Business development and growth in a slowing economy

Two articles about how professional services firms can win work and how to grow business amidst a slowing economy…

Article 1: Why professional services firms don’t win work

By Fiona Czerniawska (31 October 2023) [Source Global Research]

There are two things that firms need to do to improve their sales conversion rate.

One in 10 clients say that when a firm loses, it’s because it doesn’t have as strong a relationship with the client organisation as the firm that won. But the number one reason why any type of firm doesn’t win work they might have been considered for is that they’re not on a clients’ preferred supplier list. In straightened economic times, there is inevitably far more scrutiny of expenditure, but even when a project has been signed off at the top, the length of time it can take to register a firm that’s not already on a client’s preferred supplier list can significantly delay the start of a project.

Lack of expertise certainly plays a part—it’s the third most likely reason why a firm loses—but clients’ perceptions may also be influenced by the next most important reason, that a firm’s proposal is inadequate. In other words, although a client’s sense of a firm’s expertise (it’s brand permission) might mean that the firm will be considered, firms often don’t do enough to demonstrate this experience when pitching for the work. Moreover, where a client isn’t sure of a firm’s expertise in a given area (a firm’s brand not being considered relevant is the fifth most important factor), the proposal can play a decisive role in demonstrating the depth of a firm’s knowledge. This is a reminder that no firm can take its expertise for granted: Clients certainly don’t.

The reasons why firms lose vary by type of firm. While the preferred supplier list hurdle matters to everyone, strategy firms are right to say that their relationships give them an advantage: They’re less likely to be beaten solely on the basis that another firm has a deeper relationship with the client.

At a time when professional services firms are trying to make every sales opportunity count, what should they do?

Firstly, if they’re pitching for work from a client where they’re not on the preferred supplier list, they need to start the process of being registered immediately rather than waiting until they’ve won the work (otherwise, they are less likely to win it).

Secondly, they need to make sure their proposals are exceptionally strong and demonstrate the firm’s depth of relevant expertise at every turn.

?

Article 2: 4 Ways To Grow Faster In A Slowing Economy

By Tamas Hevizi (23 November 2023) [Forbes]

Here are four ways to realign your sales team with strategies that focus on creating additional demand.

1. Focus on the initiatives of the customer C-suite.

All change in a company starts in the C-suite. This is especially true in times of market disruption. Top executives tend to reduce the number of initiatives and identify the few that can best help with their own revenue growth and profitability goals.

Many vendors do not help customers in identifying the highest value initiatives but rather focus all their sales teams on getting a piece of the resulting budgets. In a slowing economy, this strategy is a mistake. To drive growth, sellers need to understand the customer's key goals and initiatives at the source: the C-suite.

How can sellers prove that their product or solution will support those initiatives or reduce the project risk? By focusing carefully on quantifying the impact of their solution on a company's P&L or working capital.

2. Talk about the customer's problem—not your product.

True customer-centric businesses always know how big the problem they are solving is. Everyone from sales leadership to customer support should be able to articulate what problems they solve for customers and how much that is worth to the client.

In booming times, it is not uncommon to see sales presentations 100% focused on a seller's products, track record and references without any insights into the customer's own goals and potential issues.

In a recession, most of the focus should completely shift to solving customer problems. I recommend conducting a customer-centric audit of sales conversations. Seventy percent of the content should be about the problems the vendor can solve and the value of solving them. The remaining 30% can be about the seller's company and products. This requires shifting sales training from product knowledge to industry, process and value insights.

3. Identify and measure value creation.

All major change initiated by the executive team has a financial outcome. This is especially true in recessions. The C-suite expects tangible value from all projects, whether it be through revenue growth, cost reduction or improved production capacity.

A vendor's growth depends on the ability to connect their products to the business outcomes. If you cannot demonstrate value created at prior clients, your prospect will assume that either you don't measure value or there is none. You cannot blindly state an ROI claim without offering proof that you know the path to attain it. This value discipline requires specialized knowledge that should be incorporated into your sales training.

4. Train sales team on C-suite language.

The language in the C-suite is very different than at the business user or IT analyst level. Sales teams that do not learn to speak the executive team's language will always be delegated to specialist groups in their company.

A good question to consider is this: If you were not able to talk about your product to a client CEO, what would you talk about? Most executives are interested in what their peers are doing in the industry. What trends have you identified, and how have you helped others achieve goals similar to theirs?

A discussion with the CEO should never be an update on user or IT project status. The C-suite conversation should be about the art of the possible. How can you help solve some of the problems they need to address at their level? The ability to communicate this effectively allows them to approve a new initiative and provide the resources for it.

?

Does your sales team need a realignment?

In the age of a slowing economy and diminishing demand, sales leaders need to shift from selling to existing budgets to aligning with customer initiatives. In this environment, it is essential to stay close to the customer C-suite, helping them solve problems to unleash discretionary budgets and resources. This requires a deeper understanding of customer challenges and an ability to communicate in the language of the C-suite in order to quantify and deliver tangible value in the process.