Situation: A company wants to keep both customers and employees up to date on what is happening within the company. This includes announcements of new products, services and initiatives, changes in personnel policy and benefits, and other information important to both customers and employees. The CEO is considering a company newsletter. How do you keep customers and employees updated and what benefits do you accrue from the effort?
Advice from the CEOs:
Customers and employees are two different audiences and require different communications. Externally focused company newsletters are a value-add from a marketing perspective and enhance the image of the company in the eyes of clients and prospects. Internal company newsletters are valuable to reinforce vision, understanding of company policy, and inter-departmental alignment.
Both efforts are justified from a time and expense standpoint, and perhaps deserve even more focus.
Within the companies represented around the table, frequency of both internal and external newsletters varies from semi-annual to monthly publications.
Both print and online newsletters have value. Employees respond positively to both. Print media make it easier for them to share important updates in benefits and excitement about company developments with their families. Online media can be updated more frequently and inexpensively, and the HR department can track the number of views to measure impact.
Emailed external newsletters are valuable because they enable you to measure ROI from the effort by building in tracking mechanisms and correlating web page hits to business development and revenue.
Situation: A company survived the recession by cutting back and using cash reserves. Business is now on the upswing with significant new opportunities. However, the company has limited resources to invest landing new opportunities. How do you ramp up sales and business development on a constrained budget?
Advice from the CEOs:
Identify and focus on your niche market, and invest your limited resources closing qualified clients. This is a rifle shot approach, not shotgun. While seeing new business, make sure that you have sufficient production capacity to handle new business. You want your clients to be satisfied so that they will refer others to you
Cash is the most critical resource. Spend carefully and get the most from your investment in business development.
While marketing materials are important, they may not be essential if you have and can leverage excellent referral sources. Word of mouth and referrals from trusted clients are your top assets.
Leverage Linkedin as a free or low cost resource to identify key contacts in your top 100 customer prospects.
You can also use Linked-in.com to recruit additional sales resources who may be amenable to a pure commission sale. This can help you to augment your efforts so that you only pay for success.
Your most important current unused resource is leads and referrals from existing satisfied customers. Let them know that you are looking to grow and ask whether they know of contacts in other companies who could use your product. It is surprising how frequently they will share their contacts with you. Ask whether they would call the contact and provide a personal introduction.
Situation: A small company has a candidate who seems a great fit for their culture and comes with excellent references. However, this candidate has little experience in their industry. They are struggling to assess which is more important – the quality and character of the person or their experience and skill set? What is your opinion – do you hire for character or skills?
Advice from the CEOs:
Overall, personality, character and values consistent with the firm’s values outweigh skills. However, if the individual needs significant training to attain the skills required for their new role, you must assess the ability of your firm to provide that training. Either that or bring them in at a lower level and let them grow into their eventual role.
If the candidate will fill a business development role, put them across the table from you and others, one-on-one, in a sales role play. Can they sell you on hiring them for the position? If the candidate will have to develop their own leads, make selling you on their ability to do this part of the role-play exercise.
Open up the search to other possible candidates, and assess the current candidate vs. others who may want the position. See if this individual rises to the top in a competition for the position.
Large company experience may not be relevant to the needs of a small firm. Better to find an individual with experience in a firm more similar to your size than with only big company experience.
Key Words: Hire, Candidate, Character, Culture, Skills, Experience, Training, Business Development, Compete, Large, Small
Situation: A founder of a company also heads business development. This person had no prior experience in business development, and no other skills to offer the business. Over the last two years he has generated only a fraction of his salary in new or additional business. The CEO has concluded that it is time to hire a business development professional; however, the Board is reluctant to act. What are the steps that you would take to let a founder go?
Advice from the CEOs:
Because the individual in question is an owner, the situation is delicate. Staff relationships are involved as well as morale. Therefore, it is essential that you create a convincing case for replacing the individual and show that this is the best for the business. Don’t rush the process. However, once you’ve built a solid case for what needs to be done, act expeditiously.
Start by evaluating and documenting what the individual is doing to develop new business.
Count customer connects per day. Set a baseline expectation and measure against this.
Look at the pipeline. Historically what does your new business funnel look like – contacts, presentations, evaluations, closes. How does this individual’s pipeline stack up?
What are his business advancement and close ratios? How do these compare with industry standards?
For the individual: Demonstrate that his performance is penalizing his own return as an owner. Create a spreadsheet that shows:
The current situation, and his return as a shareholder from current results, versus
Hiring two effective business development people, and how this could change his return.
Show the individual a graceful way out – one that works for him.
For the Board: if the current direction is negative, create a model that shows your current direction and the break even implications. Present this analysis to the Board to show that the company needs a change.
Situation: A company wants to expand its business development staff. What is your experience, and what has worked best for you in selecting among business development candidates?
Advice from the CEOs:
Your first priority is your compensation plan for the new person. There are three basic compensation schemes:
High Base/Low Commission
Medium Base/Medium Commission
Low to No Base/High Commission
Choice between these options depends on your own philosophy, as well as common practice within your industry. Compensation is central to candidate selection. The CEOs recommend asking candidates about their own preferences for compensation.
If they prefer Option 1, don’t hire them – they either lack experience or confidence.
They ideally prefer Option 3 – they can make more money, but cost you little unless they perform.
If they prefer Option 2, probe. They may be good but face personal obligations that make it difficult to choose the high risk/high reward option. Ask about past compensation and performance. Verify any claims made during the interview.
You want to structure sales compensation so that non-performers leave of their own accord – without costing you dearly in time or money.
What are the most important traits to seek in a good B.D. candidate?
Understanding of customer’s requirements as well as purchase behavior.
Understanding of your product or service.
How do you find candidates?
Use a Head Hunter who knows your industry and competitors.
Use written tests to evaluate the individual’s traits.
Let the recruiter find and screen prospects and present the top 2-3 to you.
Key Words: Business Development, Candidate, Compensation, Experience, Traits, Evaluation, Base, Draw, Commission, Industry Practice, Verification, Performer, Non-Performer, Selection, Head Hunter, Personnel, Recruiter, Test
Situation: The Company downsized during the recession. The CEO and sales staff are overburdened by administrative and business development tasks. What’s the best way to bring to add resources to support sales and infrastructure?
Advice from the CEOs:
Look at what hats you are wearing. Wear the hats that fit best and take off the others.
If an activity is not core to your success, off-load it. For example: bookkeeping, shipping and receiving, records and basic correspondence.
These are necessary, but don’t generate revenue.
If your core businesses are sales and service, is one more profitable than the other? Can you outsource pieces of the less profitable activity short-term?
Where do you want to be personally in the next 2 years? On what roles do you want to focus? Build a plan to transition you into these roles.
The E Myth Revisited by Michael Gerber is a quick read that outlines the process.
You may not need to bring in a high level operations manager. Consider hiring an office manager to help organize you and your business development staff. For a smaller operation this person can take care of phones, bookkeeping, shipping and receiving and routine correspondence. This will allow executive staff and sales to focus on growing and servicing customer demand.
During the summer months hire high school or college summer interns. They provide an inexpensive source of labor, high levels of energy and creativity, and are eager for work experience.
Situation: The Company has had success with a few large clients but wants to expand their customer base for long-term growth. How do they differentiate their products in what is perceived as a commodity market?
Advice of the CEOs:
One company created differentiation by getting to know everyone in the business – building long term relationships, based on reputation and trust.
They spent time up front understanding the needs of customers that they wanted to develop.
As opportunities arose, they built relationships and asked questions to clearly define client needs.
While it takes time and patience, the objective is to be able to say “We know your business” – with credibility.
Study the business, sector, and customers that you wish to serve.
Leverage the success that you have had with large customers. Talk about how you helped subunits within your large customers. This makes a big customer seem more like a collection of small customers similar to your prospects and makes your experience relevant.
Let prospective customers know, when appropriate to the situation, that you are hungry and will go the extra mile for their business. Simply out-serve your competition.
Learn who currently serves your prospective clientele. Study these competitors, their strengths and weaknesses. Talk to their customers – learn what they love about competitors’ service, and what they would like to see changed. Find the holes in what they provide and fill these holes with a better offer.
Look for and encourage repeat business and references to new business.