Tomicide Solutions, Dec 2017

Wishing For Amazing, Hyper-Productive Business Developers?

By Tom "Bald Dog" Varjan


Do you know that some 74% of American adults are overweight, some 35.7% are obese and some 5% are morbidly obese?

Now I know some people' defence is that when Arnold Schwarzenegger won his first Mr. Universe title in 1967, based on his body mass index, he was classified as clinically obese.

So, some people say, "Hey, I look like Arnold".

Oh thud me cronker stops and duffel me latches! What a splendid act of discernment.

But in most cases, they don't look like Arnold.

But the above percentages are much worse at Walmart or McDonald's.

It seems almost everyone is overweight over there for some reason.

Have you thought about why?

Just take a look at what people buy and you have your answer.

They buy all sorts of suspicious food-like substances which make them fatter and more addicted to the rubbish they eat.

But Walmart's and McDonald's low prices are not only magnetically attractive but hopelessly addictive.

It seems that when it comes to food, the unwashed masses of want high quantity at low, low prices.

They want food to fill them almost to point of bursting at the seams, not to nourish them.

But what is the cause of this obesity epidemic?

Well, maybe the main cause is that people get their health information from the wrong sources.

They trust the media and bogus, industry-sponsored academic research that have been feeding them a low-fat grain-based (thus high carb) diet for a donkey's years.

People read "expert" health advice, written by generously bribed Ivy League professors and charlatan doctors (Ancel Keys at the University of Minnesota and Fred Stare, founder of the Department of Nutrition at Harvard and many more), and then go to Walmart or McDonald's to buy the recommended rubbish at obscenely low prices.

And now the media, which is in bed with the pharmaceutical companies, has fulfilled its mission of creating millions of sick people, so Big Pharma has a huge and "hungry" market for more and more magic pills and miracle medical procedures.

As a result, people get fatter and sicker and Big Pharma makes even more money on them.

The government can collect its tax money and the media has plenty of news to blow out of proportion.

And all this shit happens because people fail to check the origin of the health advice they rely on.

And the something similar happens in business development to many information technology SMBs too.

Wishing For An Amazing, Hyper-Productive Business Developer?

"There's a lady who's sure all that glitters is gold, and she's buying a stairway to heaven." ~ Led Zeppelin: Stairway To Heaven

This is the rough approach most IT SMBs take when they hire business developers.

But be careful what you wish for. You may get one of those business development magicians and your nightmares will start gaining earth-shattering intensity faster than Bill Clinton's falling trousers in the Oval Office.

Online career portals are full of ads in which IT entrepreneurs are looking for business developers.

But what they are looking for is not real business developers, but hucksters who are willing to go after the market like bulldogs, and can generate obscene amount of business in a very short time.

Not someone who can build up business development as an organisational competence, a system that can bring in new business in a consistent, predictable and reliable manner.

Oh, no!

They seek people who are willing to pound the pavement and telephone dial pads day in day out in the hope of connecting with some buyers who want to buy what these poor bastards sell.

They're seeking the proverbial sales Superman and Wonderwoman who join the firm, hit the road running and quickly fills up the firm's coffers with money.

Basically, those IT firms try to sell 5-7-figure solutions using a sales process that is used for selling low-priced commodities.

And what do so many firms offer in return?

Based on many career ads...

"Although we offer only a moderate base salary, but you get a generous uncapped commission."

Well, the base pay is often no more than the legal minimum wage and the commission is a one-time 5-10%.

in TV series Justified (FX Network), there is a dialogue about between a real estate speculator and his mistress about this money dilemma. The mistress has an employee whom she suspects of stealing from the company and she asks her lover how to handle it.

Mistress: Know what I do, keep my people loyal? - Do tell.

Real estate guy: Overpay them. Christmas bonus, Easter bonus, President's Day bonus, Pappy Van Winkle on their birthday. Don't nobody bite this hand.

Mistress: Yeah, well, it must be a little harder to turn a profit, I would imagine.

Real estate guy: There's plenty to go around, and it's a small price to pay for loyalty.

In those career ads, salary often is just over the legal minimum wage and the commission is around 5% with a six-month clawback, meaning that if the client cancels the deal for whatever reason within six months, the commission part is taken back from the business developer.

The irony is that, in most cases, projects are cancelled due to shortcomings in project delivery that has nothing to do with business developers. Yet, since the guilty parties are on full salary, only the business developers can be penalised for cancelled projects.

And what happens next?

At the annual evaluation, the business developers get raked over hot coal rainmaker gets for losing a lucrative account, while the salaried people, who are the very reason for losing the project, receive glowing evaluations and full bonuses.

And this is precisely why so many IT SMBs are looking for miracle-grade business developers with lots of contacts in the industries in which they are expected to find clients.

Cold-calling archenemy and best-selling author Frank Rumbauskas had an eye-opening story in one of his blog posts a few months ago. He bought a sales book, and the author had a strange take on cold prospecting...

"Your reps will go broke cold calling, but that's not your problem! Let them go broke while they bring in customers who will continue to generate revenue for you long after they quit or get fired."

People in general call selling a dirty profession, but both this and many other similar stories show pretty clearly that some sales managers are some of the dirtiest scumbags in the profession who send their salespeople on wild goose chases to hunt down unqualified suspects on their own dimes.

But sadly, many IT SMBs try to find and hire those super-aggressive hucksters who can bring in new business almost overnight. After all, they are expected to hand over their most precious relationships to their employers, so they can make some quick buck.

The reality is that in many cases...

Business Development Completely Ignores Powerful Marketing And Relies On Forceful Sales

A couple of years ago, I read an interesting story in Bob Bly's newsletter.

It was a bout a sales trainer who opined that marketing was for people who didn't know how to sell.

This sales trainer earned his living by teaching aspiring salespeople cold-calling.

Basically, he was teaching people how to interrupt strangers and convince them to buy something that they neither want nor needs, but they should buy it because that would make salespeople and their employers rich.

Some experts say that people buy from people whom they know, like and trust.

Of course.

This trainer taught his victims how to trick prospects to listen to them and then convince them to hand over as much money as possible.

Now, the funny thing is that while many IT SMBs don't want to use the demeaning term of "selling" and "sales", they still focus on finding easy-to-find people and bludgeon them into submission with manipulative and pushy sales pitches and then take their money and run very far and very fast while they are screaming "Noooooooooooooooo!!!!".

In an oddball way, it's similar to pedestrian, garden-variety rape. Some people get what they want, while the others scream "Noooooooooooooooo!!!!".

Sweet merciful crap! It's amazing what the world is full of.

Listen to 100 sales trainers. Most of them talk about the tectonic changes that have taken place in the world of selling just in the last few years.

Yet, you always find some fanatics for whom sales training is the memorization of dozens of objection-handling statements and other tricks.

A few years ago, I attended a real estate seminar, and one of the presenters was a sales guy. He taught us how to leave interrupted messages for prospects.

And when they'd call us back, we could just unleash our best and brightest sales tricks on them and bludgeon them until they submit to our wills. Swell!

For some obscure reason, so many sales experts still believe that sales objections are the signs of wanting the product or service for sale. The more people object, the more they want it.

Really?

Maybe they should be raped for the sake of getting the experience of objecting and having their objections ignored.

But if the essence of business development is to pester buyers, like an annoying rodent, until they hand over the money, then is it surprising that most buyers use a protective purchasing layer in their companies?

Yes, it's called procurement and the dreaded RFP process. I guess this is why one of the biggest aspirations of every IT SMB leader is to rise above the need for participating in competitive bidding and do business on their own terms.

So, why do IT SMB salespeople are condemned to running the diabolical procurement gauntlet?

Well, you can unleash a legion-sized sales force on the land, but when they reach boardrooms, they have a problem.

There is no peer-level relationship between buyers and sellers.

Boardroom residents are key members of their companies, but salespeople are the most expendable members of the seller's companies.

By other employees at sellers' companies, salespeople are regarded and treated as social outcasts and necessary evil whose presence is tolerated only because they fulfil the most despicable business function: revenue generation.

I know this sounds harsh, but I've come across far too many IT SMB leaders who love looking at their companies' financials but feel ashamed how that revenue has been generated.

Ask most boardroom dwellers and they tell you how much they enjoy drooling over their companies' revenues, yet how ashamed they feel about their sales processes.

Oh, have you ever thought about why...

Sales-Heavy IT SMBs Tend To Have Poor Client Service?

This is all about the difference between project management and engagement management.

In most IT SMBs, client service focuses on projects and project management. There is good client service between project kick-offs and project completion.

After that, it's all forgotten and as far as sellers are concerned, former clients can take a running jump at a bulldozer... until they come back and are willing to pay for something.

By contrast, engagement management is all about managing the whole client relationship both during and between projects.

But if we take a closer look at the four functions of business development, we may come to a different conclusion.

4 Business Development Functions

  1. Generating perfect sales leads: Generating sales leads that match your perfect client profile and have specific problems (the absence of your delivered value).

  2. Converting leads into perfect clients: Nurturing and converting those sales leads with whom you have a mutually beneficial basis to work together.

  3. Keeping perfect clients: After the first engagement, you decide whether or not to keep a client for future work.

  4. Growing perfect clients: Growing "long-term worth" clients into a higher level of performance. Here performance can mean both financial and other forms of performance.

And in order to be able to click through all four functions, business development has to include all six ingredients...

  1. Offer: Creating offers that match your perfect client profile.

  2. Marketing: Making the market aware of your offer. Using farmer's lingo, this is when you start tilling the land. You plough the soil and plant. Then pull the weeds and water the plants.

  3. Sales: Acquiring new clients. This is the time to jump on your combine harvester and bring in the crops.

  4. Client management: This is partly project management and partly staying in touch with clients after projects.

  5. Alliances: Joining forces with other businesses that target your target market but offer complementing services. For a funeral home, a crematorium is a perfect alliance. And as a former gravedigger and crematorium attendant, I can only confirm it.

  6. Feedback: To operate more effectively, it's important to get frequent and quick feedback. This feedback includes feedback from peers, firm leaders, clients and suppliers.

Without proper business development, as a holistic function, client acquisition easily becomes a factory-type mass production function to forcefully hawk your services to anyone who is willing to buy it.

And that would be a rather sad state of affairs, no matter what the Association for Pet Obesity Prevention, the Benevolent and Protective Order of Elks or even the Aerial Phenomena Enquiry Network says about it.

Effective business development is all about having self-selected people come to you off their bat to do business with your firm. There is no force, objection or manipulation.

Instead of applying coercion to "close" them, you create hoops of disqualification which they have to jump through to qualify to work with you.

Or phrasing it differently, you give them several opportunities to disengage. It's like fishing with a barbless hook. You really have to know what you're doing or the fish unhooks itself.

It's like the military. If you join one of the "main-street" branches of the military, you're more or less automatically accepted and off you go to boot camp.

But if you want to join one of the special warfare units (Rangers, SEALs, Delta, etc.), there is a very hard qualification course that you have to pass in order to be able to start training.

And as a high-calibre provider, you have every right to set a qualification course for your potential clients.

After the incoming enquiry, you can start with a 2-3-page document, entitled "What We Believe", a summary of your work philosophy. If the buyers agree with your beliefs, they can start your onboarding process.

In the world of traditional selling, good sellers are good hunters.

By contrast, good marketers are good trappers. They don't run all over hell's half acre in hot pursuit of buyers. No! They bait their traps (registration forms) with valuable content and wait patiently for visitors to fill in and submit their requests for specific content pieces.

I've read somewhere that it takes about 15,000 infantry bullets to kill one enemy soldier. That's a whopping 0.006% success ratio.

But snipers' success rate is 83.3%. A mere 12,500-fold improvement, and that improvement doesn't come from more effort of the same kind. It comes from drastically different approach.

Granted, it takes more time, effort and money to train a sniper than a muzzle-to-muzzle trench soldier, not to mention the price of his equipment, but while trench soldiers shoot at other trench soldiers, snipers wreak havoc among high-ranking officers and other strategically important people.

And now let's compare trench soldiers to salespeople roaming the land and a sniper to good marketing.

Now, I'm not saying your revenue goes up 12,500-fold with good marketing, but it can go up quite significantly. The investment is definitely worthwhile.

Boutique Vs. Factory Business Development

Just as there is a drastic difference between industrial factory farming and homestead farming, there is a similarly huge difference between factory type- and boutique type business development.

You can read about some of the differences below.

Factory-type business development

Boutique-type business development

Sadly, many IT SMBs follow that silly advice that I heard some years ago from a sales trainer: Watch your gross sales like a hawk, and when it drops even a little bit, start cold-calling and hiring more salespeople like crazy.

For a moment, Jeffrey Pfeffer's (Thomas D. Dee Professor of Organisational Behaviour, Stanford Graduate School of Business) quote comes to mind...

"What kind of doctor would you be if your patient was bleeding faster and faster, and your only response was to increase the speed of the transfusion?"

Paraphrasing Jeffrey's quote...

"What kind of business leader would you be if your revenue were dropping faster and faster, and your only response were to increase the speed of hiring more salespeople?"

Most business leaders know from Deming that 94% of all problems are system-related, not human related, but there is a huge difference here.

Fiddling with the system requires some knowledge of the system.

Fiddling with people requires only a huge ego and an "I'm a genius surrounded by morons" attitude.

In a way, it's like having your salespeople run around with leaky buckets and threatening them that unless they can deliver more water, they get fired.

But instead of buying proper, leak-free buckets, business leaders tell salespeople to use bigger buckets and move faster.

They seem to care more about activity than productivity.

So What Comes Next?

Basically, stop wishing for ready-made business developers and start building your firm's business development capabilities.

It means you have to work on two parallel tracks.

  1. Track #1: The system side of business development

  2. Track #2: The human side of business development

One problem I've seen over the years is that IT SMB leaders hire business developers and then ask them to do whatever they do to drum up business.

And that leads to chaos.

You've probably heard what Bill Gates has said about systems...

"Automation applied to an efficient operation will magnify the efficiency. Automation applied to an inefficient operation will magnify the inefficiency."

Before you hire even your very first business developer, you must have a system that the new person can use to acquire new clients.

And when you have a shortage of clients, remember Deming's observation from the above section, it's a system problem not a person problem.

Most IT SMB don't underperform because they have a shortage of people.

No!

They underperform because their systems are defective, and no matter how many business developers they employ, they have to use defective systems and end up producing more defective results faster.

And since in the first 57% of the sale cycle, buyers don't even talk to salespeople, if the system is defective, there is no chance to communicate with buyers.

But by the time, buyers are ready to reach out and meet salespeople, it's too late.

Those buyers are in the solution aware stage of their buying processes, so they are just looking for the best price on solutions they have on their minds... usually the wrong solutions.

The most valuable phase of the project, the diagnosis, is eliminated, and you get hired as a pair of hands to implement as per your clients' instructions.

And, like it or not, that's commodity vendor work.

In fact, most IT SMB owners hire people to scale their operations.

You have two ways of scaling your IT SMB. Through headcount or through systems.

When you scale through headcount, more people may be able to bring in a bit more business. But get ready that your net profit per employee, which is the ultimate performance indicator, goes down.

When you scale through systems and processes, you're doing real scaling. Your firm's revenue goes up but without increasing your costs.

For instance, hiring more salespeople is scaling through headcount. Yes, your sales goes up, but your sales per salesperson goes down. And your cost of sales most certainly goes up.

Hiring a copywriter to increase lead generation and lead conversion is scaling through systems. The fee and the royalty of the copywriter is a tiny fraction of how much revenue the revised copy can generate.

Remember, the headline alone on a web page can cause as much as 22-fold difference in readership and action.

All right, you want to hire some business developers. Great.

But before you do that, patch up your business development system from the standpoint of processes and technology.

Also, accept the fact that business development is more than selling. Business development is the whole process from first contact through signed contract to last contact when either you or the client dies or the client asks you to bugger off once and for all.

I've read somewhere that good IT SMBs build sales forces and regard hiring new salespeople as the first step to grow.

But great ones build business development, not only sales, systems and regard recruiting new people as the last step to grow; only after the systems and processes have been fully optimised and work like a real Swiss Rolex.

So, this is it.

There are no perfect business developers.

Whoever you recruit will be shaped by your firm's culture and the system you've built.

If you have a good system and have the willpower to stay away from HR best practices for hiring salespeople, then you have a good chance to pull it off.

In the meantime, don't sell harder. Market smarter and your business will be better off for it.

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.