In the second of this series on successful business development from the PACE Partnership, John Monks focuses on how to find new clients. You can only get to know your customers if they let you; but they must trust you first, he argues.
In our last article we introduced the PACE Pipeline model. Managing the pipeline is about managing the opportunities for future business flow. Results cannot be managed; however pipeline activity can be managed. Anyone attempting to manage results is guilty of what we call ‘rowing boat’ management. They are in charge of a craft going forward (they hope) whilst their only view is backward. Ask a question like ‘How is business development going?’ and the chances are that, when the numbers are produced, they will relate to the results a firm has produced to date. Good, bad or indifferent there is nothing that can be done to change the future. If they are bad someone senior may tell everyone to get out and sell harder, but this is unlikely to have a great impact.
Wear for a moment a production management consultant’s hat. You are visiting a factory that you know has poor quality output.
When you go to the shop floor the factory manager tells you that they know exactly how many rejects per thousand they have and they know in which batches they occur. You ask them how they know this.
They take you to the end of the production line and introduce you to their quality team who measure every aspect of the quality of product as it rolls off the line. You would soon realise that the factory manager has misunderstood their role as a manager of quality – as their role is to improve quality not just measure it. Whilst their team focuses on the output not input, they are simply bystanders, not managers. Having the output information is of course useful, it helps us tell if changes we made earlier have worked or not – but it is not enough.
If the only measures we have in place are on the quality and quantity of output then we are not in control of production in the future. Measures need to be in place to ensure that the quality and quantity of inputs is also correct. No successful factory would be managed as above, yet this is exactly how many construction firms manage their business development. Their focus is on results, not the activities, and not in real details with a genuine understanding of what the analysis means.
Today’s results are a poor indicator of future results; the indicators that help me sleep at night are the activity indicators that are measured in my business development pipeline. The answer lies in the effective management of business and client development.
Identifying prospective clients
In the PACE model, the first section (P0) represents the total market for our services. If we are to market ourselves to prospective clients with a view to meeting them and eventually working with them, it is logical that we should identify those organisations that we would want to become clients. This is our opportunity to design our client base of the future. The most difficult task is deciding who not to invest time with. This is the process we call prospecting.
If we are to be in control of our destiny and future client base, we need to invest time and effort into defining the best of these prospects (P1 of the Pipeline) so that we initiate our approach towards them and by doing so, bring them into promoting stage (P2 of the Pipeline).
What lies inside the pipeline are only those people and organisations who are defined to us, hence the express: total defined market.
Start by picking the best clients
The first step then is to avoid taking on a client for which your talents and efforts will go unappreciated. If you bring into your pipeline an unprofitable client you will be spending lots of unprofitable time servicing it. Be strategic in your choice of target clients rather than reacting to every invitation to tender, so that you have control over the type of relationships you enter into.
A Filter is a criterion which either:
- Indicates that a prospect may be easier (or more difficult) to approach
- Indicates that a prospect may be more interesting (or less interesting) than other potential prospects we may consider.
There are many potential Filters that can be considered. Examples include:
- Prospects where the likely services they would use are a good match for the capabilities we can provide.
- Prospects where the decision making process is likely to be tangible and influenceable
- Prospects operating in an area where we have a track record and credibility
- Prospects where the work is of particular interest to us
- Prospects where we know the key people
Filters which indicate that a prospect might be more interesting to approach:
- The financial resilience of the prospect
- The size of the prospect
- The image of the prospect
- A track record of using the type of services we provide
Triggers are situations that occur which cause an organisation to consider using a firm or organisation like ours. They literally trigger the need.
In most situations neither the prospective supplier of professional services, nor the prospective client have control over them, they are often caused by factors external to the client. When they occur however, a chain of events begins to unfold. One part of this chain of events is to appoint a firm like yours.
A basic guideline for winning new business might easily be: no trigger, no opportunity.
If we select our defined prospects purely on the basis of Triggers impacting upon their organisation but with no regard to Filters, we might find ourselves with a list of defined prospects where there is work to be had, but with clients we would rather not deal with or where we have little chance of winning the work.
If we select on the basis of them passing Filter criteria only, we might find that we have defined prospects that look very interesting but have no requirement for our services.
Using Trigger and Filter selection criteria
- Select between six and ten factors in total. Filter factors should not outweigh Trigger factors. If you use less than six criteria you may not get a balanced enough view of the ‘value’ of the prospect. If you choose more than ten the process can become over complicated.
- Set some form of measurement or scoring on the Trigger and Filter criteria
- Decide the minimum criteria or score to qualify as a defined prospect.
- Screen out possible prospects using Triggers and Filters.
This will probably involve some research, as our own general knowledge will rarely be enough on which to make decisions as to where a prospective client scores.
The outcome of the exercise should be that the basket of prospects that are screened will fall into three categories
- Organisations unsuitable to be considered as future clients
- Organisations which should be treated as Key Defined Prospects and receive the personal attention of someone (or a team) involved in business development.
- Organisations that fall between these two extremes. With these organisations we should focus our more broad-brush marketing efforts. Whilst we would not want to devote a lot of personal professional time to pursuing these types of prospects, if they received our regular bulletin and later asked to talk to us about a particular issue, we would certainly not turn them away.
In our first article we talked of the need to build a relationship as a trusted advisor. The particular way we can do this with our marketing activity will be covered in our next article. Here I would like to touch on those characteristics of a trusted advisor that are recognised as contributing to the building of a trusting relationship, whether with prospective or existing clients.
Procurement professionals have become very familiar with the supplier concept of ‘understanding the client’. They recognise fully that those suppliers who understand them most and have insight into their organisation have a distinct competitive advantage. This is so, even in a tender situation.
My research with procurement professionals has demonstrated that they now choose who they allow to understand them and their organisations. They choose who will be allowed insight that might give a competitive advantage based on how much they trust the potential supplier. The deeper the trust the better the opportunity for understanding.
To earn a position of trust n the prospective client’s eyes we need to build an image of credibility, competence and compatibility.
Factors influencing credibility are:
- Initial Impact
- Delivery as promised
Factors affecting perceived competence are
- Track record
- Searching (non-manipulative) questioning
Factors influencing perceived compatibility are
- Demonstrating interest
- Active listening
- Adapting behaviour
- Showing we care
- Showing vulnerability
Managing the business development pipeline makes managing activity tangible. Though people think it isn’t measurable, it is. In the next article in this series we will look closely at marketing to our defined prospects in a way that supports building a trusting relationship.
- The circle of success
- Holding onto your Key Client Relationships
- How to reel in the right fee
- What makes the perfect pitch