Business Development & Sales Success: The Biggest Predictor. Oct 2024

Having spent 15 years in corporate life, then 15 years in a global management consulting firm, I’ve always been fascinated with the area of business development and sales, and still largely uncomfortable with the word sales.?

Dictionary.com defines business development as: the activity of?pursuing?strategic opportunities for a particular business or organization. For example by?cultivating?partnerships or other commercial relationships, or identifying new markets for products or services.

My Beginnings In Business Development & Sales

I was lucky enough to have a great mentor in this area who showed me the ropes and made his time available for my first few years.? I also made a point of picking up tips from others around me, reading 4-5 books on the topic, and hearing a few speakers over time.? Individually none of these things were definitive but collectively they made for a solid toolbox.? I was fortunate enough to have tremendous success in this area, meeting/exceeding targets every month for 15 straight years.? Over 80% of my clients became clients for life (the holy grail) that I still work with today.

?A Surprise

One of my biggest surprises in 15 years was that even in a global management consulting firm that is fundamentally in the knowledge business, there was no structured approach to business development, nor for new people to learn the business development or sales skills that were so essential for success, instead using the sink-or-swim approach…and most newbies sank like rocks. ?Even in a firm skilled in hiring practices, the success rate of new consultants was less than 50% and the average tenure was only 3.4 years: extremely poor by any metric.?

?What Factor Most Predicts Success?

Determined to take an evidence-based approach to help people learn business development, a colleague and I (off the corner of our desks) embarked upon a research project to answer the question, “What factor most predicts success in business development / sales?”? We began by identifying the number of proposals written in by our firm just in Western Canada in the previous 3 years (n=224) and then assessed each proposal on 5 separate criteria using a simple 1-5 scale.? The 5 criteria were:

1.???? Do we have a relationship with this client? (deep and/or long standing?? Or new?)

2.???? Do we have unique and/or proprietary expertise? (or can they find a solution anywhere and it will be hard for us to differentiate?)

3.???? How price sensitive is this client? (ruthless commodity shopper? cautious? big spender?)

4.???? How strategic is this client to us? (not at all?? Or in a key sector, geography, etc.)

5.???? Is the time required to create a submission (cost-of-sale) reasonable for the size of opportunity? (or will it cost us $30K of time for a $15K project)

Rating 224 projects on 5 criteria using a 1-5 scale generated 1,120 data points for further analysis.? When all the dust settled, the single most important predictor was: Do we have a relationship with this client?? So much so in fact, that this factor was more predictive than the other 4 combined!? Another interesting finding: we won 36% of all proposals submitted, our competitors combined won 31%, and 33% of the projects never actually happened.?

The Wild West

Fast forward to our firm being acquired by a similar-sized firm who spent the first 6 months telling us how everything they did was better than anything we did.? Bizarrely though, their approach to business development was 10x worse: a complete wild-west free-for-all, eat what you kill, whoever gets to the client first wins, no geographic territories, multiple consultants routinely calling on the same client even in the same week, 0 funnel management, 0 strategic approach, a complete lack of any structure whatsoever.

?5 Lessons in Business Development / Sales

This all brings us to 5 lessons in business development and sales.

1.???? Prospect prospect prospect.? Remember you need 6 prospects=3 proposals=1 win.?

2.???? Given that 33% of projects don’t happen, what can you do to qualify the credibility of the buyer?? Is he/she credible?? Do they have executive approval and/or enough position power?? Do they have a budget and timeline in mind?? Or are they on a fishing expedition with no ability to implement/execute?

3.???? Be selective in what you chase.? You can’t (and shouldn’t) chase everything.? Keep your cost-of-sale to a maximum 10-15% of the opportunity size, or don’t submit.

4.???? Another great predictor of individual sales success is a person having a high Achievement drive (Harvard professor David McClelland’s 3 motives). They are motivated daily to go find the business, yet too much Achievement drive can be highly destructive.

5.???? You are in the relationship business, not the product/service/solution business.?

Quote

Business development is about both identifying the right opportunities, and handling the opportunities right. – Mark Hunter

Building Business Development & Sales Skills: Strategies For Success

To help others grow their skills, I’ve since developed a 2 day workshop on Building Business Development and Sales covering: a wide of topics related to success (funnel mgmt, hunting vs farming, etc.), 2 self-assessment tools, 2 sales simulations, and 50 Bus Dev gems.? The program has been delivered to a wide range of sectors including global management consulting firms, legal firms, engineering firms, agriculture commodity merchandising, non-profits growing their funding, pharmaceuticals, manufacturing firms, and others looking for new markets, sectors, customers/donors, or growth.

Contact

Brent Pederson is a Trusted Talent Advisor with 15 years of corporate experience in the industrial sector and another 17 years in global consulting where he worked in 8 countries.? He holds a Master degree and various relevant certifications.? His passion is helping people grow and calling out B.S.? You might also find him mountain biking or wood working.? Brent can be reached at?1.306.581.2505, by email at [email protected], or on LinkedIn.? His website is: www.thetalentadvisor.ca.