Tag Archives: Obligations

How Do You Select Good Business Developers? Five Thoughts

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? How do you select good business developers?

Advice from the CEOs:

  • The 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 recommended asking candidates about their own preferences for compensation. If they prefer Option 1, don’t hire them – they either lack experience or confidence. Ideally they 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 and 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 hunter find and screen prospects and present the top 2-3 to you as a test of their skills.

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How Do You Avoid Payment Pickles? Five Options

Situation: A company has clients who are not paying on schedule for projects. If the company stops or delays work, the clients say this is why they aren’t paying. The CEO needs to find a solution that clarifies and codifies responsibilities of both the company and its clients. How do you avoid payment pickles?

Advice from the CEOs:

  • Look at the contract templates and adjust them to better meet the company’s needs.
    • Change the contract obligations – so that the company is not liable for failing to complete on time when the client does not pay.
    • Increase the frequency of client payments so that the company is paid on a more timely basis.
    • Document all payment promises in the contract, including clear penalties for untimely payment and the company’s ability to stop work if payments fall short.
    • Look for an insurance product that insures the company for clients’ failure to pay – include the cost of this policy in the job quote.
    • Always hold back something critical until the final payment is received.
  • Rebrand the company to improve the business proposition.
    • Highlight the founders’ credentials – use this credibility to differentiate the company from the competition.
    • Expand the company’s presence in customized solutions, tailored to meet customers’ needs.
    • Work the high-end solutions network to get to the high-end clients.
    • Obtain D&Bs on clients before signing contracts.
    • Find the founders passion and focus on this to build the business.
    • Build what the customers want and deliver on schedule.
    • Present multiple options to new clients – a basic option for a competitive price, with add-ons similar to car dealers who use add-ons to boost the value of the sale.

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