Your business development strategy can be the key to the success or failure of your business. In this post, we'll explore how to create a strategy and related plan that can take an individual, business, or entire company to new levels of growth and profitability.
Business development defined
Business development (BD) is the process used to find, cultivate and acquire new customers and business opportunities to increase growth and profitability. A business development strategy is a document that describes the strategy you will use to achieve a goal.
The scope of business development can be broad and vary greatly from organization to organization. The first two steps in the model, attracting prospects and increasing engagement, are traditional marketing activities. The last step, turning opportunities into customers, is a traditional sales function. In a traditional role, business development seeks new distribution or marketing partners.
But roles change and naming conventions evolve. In today's world, many companies call the entire marketing and sales process business development. I know, it can be confusing. So let's clear things up a bit.
Business Development vs. Marketing
Marketing is the process of defining which products and services you offer to which target group and at what price. It also includes how to position and promote your company and its offerings in a competitive market. The result of all this activity should be an increasing awareness of your firm among your target audience — and a stronger flow of qualified leads and opportunities.
Historically, business development has been a subset of the marketing function that was focused on acquiring new marketing or distribution relationships and channels. While this role still exists in many companies, the business development title has become interchangeable with many marketing and sales functions.
Business Development vs. Sales
Sales is the task of converting leads or opportunities into new clients. Business development is a broader term that includes many functions other than the sales function. And while there is some overlap, most traditional BD roles have little involvement in closing new clients.
Business development is often confused with sales. This is not surprising, as many people who are clearly in sales have adopted the title of business developer. Presumably, this is done because the organization believes that the BD name avoids a possible stigma attached to the sale. Nowhere is this practice more prevalent than in professional services.
Accountants, lawyers and strategic consultants do not want to be seen as "pressure salespeople". This particular bias is deeply entrenched despite the fact that new business development is an important role for senior members of most professional services firms. Because so many clients want to meet and get to know the professionals they work with, many companies have fixed the salesperson role. The preference for salespeople also prevents companies from establishing a full-time sales force.
As an alternative approach to using employees' time, some companies have one or more business developers. In a professional services context, these people are often involved in generating and qualifying leads and supporting salespeople in their efforts to close new clients. In other organizational contexts, this role may be considered a sales support role. As a result of this mixed picture, many professional services firms refer to sales as "business development" and make it part of the role of every senior professional.
They may also include some marketing activities such as lead generation and nurturing as part of a BD professional's responsibilities. In this post, we will focus on this expanded role, where business development includes all tasks related to lead generation, nurturing and sales.
Examples of business development
To understand this role, take a look at this business development example:
Bethany is the Business Development Director of a fictional mid-sized architecture firm. He is not an architect himself. He is also not involved in the delivery of projects signed by the company. Instead, his role focuses solely on generating new business for his company - whether with new or existing clients.
For new clients, Bethany spends much of her time responding to RFPs, interacting directly with inbound leads generated by the marketing/sales enablement team, and nurturing prospects she met at a recent industry conference. Bethany also works with the marketing team to develop new materials to sell to new accounts. Bethany also has a role to play when it comes to existing accounts. He meets with delivery teams once a month to find out if current client projects are working or if changes are needed.
In addition, he maintains relationships with key stakeholders of his company's clients. When a new job opportunity arises, he knows that his relationship with the client is an important part of the potential contract. In this example, Bethany is the main driver of the company's growth, but that doesn't mean she's doing it alone. Imagine that he has a colleague, Greg, who is the chief architect of the company. Although Greg's main focus is delivering to customers, business development - and even marketing - should be part of his professional life.
Maybe Greg attends an industry conference with Bethany, she's the speaker and the expert, and she's the main consultant. The dynamic of business development should not end with Bethany, but should permeate the entire organization. In this business development example, you can see that the roles and responsibilities are extensive. Therefore, it is important that business development is strategic rather than ad hoc. Now let's talk about it.
Strategic Business Development
Not all business developments are equally impressive. In fact, many of the activities of many professionals are highly opportunistic and tactical in nature. This is especially true for many sellers. Between the pressures of client work and the urgent need for new business, they're looking for something quick and easy that will deliver short-term results.
Of course, this is not a real strategy. Strategic business development is the alignment of business development processes and procedures with your company's strategic business goals. Strategic business development is all about getting the ideal customers for your most important services using brand promises you can deliver. Deciding what goals to achieve and strategies to use to develop a new business is actually a big investment. A good, well-executed strategy can drive great growth and profitability.
The wrong strategy can stunt growth and frustrate valuable talent. But many companies falter at this critical stage. They rely on habits, anecdotes and fads - or worse, "we've always done it this way". In a later section, we'll cover developing your strategic business development plan. But first, let's review some of the strategies that can go into this plan.
Best business development strategies
Let's take a look at some of the most common business development strategies and how they stack up against today's buyers.
1. NETWORKING
Networking is probably the most commonly used business development strategy. It is based on the theory that professional services purchasing decisions are based on human relationships, and the best way to develop new relationships is through face-to-face networking. It is certainly true that many relationships develop this way. And when you connect with your target audience, you can develop new business. But there are limitations.
Today's buyers are very busy and networking takes time. This can be very expensive when you factor in travel and time away from the office. Newer digital networking technologies can help with cost and time. But even social networks require time and attention.
2. REFERENCES
As a close relative of networking, referrals are often seen as a mechanism for turning networking and customer satisfaction into new business. You build a relationship and that person refers you to new business. Satisfied customers do the same. Obviously, referrals happen and many companies get most or all of their business from them. But recommendations are passive. They rely on your clients and contacts to identify good opportunities for your services and make timely recommendations.
The problem is that referral sources often don't know everything about how you can help a client. So many references don't match your skills. Other highly relevant referrals go unused because the referral source doesn't recognize a great opportunity when they see one. Finally, many potential customers who could be good customers write off your company before they even talk to you. According to a recent study, this number is more than 50 percent. Importantly, there are new digital strategies that can boost referrals.
The key is to make your special skills more visible. This allows people to make better referrals and increases your referral base in addition to clients and some business contacts.
3. SPONSORSHIP AND ADVERTISING
Can you directly develop new business by sponsoring and promoting events? It would solve a lot of problems if it worked. No more trying to get time from fully utilized billing professionals. Unfortunately, the results on this front are not very encouraging. Studies have shown that traditional advertising is actually associated with slower growth. Only when advertising is combined with other techniques, such as speaking at an event, will those techniques bear fruit. The most promising advertising strategy seems to be well-targeted digital advertising. In this way, companies can get their messages and offers in front of the right people at lower costs.
4. OUTDOOR TELEPHONES AND POST OFFICES
Professional service firms have used phone calls and mail to directly target potential clients for decades. Target the right companies and roles with relevant messaging and expect to find new opportunities that can be developed to customers. These strategies have a number of key challenges. First, they are relatively expensive, so they must be effective. Second, if you don't reach the prospect in time, your offer may not have traction—and thus may not impact business development. The key is to get a very attractive offer to a highly qualified and responsive list. It's not an easy combination to get right.
5. THOUGHT LEADERSHIP AND CONTENT MARKETING
The goal of this strategy is to make your expertise visible to potential buyers and referral sources. This is achieved by writing, speaking or publishing content that demonstrates your expertise and how it can be applied to solving customer problems.
Books, articles and speeches have long been staples of professional services business development strategy. Many outstanding experts have built their practices and businesses on this strategy. It often takes a good career to implement this approach.
But changing times and technology have shaped this strategy. With the help of digital communication, it is now easier and much faster to implement your knowledge in the target market. Search engines have leveled the playing field so that relatively unknown individuals and companies become known outside their physical region. Webinars have democratized public speaking, and blogs and websites provide any business with a 24/7 presence. Add video and social media and the budding expert has access to a vastly expanded market.
But this development also opens up companies to much greater competition. You may be competing with experts you were never aware of. The result is to raise the stakes in your company's development strategy.
6. COMBINATION STRATEGIES
It is common to combine different business development strategies. For example, networking and referrals are often used together. On one level, a combined strategy makes perfect sense. The strength of one strategy can support the weakness of another. But a hidden threat lurks. For a strategy to perform at its peak, it must be fully implemented. There is a danger that by attempting to execute too many different strategies you will never completely implement any of them.
Good intentions, no matter how ambitious, are of little real business development value. Under-investment, lack of follow through and inconsistent effort are the bane of effective business development. It is far more effective to fully implement a simple strategy than to dabble in a complex one. Less competently applied elements give better results.
Next, we turn our attention to the tactics used in the execution of the advanced strategy. But first, there is some confusion to clear up.
Business Development Strategy vs. Tactics
The line between strategy and tactics is not always clear. For example, you can think of networking as an overall business development strategy or tactic that enhances the effectiveness of a thought leadership strategy. Confusing to be sure.
From our perspective, the distinction is around focus and intent. If networking is your business development strategy all your focus should be on making the networking more effective and efficient. You will select tactics that are aimed at making networking more powerful or easier. You may try out another marketing technique and drop it if it does not help you implement your networking strategy.
On the other hand, if networking is just one of many tactics, your decision to use it depends on whether it supports your broader strategy. Tactics and techniques can be tested and easily modified. Strategy, on the other hand, is a conscious choice and does not change from day to day or week to week.
The 10 Most Effective Business Development Tactics
What business development tactics are most effective? To find out, we recently conducted a survey of more than 1,000 professional services firms. The study identified those companies that grew by more than 20 percent annually over a three-year period. These fast-growing companies were compared to companies in the same industry that did not grow during the same period. After that, we looked at what business development tactics each group used and what worked best. The result is a list of the ten most effective tactics used by high-growth companies:
- Outbound sales calls from internal teams
- Providing assessments and/or advisors
- Speaking at targeted conferences or events
- Instant presentation of product/service
- Presentation on educational webinars
- We strive to press opportunities in this area
- Business development materials
- Email marketing campaigns
- Conducting and publishing original research
- Network at targeted conferences or events
There are a few key takeaways from these growth tactics. First, these techniques can be used in various business development strategies. For example, third on the list, speaking at targeted conferences or events can easily support a networking or thought leadership strategy.
Another observation is that leading tactics have a mix of both digital and traditional technology. As we see in developing your plan, a healthy mix of digital and traditional technologies will increase the impact of your strategy.
Business Development Skills
Now that we've identified key business development strategies and tactics, it's time to think about what business development skills your team needs. Business development skills require a wide range of technical skills, but there are also those that make a difference.
When one Research Institute studied marketing and business development skills in our annual High Growth Study, we found that the firms who grow faster have a skill advantage within their marketing and business development teams.
The number one business development skill high growth firms enjoy are strong project management skills. And for experienced business development specialists, this makes good sense. Staying organized, accurately tracking business development activity, and managing accounts are essential for building and maintaining strong business relationships. Activities like the proposal development see business development team resources manage and produce a strong proposal quickly, including the right stakeholders, and without sacrificing quality.
The next most important skill is to simplify complex concepts. In business development discussions, it's important that team members are strong advocates for your company's service offerings and capabilities. Those who can take on complex work and communicate it in an understandable way to a potential buyer. Speaking in industry jargon or overly complicated charts is a quick way to see that leads aren't responding. So it's no surprise that the fastest-growing professional services firms have an advantage in communicating complex information in a way that buyers can understand.
The third most important business development skill is face-to-face networking. Despite a hiatus from many in-person events, high-growth companies still reported that strong networking skills were top skills for their companies. Strong face-to-face networking skills are as much art as science.
Although some may be more charismatic than others, everyone can prepare their team with the resources and plans to succeed in an online environment. Developing a strategy to plan a business development plan, researching to understand the competitive environment and industry trends and social media knowledge are also important in business development. Developing these skills should be a top priority for your company's development team.
Preparation of a strategic business development plan
A business development plan is a document that describes how you will implement your business development strategy. It can be an individual plan, a business plan or a company-wide plan. Its scope includes both marketing and sales functions, as they are so intertwined in most professional services firms. Here are the main steps to developing and documenting your plan.
YOU DETERMINE YOUR GOAL
Who are you trying to attract as new customers? Focus on your "best fit" customers, not all potential customers. It is most effective to focus on a narrow target audience. But don't get discouraged that you can't achieve your business goals.
UNDERSTAND THEIR PROBLEMS, BUYING BEHAVIOR AND THEIR COMPETITORS
The more you know about your target audience, the better you can capture their attention and tell them how you can help them. What are their main business challenges? Does your knowledge of these matters matter? Where do they look for advice and inspiration? What is the competitive environment like? How do you stack up?
RECOGNIZE YOUR COMPETITIVE ADVANTAGE
What makes you different? Why is it better for your target customer? Are you the most cost-effective choice or the leading expert in the field? This "positioning", as it is often called, must be true, demonstrable and relevant to potential customers when they choose which company to work with. Be sure to document this setup because you will use it again and again to develop your messaging and marketing tools.
CHOOSE AN OVERALL BUSINESS DEVELOPMENT STRATEGY
Choose a broad strategy or strategies to reach, engage and convert potential customers. You can start with the list of best strategies above. Which strategy suits the needs and preferences of your target audience? Which best describes your competitive advantage? For example, if you compete because you have better industry knowledge, a thought leadership/content marketing strategy will likely benefit you.
CHOOSE YOUR BUSINESS DEVELOPMENT TACTIC
A good place to start is the list of the most effective tactics above. Make sure that whatever technique you choose fits your target audience and strategy. Remember that this does not depend on your personal preferences or knowledge of tactics. It's about what works with the audience. You also need to balance your options in two important ways:
First, you need tactics that address all steps in the business development process. Some techniques work great for increasing visibility, but they don't work for long-term maintenance.
Second, a good balance between digital and traditional techniques is needed. Your research should inform this choice. Be careful with assumptions. Just because you don't use social media doesn't mean some of your potential customers aren't using it to check you out. When, how often, which conferences, which topics? Now is the time to decide on the details that turn the broad strategy into a concrete plan. Many plans include a content or marketing calendar that breaks down details each week. If this is too detailed for you, at least document what you plan to do and how often. You need this information to monitor the implementation of your plan.
DETERMINE HOW TO MONITOR IMPLEMENTATION AND TRAFFIC
Important aspects that are often overlooked often make the difference between success and failure. Unimplemented strategies don't work. Observe what you do and when you do it. This prompts action and provides a great starting point for troubleshooting your strategy. Also observe and record visible effects. The most obvious effect is how much new business you close. But you should also track at least new leads or new contacts.
Finally, don't forget important process results like referrals, new names added to your list, and content downloads that expose your expertise to potential clients and referral sources. If you follow these guidelines, you will receive a documented business development strategy and a concrete plan to implement and optimize your business.