Today’s guest post is by Greg Gentschev of Brekiri, a business research start-up in San Francisco. Greg spent the past 10 years in consulting, working in areas including growth strategy, competitive analysis, and benchmarking, before moving on to found Brekiri. He also writes extensively about research and business analysis topics at the Brekiri blog.
Most consultants spend a good deal of effort on business development when times are lean but let it take a second priority to delivering on projects when work is plentiful. Often, this approach leads to a pattern of extremely busy periods punctuated by dry spells (and stress). Avoiding those down cycles requires the discipline to constantly refill the sales funnel with new leads.
I can’t claim to be a sales guru, but I have found that simply following a regular process is one of the most important factors for business development success. The key concept to keep in mind is the sales funnel, where the wide end holds prospects (a list of names of potential customers), which narrows down to leads, proposals, and closed sales. The conversion from one stage to the next might vary from 20-50% in most cases. Most people spend the most time thinking about closing imminent sales, but keeping the rest of the pipeline full is critical because those leads will be needed to generate your business for next quarter or next year. Here are some things to keep in mind:
You need to keep the front end of the sales funnel filled with lots of names of potential customers to go after because prospects will drop out for various reasons (no budget, too much else going on, don’t like you). You should always have a list of companies and names at the ready to go after. Sources like Hoover’s, LinkedIn, trade magazines, and conferences are often the best sources for prospects. Of course, you may not have time to go digging for names on a regular basis, but if not, you should have a virtual assistant or analyst do it for you.
Once you have your list of names, you have to establish communication with them. In my experience, many people are not assertive enough in this area. Some potential approaches:
- Ask current or former clients for referrals. Don’t wait for people to offer; you have to ask them.
- Write case studies about your previous projects and mail or email them. People just love case studies, and they’re particularly effective at helping people imagine how you can help them with specific problems.
- Make cold calls. This process can be uncomfortable, especially for introverts, but it’s extremely useful. In this arena, the phone is definitely not dead. Just ask for a 20 minute meeting to introduce yourself and what you do. If you’re not comfortable making those calls, it’s possible to find people who make introductory calls part-time at reasonable rates.
- Use inbound marketing. Writing a blog, being active in industry communities, and so on can make it easier for potential clients to find you. While a certain amount of social media is overblown, don’t underestimate the power of search engines to bring people to your site. This is a topic of its own, but just putting versions of your case studies on your site regularly can be a big boost.
Once you’ve made contact, you have to transition from initial conversations towards a sale.
- Stay in touch. Schedule periodic follow-ups, although ideally not more often than every three months. Salesforce.com, Outlook, and Gmail all make this quite easy. Because most clients purchase consulting services infrequently, you need to focus on establishing longer-term relationships.
- Focus on how you can help the potential client, not the other way around. The classic example of this is sending the prospect an interesting article or comment, but the mindset is more important than the specific actions. It might also include making introductions or offering some high-level advice on their issues.
- Figure out how to get a face-to-face meeting. If the prospect is in another location, consider the “I’ll be in town next week” approach. Plan a trip before you have your meetings set up, and then contact all the prospects in that city and ask them to set up meetings since you’ll be in town anyway. If you can afford it, this approach often works better than waiting for a meeting to materialize first.
- Consider initially doing a quick discussion document rather than a consulting proposal. A discussion document tends to be a little less specific and leaves out the pricing until the scope has been finalized. This step allows you to collaborate with the prospect on figuring out the right scope and issues to address without worrying initially about price.
Of course, closing new customers is a challenge in itself that I don’t have space to go into here. But if you do a good job of keeping the front end of your sales funnel full, you won’t find yourself scrambling to replace the business when your current set of projects ends.