How to win customers (old and new).


GUEST POST Courtesy of Bruce Lynn, leader and founder of Dynamic Work.

img6 Twenty-plus years into my career, I’ve worked for all sorts of companies…start-up, major corporation, mid-market.  The one thing that was shared across all was the pivotal imperative to bring in business.  Paying customers.  The domain of developing business is familiar territory for me.  I set up two branch offices for Kenan Systems to build new business bases in new markets, and I was one of 7 individuals awarded Microsoft’s ‘Worldwide Top Sales Manager’ several years ago (including an inscribed Rolex watch presented to me by Billg himself in front of 10,000 people).  But, now that my most recent work is starting my own small business, the focus on drumming up business has never been closer to home.  I started Dynamic Work Ltd. in September of last year and aside from some logistical and operation set up, job one from the outset has been developing and closing a pipeline of business.  Getting back to the coal face of this mission critical function has highlighted in stark relief the dynamics of bringing in new customers.

My first job out of university was working for a management consultancy (then called ‘Temple, Barker and Sloane’ (TBS) but now rolled into the Mercer family companies).  So, it is perhaps no surprise that I see the fundamentals of business development strategy boiling down to two dimensions which conveniently form that ubiquitous 2×2 matrix.  Essentially, winning customers comes down to…

  • Relationship
  • Authority

If you plot these as dimensions to the challenge, then you get the following matrix with 4 fundamental ways of bringing in the new business (with perhaps some other variants plotted at slightly shifted positions on the axis)…

Low Relationship High Relationship
High Authority Publicity Referral
Low Authority Outbound Network

Not only are these discrete options, but they typically are also stack ranked in the following priority.  Of course there are exceptions, but I find that the lions share of business grow according to this prioritisation.

1. NETWORK (High Relationship, Low Authority) – In most 2×2 matrices, the ‘Star’ quadrant is where there is ‘High’ in both dimensions, but in business development, the lowest hanging fruit and most prevalent ways to especially start from scratch is the ‘Network’ where the Relationship is everything and the ‘Authority’ may or may not come into play.  The ‘Network’ is ‘leaving a company and taking your top customer with you.’  Sometimes it is ‘leaving a company, but then making that company your first customer’ (maybe you spotted a customer need while being inside or maybe the company just decided to outsource your role giving you the opportunity to set up for yourself).  In my experience, this is by far the most prevalent way that businesses start…with a strong customer relationship will to support the undertaking.  That best customer is often your ‘anchor’ which provides both a basic assurance of some money in the door as well as the every critical reference which brings us to…

2. REFERRAL (High Relationship, High Authority) – Referral is definitely step two in building business.  Once you have secured your ‘first’ customer, typically through a direct relationship where your capability is trusted through that connection, one of the best ways to get your next one is a Referral.  Customer #1 recommends your to Customer #2.  This is not a truly ‘high’ a relationship sell as selling to your network because the ‘relationship’ is one-step removed.  But, being recommended in this ‘friend-of-a-friend’ manner is absolutely a ‘relationship’ sell.  Furthermore, the proposition is not solely relationship based.  Your initial customer might give you business out of implicit, probably time-tested confidence that you can deliver, but a ‘friend of a friend’ wants something more.  In this case, that something more is ‘authority’.  It is not just your relationship with Customer #1, but just as importantly his or her testimonial on the success of your work in solving a problem that Customer #2 has.  That provides you with the double credibility…trust in your character (relationship) and trust in your relevant skills, knowledge and experience (authority).

I would hazard to guess that ‘Referral’ is the largest percentage of all business generated for a growing company.  It makes a powerful argument for shifting some of those marketing monies going to Publicity and Outbound and investing it in Customer Service.

‘Referral’ also is primarily the model on which Microsoft built its empire.  Microsoft did not seek to woo customers with a flashy salesforce or seduce them with sexy marketing.  It was a company built by and on engineers and mathematicians who (a) sought to first and foremost built the best mousetrap, and (b) made sure that the ‘ecosystem’ of developers, resellers, OEMs, channel, ‘IEU’s (Influential End-Users) and early adopters all ‘referred’ buying customers to the Microsoft choice.  They sought to command the ‘Authority’ high ground by winning product reviews, feature comparisons and price battles, while they happily eschewed any interest in a direct customer relationship by building an army of partners to do that piece.

3. PUBLICITY (Low Relationship, High Authority) – I was first introduced to the ‘Publicity’ approach in my first job out of university.  TBS invested in doing a big survey a Third Party Administrators (TPA) which they published into a special report.  The ‘authority’ that this special knowledge and au courrant insight accorded them literally brought business in the door.  TPAs called them up to do consulting for them based on their perceived deeper understanding of their business.

As a number of ‘mid-list’ accounts powerfully illustrate, writing a business book these days is not done for the royalties.  It is an exercise in ‘publicity’ to build ‘authority’.  Despite the digital age, there is still something psychologically compelling to publishing in a book that conveys a special air of authority over the author.  The person who literally ‘wrote the book’ on said topic.  Self-publishing a book on your chosen field of expertise is becoming as essential and common as printing up business cards these days.  Of course, in the social media age, a blog, well done web site, or stream of tweets can all also convey the same sort of Authority.

Another good example of ‘Publicity’ is Sponsorship.  Too many Sponsorship deals are just about ‘name recognition’ (typically in the FMCG sector) or in the worst case ‘vanity’ deals so that the Marketing Director gets VIP treatment at some prestigious event.  The best Sponsorship deals provide the company with the Authority in the segment. ‘Quiksilver Surfing Championship’ as well as ‘Champion’ and ‘Castrol’ racing car sponsorship convey a sense of Authority on the sponsor in those areas.

The issue with the ‘Publicity’ approach to business development is that it is basically  random and quite low probability.  As such it becomes very hard to measure and thus very hard to calculate how much to invest and what ROI to expect from that investment.  Every once in a while, getting yourself ‘out there’ will attract a customer who taps you on the shoulder interested in doing some work.  Every once in a very rare while, a publisher will approach a blogger and sign a book deal.  Yes, these instances get lots of press and bar talk, but so do lottery winners.  And in essence, that is exactly what this approach is for bigger ticket items that require business development…a lottery.

4. OUTBOUND (Low Relationship, Low Authority) – Outbound is the gritty, ditch-digging work of business development.  The boiler room.  The cold call.  Glen Garry Glen Ross stuff.  The lowest yield and typically the last resort.  But if all of the 3 other approaches have failed, it is the lifeboat to hammering out survival.  Given that the prospect has no connection to you nor any view of your authority over their problem.  This approach is where highly honed skills are critical.  Clumsy spam or dinner-interrupting phone calls will not go far.  The marketers two primary tools – segmentation and value proposition – need to be well refined to make this approach remotely successful.

A comment from Susanne:

My sincere thanks for Bruce taking the time to submit this post which highlights some interesting points to consider on how to best develop your business connections with your existing and prospective business clients.

In recent months, I have observed many people struggle with finding a balance between the soft and hard benefits of their ‘away from the desk’ activities. Bruce’s observations helps clarify four aspects to help you think strategically about what you do when it comes to business development. And, whilst all four are important, they definitely change on a regular basis in terms of their relevance of where you are at in your career and business.

Since some of these aspects are not understood by everyone, building relationships and authority in this way is not just customer-specific; it is important that those implementing any of these areas must be able to ensure they are relevant and benefit to the business internally as well. Be sure that you can justify and communicate the benefits of what you do to others so that, ultimately, everything you do is for the benefit of your business.

Further resources:

Susanne Dansey is the Managing Director of Purple Cow Ideas Management – an organisation that facilitates a paradigm shift in the collaborative nature of the ICT Industry. You can follow her on Twitter and join the conversation on Facebook.

 

 

 

 

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3 thoughts on “How to win customers (old and new).

  1. Pingback: Embracing Cold Calls | Leadership and Management / Turning Adversity to Advantage

  2. Pingback: Fresh Ideas | Andrew Munro's Blog

  3. As with all things, it would seem the best results are from a regular balanced approach encompassing elements of all four of the areas Bruce mentioned. The challenge is finding the balance, I know we often neglect Outbound in favour of Referral, for instance. Bruce and Susanne – a great read, thanks for sharing!

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