Business development doesn’t have to be hard.
July 28, 2014 | The Whetstone Group

Let’s face it – you most likely didn’t work hard to develop your professional service skills and expertise because you wanted to be a sales person.  That said, you probably also realize the importance of developing new business so that you can continue to practice your professional skills — it’s a conundrum.

What if I told you the most effective business development tactic you can employ is also the easiest AND least expensive? I’m guessing you’d want to hear more — so here goes. I’m talking about mining your existing client data to identify business development opportunities.

The Tried (and True!) 80/20 Rule

Start by listing your clients in order of the fees they pay you annually — highest to lowest. Then look at the top 20% on the list and calculate what percentage of your total revenue they represent. I’m pretty sure you’ll find that top 20% of your clients represent close to 80% of your revenue. It never seems to fail!

So take a look at those top clients – what makes them your “A” clients — what industry are they in, what size companies are they, is there anything different about the way you serve them? Have you asked these “A” clients for a referral and/or testimonial? They obviously trust you and depend on you for a significant level of service — they will be your best introduction to meet prospective clients.

Based on the profile of your best clients, what types of business development activities should you be doing to bring more of those into the firm? What professional organizations, publications, web sites, etc will put you in front of companies who match the profile of your “A” clients?

Now take a look at the next tier of clients — many times they represent significant growth opportunity. What can you do to move them up to the “A” list? The first step is easy – call them to schedule a lunch or meeting and catch up on their business.

Now take a look at that bottom 80% or so that are only accounting for 20% of your revenues. How many of them are there? What is the average annual fee/client? How profitable is it for you to continue to serve all of these clients? Is it worth referring some of these clients to smaller firms to free up your time to develop and serve more profitable clients?

Develop an Opportunity Matrix

Once you’ve identified your “A” clients and the next tier below the “A”s we’ll call them the “B”s — develop a simple matrix to identify where you have cross-sell opportunities. List these clients down the side of the matrix and list all of your firm’s services across the top. Fill in the cells with one of four statuses:

  • Providing/provided — you are already doing this service for the client (or have already done it if it’s a one-time project)
  • Proposing — you are already in discussions with the client about providing them with the service
  • Not applicable — you can’t provide the service for the client because you are conflicted out our because there is no need for the service based on the nature of their business
  • Opportunity — everything else!

Don’t make decisions for your clients, assuming they don’t want a particular service. Anything that isn’t in the first three categories — the Not applicable should only be used for truly non applicable services — should be considered an opportunity.

The opportunity matrix will help you prioritize which clients to meet with (those with the most opportunities) and what to prepare to discuss with them (the services you haven’t yet provided them).

Remember, cross-selling to clients is the quickest, easiest, least expensive way to develop new business. Use your client data to identify the right clients and right services to target for growth.  And even though you can’t rely solely on client cross-selling for growth, the data you have about your existing clients can help you identify the right prospects to target and help you meet them through referrals and testimonials.

See? It doesn’t have to be hard — you have what you need right at your fingertips. Good luck!

Boring concept. Big payoff.
March 4, 2011 | The Whetstone Group

Last month we posted about the importance of database maintenance — with some guidelines on effective data management. We made the point that most companies realize they need to segment their target market, but “segmentation” goes beyond just identifying the type of companies you want to target. Not flashy, but pretty darn important.

Shortly after we posted our commentary, we came across a cool report by ITSMA and the good folks at RainToday.com* that details the lead generation best practices of high performing companies. The report is full of great strategies and tactics you can employ to generate more leads and get a higher return on your marketing investments.

Among other things, the report found that the highest performing companies take segmentation a few steps further to figure out the title of the decision maker(s) for their services, and the names of those individuals at each company.

This finding is in complete alignment with our experience.

We’ve really seen those additional steps make a tangible difference in direct marketing campaigns. We worked with a client who was skeptical about investing the time and budget to research the names of individuals at their target list of companies. Like many firms, they thought they had a pretty clean list already. But, they were willing to test the scrubbing process. So we divided their list in half. On one half we called to update contact names. The other half we used “as-is”.

The “scrubbed” list produced 2.5 times more appointments (qualified leads), and the total cost per appointment was 50% lower, even with the added cost of scrubbing the list!

So, yeah, we scrubbed the rest of their database before embarking on their year-long lead generation program.

This is just one highlight of what can be found in this great study. Click here to find out how you can get access to the full report.

* Lead Generation Benchmark Report: How the Best Firms Fill the Pipeline, 2010 ITSMA & RainToday.com

The most neglected part of your business development strategy
January 31, 2011 | The Whetstone Group

I received an email from LinkedIn recently with a subject line indicating that nearly a third of the contacts in my network changed jobs in 2010. It got me to thinking about the most critical and neglected component of most firms’ business development strategy — database management.

Your database may contain all the companies that reside in your geographic footprint. If so, you must use your defined target market criteria to zero in on those companies that would be the best fit for your firm as clients based on industry, size, ownership, etc. But that’s only step one.

The mantra of professional services firms is: “Ours is a relationship business“. Does a relationship happen between entities? I have a mortgage, but when I need something I don’t call “the bank”. I call Dave. When Dave left the bank, I moved my business with him.

Your database should contain updated information about the individuals at the companies you would most like to have as clients. And maybe not just one individual, but several who play different roles in the decision to hire your firm — influencer, decision maker, gatekeeper, etc. That’s step two.

Now, consider the fact that those individuals are not static. They don’t stay where they’re supposed to, and if you look away roughly a third of them (by my admittedly unscientific measurement) may take off on you. How can we prevent this from raining on our business development parade? More importantly, how can we use this as a business development opportunity?

If your list is already out of date — meaning you haven’t made any efforts to clean it up in, say, the past six months — a good exercise is to have someone call each company and ask if CFO is still the CFO, the CEO is still the CEO, etc. Make these changes and add any new contacts you discover to the list. Yep, that’s step three.

Within the target list, you probably have a handful or two of individuals that you would like to get to know on a deeper level — and who you would really, really like to land as clients.

Social media (as we have recently discovered) can be an excellent tool to help keep this targeted prospect list updated. When you receive those messages indicating that someone in your network has updated his/her profile — don’t ignore it. As a matter of fact it’s a good idea to check in on your network at least a couple times a week to make sure you don’t miss anything. If you see someone has changed positions post a congratulatory note on their profile. Better yet, call him or her with congratulations and offer to find out more about the new position and employer over lunch. And don’t forget to update your firm’s marketing database with any new contact information. Steps four, five, six, etc…

If your targeted prospect leaves it’s not only important to follow that person, but also to make sure you know who his or her replacement is. You can probably find this out by a quick phone call to the company’s receptionist.

Promotions within the same company can be treated similarly. Ask this person how their role has changed. Are they overseeing any new areas? Do they have additional decision making authority? Again, makes sure your list is updated internally — especially titles. Receiving something in the mail that doesn’t acknowledge his/her accomplishment is pretty off-putting to a lot of people.

All business development efforts, whether virtual or not, are fundamentally dependent on keeping your data updated. Implementing a few of these ideas will profoundly improve the results of your business development efforts.