BD leadership to improve revenue and profits for professional services
The world of professional services is changing at an unprecedented rate.
Conventional business development (BD) strategies are proving inadequate. Generational loyalties and networks can no longer be relied upon to deliver budgeted growth. Attending enough business breakfasts offers no guarantees for building a client base of choice.
This short manifesto sets out the pivotal role of business development leadership and associated processes to enable professional services teams to win, retain and grow the very best clients.
We believe that it’s time for professional services firms to embrace global best practice from the world of full-time B2B sales teams
There is broad consensus about what constitutes best practice in business development leadership in the world of B2B selling:
- Effective sales leadership
- Sustained and effective coaching
- Rigorous sales processes, especially CRM
- Focus on the co-creation of value for all stakeholders
- Ability to develop a business case built around ROI – return on investment
- Effective key account management
- Integration with marketing
- Managing expectations to ensure customer satisfaction
- Explicit connections to business plans
1. Effective business development leadership
In the world of B2B sales, the single biggest determinant of sales team success is the effectiveness of the sales team leader.
This pivotal and highly skilled role is widely researched and understood. With the right resources, the role of B2B Sales Team Leader can be learned and continually improved.
We propose a new role for many professional services firms. This manifesto argues the critical need for the role of Business Development Team Leader. This key individual will equip their colleagues with vision, skills and confidence. The BD Team Leader will ensure that revenue and profit goals are achieved.
The large majority of trained professionals prefer to spend their time doing paid work for clients who respect their time. It can be hard to remain motivated and disciplined for the task of continuing BD where rejection, frustration and wasted time are inevitable. This new role of BD Team Leader will provide the support, encouragement, coaching and discipline to ensure effectiveness.
Key Questions – Who plays this key BD leadership role within your firm? How effective are they currently and what are you and your colleagues doing to improve their effectiveness?
2. Sustained and effective coaching
Of course, you say, sustained coaching is one of the principal elements of effective leadership.
Yes, but it’s so very, very important in the world of business development. We need to single out this key activity to indicate its relative importance.
When business development activity is not happening, why is that? It’s because the activity is full of rejection, frustration and calls not being returned. “And all of the time I’ve got professional work stacking up for my paying clients who treat me and my time with respect!”
It’s at times like this that sustained and effective coaching makes all the difference. And it’s not just the encouragement, it’s the structured and systematic improvement of skills and the quality of thought that is being developed to improve business development and key account management.
Key Question – How effective is the business development leadership coaching in your team currently?
3.Rigorous business development processes, especially CRM
To minimise risk to the firm and to ensure that all expectations are managed, we need excellent processes that ensure sufficient activity of a high enough quality to achieve agreed results.
Taking a lead from what is proven to work in B2B sales teams, this means that we need effective records and systems that enable continuing analysis, reporting and consequent prioritisation of effort. These processes are typically managed within CRM, or customer/client relationship management systems.
One key task for the BD team leader is to own, manage and improve these processes on behalf of their colleagues. The outcome is that BD becomes and remains a managed process that delivers no surprises.
Key Question – How effective is your CRM system and your BD processes?
4. Focus on the co-creation of value for all stakeholders
The last 30 years has seen transformation in the sales role in the best B2B sales teams. Stereotypical and unflattering sales behaviours seen in the popular media are being replaced with sophisticated modelling and development of client needs.
Amongst the most recent development in B2B sales theory and practice is the idea of co-creating value.
The key focus of this approach is that people in BD roles use their expertise to coach clients to understand, develop and to articulate their needs more clearly. This approach to BD is clearly highly appropriate for people working within professional services firms.
However, it can be very challenging for an experienced professional to change their behaviour from advising current clients to coaching potential clients when they need to work in a business development role.
Key Question – Where is the evidence of value co-creation in business development activities in your situation?
5. Ability to develop a business case built on ROI
B2B sales people work with potential customers to research and to develop the business case behind a proposed investment. Credible numbers that demonstrate best value to senior financial decisions makers must underpin decision processes.
The world of professional services has much to learn about how to research and construct proposals that focus on an ROI business case.
Key Question – Are you and your colleagues creating proposals built on an ROI business case or are you preparing quotations for services?
6. Effective key account management
More than 20 years have elapsed since the pioneering work on key account management was published from Cranfield by our Chairman, Emeritus Professor Malcolm McDonald. Since then Key Account Management (KAM) has become a critical element of all effective B2B marketing and sales strategies.
It is highly likely that about 80% of our revenues come from 20% of our clients. The 80:20 rule guarantees the need for an effective KAM strategy!
The relative importance of these key accounts is typically changing all of the time. Consequently, we should undertake regular key account analysis by revenue, profitability and a range of other criteria.
Key accounts must be managed within processes that deliver retention, profitability and growth. In most situations this will probably mean that one named individual takes responsibility for the account development plan for each key relationship.
Key Question – How much scope is there for improvement in KAM planning and management in your situation?
7. Integration with marketing
Marketing best practice is changing just as fast as everything else in business development.
The fundamental differences are characterised by the change in focus from broadcasting to individual conversations. “One size fits all” has changed to “unique, authentic and specific”.
Clients and potential clients can research potential business partners with ease. We must have effective marketing strategy and plans in place and working to underpin and support our business development activities.
In the coming years, “marketing automation” will become an increasingly necessary element of marketing strategy for most organisations. Marketing automation will be a key process for nurturing relationships and facilitating the co-creation of greatest value at least time cost.
Social media literacy has already become a pivotal skill for effective BD activity.
Key Questions – How effective is your marketing strategy and how strong are the connections to your BD activity?
8. Managing expectations to ensure customer satisfaction
In the world of B2B selling, the term is “customer satisfaction”. In Professional Services, we speak of “Client Service”.
The expensive and frustrating way of ensuring client service is to pile in expensive resources to ensure over-delivery. The commercially prudent and far better way to ensure client service is to negotiate and agree expectations from the outset.
Great care should be taken by increasingly skilled negotiators, working within managed BD processes to deliver the goal of “No Surprises”.
Key Questions – In your situation, how much scope is there for more effective negotiation that results in improved client service?
9. Explicit connections to business plans
“No Surprises” is not just about managing client expectations, it’s at the heart of managed BD processes.
Most significantly, the goal of no surprises must underpin the firm’s business plan. Of course the hardest part of the business plan is the projection of the top line. How can we accurately predict revenue?
Is it possible to reduce risk by managing BD more effectively?
The world of B2B selling answers with a resounding “YES!”
Of course it’s not easy. There are huge challenges in the implementation of each of the elements of this manifesto. But the vision remains that it’s absolutely worth the effort to get as close as possible to ideal.
Increasingly effective BD leadership will lead to compelling evidence of managed processes. These managed BD processes will lead to more and more confidence in our ability to make choices about our future and then to deliver these choices consistently.
Key Question – What changes are needed to BD leadership and processes to deliver your business plan aspirations?
Call to Action
This first draft of the Business Development Leadership Manifesto for professional services firms has been published by Real World Strategy in the Autumn of 2014 to coincide with the launch of their new 3CSELLING programme.
The 3CSELLING programme is particularly appropriate for professional services firms.
However, there are many experienced proponents of business development team leadership, processes and value cocreation.
If you ask them to support and coach you, they may need some help to change their vocabulary. You may need to help them to speak of clients as opposed to customers, and business development as opposed to sales. They will need to be aware of the challenges faced by professionals who need to report the percentage of their time spent on billable hours but who must also spend enough of this highly valuable time in structured business development.
Together, let’s take the very best of what has been learned in the world of B2B sales, and let’s transform the effectiveness of business development within professional services.