By Tom "Bald Dog" Varjan
Most companies treat planned and consistent business development as a "when-I-get-around-one-day" issue. This behaviour is fuelled by the mistaken belief that if businesses build better mousetraps, then the world will beat a path to their doors and want to exchange hard-earned money for whatever doohickie the company is making.
Well, it won't happen. Every single sale is the result of consistent marketing. So, let's see here some common costly business development blunders.
1. Advertising is just a waste of time and money, and a euphemism for flushing money down in the toilet. There is nothing wrong with advertising as a process. When it is done correctly, it works like magic. The problem is that most business owners try to convert prospects into paying clients and customers at the very first encounter. That is retarded. It is the same as taking your date to bed after the first meeting. Yes, it happens, but it also speaks pretty loudly about the virtues of that person.
However, if you have no earthly idea of how to write promotional copy, how to negotiate deals for ads and how to position your ad in a publication, then it is really a waste of money and a grossly overlooked opportunity. Just because you cannot drive, you cannot say that having a car is a stupid idea.
2. Everybody knows us, so we can save our business development budget. It is the same as saying that I have just shaved, so from now on I can save my money I spend on shaving tackle. But in a few days you turn into a retarded monkey. Looking like a monkey on the outside, with the brain of a semi-evolved simian on the inside.
We all know Microsoft, Nike and IBM, but they still do marketing on an ongoing basis. How known is your business in comparison to them? Probably not at all. What would happen if these companies relaxed on the marketing activities? If Microsoft relaxed, then the open-source community would take over. If Nike relaxed, Adidas would take over. If IBM relaxed, then Apple would take over.
How many competitors do you have who would like to see you dead and buried? Harsh question, but think about it? Do you really think you are the one and only choice for your clients and customers? If they can solve their problems without your help right now - and they can (stop arguing!) - then what is your chance of being selected from the endless ocean of competitors? I could say, not a sausage, but maybe a tiny bit more. But not much.
3. Our sales people do their own prospecting. This is a brain-dead but commonly used approach. Mr. Richard (Dick) Head, the president of Dumbass Inc. decides to "save" his marketing budget condemning his sales people to pound pavement and dial for dollars in order to make the monthly quota. So, the salespeople spend some 70% of their time on prospecting and only 30% on selling.
That is productivity. By spending the 70% on selling, they could easily make more than enough money to cover lead generation, but Mr. Head is such a narrow-minded and short-term focused charismatic cantankerous curmudgeon, that he focuses on how much he can "save" regardless of what opportunities he loses. Within a year, 42% of the sales force disappears, taking some clients with then and spreading the negative word about Mr. Head and his retarded drudgery joint.
Sales people can sell and love selling, but hate prospecting. You must provide them good leads if you want to benefit from their full performance. They can only perform in the right environment, but in an environment where they have to hunt for each and every lead, they won't be able to operate at their best. And sooner or later they just leave, forcing you to start hunting for some new sales people. That is a pretty retarded way of running a business.
4. Direct mail is just junk mail. It depends on the sender. If you send junk, it is regarded as junk mail. If you send a unique value proposition, then it is not junk. Not everyone will respond to it, but it is not junk. Hey, just because you turn down the waitress' offer for one more cup of coffee, it doesn't mean she is offering rubbish (well, only slowly-killing poison, but it is socially acceptable.). You have just made a conscious decision that you don't want more.
It is up to you if you send trash or treasure. Again, just because you don't know how to conduct effective direct mail campaigns, and are too stingy to hire someone who can, the method itself is still valid and wildly successful. The fact is that good mail gets opened, read and in many cases responded to. Address one of your direct mail packages to yourself and see how you respond. You may be shocked.
5. Relying on word of mouth only. Imagine you want to date, but instead of going out and making connections with new potential dates personally, you rely on your previous dates' introducing you to new people. So a date from 15 years ago introduces you to a friend of hers, saying "You must meet this guy. He is the best-looking dude in town and the greatest bed-artist you'll ever meet". But by now you have become a fat, chain-smoking slob who smells - due to smoking - like a vacuum cleaner's armpit. On the top of all this your hair is halfway gone. So, you meet and she runs away in disgust screaming.
Imagine this in business "She is an amazing bookkeeper, and her rates are only $45 per hour." But by now - 15 years later - she is a chartered accountant, charging $220 per hour. But this potential referral expects her to work for $45 an hour. None of those word of mouth people will do business with you due to the shock your fees cause. Word of mouth is only one component of your marketing. Why are you making other people solely responsible for your success? Why do you ever want to depend on other people's opinions of you?
6. The media ignores us anyway, so there is no point in playing the media game. Why do you think this is the case? Just read the "News" section in most firms' websites. It is all about blatant self-aggrandisement about the number of MBA's the principals hold and the number of awards they managed to conjure up. Would you want to read about other people's drumming on their own chests, shouting "We are the best, we are the nicest?" And retarded buzzwords like "quality", "integrity" and "service". Who the cricket cares about such platitudes?
If you want to work with the media, then you have to have something worthwhile to say above and beyond empty chest pounding. There can be many things in your company that are relevant to your target market, thus could be published in newspapers. But looking at things from the same perspective always produces the same results. Put yourself into your prospects' shoes. What are they looking for? Are they getting it from you or do you condemn them to going to your competitors? Are you attractive and exciting enough to do business with?
7. We are just a small company. Marketing is only for large companies. This is the same as saying that education is only for educated people. Yes but if you realise that you can't get into Ph.D. school straight from kindergarten, you also understand that there must be a starting point. You have to start taking out "your message" on a small scale first.
Once all large companies started out small companies, and as a result of good marketing and business development they gradually became a large company. Marketing is a business function, just like accounting or even cleaning the toilets on your premises. These functions have nothing to do with the size of the company. They just must be done.
But without constant business development you will never be able to become a big company. You end up spending your life spinning your wheels and throwing more and more sand into your eyes making your vision more and more blurry and your journey more and more painful. Imagine marketing and sales as a continuum. Marketing is the process of building momentum which "climaxes" in getting the sale. After that you have to provide great after-sales customer service or you lose the client.
8. For our target market price is the most important factor. It is, if this is what your marketing messages and your people communicate, then your market positions you accordingly. If you promote low price, you are expected to become an "economic alternative", you get judged on price and eventually may well die on price.
In contrast, if you promote value, then it is value that will position you in your industry. Studies indicate that only about six percent of all lost sales are lost on price. And most of the other 94% is lost on the salesperson's incompetence. And that is your fault, not the buyer's.
Don't drop your prices, but learn how to sell better. If your prospects focus on the price they pay instead of value they receive, you have lost the game and you are the only one to blame for it. Instead of thinking about discounts, think about how you can improve the way of presenting the value of your solutions. You also have to find smart buyers. They know they get what they pay for.
9. Our sales are already growing. Why waste money in marketing? Sales are for now. Marketing is basically investing in the future, making sure that your sales keep growing. Marketing today will create the steady stream of prospective clients who will become paying clients tomorrow.
But look at what most companies do. In order to increase sales they hire armies of salespeople (with the average annual attrition of 42%), and then usually with no or (just minimum training) these salespeople go out cold calling, pounding pavements and breaking through "No solicitors" signs to make their quotas. Then they get burnt out or just plain ticked off because there is no support from the company, only retarded demands, so they leave.
So, while most companies can say their sales are increasing as the years go by, only a handful can say that their net margins are increasing. In spite of the great management fads, most companies' performance is barely mediocre or plain lacklustre.
Never mind whether or not your sales are growing. Are your profits growing? This is the question here. How much of what you make can you actually keep.
10. We know where our potential clients are. Business development must be 100% certain about who exactly your potential clients are. However, as the market changes, it is important to keep pace with that change, which only very few companies do. For that it is a good idea to keep an ideal client profile (both ideal company and ideal buyer profile), including demographic, psychographic and maybe even technographic profile on clients.
And here I also have to warn you about marketing research. You have to consider two major factors. One is the Hawthorne effect, which basically states that people behave differently when being observed or surveyed. The other is the Participative Universe principle, which says that researchers find what they are looking for.
Think of Kentucky Fried Chicken's research in the 90s. Researchers concluded that there was high demand for healthy, low calorie food options. According to research, people wanted it. Realistically people wanted quantity, not quality. The plan failed miserably. Other example: In 1943, Thomas Watson, the then-chairman of IBM spent a small fortune on hiring a prestigious consulting firm to research the computer market. The firm concluded that there was a market "maybe only for a few computers." Now we know better.
So, instead of wasting your time and money on excessive research, just observe and pay attention. Take hard evidence with a grain of salt, and pay more attention to soft evidence. Remember, soft evidence is from the real world, whereas hard evidence is merely hypothetical or documented academic mish-mash.
As you can see, business development is an important cornerstone of any business. You can ignore it at your own peril, but the alternative is sheer backbreaking grunt work selling. Again, you end up pounding pavements and dialling for dollars.
Heck, you have to sell your stuff either way, but when you have an automated business development system, then you can sell more stuff with fewer staff at higher fees and prices and less effort and money wasted.
Keep looking for the easier way and make sure you don't become a burnt out selling martyr.
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.
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