative working, for example; if the company goal is to improve margins but sales targets are based on increasing new business revenue the opportunity for conflict is obvious.
• Having an effective CRM system can help to provide a framework for the underlying support required to ensure the complete customer engagement cycle operates as a single contiguous entity.
  It is common that CRM systems are primarily driven by marketing needs and are typically used less effectively as the customer relationship transfers to BD to NB then AM. Ensure the CRM is built around your sales methodology and processes and that it is the core system used to record any customer related and commercial matters. Users of the system should include anyone that touches the customer including, for example, your accounts, credit control and engineering functions.

While the split role is the most common model used to organise sales and selling functions there are other models worth mentioning.

• The first is where the NB person remains responsible for the commercial relationship with the customer after a contract has been secured. There will be someone else from the supplier such as the; delivery, project or site manager that the customer will come to know but the roles of sales and delivery will be clearly demarcated in this model. This can work well but will require a close and trusting working relationship between the NB and project delivery team working with the customer. Sadly it is not uncommon that delivery staff feel projects were oversold leaving them with a difficult situation when trying to deliver what the customer thinks they have bought so the relationship with NB becomes strained. However, this model, coupled with the appropriate incentive plan, may provide a good vehicle for the creation of a more trusting, cooperative relationship between sales and delivery resulting in projects that are more feasible and more likely to delight the customer.
  The key to success here is early communication internally between NB and delivery staff, involvement of delivery staff in bidding so they know what the customer is being promised and an early introduction to your engagement approach for the customer. As with earlier points, it is equally important in this case that the customer understands your sales and delivery model avoiding surprises when new people are introduced once the deal has been done.
• For some companies and markets a go-to-market model built around agents, re-sellers or other forms of ‘outsourced’ sales capabilities is common. All of the previous points about hand-over, common goals and rewards, management and other process matters, organised to avoid a silo mentality apply to this model. In addition there are two potential additional issues to consider when contemplating this type of sales model.
  • First; if your agents or re-sellers work for other suppliers as well as you particular attention will be required to ensure they are giving you the amount of attention you expect.
  • Secondly; you need to be clear what role(s) they are playing for you; BD, NB, AM and delivery – if they are fulfilling all roles then there is a risk you will lose control of your customer base. This is a good model for many market sectors but it does require you to provide vigilant management attention to ensure you get what you expect from the relationship.

  All too often a decision to outsource sales in this way amounts to an abdication of responsibility by the supplier leading to a loss of control. Ideally responsibility for BD and possibly NB should be outsourced with AM and delivery being kept as in-house functions. Regardless of the degree of outsourcing it remains the responsibility of the user to actively manage the relationship to ensure the supplier delivers what is required and expected.

In Summary

Which ever model you choose to deploy, the same basic principles apply.

• You need to ensure it fulfills the three primary selling functions; new business development, new business selling and account management that pro-actively farms and grows the value of the relationship with the customer.
• You need to ensure the various components of your sales and selling operation are locked together by common; purpose, goals & objectives, management philosophy, rewards & incentives and KPIs.

A good principle to keep in mind when considering which sales and selling model to deploy is: which will deliver the best ‘lifetime value’ from the relationship with the customer?

How do you answer the question …

“What do you do?”

This is a question that many people struggle with and getting the answer right is ever more pressing as networking events are increasingly popular aspects of business these days. It is also a question that is being asked in the on-line world of LinkedIn.

Add to this the situation where you might be commenting in a discussion thread on LinkedIn where you want to communicate what you do as well as contributing information to the discussion topic. This requires a more subtle approach where you are effectively answering a question that has not actually been asked but may be implied in the original discussion topic.

In answering decide what effect you want to create – just answering, commencing a conversation, or perhaps the very early stages of starting to prospect for business.

Here we provide a few tips on the way you might respond to the question “What do you do?”

Context. It is very important that you consider the context in which the question is being asked. For example, if you are at a conference where the topic is data security on mobile devices, it is reasonable to assume all attendees will have an interest in some aspect of that topic. This should be used as a guide and your answer should focus on what you do in the context of the conference topic/focus. Be aware of course, that if you are a supplier in that field, you maybe conversing with a competitor.

You also need to be aware of other contextual factors that might help you provide a meaningful answer. For example; it may leave the other person cold if they come from a banking background and you tell them all about what you do in the shipping industry.

Clues. Under context I provided a couple of examples of information that might condition your answer; conference subject matter and the industry of the person asking the question. These and other clues can help you make the answer meaningful and personalised. Some other examples are; location, company size, job role of the person asking.

If you know the location of the person asking you can include in your answer a word of two that positions you as having a footprint in the area or understanding specific regional issues and challenges. Being aware of the size of the enquirer’s company means you can further personalise your answer demonstrating that you understand the challenges of; start-ups, SMEs, global or public companies. In crafting your answer, knowing the other party’s job role is also very useful; a CIO and FD are each likely to have their own perspective (field of interest) which your response should address.

Tips to build your own answers:

• Decide on the tone you want to adopt; formal/informal, serious/humorous, provocative, audacious, etc.
• In an attempt to be clear, people try to provide so much information that their message is lost because it becomes too complicated. Keep it short, sharp and sweet.
• Avoid jargon, acronyms, or big words. You may think it sounds smart but in many cases it will be a turn-off. Beware of acronyms in particular; their interpretation may not be the one you intended. Simple is better and less is more are good guides to keep in the back of your mind.
• Avoid drivel such as “I have a passion to understand your pain points so before answering may I ask you …?. Much too Uriah Heep-ish!
• Avoid words such as unique or claims such as “we are the leading …”unless you can prove it. I once met someone at an event who turned the standard company message into a point of humour which proved to be a great conversation starter. I asked what he did and he replied “We are one of the top 5 … this of course means we are fifth!”
• Avoid making unsubstantiated claims such as we save time and money. Unless you absolutely know you can do this in every case it is a dangerous claim to make when you do not know their circumstances; even if it is true it is unlikely to sound very credible to someone you have just met.
• When thinking about your answer it is good to have it in mind as a newspaper headline or a tweet – you have limited space to get your point over. What you say in answering the question is a very high level summary of what you would say if you have 30 minutes to answer the question but typically; if you can’t answer in 30 seconds you probably can’t answer in 30 minutes either. Your answer should work at every level.
• James Potter (The Linked In Man) recommends that you effectively answer this question in what you say about yourself in the headline of your professional profile on LinkedIn. This makes the information available with any contributions you make on LinkedIn.
• Remember they have asked you what you do. They may be asking just to be polite or they may really want to know so whatever you choose to say it must attempt to address the what. Even if it was just a polite conversation piece you may have the opportunity to turn it into something valuable for both parties so make sure your answer piques the interest that may be lying dormant. To achieve this, your answer could tell them ‘what you do for them’ in terms of the results you have achieved for others in a similar circumstance.
• You need to be concise and try to structure your answer so that it is the beginning not the end of the conversation. If you are able to answer what but preface with some how that will help to create the impression that you are someone they should have a longer conversation with. For example; “We do … and, as a result, our SME customers typically gain … improvement in customer satisfaction”. By focusing on the potential outcomes gained it is less likely to sound like a generic answer. You have managed to tell them what you do, the type of customers you work for and the benefits they have gained from working with you.
• The key is to be brief, show your value, and open up a conversation. One way to open up the conversation is to follow the answer you have provided, such as that in the previous point, with an open question such as “How do you measure customer satisfaction in your business?”

Here are a few examples of ways you might consider structuring your answer:

• “I work with [your ideal/typical customers] who want more [result types] with less [resource types]”
• “I [action verb] for [target market] so they can [benefit].”
• “I [action] for [your ideal/typical customers] who [cause/impact] to [effect/result]”
• “You are familiar with [the problem], well I [what you do] so that [the value you provide].”

All of these will be more useful to both parties when built around the concept of Feature : Benefit : Incentive and followed by an open question, for example;

“Customers that use our [what you do/feature] typically gain from improvements in [what they gain/benefit] leading to [what that gain helps them to achieve/incentive]. How do you handle/manage/support [what you do/feature]?“

First published on LinkedIn Pulse

Networking for new business development

Most people accept that business referrals and personal introductions are the best approach to new business development. However, to gain referrals and introductions you first need a relationship founded on the principles of “know, like, trust” and that cannot be achieved at a one-off networking event.

An event organised with the sole purpose of networking often disappoints as a medium for business development. At best, it can only deliver very early stage contacts rather than new people ready and willing to genuinely network with you and to have conversations that might lead to business opportunities for you. It can satisfy the early stage of name and number collection but in most cases a networking event is just one notch above talking to random people on the tube or taking a couple of pages out of the Yellow Pages.

If you wish to attend networking events as part of your new business development strategy, and there are other perfectly valid reasons for attending events, then what really matters is what happens before the event; your preparation and planning. The second most important thing is what actions you take after the event has finished.

Here are a few tips to help make networking events good for business development:

• Don’t expect to gain business at an event. One possible exception being an event that you attend regularly where you have built up genuine relationships with others.
• Always choose events carefully to ensure others who may be attending will have similar interests to you. This may involve clusters built around; location, business types, business sector, business size or some other parameters that are relevant to your target market.
• Try to get the list of attendees a couple of days before the event and do some desk research to decide who you really want to meet. Plan what you want to say to each person, don’t just go with a generic message or elevator pitch.
• If the event provides the facility to pre-book meetings this may be useful but beware that it might also warn people off – it all depends on the message you send them and whether meeting you will be valuable for them.
• Have a plan for each conversation, just as you would when meeting a new contact in a more formal ‘office’ environment, including a call to action – what do you want them to do as a result of meeting you.
• Follow your plan through, agree next actions with the other party and make sure you follow through. I understand that a high percentage of people do not follow up with contacts they make at networking events – what a total waste of time!
• Review every event and calculate the RoI you get for the time invested. If it delivers what you are looking for do it again, if it does not then try something else. Having said that, as mentioned earlier, if the event was your first visit to a regular group, don’t expect results on your first visit, and if you’re a shy type just starting out on ‘networking’, try a few non-target sessions to build your confidence in approaching new contacts.

You need to treat networking events as you would any other early stage marketing activity; it is a numbers game and you need to constantly review how effective it is being. You would not continue with mail campaigns if the results were progressively getting worse so you must do the same for networking which is an even more expensive use of your time.

Using LinkedIn for B2B Business Development

LinkedIn for Hunters

In talking to many others about LinkedIn there seem to be two main schools of thought. One says you should have as many connections as possible while another, less common view, is that you should be very selective worrying more about quality and relevance than quantity. I am in the quality, less is more, camp.

My thinking is to some extent shaped by the approach I have always used when looking for new customers; research, create a list, refine and filter until I have a small list of well qualified suspects that I then approach one-to-one. I have carried this approach with me from long before there was an internet.

I found support for my view some years ago when I read about Robin Dunbar who undertook a piece of research from which he coined the term ‘Dunbar’s number‘ which is about 150. This says that a human being can only effectively maintain around 150 relationships at any one time and if new relationships are created some older ones will have to go or probably fall into disrepair.

But many people would say they have many hundreds or even thousands of relationships as Facebook friends or contacts on Twitter or LinkedIn? Who is right; Robin Dunbar or everyone else? The answer is actually both. The on-line world makes it very easy for us to connect so with the click of a few buttons we can put someone else on the list of names we call our friends, contacts or connections. However, when Robin Dunbar did his research he was focused specifically on “relationships” which implies interaction between the parties and a mutual acceptance that there is a relationship that has purpose and will be worth investing effort to develop and maintain; this is different to a list of names.

Another idea on this goes by the name of ‘The 6 degrees of separation‘. Put simply this says if I speak to a contact of mine and they speak to a contact of theirs and so on and so forth, after six layers of contact I could have access to anyone else in the world. Mathematically this could work as it would only require every person in the chain to have 43 contacts to equal the current world population. So, for a much smaller number than Dunbar’s 150 it would appear that everyone in the world is available to us. However, this cannot work as it misses the point made by Robin Dunbar that to be meaningful, the connection must be a relationship and relationships are not infinitely transferable. This means that my friends’ friend is not going to be my friend unless I put in the work to make them so. They might be more inclined to meet me due to a transfer of mutual respect through our shared friend but from this point onwards they are a stranger.

While it could be argued that having many connections on LinkedIn, all of whom can view my activity, is rather like a market stall or shop front where the model has always been that people passing by are attracted by the window display so they come in to browse. That may be good for traditional retail, but this browser approach has never worked well for B2B.

With respect to invitations to connect; be aware that any you receive which only contain the standard texts, may have been automatically generated. Take the time to review the sender and start a conversation before connecting. They may be genuine, or a competitor seeking to monitor you, or just acquisitive. Their response to your initial contact may even set the scene for a blossoming relationship. Bear in mind, others may think this way about invitations that you send so always be genuine. You can end up black listed by LinkedIn if you get too many messages rejected by intended recipients.

My conclusion is that I see no point collecting 100s of connections on LinkedIn if I want it to be a part of an effective business development mechanism, so here are my top tips on using LinkedIn as part of a B2B go-to-market strategy:

• Make sure you really understand what people buy from you and why.
• Make sure you know (really fully understand) what your customer would therefore look like.
• Use the above information to create a profile of where you are most likely to find your target new customers on LinkedIn; a good starting point is appropriate groups.
• Share/post interesting external articles with a short introductory perspective on its value; it may be commented on or liked by your existing connections and thus receive wider visibility. It may just be seen by someone with whom your observation resonates regarding a current focus of their attention.
• Get active on the groups; post comments and create your own discussions.
  • Look at who viewed you every day and if they are of interest look back at them so they know you have seen them.
  • Whenever you see someone that might be of interest to you, take the time to view their profile – they will probably see you have done this and look back at you.

  This is one method of laying the ground bait, piquing interest, before starting a conversation

• You can reply privately to people in discussion threads, especially if they have also ‘viewed’ your profile; make sure you have something really worthwhile to say to them
• You can send people In-mails; again make sure the message is individual, specific and pertinent to the other party otherwise it may be viewed as any other cold generic e-mail
• Even at the basic level (non-paid) membership you have some advanced search facilities so you can search for people who are likely to be interested in what you sell; Location, industry sector, job title, etc. You can then approach them directly either by e-mail or better still by phone.

In summary; focus, filter and refine and then make direct outbound contact; don’t wait for them to happen by your stall or shop front.