April 29, 2014
In my line of work, one of the most frequent expressed needs my technology clients talk about is new business development. Sales have stagnated or dropped, and the CEO is seeking the classic Hunter. This makes sense. New business development is incredibly important. But what about old business development? I’ve found out that many business owners are kidding themselves about the business opportunities that come from current accounts and continue to believe some whoppers about the current state of their sales, and that belief is costing them easy sales.
Why do CEOs believe that hunters are all they need?
- The Hunter is much more exciting and harder to find, he has a huge Rolodex (like a cool elephant gun), and brings back big game that the entire company village can feast upon for a month. Farmers aren’t sexy at all. They just bring about ongoing sales opportunities from existing accounts, and those tend to be kind of boring, follow-on affairs. There’s just no thrill of a new conquest.
- Many firms have failed miserably on the new business development side and all of their sales tend to come from past customers or referrals from past customers, so naturally that would lead one to believe that the only real problem is sales hunting.
- The ugly truth is that many non-sales driven company leaders can’t stand paying out commissions to salespeople on existing accounts, viewing it as lost money that account managers don’t need to work for. Their compensation plans use a declining commission schedule over a few years, often going to zero. This is particularly true for technology firms that may have embedded consultants working with a client. They’ll deliver all the opportunities for the house accounts, right?
The reality is, as hard as the business development process is to execute, it masks problems in the development process for existing accounts that leave opportunity and money on the table. These existing account sales are and should be the easiest ones your company will ever get, yet some business leaders pull the ostrich routine and rationalize it with these false beliefs.
Our past work speaks for itself
I take it on faith that you did a bang up job the first time your firm does work for a client. Time sets in, and you become further removed from the work completed. Sometimes the memory of prior work becomes less positive as new people enter the company and priorities change, making your past solution no longer the “fit like a glove” solution it once was. Perhaps the prime advocate for your company has been transferred or left the company and has been replaced by someone that did not work with you on the project. Not to mention competitors that may be buzzing in the ears of the key players in the account make things even more fuzzy.
The fact is, the further from past work you get, the less important your past history becomes. This is not to say it isn’t important. Past success is vital and is the key to securing more business. However, be careful not to overvalue it when there is a time lapse since your company last did business with a client. Like Dirty Harry once quipped, “You’re a legend in your own mind.” Your job is to routinely keep in front of the customer and add value in terms of information and follow-on service.
I know this sounds so obvious, but in many small firms it is the CEO or other high level executive tasked with this client maintenance, and even though they have the best intentions of doing so, they get caught up with CEO stuff—charity events, speaking engagements, profiles in the business journal—and suddenly routinely mining opportunities at 25 or more key accounts gets pushed aside and contact becomes less frequent. It can be a customer killer.
We’re known throughout the organization
Once, many moons ago, I met a prospect at a networking event, got a meeting, and eventually sold some nice consulting business. I knew the company was a legacy account but suspected they had been ignored. When the sale was announced, another consultant got angry with me and the situation as a whole, screaming, “They knew we did that kind of work! Why didn’t my guy call me?” When I found out that John Doe was “his guy,” I had to explain to my colleague that John Doe actually got serious cancer and left the firm 6 months earlier, now fighting for his life. I met the replacement Jane Q. Public, who had no idea that our company existed.
And this was a small client firm! Multiply this problem by a big factor the larger the customer company is, it is replete with different divisions and departments, each with its own budget, problems and vendor lists. I’ve actually seen situations where there was technology project work ongoing within a company from the service provider, while other departments were making decisions on similar work for hire, and the on-site consultants weren’t even invited to the table.
It is a falsehood to believe that the most important thing on the mind of your prime client contact, even if it is the president or CEO, is to shout from a mountain how great your firm is, repeatedly over time, so that other decision makers throughout the company know about it. That’s your job, and if you’re not doing it, it is costing you.
Our customers talk about us
Maybe. This mistaken impression results from some leads coming from an account. Are they talking about you to the extent that they could, in all situations where your offering could provide the right solution? That’s really drinking the Koolaid. Because of the elements of time and lack of total account penetration in the big firms that we just talked about, know that you’re not getting all the possible referrals you could be, both inside and outside of the company.
Sometimes clients don’t refer you for the simple reason that you don’t ask them to! If you want your sales driven organization to be great at securing referral business, don’t make the assumption that your customers know you want referrals. Some may even feel referring you may hurt their own service, thinking you may have to borrow resources from their company to service those potential new clients (and many times they would be right!).
How to mine all potential business from current accounts
By now you likely realize that despite what you think may be happening, you may not be getting all of the repeat business you can from existing customers. You may even have discovered that new business development may not be your biggest challenge, or at least it has a partner in crime.
The great news is that the cost of repeat business is a factor less than creating new clients. The trust barrier is much lower because you have transferrable good will inside the organization. It just requires a few simple strategies:
1. Automate Routine Sales Contacts with Customers – No self-respecting sales organization is not using one of many CRM systems these days to house their customer databases. There is not one of those systems that do not have schedulable events that you can program into your key accounts that generate task lists for following up with clients. Remember, even if the work is ongoing, the project team may not be dealing with the initial high-level decision maker that authorized the project, and she is the person that continually gets other opportunities on her plate for your company to earn business.
Mix it up. Your follow up can be the offer of a lunch or coffee meeting, sending a valuable article that you found that would be of interest, a newsworthy award you won, or to ask for an opinion on a new offering that your firm is developing (customers love to be sought for opinion). The important thing is that the re-connect is not a sales pitch but provides some level of value to the customer. The new opportunities will surface as a natural result.
2. Create an Account Penetration Plan – This becomes paramount for large customers that have multiple divisions and sites. It starts with asking your current client to refer you and provide names of other departments and executives that may be able to use your firm goods and services, and then establishing those relationships and meetings. Your goal is to be like a dye injected into the bloodstream of the organization and work your way into every available place you can provide value.
3. Establish a Referral Marketing Program in Your Accounts – Depending on the industry, this could have incentive systems built in (think insurance, DirectTV, etc.) or could be as simple as innocuously asking for referrals at the close of every follow-up meeting. Providing financial incentive may be considered in poor professional taste for things like high-value professional services, so it’s up to you to decide the strategy. The important thing is to create and live by a focused referral strategy that becomes part of the DNA of your company.
I realize that many of you reading this, if you got this far, may be offended and think these aren’t lies when it comes to your business, that you really are finding all the possible repeat business from current accounts, and that may be true. For those of you who may have had the “Ah-hah!” moment, following these three steps will get all current accounts producing like well-oiled machines.
Karl Walinskas is the CEO of Smart Company Growth, a business development firm that helps emerging technology firms build competitive advantage and move the sales needle. His Smart Blog covers sales and service, office technologies and SEO, leadership, business communication, and has been named by Buyerzone and others as a top business blog. He is the author of Getting Connected Through Exceptional Leadership, available at Amazon.com, and has been a featured expert for Inc.com with articles published in many online and print venues.