We attend business events all the time: networking do’s, seminars, conferences, trade shows and so on. But how do we know whether it was worth it or not? Naturally if we went to learn something new the value comes from the quality of the new material but if we didn’t how else can we measure value?
I mean sure, we might emerge with a new client or a piece of work in much the same way that we might emerge on the arm of Pierce Brosnan or Katy Perry. Possible but unlikely.
Here are the 7 tangible benefits you can get from an event each of which are easy to measure; you got them or you didn’t: -
- New contact: you made contact with a new potential client or intermediary and secured their contact details and preferably agreed a next contact.
- Informal meeting: with somebody you have been communicating with via the telephone, email or social media. It might just be a DBC (Drop By Coffee) but it’s also a step forward.
- Formal meeting: repeated DBC’s does not constitute progress. At some point you must arrange to meet at your or their offices and talk turkey – get to know more about them and tell them more about you heading towards doing some business.
- Latch-key opportunity: you are promised the opportunity to deliver a latch-key offering.
- Referral: somebody says “You must meet so and so. Give me a call over the next couple of days and I will make it happen”. Fine but make sure you get the introducer’s contact details and a semi-appointment to speak with them.
- Opportunity for work: that means they explicitly say they have some work for you or you can bid for some work, either is fine. Agree when you can get the instructions and make sure they know you’ll be following it up.
- Showcasing opportunity: you are offered the chance to write for a magazine or blog your prospective clients read or to speak at an event that they might attend. A vague promise doesn’t count – follow up action must be agreed.
So come away empty-handed and most likely the event was a waste of time.
Don’t get fooled by the old “you have to be seen at these kind of things” or “I was building my profile” and certainly not that tired old ”I got loads of useful information”. Meh!
Meet new prospects or advance existing prospects or stay at home with the family – a much more worthwhile use of your time.
Doesn’t matter what you buy a surly shop assistant will make the buying experience an unhappy one.
Even if your lawyer gets the result you want you won’t feel good about the deal if they constantly failed to return your calls.
The electrician may have fixed the problem but you’re unhappy because he left a mess behind him.
Your accountant did your books OK but she never smiled once during the whole time you were with her.
We can get good products and services anywhere these days but the thing that keeps us coming back for more and compels us to tell our friends they should do the same is based largely upon how the experience made us feel.
Just delivering the required result isn’t enough any more – the experience has to be fulfilling too.
How fulfilled do you leave your clients when you’ve done with them I wonder?
There are a number of definitions for the words “sales” and “marketing” but what follows are the ones I prefer to use. Many would shrug their shoulders and say “who cares” but I think they would be wrong. Have a read and see what you think.
Why is it important to know the difference?
Put simply if you are relying on the wrong approach to help you secure new clients or win business then you will be working harder and spending more but achieving less. In today’s business world that is a luxury few can afford.
So here are a few key points about marketing: -
- it’s made up of 1:many activities such as mail-shots; advertising; mass events; PR and broadcasting
- only practical when what you’re selling doesn’t cost very much
- is pointless unless your offering is different enough to pass the “so what” test.
- “here is what I am offering - come and get it if you need it” approach
- typically you do not know who your actual client is going to be
- can help to build and sustain a brand
- is usually expensive and you cannot easily measure a return on your investment
- can be habitual – do the same thing over and over even though you aren’t sure if it works.
- When challenged a common defence is “we need a presence” – I don’t buy this and neither should you!
And the same for sales: -
- it is a 1:1 activity such as taking somebody for lunch; calling them to invite them to an event or asking for the business
- most effective where the average business deal is larger – the bigger the deal the more you should be selling not marketing
- “let me understand what you need and then propose a way forward” approach
- you know the actual name and contact details of your target – or can easily find them out
- is not about establishing a brand – it’s about individual rapport, trust and understanding
- Is very cheap (unless you “lunch” at the Ivy) and you can easily measure the return on your investment
- should never be habitual – you should be “going where the money is” right now or is going to be in the near future.
- In most cases you don’t need a presence or a brand – it’s all about finding a way to get to your target, understand their needs and propose an attractive way forward.
Don’t get me wrong traditional marketing does have its place. It’s very useful as a “poke” or reminder to your external stakeholders that you still exist and you still love them but as a means of winning new business I’m not so sure.
Marketing activities tend to be expensive in time and money and since you can’t really measure their effectiveness I can’t see that it’s sensible to keep pouring money into it especially in these difficult times.
If you’re product or service costs more than a few thousand pounds or has a high probability of a repeat sale then I would suggest sales over marketing. You will spend less, have a clearer idea of which activity provides the best results and achieve more revenue in less time. True, it’s harder (which is why most people don’t bother and rely on the marketers instead) but that isn’t a valid excuse to avoid doing it.
So here’s my advice if you want to sell more and market less: -
- Get a CRM system and add all your clients and prospects to it
- Learn how to sell
- Know what your ideal client looks like
- Go where the money is – put your time and money where you are most likely to make a sale!
So, you’ve got this prospective client in your sights and you’re trying to work out why they would abandon their current suppliers and use you instead. Regrettably there are a whole load of ill-founded beliefs surrounding this very simple question such as: -
- I’m fabulous and if only I can get to speak to them they’re sure to realise this and hire me
- Because I’m cheaper than everybody else (I feel dirty just writing this).
- Because I’m better than their current suppliers (and your proof would be?)
- I’m not sure really but I’ll keep taking them out for coffee and lunch until they roll over and give in.
But when it actually comes down to it there are only three possible reasons a potential client will switch from their current supplier base to you and here they are.
They just fancy a change
Don’t get to excited about this one. Whilst we might say this when selecting a restaurant for this evenings family feast we are unlikely to take the same approach when selecting our corporate suppliers.
In truth we do get bored with the things we buy and the places we buy them from but resistance to change is a factor here. The more effort it takes to swap from one supplier to another and the more risk involved the less likely somebody is to actually do it. Most people fall into the “high resistance to change” bracket so we should not rely on clients choosing us because they “fancy a change”. Sorry.
Deficient Supplier Base
This could mean they don’t have any suppliers at all because they have not actually bought what you are selling before or, more likely though, their current panel of suppliers is not hitting the mark in some way. Consider these reasons: -
- Perceived indifference: in other words their suppliers are not showing them enough TLC and as a result they are vulnerable to attack. Over time a level of complacency has crept into the relationship – it happens more than you think.
- The client’s needs have changed but their current suppliers are not equipped to satisfy their new needs to the required standard.
- There have been changes at the supplier (staff comings and goings; merger or acquisition; hard times etc.) which has caused the suppliers’ performance to deteriorate.
- An event has occurred that has seriously vexed the client: the supplier has dropped a right royal clanger and for some reason the client is not inclined to work with them to overcome it.
Now the important thing to bear in mind here is that we won’t know there’s a problem unless we, or one of our trusted external stakeholders, are close enough to the prospect to glean something is amiss. It is unlikely a prospective client will call you out of the blue and say “I’ve just been let down by one of my suppliers – this is your big chance matey”. Possible but I really wouldn’t bet the farmstead on it, would you?
If you want to rely on this as a way of getting your opportunity you must stay very close to your prospect base and pounce when you sniff an opportunity.
You have something they don’t get at the moment
I’m at the seaside as I write this and was walking along the promenade yesterday when I passed Tywyn’s only seafront fast-food outlet and smelled chips – until then I had no idea I was even hungry but as soon as I was exposed to the delicious aroma of root vegetables fried in animal fat I discovered I was ravvo.
So it is with business buyers too. They are happily sailing along thinking everything is hunky-dory then they sniff the business equivalent of the onions they put on hot-dogs and bingo! they must have it. Quite often they have a need but don’t even realise it until they are exposed to a solution or multiplier (a way of capitalising on an opportunity) and then it all falls into place.
Since my entire business career has consisted of starting businesses in mature markets I have always operated in a competitive-knockout situation and as such I have to say that this is my new-client winner of choice: offer them something they don’t already have.
- Examine the market you’re in and look for any gaps that might be appearing as a result of any external changes. Client preferences are constantly changing and each time they do the market lags behind creating a vacuum and as we all know nature hates a vacuum so maybe you could be the first to fill it.
- Speak to your clients and prospects and get a real feel for where things aren’t working for them. This is not an exercise aimed at exposing your competitor’s weaknesses but rather to discover itches that aren’t being scratched.
- Convert your services into products because they are much easier to differentiate and promote than a service. I know this takes time, effort and a fair amount of creativity bit it is sooooo worth it if you can.
So what is a person to do?
Well in summary if you seriously want to beat down the fortifications surrounding prospective clients here are your choices: -
- Keep in close contact with the prospects you have the best rapport with – some kind of contact every month and wait for your opportunity.
- For everybody else aim for two email/snail-mail contacts every month which add value rather than sell or promote. Let them see what you’re all about and if they need you they might just call.
- Develop some products that nobody else has and promote the bejeebies out of them through marketing and by picking up the phone and selling them to your clients and prospects. This is the option that puts you in control of the new-client acquisition process but is the hardest to achieve.
Whatever you do forget the idea that repeated trips out for coffee lunch, or any other kind of face-feeding event will grind them down. Maybe years ago this was a reliable method of wooing new clients but your prospect base is way more sophisticated than that these days. You really need to do more!
This is a picture of a flyer my local Mercedes garage sent me. I have no idea whether they dreamed it up themselves or it was produced centrally by the Mercedes marketing people but I think it is a very telling document – have a look at it in more detail here.
What they have done is take a common or garden car service and turned it into a product that they can customise, differentiate and promote. In my opinion it changes the game.
From a psychological point of view we like to buy things in a box which are easy to set-up and use (engagement) and with a very simple set of options attached that help us to choose the right version of the product for us. If you’re interested in the thinking behind choice (and you really should be if you want people to choose you) check out this TED talk by Sheena Iyengar.
So if you believe the research (and your very own buying habits) the more you can productise your offerings the easier it is to differentiate and ultimately sell them.
Does this apply if you only “sell” internally? Well if your internal stakeholders have a choice of whether they engage with you or perhaps more importantly, how they engage with you then it very much does. If you are an IT person offering a range of services to your internal customers then exactly the same rules apply.
So what does “productise” actually mean? Well here is my take on it: -
- Give your service a name that would indicate an outcome rather than a process. “Limousine Premium Valet” is better than car wash (tongue firmly in cheek their folks).
- Provide different levels with prices to match. Each level has a very simple set of features and benefits attached – notice the tick-box approach Mercedes took. Each option should have also have it’s own name and fixed price attached.
- Talk about outcomes not features. Nobody cares if your your “Limousine Premium Valet” uses one bucket of water per wash but they do care that you don’t need to keep asking them to refill your bucket with clean water” .
- Make the engagement as easy as possible. Apple does so well because their approach is plug and play: see an app, download it and use it straight away. Compare this to loading software onto your PC.
- Choose a brand look and feel to present your product. After all it has now become something much more tangible than when it was a simple service.
- Make it very predictable. When somebody buys your product of choice they know precisely what they are going to get. In many ways this aspect of a productised service is the most important: consistency builds brand identity, improves referral rates and creates many more satisfied customers.
Ultimately we do what we do so it shouldn’t really matter how we present it but just ask any chef and she will tell you “the first taste is with the eye” and so it is when we buy things. The way we present our offerings will have a gigantic influence over the way in which we attract our clients and how they go through their decision making process.
So my final message: productise to accumulise (I may have made that word up for rhetorical purposes).
The other day I attended a lunchtime networking event in Birmingham. I had gone to meet somebody who I believed would be there but at the eleventh hour had to duck out (I learned later) leaving me at the mercy of a heaving mass of smartly dressed, enthusiastic and fragrant professionals. My worst nightmare!
I have nothing against enthusiastic professionals (especially if they smell nice) in fact I earn my living from them but to see a huge posse of them all swigging away on free orange juice and engaged in the art of “networking” was almost too much for me to bare.
[ <---- Thanks to Nick Lincoln at V2VFP for the caption]
I deal with medium to large law firms. The decision makers within those firms rarely go to those kinds of event and if they do they aren’t going to make a purchase worth tens of thousands of pounds from somebody they’ve just met over a sausage on a stick! So this is my key message: if you sell to medium to large organisations you are wasting your time attending networking events.
I’m not saying business doesn’t get done at these gatherings because I’m sure it does but the conversion rate is so low as to be laughable. Think about it. You have to meet a decision maker who right now has a need you can help with and a budget that matches your expectations but does not have incumbent suppliers who can already deliver what’s required. Not really very likely when you consider it that way is it?
Of course the argument goes that networking events are also about building relationships which is true but if that’s the best way you can engage with your stakeholders you may find your depth of relationships a bit on the shallow side. If you want to build strong relationships you’re much better off arranging to meet people on a 121 basis; at least they know you cared enough to make the effort.
For my own part I have built all of my businesses (the biggest tipping the scales at a hefty £40m turnover) on the firm foundation of relationship selling; it’s easy, efficient and really quite fun. I cannot recall a single client I have won from a networking event and nor can I honestly say that going to them strengthened any of my relationships. Remember: people attend these events to sell not to buy!
So in closing if you must attend these frightful shindigs learn how to work a room (personally I can think of nothing worse) and get stuck in but don’t expect to win loads of business as a result.
Alternatively you can avoid them like the plague and reinvest the time you have saved into one of four alternative approaches to finding and connecting with new clients that I will be talking about in my next post!
Despite what anybody tells you tenders are designed to lower costs. They may request all sorts of information from you; encourage you to be creative and innovative and bang on about quality and value but when they open up your response the first page they turn to is the one headed “Costs”.
Since there is always somebody in your peer group who is more desperate than you it means there is always somebody out there who is going to be cheaper than you. Tenders are creating a race to the bottom of the price barrel and that isn’t good for anybody including the client.
So what are your options? Here’s five of the best…….
1. Keep doing the same old, same old.
Einstein’s definition of madness was doing the same thing over and over in the same way and expecting a different outcome each time. This option is not recommended by your local business development specialist.
2. Become a Cost Plus Operator
Instead of plucking hourly rates out of the air why not work out what it actually costs to provide a service including direct (what is the true cost of a partner, say) and indirect costs (overheads and so on). Once you have added your margin to this you can be sure that this is a reasonable price and hopefully will be somewhere in the ball-park.
One side-effect of this approach is that it throws a spotlight on the way in which you deliver your offering. By innovating, using new technology and standardisation you may be able to lower the delivery costs and so lower your bid prices and therefore increase your chances of winning the deal.
Of course this is setting you on a path of providing a commodity based service. Some firms will make a lot of money by doing this. I personally wouldn’t choose to work in that part of the field myself though because it’s not much fun and it also happens to be highly vulnerable to the effects of market fluctuations.
3. Go Niche
People recognise that when they base their decisions on cost they will not actually get the best possible service available. It’s a trade-off they’re willing to make. But some will also recognise that certain types of work do demand extra skills or a more studied approach where the price of under-performance is high perhaps.
When you submit your proposal you point out the value of your offering, admit it is not the cheapest but single out when a more expensive flavour (yours) is the right one. Price it up based on decent rates and position yourself as an escalation supplier: in other words work only comes to you when it needs to and you charge differently to the rest of their suppliers.
If your offering genuinely is much better than the competition and there is a real need to use it under certain circumstances then you could be onto a winner here. Note you could do much less business then the other suppliers but make the same amount of profit!
4. Change the game
Always submit a tender response in the format, style and content that the client requested but include a second option which is disruptive. So they ask for hourly rates which you provide but you also offer to take a risk and do all the work for a fixed price with no if’s, but’s or maybe’s. Game changer; makes them begin to think of things other than comparing one suppliers prices against another’s.
Risky and needs innovation but can work handsomely – worth some thought I’d say.
5. Just not bother
Seriously. If you’re not going to change your business to use a cost-plus model; take risks or have a real niche then my advice is don’t bother responding to tenders. If you take this option there is one thing you have to do: build yourself an active sales environment which systematically generates lots of new leads; has a process to grade the leads and then convert the good ones into clients where you have an outstanding client care programme in place to maximise ongoing revenues.
Qualified volume coupled with effective processes, tools, techniques and control mechanisms when combined properly will provide more of the target clients who base their buying decisions on more than just cost.
Tendering is here to stay and if anything will become even more prevalent and cost-sensitive. The “do nothing” option really isn’t an option so whatever you do do it soon and do it well.
Do you love a trip to the races as much as me?
Dressing up to the nines, with a few spare bob in your pocket and a foolproof system for picking a winner makes for a great day out. Then, even when your gigi with the double entendre for a name turns out to be a three legged nag and limps in 20 minutes after the field, it doesn’t dampen the joy does it?
But, when it comes to picking a winning prospect that isn’t a three-legged nag do you use the same approach? Can you say you really stop yourself throwing your precious resources at prospects who will never deliver for you and even more challenging, stop them draining you?
Like a gambler on a losing streak thinking each failure makes a winner more likely it’s all too easy to start investing your limited time and money on prospects that you shouldn’t. But bad bets are bad bets and bad clients are bad clients, whatever the market conditions; they will drain your precious time, are more risky and deliver you less profit – who wants that?
So if you need to reject non-ideal clients to get through a tough market then what is the way forward? Well to start with: -
- strip out the waste: make costs savings where you can, but without affecting the quality of your service
- innovate to become more effective and free up time; new technology is a good place to start
- spend that new free-time to dramatically increase your sales activity.
Don’t take on bad business; it will only make things worse not better!
Spot the winners.
Start by analysing your current clients and picking out the winners. They’re the opposite of the “bad” clients: lower risk, easier to work with and more profitable.
Next, look at the characteristics of these clients, paying special attention to the personality, goals and values of the decision makers but not forgetting to put the firms purchasing process, size and sector into the equation.
Lastly, educate your sales people and your marketers to identify more prospects with these qualities. Difficult for them to do without starting a relationship but keeping these qualities in mind from the start will make it easier.
Dodge the losers
This is easy, when you spot a loser close the relationship down. Immediately. And if they ask you to supply just say no, be brave: you’ll be glad you were in the long run.
Remember: nobody makes you do bad business, or engage with bad clients, except you!