Archive for the ‘Lead Nurturing’ Category

When IT Business Development Goes Broke

Monday, October 26th, 2009

Oscar-winning actor, Nicolas Cage who’s made a pretty penny over his career now claims he’s dead, flat broke as a result of his business manager’s incompetence. He’s actually suing Samuel Levin for $20 million for leading him to financial disaster.

Cage claims that Levin handled his money irresponsibly, took unnecessary risks and failed to pay taxes on several properties, so now Cage owes the IRS some $6 million in back taxes.
Interestingly, this is the exact dynamic I’ve seen in so many smaller IT companies.

Executives don’t wants to get involved in business development because they regard it as substandard activity to their highly developed technical minds, so they hire armies of salespeople on straight commission and clearly communicate to them the key message…

“Your job is to bring us signed contracts and purchase order. Do whatever needs to be done but don’t disturb us with the details. We’re extremely busy, and we’re not interested in it anyway. You get clients and hand them over to us for further work.”

I bet my bottom dollars that this mentality has led Nicolas Cage down the doom loop too.

“Look, business manager. I’m an actor. I don’t care about the dirty details like money or business. I’m an actor. I’m an artist. You take care of the business but leave me out of it.”

In this dynamic two strong factors work in favour of salespeople…

First, salespeople can do whatever they want to do in order to get clients, and since they work in isolation, no one can really supervise what they do and no one in the company knows what’s happening around business development.

Second, salespeople have no rules for their work. Since the company doesn’t care about the details, salespeople focus on 1) what’s good for them and then 2) what’s good for the company. One thing they don’t focus on: What’s good for clients. So in the process of maximising their personal earnings, shoddy often practices raise their ugly heads.

By shoddy practices I don’t mean nasty practices but that can happen too. One areas of shoddy practices is short-term vision.

The company may be interested in landing long-term repeat and referral clients, but due to their compensation model, commissioned salespeople only care about the “right here” and the “right now”. And we can’t even blame them, since they have to eat too.

And we haven’t even mentioned the huge attrition of salespeople in the IT industry. Again, due to their archaic compensation model, they keep looking for greener pastures.

And when that happens and they decide to move to the competition, they take all their clients with them.

And executives get pretty pissed off for this “stealing” act.

But let’s see the other option of not “stealing” clients

Fred salesman leaves the company where he worked on a “Do it and spare us from the details” basis. The company has no built-in business development.

So, what happens to the prospective clients and past clients after Fred’s departure? These are the people the company should stay in touch for future business. And they get neglected.

Here is why…

These prospective and past clients have relationships with Fred not with the company.

Fred has his own stay-in-touch system but the company has none.

So, it’s only fair to say that the company’s haphazard stay-in-touch programme will soon go down the toilet and these prospective and past clients will be unceremoniously abandoned.

And what are the executives doing in the meantime?

They are probably naval-gazing in the boardroom about executive compensations, website colour schemes or the latest management fads that have just come out of one of the Ivey League business schools.

And what happens when the company runs out of money due to lack of clients?

Simple…

Bring on the next round of venture capital.

And when no more money is to be had, the company quietly goes tits-up.

The way I see it, unless business development is a centralised organisational function, it’s not a business but a glorified hobby.

Yes, salespeople may be needed, although I doubt it, these salespeople have to work on executing the company’s business development strategy not merely doing their haphazard work to get clients here and there.

Message to IT companies: If you want to hire great salespeople, show them that your company actually has a business development strategy.

Message to IT salespeople: Ask you would-be employer about the company’s business development strategy. And when the recruiter says that you just go out and hunt for clients on your own, you’d better run because the end can be near.

What do you think? Is this a reasonable perspective on business development?

Some Thoughts On Lead Qualification

Wednesday, October 14th, 2009

How many times has it happened to you that some of your sales leads went through your Q-course (qualification course as it’s called in US Special Forces training) to become clients to quickly?

Yes, on the one hand this looks like a good thing because we can quickly collect the down payment and start the project, but realistically, it’s not. It must take some time to qualify for in-person meetings with you, and prospects who shoot through your lead qualification programme must be treated with some scepticism.

In many cases the reason they can shoot through so quickly is because they skip some vital steps of qualification and your salespeople are too eager to rush the process

So, in this article we look into the lead qualification process.

We also assume that you run a salesperson-free operation, in which highly qualified buyers can meet your real experts.
Lead qualification is a mix of human and automated efforts. The mistake I’ve seen many IT companies make is that they try to make the process 100% because they don’t want to bother to develop a system to perform the automated part.

So, their salespeople spend an inordinate amount of time meeting prospects who are not yet ready to make decisions. The other problem is that using only human effort, what prospects meet first is the sales pitches from the salespeople, so prospects instantly position the company as a fungible vendor.

However, if you run a salesperson-free operation, as I often encourage my clients to do, an automated system can spoon-feed prospects with the kind of valuable information they are looking for in order to make decisions. And then prospects request meetings with your experts not with salespeople.

When I have a legal problem, I want to see a lawyer not one of the law firm’s salespeople.

Look at all salesperson-free business structures, like law firms or medical establishments. They are highly trusted, respected and blazingly profitable. Maybe we have something to learn here.

I believe one of the secrets of running a “respected expert” type IT company is by not having salespeople.

Instead, have a great lead generation and lead qualification system that allows buyers to “experience” your company’s expertise through valuable content.

Your company can only be perceived as respected experts if your market “meets” lots of your content before talking about working together.

So, the qualification process is a mix of automated efforts and human efforts, we have to decide what percentage of which offer we design into the system at what stage.

Lead Generation Continuum

Lead Generation Continuum

At the beginning, when your prospects have just entered your system, your lead qualification is 100% automatic. There is no need for human touch because these prospects are merely interested. They’ve entered your system by requesting your lead generation white paper. They are still at the very beginning of the decision-making process, so no human touch is required at this point.

If you humanise this point, you can scare prospects away with your salespeople’s early eagerness to close the sale.

As buyers move down in your sales funnel, at one point their interest becomes commitment to improving their situation and start searching for the right company that can help them to pull off the change initiative.

But now they’re committed to making the change.

And the good news is that through your valuable content prospects have read so far, you are now positioned as a respected expert as opposed to a fungible vendor. Buyers know they can’t relegate you to their purchasing departments because your people wouldn’t even talk to them.

And since the process has been automatic so far, you don’t even realise that prospects come and go. It all happens in the background while your people are doing other types of paid work.

At one point, buyers decide to take the next proactive step and start requesting meetings with your experts.

And this is the key here.

During these meetings, instead of presentations of capabilities and sales pitches, your subject matter experts do diagnoses.

But diagnoses of a different kind.

Yes, you do IT, but your buyers are looking for business solutions not IT solutions. Boardroom-calibre people are looking for business solutions to business problems.

So, instead of smooth-talking salespeople you need technical people who are cross-trained in business, and feel at home both in the boardroom and the server room.

And after this initial “general practitioner” level diagnosis, the first project with this new client can be a detailed “specialist” level diagnosis.

The project ends with a diagnostic report and an action plan of how to improve the situation. And clients can decide whether or not they want to retain your company for that change effort.

But I like the diagnostic project because clients have a chance to start with you, the new guys in the block, on a small scale and get to know your capabilities.

And you can do these diagnostic projects for a smallish fee that is fairly easy to accept but it’s still profitable for your company.

Many IT companies make the mistake of expanding the scope of their projects, but in most cases, fees don’t expand to the same extent.

So, you soon have a significant number of clients who’ve already experienced you though your diagnostic projects and are likely to re-hire your company for you know their situations much better than anyone else.

So, start small, and watch out for prospects who request your personal time too soon. Make sure they go through every stage of your lead qualification process.