With help from the Sales, Marketing and Business Development teams, We have distilled the process into a handful of steps that should help you build a diversification strategy that works for you; (1) Gain insights, (2) Gain contacts, (3) Gain their interests, and (4) Gain attention.
Customer Diversification is an important key to Company Value
…and to de-stressing your life as CEO/President.
Recurring Revenue and Customer Diversification are two keys to increasing your enterprise valuation. This blog post is directed to the latter; how to find new prospects to feed into the sales pipeline – qualified prospects who have expressed an interest and will drive Customer Diversification.
Quick question: What percentage of your business this last year came from new accounts?
If >50%, you already know how to do this. If <25%, you need to consider more focus on this important area. As for de-stressing your life, if you have 2 or 3 customers driving more then 10% of your business each, you know what I mean. Of course, the best source of new clients comes from referrals, so treat your existing customers like the gold they are.
Hunters vs. Farmers
It is easy to become comfortable with farming existing customers. To start with, they like you or at least made a decision to buy from you vs. your competition.
Sales people more often than not, are farmers, not hunters, in that they are relationship-driven. Getting them to step out of their comfort zone is difficult. Changing their comp plan to provide an incentive around finding new accounts can work in some situations, but often not – it is not comfortable to them.
Fortunately, the job of finding new accounts is not restricted to the Sales team. It should include a combined Marketing, Business Development (BD) and Sales role and they need to be coordinated. Often in smaller companies, these roles are shared, but the functions remain separate.
Note: there is no cookie-cutter solution to this. Every company needs a bespoke solution. This blog post is simply to provide some thoughts on the process you should consider.
Finding new accounts takes investment (allocation of time) and support from the top of the organization. There needs to be a plan for each market you are interested in. Whether this is a formal plan or more simply guidelines to be followed, it needs to have some basis for analysis over time that can be reported on regularly at the Management meetings.
Making Gains
If I try to simplify the BD process to find new accounts, it can be boiled down to these steps:
- Gain Insights – who are the potential customers you want to reach?
- Gain Contacts – how to identify and connect with the right contact(s)?
- Gain their Interest – how to ensure they will respond with interest?
Gain Insights:
It starts with data: i.e. information about the market you are trying to sell into. The more insights you can gain the better the opportunity to find new prospects and keys to open doors. Where do you get this data?
- Your existing customers – Do not be afraid to ask for any insights they can help with. Remember, they already like you. One idea from Verne Hernish in his book Scaling Up is to set up a routine with individuals on the management team, starting with the President/CEO to reach out to customers on a regular basis to ask how they are doing and for any insights they may be willing to share. Report back regularly on these calls.
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- Research – look into news sources, competitive websites (read their news) etc.
- Channel partners – If you have them, they have a strong vested interest to help with this. Work them. Make them part of your BD effort (and sales efforts)
- Lost Business Analysis – We do not know always know why an opportunity we had in our sales pipeline is lost. While sometimes it is obvious, price or feature-related; often it is unknown. Ask. Do the digging to find out as it can lead to improvements in your future efforts. It can also help find new opportunities. It is another source of market data.
Hopefully from this effort, you can identify new account opportunities including your competitor’s current customers. Make a list and then filter it to where your strengths play.
Gain Contacts:
Identifying the potential customers is one thing; reaching the key decision-makers might be a bit more challenging if you do not know them. Again use your network. Ask…
You might also try social media tools such as LinkedIn. They provide an opportunity to send succinct messages to clearly filtered contacts. A few key filter words and you limit who might click (which = $) to those who should be valuable. You can also ensure your competitors do not get these messages. The resulting clicks = first contact with people who meet your criteria and interested enough to want to hear more.
The key to this is a well-crafted message. Graphics tend to have more impact.
Gain their Interest:
This also requires some consideration of what hot buttons will grab their attention. It ties to your key differentiation/advantageous as they matter to the prospect.
If you are reaching out to a competitor’s client, tailor the message to attack their weakness(es) without it seeming like you are doing that. Ideally you want to set up a call that allows your sales team to work their magic or in fact this may be led by the Sales team.
Remember, listen before selling is a key that allows the prospect to believe you really do care about their needs, and not simply selling. A good salesperson does this by nature.
At this point, the BD effort has achieved its’ goal – identify potential prospects and get their interest. Now over to the Sales team, if that has not already happened given the overlapping responsibilities of BD and Sales. Cold calling and hunting skills are not the subject of this, but the underlying principle of understanding the potential hot buttons is still in play. Add to that persistence. Similarly, overcoming sales objections is a key part of this!
One more thing…
One additional item of course I should mention is the role Marketing plays in this and it tends to lead this effort by gaining awareness or attention to your company but can also nicely follow the Gain Insights process as that can help direct your marketing efforts. Good marketing helps establish your name and key strengths broadly to the market and can help feed into this process.
Gain Attention:
There are many means to do this and, while not the focus of this post, it can be a great source of new leads. Some examples:
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- Advertising – if you can create a strong brand, even better. Hint: imbed url and QR codes you can track so you get feedback on the success of the media and ad.
- Communications: Press Releases, Blogs, White Papers, Social Media
- Events
- Webinars
One potentially effective marketing tool that can create awareness and leads is the webinar. An effective webinar can be amplified if you work with others. Three aspects I believe can help ensure a successful webinar:
- Choose a topic that is important, perhaps controversial. It is critical that you are educating, not selling, if you want to maximize attendees.
- Work with partners, including, if appropriate, a media partner. This expands the potential list of attendees through their networks. Each partner will participate in the education, bringing their own unique views (which means selecting the right partners for this).
- Practice and practice again, ahead of the session, to ensure the messaging is strong with minimal repetition.
Done well, this webinar will yield a number of potential customers that feed into your BD process or directly to the Sales team. Timely follow up is key.
I hope this blog post provides you with some additional ideas to boost your current Business Development activities. Remember, it requires deliberate planning and then execution. It includes Marketing and Sales efforts. BD needs to be a conscious, separate and important activity – critical to adding new customers – to create the Customer Diversification that is so key to your company’s valuation. Of course, gaining interest is not the end game. Sales next has to close these leads ☺️.