Tomicide Solutions June 2006: Switching Into Higher Gears In Your Business Development Gearbox

By Tom "Bald Dog" Varjan

Do you remember the type of car the Flintstones drive? What is it powered by? Yes, it is powered by 20 toes of total contribution from Fred and Barney. And what was it stopped by? Well, pretty much by the same 20 toes.

Where is the problem here? Barney and Fred are working far too hard to reach their destinations much more slowly and inefficiently then they could with an automated system, what we can call in plain English, the engine.

And this is how business development works in so many companies.

In a fiendishly oddball way business development can be compared to a car's gearbox.

So, let's use the car gearbox analogy here. That is a system on which you can't skimp. You must start in first gear. If you are awkward, the car will shake you up a bit.

If you're really awkward with the clutch, the engine will die and you have to start it again. If you try hard you can start in second gear or for some lucky and delicate souls even in third gear, but the engine won't appreciate it.. The car will sneeze and cough a few times, and finally you just burn out your clutch and you're in for some repair work.

So, even while you're standing still, lingering in neutral...

The Neutral Of Your Business Development Gearbox

...and before switching into first gear, you have to do some...

Preliminary Work Before Action

Even before you can switch into first gear, to progress one single inch, you have to make the right preparation. Your car must be mechanically ready, officially tested and approved for participating in traffic. Similarly, your business must be ready to participate in the game of commerce. What that means is that first your business must be positioned, packaged and promoted properly.

Positioning Your Business for Maximum Market Recognition

Where are you located in your industry's pecking order? Is your service perceived as and compensated for as a Timex or a Rolex? A Ford or as a Ferrari. A Wal-Mart or a Nordstrom? There are some vital considerations here. You must know your target market. You must have an ideal client profile. The sad thing is that far too many business owners adopt the "We do anything for anyone for money" approach and are not selective with their clients and the work they take on. The main question becomes: " Can the work pay the upcoming bills?" If the answer is yes, then they accept the work.

In the area of positioning, ask the following questions...

Mission. Do you have a clearly articulated, problem-based audio logo you can you can use when asked The Question, "What do you do?" Does it tell clearly who you work with and what problem you solve?

Target. Do you know exactly who your clients are? Do you have a clear Ideal Client profile? Do you know where they are? What their problems are? What typically those problems cost them? Where you can connect with them? Why they would buy the kind of services you offer?

Benefits. Do you have several well-defined specific client-focused benefits that your clients receive when they use your services?

Uniqueness. Do you have a Unique Value Proposition to approach your target market? Do you have a Unique Selling Proposition to fend off the competition and help you to stand out of the crowd like a trombonist in a heavy metal band? Are you clear about what all this means to your clients?

Qualities. Are you crystal clear about the unique qualities and character traits you bring to the client's business?

Packaging Your Business For Maximum Market Impact

How do you package your service for attraction, differentiation, risk-free sampling and maximum compensation? Here we're talking about how you want to render your services. And don't just think about offering your services in person. There are many other ways, and technology is becoming more and more affordable.

You can offer your services packed into special reports, consumer's guides, questionnaires, websites, Power Point presentations, CDs, DVDs, MP3 downloads, books (both printed and e-books). The list is pretty big.

Here are some key questions to consider regarding packaging your services

Identity. Do you have an attractive and "Business Identity Package" (Website, business cards and letterhead printed with your own unique company identity) that appropriately and uniquely represent your business?

Value. Do you package value into your client communication? Do you answer their non-asked question "What's in it for me?" Do you present all this in a one to two-page "Executive Summary"?

Services. Do you communicate clearly what exactly your clients get from you? Do they know what you do and how you do it? Do you clearly present all this in your marketing collaterals?

Pricing and Proposals. Are you ready for incoming enquiries? Do you have a clear, well-defined strategy to set and explain your fees? Do you have a proposal outline and a proposal process? All in all, do you have a clear-cut "From first contact to signed contract" process?

Personal Presentation. Do you have a clearly defined presentation process? What percentage of that presentation is diagnosis? What percentage is discussing solutions? Is the whole process authentic to you? Does it allow your personality shine?

The interesting thing is that people don't buy services per se, which are endless entities, like sand. You don't buy sand. You buy packaged sand. Packaged in buckets, in bags, in trucks, etc. Services are the same. People buy packages of services. Why? Because, unlike services, which are infinite concepts, services packages, which are finite processes, have specific start and end points.

People want to know how long it takes and how much it costs. It's not good enough to say that I can sweep your chimney for $125 and hour and have no idea how long it takes. No one buys that. Buyers want to know at least roughly how much they have to invest. And if and only if you've done all this preliminary work, you are ready to reach out and switch into...

…The First Gear Of Your Business Development

The First Gear Of Your Business Development Gearbox

Now you're in active client acquisition mode. But when you just reach out, you're a…

Stranger

No one knows you, no one trusts you and no one cares about you or your services. As far as your target market is concerned, you can take a running jump at a freight train or die in a ditch, and they wouldn't even turn up at your funeral. I used to be a gravedigger, and I can tell you that when we were burying business owners (most of them killed by stress), not many people from their target markets attended their funerals. Somehow they just didn't care. You're just another ingredient in the noise of commerce that surrounds us. You're nicely blended into the crowd. So, what you have to achieve now is to perform the magic act of...

Infiltration Into Your Target Market

This is where your positioning will help you. You need a good Unique Value Proposition to craft a valuable offer with which you can approach your target market. If you don't do the preliminary work, then here you're in deep yoghurt. You end up shooting in the dark but in the absence of competitive intelligence all your work is speculation and rather uneducated guesswork. And sooner or later you'll shoot your own toe or ear, which is a rather miserable way of ending an otherwise nice day.

Then you also need a good Unique Selling Proposition to differentiate you from the competition that is approaching the same target market. You're not the only company aiming at the same target market. And rest assured, your competitors want to see you out of business, with your head safely resting on the tip of a pike and your body quartered and comfortably relaxing on display in the four corners of your city. Harsh? Yes. Gruesome? Yes. True? I dare to bet some vital parts of my anatomy that it is.

And then as a result of your infiltration strategy, be it good advertising, a radio interview or dancing naked at your city's main square, you eventually draw the attention of qualified prospects.

And although most women are not willing to go to bed with you right away, they are willing to watch you dance. That is, they are open to consider your free offer.

This is the point where I like offering very specific free information to the target market. It can be free report, CD or any information-carrying medium. I changed my approach after I quit dancing naked at the city square. The new approach seems to work better.

Other free offers can be...

...don't play out really well.

And let's stop here for a moment.

Most businesses barge into the marketplace and try to sell their services to crowd that doesn't know and doesn't trust them. Instead of lead generation, they try to generate orders and contracts right away. It's the same as walking up to a woman at a public place and suggesting to her that the two of you should have sex right away. It's retarded. Don't get me wrong. The approach is used quite commonly. But look at the quality of those relationships. Do you really want that kind of "transactional" relationship with your clients? Or do you prefer some kind of transformational relationships? So here is a little comparison for you to consider what sort of relationship you are aiming to create...

Opaque, Transactional Relationships Transparent, Transformational Relationships
Basic Question: What can you do for me? Basic Question: What can we achieve together?
Work for me and make me successful Work with me so we can get successful
Short-term focus: Proverbial one night stand with a hooker Long-term focus: Proverbial romance
Them - We're on opposing sides Us - We're on the same side
Outsourced labourer, situational elbow grease, extra pair of hands, hired brawn power Trusted advisor, hired brainpower
Suspicion, duplicity and scepticism Mutual trust, respect, peer-level candour
Obligation, compliance and following order Making commitments and keeping accountabilities
Detailed, legalise-infested contract with lots of small print and special closes Handshake on paper"
Impersonal, detached business-like style Personal, intimate, engaged style
Focus on the present: Reap today whatever was planted yesterday Focus on the future: A healthy balance of reaping today's harvest and planting for tomorrow
Opaque, antagonistic confrontation Transparent, collaborative symbiosis
Being extra cautious not to upset each other Being truly authentic
Being dutifully impressive and looking expediently "business-like" Being helpful and professional
Listening to what is being said Listening for why it's being said
Interaction is tense, defensive, protective, formal and business-like Interaction is relaxed, open, inquisitive, informal but professional
Master-servant relationship between superiors and subordinates Collaboration between peers
The overall goal is to get the job done The overall goal is to preserve and advance the relationship
Buying decisions are based on testimonials and references Buying decisions are based on personal fit
Sellers are regarded as fungible vendors Sellers are regarded as trusted advisors
Small misrepresentation, exaggeration, expediency, artificially created appearances are normal and even expected Bone honesty is expected and practised
Focus is on impressing prospects Focus on improving the prospect's business
Becoming the corporate parrot: Saying what clients want to hear while creating good impressions Becoming the unbiased observer: Saying what clients need to hear, while creating improvements and results

The difference is significant. Neither is right or wrong. They just require different approaches. But, for instance, if you go for the transactional relationship, don't expect to be fully trusted.

And if your infiltration strategy works out, then you...

Gain The Attention Of Your Target Market

Now certain members of your target market selected themselves to initiate a connection with you based on your initial free offer. There is nothing to force. No convincing. No manipulation. People decide for themselves whether or not they want to play your game. The first gear can be fully automated. And after gaining sufficient momentum, you then you switch up to...

…The Second Gear Of Your Business Development

The Second Gear Of Your Business Development Gearbox

Great. You've gained your target market's attention to your message and now you do your best to keep prospects' interest. At this point you're building…

Familiarity With Your New Prospects

Let's face it, at this point both you want to get to know your prospects and they want to get to know you. You are assessing each other for fit. I hope you have an Ideal Client profile and reject everyone who doesn't fit into it.

You want to become somewhat familiar with each other. What can you do to achieve that? Here are some pieces for the puzzle.

Information

The more information you provide, the better. People can skip if it's too much, but if you don't give them enough, they put the puzzle together for themselves, and very often that can be the wrong puzzle. Can you leave this to chance?

Yet, look at many websites and see what they do. They are chronically short on content because they believe that no one reads long copy. My contention is that before I make a significant investment in a service, I want to learn about it as much as I can. Both about the service and the people behind the service.

Experience

Outline the experience your people bring to clients. But outline it from the perspective of benefits. There is no benefit is saying, "Vumpit Luluprat has a triple Ph.D. in chimney sweeping." But you can say, "Vumpit Luluprat helps his clients to improve their quality of life using his extensive research that earned him a triple Ph.D. in chimney sweeping, coupled with over 12,000 hours of client work." This sounds more more-benefit-orientated.

And this whole stage can be fully automated too. So, let's go now to...

...The Third Gear Of Your Business Development

The Third Gear Of Your Business Development Gearbox

At this stage you have gained your prospects' interest and obtained their consent to send repeated messages to them. You've been given the permission to stay in touch. However, they agreed to receive valuable information from you, not retarded sales pitches. You have to learn how to package your messages that are both of interest to prospects and gently move them towards the next gear up in your gearbox.

And at any point you must be ready to switch into reverse gear and disengage. You must give prospects a way out and avoid hard sell situations. Just read this article, entitled to Rotten Effort by Don Tennant on a Microsoft sales manager. But be careful. If you are any ethical and moral in your business, this story may turn your stomach.

Now you're in the stage of building desire for your services. At this point your prospects are interested but interest is not enough. People don't commit to what they're merely interested in.

Tell Them More About Yourself

At this point they want to know more about you and how you practise. They're looking for a fit. They are checking your beliefs, values and how you manage assignments. It's important to discuss both the pros and the cons of working with you. For instance, I always tell prospects that if they become clients, I will push them very hard to achieve the goals they set out to achieve.

I tell them that I'm an ex-military, so my style is a bit rough around the edges and very demanding. Tell them that it will be both exhilarating and exhausting to work with me. They know what they get into. And I know that this honestly loses me potential business left, right and centre, but the prospects who decide to work with me are truly amazing, committed people. And when they understand why I work the way I work, many of them follow the same approach.

Discuss More About Them

Talk more about the problems they may have. Start doing some high-level diagnosis. Diagnosis is good because it talks about their problems, which they are concerned and anxious about, not about your solutions, which they don't care about. And if you barge in with your solutions too soon, most prospects back off. You have to raise people's awareness by outlining the problem they're struggling with and the consequences that could be waiting for them if they don't take action. And here lies a huge difference. The difference between peddling your own services...

"Unless you hire me right away and give me a huge pile of money (an accountant) your business goes bankrupt in two years."

...and making general recommendations for accounting help...

"Based on the numbers you've shown me, unless you have an accountant takes a closer look at this issue, your business could go bankrupt in two years."

The former uses scare tactics to make an instant sale. The latter makes a general recommendation and trusts prospects' intelligence to make a decision. The former offers a pre-designed course of action. The latter offers some guidance but still relies on prospects' ability to decide for themselves. It's collaborative.

Expected Results

Here you outline what results your prospect can expect when they become your clients. You can talk about both your processes and the end results other clients have achieved working with you. And to make life really sweet, this stage can be fully automated too.

...The Fourth Gear Of Your Business Development

The Fourth Gear Of Your Business Development Gearbox

Now your prospects are considering projects with you. At this point you may offer some personal time in preliminary meetings, but I suggest you still automate the process as much as you can, and offer personal time only to highly committed prospects and not for mildly interested suspects. Here are some of the considerations in fourth gear...

Next steps

What is the exact process of moving forward in this section of your funnel? You have to give prospects very clear directions about what the next step is. Don't overwhelm them with many steps. Just one step at a time, so they can make a decision whether they want to move to the next step or want to quit. Remember, by the time you come to in-person meetings, you want to meet only "wildly committed and enthusiastic" prospects not merely "mildly interested" ones.

Conceptual Agreement

At this point you establish three parts of the engagement, you might even call them the holy trinity of the engagement...

1. Establishing objectives for the engagement. What exactly do clients want to accomplish? What are the symptoms that must be eliminated to accomplish that?

2. Establishing measure of success. How do clients measure progress? How do clients know that they are progressing?

3. Establishing value. What is the expected impact on the clients' condition? How are they better off after the engagement?

Signing The Agreement

I reckon this is as obvious as a ham sandwich.

The Proposal

The proposal is NOT a sales document. The proposal is a written summary of the conceptual agreement which you've already made with the buyer verbally. And although this is the first time your client first sees your fees for the engagement, they must be prepared for the ball park they can expect. And that's what you do during the conceptual agreement.

Money Exchange

Here I have some ground rules. 50% upfront and 50% 45 days after commencement. I never leave anything to "completion" because the date of completion is out of my hands. I've recently worked with a web design firm on their fee structure. They would sign the contract and the client was supposed to pay the downpayment after the initial design was done. The design was done pretty quickly, but the client took 11 weeks to review it and then 4 more weeks to request some more changes. The firm received the - heavily haggled-down - downpayment after 17 weeks into the project. That's retarded. Make sure you have very clear guidelines around payments. And guess what? For great clients this is not a problem.

First Sale And Fist Client Experience

Now you've done your first sale, so you can celebrate and provide a kick-arse experience for clients. And here I mean overall experience not merely great work. You mechanic may do great work on your Mercedes but if he sits on your white leather seats wearing his greasy overalls, that will ruin your experience... well, and your seat upholstery.

Since we're comparing business development to the gears in a car, we have now to talk about an important manoeuvre that can only happen in fourth gear, that is, when we have a pretty good momentum. And that is merging into the highway traffic and making significant progress. You see, before you merge, all you have is high fuel consumption happens and low progress. Once you have the momentum to merge onto the highway, everything changes; your fuel consumption comes down and you start making some serious progress. And this rule applies even in Canada although the top speed on the only highway is a ridiculous 90 km per hour.

And then soon after merging, you gain more speed so you can switch into...

...The Fifth Gear Of Your Business Development

The Fifth Gear Of Your Business Development Gearbox

After the first successfully completed project three things are likely to happen

  1. Repeat business

  2. Referral business

  3. Abandoning client

Repeat Business

Clients got huge value form collaborating with you and now ready to bring you more of their problems.

Referral Business

By now your clients have so much confidence in your expertise that they are willing to refer their contacts to you. You just have to make sure you show appreciation for these referrals.

Abandoning Inappropriate Clients

Abandoning inappropriate clients is really switching into...

...The Reverse Gear Of Your Business Development

The Reverse Gear Of Your Business Development Gearbox

So, why would you abandon clients and turn business down? Because you're picky. You have your target market and in your target market you the cream at the top and the sludge at the bottom. The first project is a honeymoon, and now you know beyond the shadow of a doubt whether your prospect is in the cream or sludge category. You've assessed each other during the project, and at this point you decide whether or not it's worth carrying on and accepting other gigs from this client. And if the client proves to be in the sludge category, you have to make a tough decision for your own sanity's sake. The fact is that the more sludge you have in your roster, the less space you have for cream. As the saying goes, you can't expect chicken shit to turn into chicken salad.

So, why specifically do you abandon clients? There are several reasons. Some of them are...

Summary

So where is the problem here? Well, many companies want to bypass the first two gears, and abdicate forced peddling to people who are the...

...group of people, called the commission-based sales force. Yes, you're right. I have a major issue with commission as a method compensation. It rewards the wrong people (greedy, individualistic mercenaries) for the wrong thing (competing with each other for personal glory with no regards for the company) and for the wrong reason (Short-term quick buck). That's all really. You can read two brilliant anti-commission articles here and here. They open in new windows, so you can then return to continue reading this article.

Then this commission-based sales force as sent out to pound the pavement selling the company's "amazing solutions" no one has ever heard about. Of course, at this point executives all say, "Our stuff is so good is that it sells itself." There lies the next problem. If it is so good, then why do you need an army of salespeople to ram it down people's throats?

Foregoing the first two gears and just condemning your sales force to cold-calling, pavement pounding and door knocking is just as futile as trying to outsell Amazon through peddling books door-to-door using more and more salespeople. You can never "out-peddle" Amazon's seamless automated book distribution system that sells millions of books but operated by only a few people.

You see, you can free up lots of your people's time by automating the first three gears, so your salespeople can meet only prospects who are ready, willing and able to buy. Instead of chasing, it is prospects who will contact you and ask you for appointments.

But then knowing all this, what is the reason so many companies just keep hiring more salespeople chasing more suspects? It is really like trying to out-sail the fastest cruise ship by hiring more slaves, giving them bigger oars and whipping harder.

You need an engine with fuel not more people with oars. So, what to do next? First let's look at the business development continuum below. Business development is marketing and selling in the first phase to get clients and post-sale service to keep clients. You can get clients in two ways...

One is heavy on sales and light on marketing, the other is heavy on marketing and light on sales.

Comparing Sales-Heavy And Marketing Heavy Business Development

Sales-Heavy (Marketing-Light) Business Development Marketing-Heavy (Sales-Light) Business Development
Pay as you go but forever 1-off upfront investment in a system and it's all yours forever
Perpetual for hunting for prospects through manual labour grunt work Perpetual attraction and selection of ideal prospects on autopilot
Haphazard and unpredictable Consistent and pretty predictable
Instant gratification, quick buck Delayed but lasting gratification
Focusing on making more (Increasing gross sales) Focusing on keeping more of what you've made (Increasing net profit)
Low margins due to price objections) High margins due to price acceptance)
Human-dependent manual labour drudgery System-dependent largely automated process
Chasing prospects Being chased by prospects
Selling through a large army of super-aggressive, glib, smooth-talking salespeople Selling through a small commando of business-savvy diagnosticians
Every prospect is to be turned into a client…whatever it takes Prospects (buyers, companies and opportunities) are carefully screened for acceptance/rejection
Outbound: You chase people and try to sell your stuff to them Inbound: Interested people contact you when they are ready to buy
Objective: Closing the sale Objective: Deciding whether or not to open a relationship
Rejection: Some 97% of the people you call want you to get lost or if it's all possible, to will yourself dead... right away. Acceptance: Only interested people respond. There is no rejection, no overcoming objections and no closing the sale. Qualified prospects close themselves. You decide whom to accept and whom to reject.
Traditional sales model: Trying to convince people they need what you sell Diagnosing model: Establishing if there is a reason to change the status quo and the fit to use your services to do so.
This is the traditional approach the mediocre majority follows. "We want instant sales now!", "We refuse to plant but demand instant harvest!" - They cry. To pull this off, you need and army of salespeople, which is extra overhead and a drain to manage. Besides, you have to pay them on every sale. And if you pay peanuts, you'll get only monkeys. Until and unless you talk about base pay plus 15-20% commission, you can't expect good people. And as long as you pay salespeople differently from how you pay other employees, you will never get team players. Through a process that is heavy on marketing and light on sales, practised by the top-performing minority. Look at McKesson Corporation, the leading provider of healthcare supply. In the 2002-2003 fiscal year, with only 500 employees, McKesson produced $7 billion in gross revenue. That's an outstanding $14 million per employee. Do you really think they achieved this by running the world's biggest group of peddlers and pestering the largest number of people? I dare to say, they used their brains as well. In this process you can have only a tiny sales force that can deal with the prospects your marketing process has brings to the point of conversion. There no chasing, hunting, pounding pavements and dialling for dollars. Qualified prospects seek you out as an industry expert.

At this point you have to choose your approach. What's yours? Tactically out-brawning your competition using a sales army and brute backbreaking grunt work? Or strategically out-marketing the competition using finesse?

Attribution: "This article was written by Tom "Bald Dog" Varjan who helps privately held information technology companies to develop high leverage client acquisition systems and business development teams in order to sell their products and services to premium clients at premium fees and prices. Visit Tom's website at http://www.varjan.com.