Acquiring a new customer involves serious investments of time and money. Success rates are generally low. Competition is fierce on an ‘open tender’ playing field, with bidders dangling carrots of risk-reward, price cuts for market entry and simply desperate offerings just to remain in the marketplace at all.
So isn’t there a better way of gaining new business, of avoiding throwing away time and money that benefits neither suppliers nor customers? Yes, there is: optimised Account Development led by senior consultants. Court customers already won. If a customer base provides £x million of revenue in one year, then why shouldn’t it do the same the next?
Realising the opportunity
At any time a supplier’s business works with a specific set of clients. Deals have been won, resulting in delivery against contracts. But clients’ needs don’t stop there. Ahead lie a whole host of opportunities to be exploited: efficiency gains, operating cost reductions, outsourcing services, new legislation. But how can such opportunities be realised?
The key is trust. Building valuable relationships with clients demands integrity, even when this means admitting shortcomings and failures. A difficult balance has to be maintained between honesty and professionalism, company loyalty and client loyalty, but a good relationship builder can judge where boundaries lie and operate successfully within them. Good relationships are supported by timely, quality delivery to cost; the basics remain constant.
Relationships aren’t built overnight; they require ongoing investments of time and energy. Neither are they constant. As a good supplier supports and influences his clients, those clients mature. Consciously and unconsciously, skills are transferred to customers. These customers become increasingly able to recognise their own needs and how best to address them. While on the one hand making a supplier’s selling job easier, a more aware client equally understands how to demand improved value for money. The stakes get higher, and a good business developer needs to remain one step ahead, progressively adjusting how the game is played.
To maximise revenue from each client base, the successful business development consultant networks across an organisation, building multiple relationships with as many relevant decision makers and influencers as possible. Relevance is important. There is no point in a supplier wasting time and effort on parts of an organisation that have no synergies with what his company sells. Neither should energy be squandered on those with no power or influence. The aim is for a supplier to capitalise on an initial relationship, using it as a launch pad to identify further needs and pains within other parts of a client’s business, ensuring that his own organisation is selected to tackle these.
As the network widens, the business developer brings in other specialists from his company. To remain credible it is imperative that strategic advice provided to a client is offered from a suitably knowledgeable and skilled source. Poor quality advice weakens a relationship; trust is lost. It is always better to say, “This isn’t my field”, than to bluff.
Sales people are fine for selling commodities, but valuable business isn’t about simply defined products. Good Account Development involves indepth analysis of a client’s business and their ability to deliver, baselining against others in the same market, with consideration to recognised ‘best practice’. Having identified areas for improvement, business opportunities are created by convincing the client of the need to make these improvements. Further, the business development consultant has to provide the mechanisms for achieving the required goals and for measuring successful outcomes.
Effective Account Development demands senior consultancy skills: business analysis, strategic planning, benefits realisation. Sales people operate in the ‘here and now’, supplying to current client needs. Consultants look to the future, formulating and selling visions. The business development consultant’s ‘big picture’ thinking generates the significant opportunities, which sales people don’t have the long-term, objective thinking to visualise. While suppliers too often see Account Development as a sales activity, clients are seeking strategic planning and programme leadership from a ‘trusted advisor’.
Leaving aside the skills gap, an additional disadvantage for the sales person is client perception. Customers know that a sales person has only one aim: selling. By contrast the same customer openly welcomes in the business consultant, perceiving his strategy setting as a ‘means to an end’. The consultant’s relish of his solutioning and planning role disguises the business development activity running in parallel. Is the client being deceived? No. Consultancy-led Account Development simply offers a fortuitous win-win. Clients receive quality strategic advice, coupled with the supplier’s commitment to deliver. Suppliers gain a well thought-through sale.
Reaping the benefits
So what are the benefits of successful Account Development? Steady, year-on-year orders are achieved, providing high probability of a continuing order book into the future. Rewards may generally be smaller than the big deals won through open tenders, profit margins lower, but the continuity of orders through Account Development offers a security into the future which any worthy business leader values. From such constancy, higher risk selling can be launched, without fear of undermining a company’s ongoing sustainability.
Further, Account Development generates low risk work, as the customer is a known quantity. Due diligence has long since been completed and good customer relationships, the buffer to the trials and tribulations of any project, are firmly in place.
Consultancy-led Account Development involves minimal pre-sales budgets. Indeed it isn’t unusual for such costs to be zero. After all, when a business development consultant is delivering strategy, defining a client’s vision and translating this into a solution with business benefits and an implementation plan, he mirrors the very activities of good bidding. Customers pay heavy prices for strategic consulting, so any consultant worth their weight should be able to bundle sales work and strategic consulting into a single package, funded by the customer.
And the benefits don’t stop when the sale is achieved. Project management costs are reduced, as a consequence of enhanced trust and the likely stability of the project team.
The quality of work available in projects generated through optimised Consultancy-led Account Development can be very high. In an environment of trust, customers are more prepared to embark on leading-edge developments and challenges, containing high levels of change management, confident that their supplier will stay the course with them. The result for a supplier company is fulfilled staff, with increased skills and experience, and excellent up to date collateral. Both impact very positively on future sales beyond the current customer.
In trusted relationships customers are more often tolerant of commercialism. They recognise and may support the development of transferable solutions and skills. Negotiations around IPR, shared and outsourced services can take place more readily when, rather than being wary or even hostile, the client believes at the outset that the aim is a win-win.
In short, Consultancy-led Account Development benefits everyone involved, enhancing a company’s reputation across the market place.
Recognising the pitfalls
Nothing in life is all good news. There are pitfalls. Most importantly, a company can become too dependent on a small handful of good business development consultants. Such people, mindful of the value of their skills and the customer relationships that they’ve built up using them, can develop over-powerful positions and hold a company to ransom. Thus, what initially held the promise of a dependable revenue stream, requiring minimal higher-level management, becomes quite the reverse, where an employee’s demands and ego have to be attended to, just as carefully as the most petulant customer’s.
Even with the most gently nurtured relationships, customers can be lost. Opportunities dry up, budgets are cut, personalities change. It is vital therefore that no company sits back and relies on Account Development too completely. Customer churn may well be significantly reduced and a healthy forward order book in place but, at the very least, for every customer lost, a replacement is needed, to make up the income shortfall. The processes of following up new leads and competitively bidding must remain firmly in place, even if scaled down. Account Development is a basis for a company’s sustainability, not for its growth.
What of the impact on staff, assigned longer term? They may grow too settled into one environment, becoming sluggish and stagnant, reluctant to move on as their comfort zone closes in around them. Worse still, staff ‘go native’, forgetting the commercial necessities of the company that employs them.
Avoiding the pitfalls
The pitfalls of Consultancy-led Account Development are avoided, and the greatest benefits realised, when activities are planned and co-ordinated by a business leader, with a long term focus, across the full, existing customer base. Left to their own devices, most able business development consultants will operate in their own self-interest. Resulting behaviours challenge the fundamentals of Account Development. Once the business development consultant becomes greedy, short term gains are achieved at the price of long term sustainability.
An overly hungry business development consultant, can quickly lose integrity in a thirst for sales. Customer strategy setting becomes influenced more by the consultant’s career and personal wealth aspirations, than by the genuine requirements of the client. In such situations the good relationship between customer and supplier sours, as trust is lost, and the potential for easily winnable opportunities in the long term erodes away. A client, once suspicious of the honesty of an individual who had acted as ‘trusted advisor’, either seeks advice elsewhere, quite possibly forging links into a competitor company, or returns to the scenario of open tendering. The message is loud and clear: successful Account Development cannot be rushed.
Despite the apparent gentle nature of Account Development, it in fact takes a strong leader to manage the activities of a group of business development consultants. Effective business development consultants are highly motivated, proactive, confident people. Reining them in, to operate for the greater good of the overall department or company, is no easy feat. Re-aligning bonuses away from simplistic individual performance towards departmental performance can be a useful start point, encouraging business developers to think and work as a team together, instead of in competition with one another.
As soon as a primary business development consultant is securely in place, the practiced leader must ensure that other business developers enter the account, taking forward opportunities identified by the primary business development consultant and shoring up the initial relationship on which the account was opened, with further relationship building across the customer organisation. Such tactics avoid the pitfalls of any account becoming too dependent on single representatives from either the client’s side or the supplier’s side. Multiple good relationships significantly reduce risk across the account, while maximising the chances for business development, as the customer is exposed to a wide range of skilled consultants from a variety of disciplines.
Why the missed opportunity?
So, if Consultancy-led Account Development offers such rich benefits, and any pitfalls are avoidable through good business leadership, why is this valuable opportunity too often missed?
Two clear reasons: the first being short-term focus. Bonus criteria for senior staff, both business developers and their leaders, too often encourage maximising sales and delivery within the forward 12 month period. Inevitably, against such incentives, ‘slash and burn’ behaviours dominate. The initially right-minded business development consultant is driven to exploit his customer as quickly as possible, with insufficient regard to the longer-term consequences. What had been a steady revenue stream year-on-year, accelerates into a flood for a short period, drying up into lean times further ahead.
Another consequence of short-term focus is lack of commitment to Account Development. Cross-fertilisation of solutions between customers takes time to generate meaningful sales figures. Customers need to be gently coaxed into visualising the benefits of what is being offered, moving onto small consultancy packages and feasibility studies, before becoming receptive to the big sales.
The second reason for missing out on Account Development opportunities is that many people, even senior business consultants, just do not possess the required skill set. The customer wants to see:
- Delivery capability
- Strategic thinking
Too many keen business development consultants believe that they can bluff their way through, appearing to hold the above qualities when they don’t. They can’t. If the consultant doesn’t genuinely respect his customer, that customer will know. If the consultant tries to manipulate for commercial ends, his influence will fade. If poor advice is provided rather than involve another, for fear of loosening personal grip on a client, the consultant’s advice won’t be sought next time.
Building long-term, good relationships isn’t easy. Continually recognising the benefits of symbiosis calls for a degree of humility. Developing win-win scenarios time and again requires creativity and empathy. Maintaining trust in a customer-supplier situation is demanding. Many good intentioned business developers can’t live up to the challenge.
Maximising the Consultancy-led Account Development opportunity
Consultancy-led Account Development offers a company a secure future and a solid backbone from which to grow, through:
- Provision of a continuing, year-on-year order book
- Low risk work
- Minimised pre-sales costs
- Reduced project management overheads
- Development of leading-edge, onwardly sellable solutions
- Enhanced reputation
- Improved staff skills
To maximise the Consultancy-led Account Development opportunity, a supplier needs to:
- Develop a strategic Account Development plan
- Employ suitably skilled business development consultants
- Manage the consultants’ activities against the plan
- Replace losses from the customer base
These four simple steps will maximise the benefits on offer.