A CEO is concerned that her company does not have enough new prospects or
business on the horizon. New business opportunities appear sporadically but not
predictably. She asks how others schedule their time and effort to bring in new
clients. How do you maintain a robust pipeline?
from the CEOs:
Devote a regular amount of time to business and relationship development. Even when business is busy it is important to have the discipline to devote 4 to 6 hours per week to new business development. Schedule this time and fill it with activity. Occasional networking doesn’t work.
What differentiates a company is its brand. If new business comes from referrals, turbo-charge this by becoming the information hub for the referral group. Make it easy for others to make referrals.
There is a hierarchy of things to do.
Stay on potential referrers’ radar screens – monthly or quarterly awareness marketing to referral sources.
Spread awareness of best practices in areas where the company has expertise.
Make best practices relevant with situational stories.
Think in terms of a target.
Where do most referrals come from? This is the center of the bull’s eye
2nd Ring – 2nd level of referrals
3rd Ring – 3rd level of referrals
Network more with contacts at the center of the target – they know clients in need of help.
There is a lot of information in the cloud that is relevant to the business – personnel moves, hiring, firing, etc. If you it is possible to track this, it can help.
LinkedIn can help. Look for 1st and 2nd degree links to individuals of interest. For example, you want to meet a CEO who on LinkedIn is a 2nd degree link. Request a warm introduction from a 1st degree link between you and the CEO.
Think of LinkedIn in terms of rifle shots, not a shotgun approach. This makes it both more manageable and more valuable.
Situation: A CEO has been analyzing the metrics that she uses to track her company’s performance. Historically she has used common metrics like sales, gross and net margin, profit and net operating income, budget plan vs. actual expenses, and sales forecast vs. actual sales. She is curious what other companies use to track performance. What are your key business metrics?
Advice from the CEOs:
The most important financial metric for many companies is actually cash flow – how much cash you have on hand and your cash flow forecast. Two metrics that can help you to better understand and boost cash flow are:
Receivables – aging rate
DSO – Days Sales Outstanding
Additional financial metrics include:
Variable versus fixed cost ratios
To augment understanding of profitability, track “good” profit – revenue from customers who are profitable, as opposed to revenue that is either break-even or unprofitable.
Sales metrics to measure future revenue include:
Order backlog – by month for X months out
From this, forecast beyond visible orders
Marketing metrics include:
Net promoter score – would the customer refer us to a friend or family member?
Client and referral client retention rate
Metrics for utilization of resources for a service provider include:
Total hours paid versus total hours billed
Business trend tracking. If business is seasonal, look for historic peak to peak times – this may be 3 months and may be 18 months. Determine this and make the rolling cycle equivalent to your business cycle.
Review your metrics regularly to reinforce their importance across the company
Situation: A company has learned that a competitor has cloned their client development approach. This approach enabled the company to gain early market share. They have since moved up-market and have enhanced their sales tactics. How should the company respond to the competitor’s tactic?
Advice from the CEOs:
Reconnect with the market contacts that got you where you are. Be sure that they are aware of your track record, the value that you provide your clients, and reinforce your current market development focus. Now that you are established, position yourself as the proven producer who consistently produces results.
Study what the competitor is doing, who their target customer is, their close rates, and what if anything they are doing to enhance their close rates. Learn from them and copy or improve on their practices where this will yield benefit.
If your sales development is based on referrals, enhance the rewards to contacts who bring you new business in your prime target markets.
Your principal concern may not be your client base, which is likely unaware of the differences in your versus your competitor’s approaches, but in the referral structure that is your primary source of new business. Focus effort and resources to shore up your relationship with your referral base.
Focus on your strengths – performance and excellence in managing client relationships.
If the competitor is focusing on down market accounts that you no longer cultivate, then expect them to succeed in this market. Become the provider of choice to up market accounts and the natural referral choice for these accounts. If the competitor stumbles, you may pick up unexpected business.
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: Despite high unemployment, a company is finding it difficult to attract qualified candidates for technical positions. Many applicants don’t possess the requisite skills, and recent graduates aren’t responding to job posts. What works best attracting good candidates for open positions?
Advice of the Forum:
There is a wide array of specialized online resources to help you find qualified candidates. As an example, for tech candidates, try DICE.com. For a reasonable cost, you can post position on DICE.com or get employer access to the database and search it yourself using key words.
Better results come through networking with vendors, suppliers and customers to identify currently employed and highly qualified candidates. This should be regular company practice.
It is feasible to hire nationally and to relocate. As long as the employees and young and not invested, relocation expenses are not severe, and the Bay Area is appealing to young workers.
For distant candidates, companies frequently use an initial telephone interview, and then bring qualified candidates to the office for a face-to-face 2nd interview.
Push current employees for referrals. Give them a reward for successful hires that stay with the Company for a pre-set time period.
One company pays $5-10K for referred employees who stay with the company for 1 year. This is inexpensive in comparison with recruiter costs.
There are some highly targeted recruiters in Silicon Valley who specialize in technology positions. Get to know these companies. They may already have candidates for your positions.
A number of companies have had success with semester or summer interns from local colleges and graduate schools. Current students are highly aware of the challenges finding a job once they graduate, and unemployment among recent graduates is very high.
Key Words: Human Resources, Candidate, Technical, Applicant, Job Post, Networking, DICE.com, Relocate, Referral, Recruiter, Intern
Situation: A company needs to hire several upper level managers to support growth objectives In the past they have selected candidates based on referrals from existing employees or management’s “gut feel” of candidates. The results have been inconsistent. What have you done to identify good job candidates?
Advice from the CEOs:
The answer depends upon the success of your hiring in the past, both for areas where you are comfortable with the skill sets and those areas you are less comfortable. For example, you may be good at identifying candidates for technical positions, but not for sales and marketing.
One CEO’s “gut feel” hires have been consistently wrong. The solution has been to have recruiters screen and evaluate candidates. Once candidates are prequalified, only the best are presented to the CEO for final selection.
Another CEO uses a two-step process:
A recruiter selects and ranks their final two or three candidates.
Then the CEO gets a second opinion from another recruiter on the recommended choices of the first recruiter.
If both recruiters agree on the best candidate, the CEO meets the person and offers a job provided that they are compatible. If the recruiters disagree, the CEO probes the differences between the evaluations and decides whether to meet with one of the candidates.
Another CEO involves staff and uses a ranking system to evaluate candidates in areas of competence and fit. This produces composite scores that assist them in identifying the best candidate.
Key Words: Hiring, Manager, Selection, Referral, Gut Feel, Process, Skills, Head Hunter, Recruiter, Ranking