Win Without Pitching is the business development consulting firm for ad agencies and design firms that believe there is a better way to build a marketing communication agency.
The New Rainmakers
How the Skills of Business Development are Changing
May 2012 |
Years of insisting that business development people generate leads instead of just follow up on those generated by other means has forced creative firms to prefer sales-based skill sets of cold calling and networking over others. In this article I explain why those skill sets are less valuable today and what is replacing them in a new breed of business development person.
In my last article on the increasing importance of CRM I mentioned that the responsibility of lead generation is becoming decoupled from sales and moving to more of a marketing function. While it was a casual mention, the implications of this trend cannot be overstated. Once lead generation is removed from the traditional business development role it not only changes how we think about the role, it becomes easier to predict who is most likely to succeed in it.
First, let’s explore a couple of the trends that are turning lead generation into a marketing function.
The Declining Effectiveness of Unsolicited Enquiries
The good news for salespeople is there has never been a greater number of ways to reach out to a prospect. In addition to the telephone and email, a host of social media platforms offer avenues in to those you want to reach. (In a webcast I did earlier this month I showed how the Gmail plugin Rapportive ties social media account information to an email sender. One example from my inbox showed 10 platforms where a single individual could be found, and connected to, via social media with one or two clicks.)
The inevitable corollary however is a corresponding decrease in likelihood that prospects will respond to any uninvited outreach. Telephone connection rates, which seemed steady for years at 20% - 25%, are now declining and email response rates have been in decline for years. Twitter is evolving into a broadcast medium as many people now follow thousands in an effort to increase their follower base. Both cold calls and unsolicited emails can still work but the return on effort keeps going in the wrong direction. It’s getting harder and harder to compensate for an over-supplied product with a strong sales force.
Indeed, we increasingly get this image of prospects receding from us; taking in more information in isolation and progressing further into their decisions about us without ever speaking to us, and this is having a significant impact on how we sell. For years the telephone was the business development person’s best friend, but it’s been supplanted by the content-driven website. The image of the old school salesperson sitting at his desk, resolutely smiling and dialing is becoming a thing of the past. In specialized firms today, those telephone resources are allocated to following up on need that prospects have already expressed, either directly through an inbound enquiry or indirectly through some behavior on the firm’s website.
In B2B sales in general (not just agency business development) sales people are being freed from outbound lead generation and are being refocused on following up on the leads generated by marketing, primarily online content-based marketing that helps assert expertise before the conversation even begins.
The Overstated Effectiveness of Relationships
One of the interesting implications of technology’s impact on business development is the diminishing importance of relationships. Before you choke on that statement, consider this: in the pre-Google, pre-social media era when buyers didn’t have much information on potential suppliers, relationships were paramount. Buyers called whom they knew and they looked for those people to steer them in the right direction. In the past, far more than today, it was harder to discern what all the options were, let alone what the safe options were. In that era the relationship served as a surrogate for expertise, but today expertise is more easily discerned and a number of expert options are easily found.
As Neil Rackham, author of SPIN Selling and one of the few sales gurus who actually grounds insights in extensive research, puts it, “The relationship is the reward for delivering value.” Increasingly, it’s not what gets you the deal.
There is new support for the overstated importance of relationships in the book, The Challenger Sale: Taking Control of the Customer Conversation, by Matthew Dixon and Brent Adamson (Portfolio/Penguin, Nov 2011). Like Rackham before them, Dixon and Adamson undertook extensive research in B2B sales as the underpinnings for their book. What they learned has significant implications for agency business development.
First, Dixon and Adamson found there were five clear cohorts of B2B salespeople. They call them relationship builders, challengers, lone wolves, hard workers and reactive problem solvers.
The goal of the research was to determine which of the five profiles was most likely to be a top performer. There was a clear winner and a clear loser, but the results were not what the authors expected. The winner was the challenger – the sales rep that didn’t just respond to the client’s needs but challenged them and the assumptions underlying them. Challengers, the research showed, add value within the sales cycle by having more meaningful conversations that help the client rethink his situation. Two traits of challengers are their ability to teach the client something new about his situation and their ability to take control of the relationship - and to do both before they are hired.
The clear loser in Dixon and Adamson’s research – the cohort least likely to be a top performer – was the relationship builder. These reps place a premium on building rapport as they view sales as the acts of building relationships.
Perhaps most interesting of all however was how performance changed with sale complexity. The more complex the sale got, the more challengers outperformed the other cohorts and the worse the relationship builders performed. Some of you will find the numbers shocking: in high-complexity sales over half (54%) of all top performers are challengers and only 4% are relationship builders.
This is significant because as you attempt to move the offerings of your firm away from more commoditized tactical services to more strategic, the sales cycle gets more consultative and complex, demanding more ability of the salesperson to challenge the stated needs, the underlying assumptions and even the way in which the client is proposing to hire a firm. The inveterate rapport builder may succeed in a more tactical, transactional sale, but they get left behind as selling moves into proactive problem solving. Relationship builders’ need to be liked overrides the need to challenge assumptions and disrupt the buying process.
The Calcification of the Buying Process
One of the implications of clients doing more research in advance of reaching out to firms is when they do make themselves and their needs known, they’re likely to arrive self-diagnosed and pre-prescribed, simply looking for a firm to implement on their chosen solution. In this way the initial stated need is almost always a tactical one, regardless of how well the firm’s content marketing strategy has positioned it as one of brilliant strategists. It’s the challenge of all modern day B2B salespeople to swim upstream from the stated need and explore the underlying assumptions. I see it as your obligation to do so, just as it’s a doctor’s obligation to challenge or validate his patient’s self-diagnosis before prescribing or operating. Dixon and Adamson have shown that those who do so are far more likely to succeed.
Relationship builders and challengers are at opposite ends of the spectrum in how they deal with the self-diagnosed prospect. (I’ll continue to use Dixon and Adamson terms for the rest of the article, even though the assertions that follow are based on my observations and may not completely align with their challenger or relationship builder profiles.) If the salesperson is motivated by the relationship (which is why he chooses relationship building as his strategy) then he’s inclined to say yes. “We can do that,” is his typical response to the stated need. With every step that follows this initial compliance, the prospect’s thinking on his problem, his solution and his buying process calcifies.
The challenger, on the other hand, starts questioning things from the beginning. He sees his role as not to make friends or build rapport but to get to the essence of the real problem, damn the feelings and friendships. Where the relationship builder’s natural inclination is to say, “We can do that!” the challenger’s is to ask, “Why do you want to do that?” As the prospect progresses further into the buying cycle with a challenger leading the way, he is likely to become less sure of his stated need, more open to rethinking his strategic assumptions and less intransigent in his buying process. In this way the challenger reframes or at least affects the environment of the sale where the relationship builder is constrained by it and even contributes to those constraints.
The New Business Jedi
The best business development people in the creative professions are not the dialers or the networkers – many of them aren’t even that effective at lead generation at all. No, the best – the new rainmakers, the Jedi – are those whose strength and value is in taking prospects with RFPs for tactical engagements and budgets of X, and turning them into clients for strategic engagements with budgets of 5X. They reframe competitive pitches so that by the time their competition is pitching to the brief, the brief has changed. The very best are sometimes able to derail the pitch completely and get hired to do a proper diagnosis that can lead to an altogether different type of engagement than what the client initially envisioned.
The vulnerability of this new breed of business development person is they cannot work in an environment that does not provide them with an adequate number of leads. They therefore tend to be most effective in specialized firms employing content strategies or other "expert" forms of speaking and writing-based lead generation.
The skills required to navigate opportunities the challenger way come from years of working in the business or the vertical the firm serves. You cannot fake knowledge. As important as acquired skills however, is the inclination to operate this way – the motivational make up. The challenger’s motivational assets (high need for authority, low need for affiliation and only a medium to medium-high amount of sales drive) are at odds with the make-up of a cold caller (high drive, low authority) or a networker (high affiliation, low authority).
The irony is that a lot of these challenger-type Jedi profiles exist in creative firms (often as principals and strategists), but many of them steer clear of business development because of the requirement to generate leads. Many of those who try are deemed to have failed because they did not generate leads. Some have had their challenger inclinations repressed from years of operating in firms with institutional addictions to pitching and that value the demonstration of passion and enthusiasm over skeptical enquiry.
What might these people be capable of if they were freed of the need to smile-and-dial, freed of the need to network and freed of the absurd notion that the client is always right and should get what he asks for?
A challenger-type Win Without Pitching Jedi working for a specialized firm employing a productive content strategy is the killer combination that can transform a firm one new client at a time.
On average, it takes about four years to turn your client base over. Imagine how different your firm would be in four years time if business development was being done by a person whose skill was not cold calling or networking but turning tactical RFPs for X dollars into strategic engagements for 5X.