Business Development Strategy
Pipeline Mix
Selling to new customers is an expensive process and ties up your most expensive resources before it delivers any contracts or cash. As a CEO, I was soon to learn that an ambitious start up is in for a bumpy ride if it’s not developing predictable ways of finding sufficient good leads and then nurturing them to create sales-ready opportunities. Building and nurturing pipeline in this way, we can call a business development strategy.
It would have been in our fourth year that we’d reached a size and maturity where we were investing in hiring in expectation of accurate sales forecasting. If we did not bring in the new deals, we’d not be able to generate the cash to cover our overheads. We’d become reliant on a couple of important lead generation partnerships with well-known technology companies that we liked to co-sell with. After a good twelve months of closing business together, the leads began to slow, and I had to learn an urgent lesson in how to build reliable pipeline. Fortunately around this time a new Board member joined me and my other co-founders to help us progress and his background was selling to enterprises.
After our second board meeting together, Brian sat me down and said, “Richard, from what I’ve seen, I’m worried that you don’t have enough new leads. Where is your new business coming from? Tell me how you are doing your business development.” My answer was that we’d had plenty of new leads from our partners until earlier that year, that those referrals were now becoming quite rare, I added that we were still getting good word of mouth introductions from our own network, and we were still expanding in our existing accounts, but I shared his concern.
Brian stepped up to our whiteboard and started writing a list and talking as he did so.
“Richard, it’s just crazy to rely on partners for all your business. I think you should expect no more than 20 per cent of your leads to be direct introductions from partners. In my business, we aim for marketing to generate about one-fifth of our leads as inbound enquiries, and another fifth we try and get from events and trade shows. Another 20 per cent, but ideally more, should come from customer upselling, owned by your sellers. Twenty per cent must be coming from your targeted outbound business development calling activity, and the final fifth can come from those partnerships.”
“Richard, it makes much more sense to deliberately build the growth engines that yield new business leads. Don’t be over reliant on one lead source and haphazard about the rest of them.
“You need a business development plan that covers this stuff. The first thing you can fix, starting from tomorrow, is your expensive salespeople need to stop waiting for the phone to ring and be responsible for creating at least one fifth—ideally a quarter—of their leads. Yes, there are cheaper ways, and yes, they are busy with engagements and closing, but keeping deals flowing is their job.”
I snapped a photo of the whiteboard on my phone as Brian began to erase his list. “Richard,” he said, “What is your customer profile?”
At this point I felt growing confidence. I knew I could do better here. “We sell to telecoms and media companies that have field sales teams.”
He wrote that on the board then came straight back saying, “Which telecoms companies? Land line or mobile phone providers?”
I hesitated. “Err, both,” as he wrote that down. I thought he was right to ask, these businesses were pretty different from one another, and bucketing it all as “telecoms” hid important differences.
He said, “Okay, good. And what size of company are we talking about here, what’s the addressable spend you think you can get from them in their first year?”
“Brian, honestly I don’t have an answer to that, other than we sell to the big ones, with lots of budget.”
“You need to know…” he said with a smile, adding my words to the white board, “otherwise how will you know if all that business development is aimed in the right strike zone?
“Final thing. If you want to do all this cheaply, you need to start by looking for the places that your customers meet. Make it easy for yourselves. Where are your customers meeting online? What events do they go to? Where can you easily meet with your own networks? Where do your potential customers go for an expert opinion?
This final point took some time to sink in and it made a lot of sense. If we wanted to build connections with the right new businesses, we needed to think smartly about how to reach the maximum audience.
The whole discussion was an eye opener, and I began to contemplate the sorts of changes I would need to make to get the business on track. These were changes that would take time and focus to get right, but there was no time to lose.
Prospecting
How were we to find the people we needed to speak to? How were we to know when they needed something from us? We were a small company with limited resources and no access to decision makers.
Working through the problem that faced us, I drew the conclusion that we were many years off grabbing the attention of the Telecoms or Media Industries with our latest product releases. We just didn’t have the clout to interrupt in this way.
Reflecting on what had made us successful so far, I knew that when prospects were ready to have a conversation, within our tightly defined value add and niche, we had a good story to tell. It was all about as Brian said, knowing where our customers went to get an expert opinion.
We needed to build a community where we could influence prospects looking to adopt the changes that we understood and where our software would naturally support.
Thinking about how selling software has evolved from traditional field sales reps educating their executive audience on what lay ahead, to well informed buyers influenced by their team’s deep online analysis and socially sourced, trusted opinions.
So we had to turn our sales people into community influencers in our sectors, to encourage network connections and increase the probability that the teams of our prospective buyers would turn to us as they began their change journeys.
To do this well, every one of our team had to present themselves well. They needed the right LinkedIn profiles. A profile was an advert for the individual and not for the business. Our guidance was to use quality pictures and a narrative to convey expert status whilst not describing sales status or their role in our company. Profiles should think about what the potential expert buyer would respond well to and giving them a way of making contact by email, phone, or messenger.
Rather than use our community to tell people what we wanted them to know about our products, we trained our team to read posts in the community, provide thoughtful comments and suggestions, reshare other relevant and interesting posts and basically avoid sales pitches; and we provided suggestions for content to share, mainly from other topical authors, mixed with targeted, useful customer results and testimonials. These behaviours began to built trust, which inevitably led to more connection and engagement.
We also shared our own thought leadership regularly. We encouraged the team to post every day but only publish our own content once a week. This demonstrated not only that our people were part of a community with many points of view, but one where we could be the glue, providing expertise as well. This content required a concerted production plan from our marketing team, to produce everything from long form white papers, to shorter articles, infographics and videos with the focus always remaining on standing out through quality and originality.
As our experts engaged with their community the sent and received increasing numbers of connection requests, which upon acceptance propagated our content to a wider community as well.
We ran events on LinkedIn and attracted people with shared interest to attend, and we could join events filled with attendees in our niche. We were able to build rapport and our communities at a fraction of the cost of attending traditional events.
Running summits and webinars were a good way to build community. They built our network at close to zero cost. We’d build the speaker schedule with our partners and have them co-market the event they were speaking at. This led to a lot of new connections in our community. It also increased our marketing database because we’d gain access to email lists from our partner and bring them into our marketing activity. We’d invite customers to speak at our online summits and use them to build our community and database too.
Email Marketing
We didn’t always know when someone would be ready to buy, but we knew that keeping us front of mind helped when the day came that they wanted to learn more. So we began to build a high-quality contact database that supported our social network.
Piecing together tools such as Sales Navigator for LinkedIn and various email address export apps alongside side it, our contact database which started small in the beginning, began to grow to match our team’s online community development.
Our email database allowed us to market effectively to our prospects once we had made a connection to them.
Email marketing was efficient for us, because it really cost us nothing to run campaigns to our database and messages could be directed exactly at the companies we wished to communicate with. We were using emails foremost as a nurture tool, for gaining initial interest at the ‘top of the funnel’ always sharing information and insight ahead of pitching our own products much later in the sales cycle. We led with customer success stories, filled with their outcomes in case studies that validated why we were a crucial asset
Our emails were usually sent out in sequences that lasted up to three days, with different emails that expanded on our story theme. At the end of that, we knew the effectiveness of that email sequence with that customer based on the engagement statistics.
Here’s an example of the automated steps the prospect could take on their own that would build up a lead score and start a conversation:
1. Download an ebook with a call to action to watch a webinar.
2. Watch the webinar that coached them on doing the online ROI analysis.
3. Complete the ROI analysis, which prompted a live call with one of our business development salespeople, who reviewed the results with the customer.
Our aim was to automate the earlier stages of this engagement process so that nurture was efficient and repeatable.
Partnering
For CloudSense in the early days, partnership changed the trajectory of our business. When a big partner brought leads to our small company, it offered an amazing way of accessing customers. We were able to sell to much bigger opportunities with bigger budgets because our partnership gave us extra credibility. We’d never have made it through the door on our own but once we did and were on the supplier roster we could begin a “land-and-expand” journey, where we only contracted the once, and then expanded with more orders but fewer ongoing sales expenses.
But how did we do this?
Getting noticed and making the partnership happen in the first place was the biggest challenge. Our biggest partner was one of the largest CRM enterprise software companies. We designed certain features in our own software to really add value to this partner’s core features, without competing, and then we focused deliberately on first selling to smaller, less strategic customers of theirs ourselves. From there we took the success stories into some of their biggest accounts, sometimes by contacting their salespeople on the ground. We only needed a couple of good case studies to open many doors with our offering. We were not the first software business to create leverage through a larger partner in this way, just search up Microsoft with IBM, or Adobe with Apple.
Initial customer case studies created traction with the partner, and then co-selling with that partner had its own positive impact with new prospects. Being validated by a bigger supplier gave us more credentials and built more trust with the prospect, and that helped them feel better about buying from a smaller provider. They saw our CRM partner like our insurance policy when we were just starting out.
As our product partnerships matured, they inevitably reached a size where what you might call ‘creative tension’ entered the room. Our CRM partner for example continued to expand their own strategic ambitions into some of areas our software naturally inhabited. This dance, to expand and remain a good partner, took us ever deeper into industry-specific features where a broader multi-sector platform would never focus. But this focused specification, made us desirable and a perfectly ‘sticky’ solution that our customers would continue to renew year after year.
Business Development Representatives
I made the mistake of thinking that Business Development, i.e. finding prospects, is best done using a sales team. So, with my own selling going well, the next step I took was hiring another salesperson to help. But when they joined and took a half share of my pipeline there were not enough deals to cover the increased payroll cost. Worse, I soon found out that having an expensive seller to do those first calls to qualify interest, was a poor skills match. I eventually figured out that most salespeople do best when served with a steady supply of willing first meetings, after interest has been established; good selling skills isn’t the same as persistent dialling, pitching and qualifying.
I began watching what the more established companies did, and started to copy. We hired a business development representative (BDR) to cultivate new early-stage business, at a fraction of the cost of an experienced seller. My BDR ran the outbound marketing activity and became the glue between that work and the qualified Sales opportunities where I spent my time.
Without the experience to properly advance sales opportunities, BDRs with some energy and training could repeatedly engage a list of prospects and find leads. BDRs were a cost-efficient and quite easy scaling route to tapping into our target accounts.
Over time we hired a team of BDRs, who worked in healthy competition with one another. They’d be researching and building our database, our online community, helping enrich partnership activity as well as doing meeting bookings, qualifying prospects and handing off qualified opportunities to sellers.
In short, they came to play a vital role in the business, glueing together lots of our outbound marketing.
Running a BDR team
Being a BDR is an intense front-line job, a learning experience, with tough short-term targets, the role has high staff turnover, with people moving up and taking ever more responsibility as they head through to sales or leaving because it not for them. So, we needed an ongoing and constant pipeline of BDR candidates. Staying ahead on hiring was important because BDRs kept salespeople busy.
We were fortunate to find a good BDR manager called Joe, and here’s how he once explained hiring to me:
“Good recruits will have some experience in recruitment or other call-based jobs, but not be an experienced BDR. If the applicant is an experienced BDR, that’s usually a sign that they didn’t progress elsewhere, because it’s a starter role. Most importantly, determine the recruit’s phone skills. These include active listening, interacting, building rapport, and understanding the thread of a fast-moving discussion. If a new recruit realises they aren’t making it as a BDR, they usually leave, bur be ready to let them go if they aren’t doing a good job.. That’s why it’s good to give them monthly progress assessments. Put a big focus on KPI and performance-led progression—that is, once you achieve KPI ‘X’ in terms of leads handed to sales, you get ‘Y’ reward. This soon sorts out those who will be moving up onto higher pay and bonuses from those who will be leaving.
“We always gave our BDRs a planned calendar with a tight, spoon-fed schedule. It specified at this time you do research, at this time you do calls. This is your standard allocation of accounts and calls to make a day. They need to know what they are doing at any one time, as they are relatively inexperienced. By giving structure, you do two things: you help them succeed, and you can measure and drive performance.”
Joe took some advice from a consultant on the best way to drive BDR behaviour, and this resulted in a new pay plan. BDRs who have a clear pathway to ever more and greater incentives are most effective and motivated. We used systems like increases to base pay and bonus per centages as they brought more well-qualified leads into the funnel. Their progress to improving pay was a stairway stepped with cumulative performance hurdles matched with increases to base pay and potential size of bonus.
Sales Handover
Eventually, all the work that BDRs do results in the handover of qualified leads to sales. This was the hardest part of all. BDRs wanted to quickly hand over prospects to sales so they got paid, whilst the people in sales didn’t want early-stage deals for which they would be held accountable if they fell apart. This created a friction.
So, our business needed to be very clear on the handover. Our exit gate criteria were written down and well understood so handovers happened in clear conditions, and there wasn’t double ownership from BDR and sales at the same time.
We ran a regular handover meeting between business development and sales. We made handover clear within established ground rules that kept the pipeline to a high quality. Salespeople interested in getting quality opportunities realised they had to take a bit of ownership and mentor the more junior BDRs and buddied with them. Over time, salespeople started to find ways to make the BDR feel like part of the sales team and invest in them to get the best out of them. In turn, this instilled a team-oriented culture of helping out.
Final Thoughts:
In this note, I discuss the critical importance of developing a diversified business development strategy to ensure a consistent and reliable pipeline of new leads and opportunities.
Key Takeaways:
Diversify Lead Sources: Avoid over-reliance on a single source, such as partner referrals. Aim to distribute lead generation across multiple channels, including marketing, events, customer upselling, outbound activities, and partnerships.
Empower Sales Teams: Encourage salespeople to proactively generate a significant portion of their leads, fostering ownership and reducing dependence on external sources.
Define Ideal Customer Profiles: Clearly specify target customer characteristics, such as industry segment, company size, and potential spend, to focus business development efforts effectively.
Leverage Customer Congregation Points: Identify and engage with venues, events, or platforms where target customers gather to maximize outreach efficiency.
Implement a Comprehensive Business Development Plan: Establish a structured approach that encompasses various lead generation strategies, ensuring sustainable growth and resilience against market fluctuations.
By adopting a multifaceted business development strategy, startups can build a robust and predictable pipeline, mitigating risks associated with dependency on limited lead sources and positioning themselves for sustained success.