Business Development Strategy: A High-Growth Approach
Your business development strategy can be key to the success or failure of your firm. In this post, we’ll explore how to create a strategy and associated plan that can propel an individual, a practice or an entire firm to new levels of growth and profitability.
Business Development Defined
Business development (BD) is the process that is used to identify, nurture and acquire new clients and business opportunities to drive growth and profitability. A business development strategy is a document that describes the strategy you will use to accomplish that goal.
The scope of business development can be wide-ranging and vary a lot from organization to organization. Consider the model of how professional services organizations get new business shown in Figure 1.
Figure 1. 3 stages of the marketing funnel
The first two stages of the model, Attracting Prospects and Build Engagement, are traditional marketing functions. The final stage, Turning Opportunities into Clients, is a traditional sales function. In the traditional role, business development would be looking for new channels of distribution or marketing partners.
But roles are changing and naming conventions evolve. In today’s world many firms refer to the entire marketing and sales process as business development. I know, it can be confusing. So let’s sort it out a bit.
Business Development vs. Marketing
Marketing is the process of determining which products and services you will offer to which target audiences, at what price. It also addresses how you will position and promote your firm and it’s offerings in the competitive marketplace. The result of all this activity should be an increasing awareness of your firm among your target audience — and a stronger flow of qualified leads and opportunities.
Historically, business development has been a subset of the marketing function that was focused on acquiring new marketing or distribution relationships and channels. While this role still exists in many companies, the business development title has become interchangeable with many marketing and sales functions.
Business Development vs. Sales
Sales is the task of converting leads or opportunities into new clients. Business development is a broader term that encompasses many activities beyond the sales function. And while there is some overlap, most traditional BD roles are only lightly involved in closing new clients.
Business development is often confused with sales. This is not too surprising because many people who are clearly in sales have taken to using the title of Business Developer. Presumably this is done because the organization believes that the BD designation avoids some possible stigma associated with sales.
Nowhere is this practice more prevalent than in professional services. Accountants, lawyers and strategy consultants do not want to be seen as “pushy sales people.” This titular bias is firmly rooted despite the fact that developing new business is an important role of most senior members of professional services firms.
Since so many clients want to meet and get to know the professionals they will be working with, the Seller-doer role is well established in many firms. The preference for Seller-doers also tends to discourage firms from fielding a full-time sales force.
As an alternative approach to leveraging fee-earners’ time, some firms have one or more Business Developers on staff. In the professional services context, these folks are often involved in lead generation and qualification, as well as supporting the Seller-doers in their efforts to close new clients. In other organizational contexts, this role might be thought of as a sales support role.
The result of this confusing picture is that many professional services firms call sales “business development” and make it part of every senior professional’s role. They may also include some marketing functions, such as lead generation and lead nurturing, into the professional’s BD responsibilities.
It is this expanded role, where business development encompasses the full range of lead generation, nurturing and sales tasks, which we will concentrate on in this post.
Strategic Business Development
Not all business development is of equal impact. In fact a lot of the activities of many professionals are very opportunistic and tactical in nature.This is especially true with many seller-doers.
Caught between the pressures of client work and an urgent need for new business they cast about for something quick and easy that will produce short term results. Of course this is no real strategy at all.
Strategic business development is the alignment of business development processes and procedures with your firm’s strategic business goals. The role of strategic business development is to acquire ideal clients for your highest priority services using brand promises that you can deliver upon.
Deciding which targets to pursue and strategies to employ to develop new business is actually a high stakes decision. A good strategy, well implemented, can drive high levels of growth and profitability. A faulty strategy can stymie growth and frustrate valuable talent.
Yet many firms falter at this critical step. They rely on habit, anecdotes and fads — or worse still, “this is how we have always done it.” In a later section we’ll cover how to develop your strategic business development plan. But first we’ll cover some of the strategies that may go into that plan.
Top Business Development Strategies
Let’s look at some of the most common business development strategies and how they stack up with today’s buyers.
Networking is probably the most universally used business development strategy. It’s built on the theory that professional services buying decisions are rooted in relationships, and the best way to develop new relationships is through face-to-face networking.
It certainly is true that many relationships do develop in that way. And if you are networking with your target audience, you can develop new business. But there are limitations. Today’s buyers are very time pressured, and networking is time consuming. It can be very expensive, if you consider travel and time away from the office.
Newer digital networking techniques can help on the cost and time front. But even social media requires an investment of time and attention.
The close relative of networking, referrals are often seen as the mechanism that turns networking and client satisfaction into new business. You establish a relationship, and that person refers new business to you. Satisfied clients do the same.
Clearly, referrals do happen, and many firms get most or all of their business from them. But referrals are passive. They rely on your clients and contacts to identify good prospects for your services and make a referral at the right time.
The problem is referral sources often do not know the full range of how you can help a client. So many referrals are poorly matched to your capabilities. Other well-matched referrals go unmade because your referral source fails to recognize a great prospect when they see one. Finally, many prospects that might be good clients rule out your firm before even talking with you. One recent study puts the number at over 50%.
Importantly, there are new digital strategies that can accelerate referrals. Making your specific expertise more visible is the key. This allows people to make better referrals and increases your referral base beyond clients and a few business contacts.
- Sponsorships and Advertising
Can you develop new business directly by sponsoring events and advertising? It would solve a lot of problems if it works. No more trying to get time from fully utilized billable professionals.
Unfortunately, the results on this front are not very encouraging. Studies have shown that traditional advertising is actually associated with slower growth. Only when advertising is combined with other techniques, such as speaking at an event, do these techniques bear fruit.
The most promising advertising strategy seems to be well-targeted digital advertising. This allows firms to get their messages and offers in front of the right people at a lower cost.
- Outbound Telephone and Mail
Professional services firms have been using phone calls and mail to directly target potential clients for decades. Target the right firms and roles with a relevant message and you would expect to find new opportunities that can be developed into clients.
There are a couple of key challenges with these strategies. First they are relatively expensive, so they need to be just right to be effective. Second, if you don’t catch the prospect at the right time, your offer may have no appeal relevance — and consequently, no impact on business development.
The key is to have a very appealing offer delivered to a very qualified and responsive list. It’s not easy to get this combination right.
- Thought Leadership and Content Marketing
Here, the strategy is to make your expertise visible to potential buyers and referral sources. This is accomplished through writing, speaking or publishing content that demonstrates your expertise and how it can be applied to solve client problems.
Books, articles and speaking engagements have long been staples of professional services business development strategy. Many high visibility experts have built their practices and firms upon this strategy. It often takes a good part of a career to execute this approach.
But changing times and technology have reshaped this strategy. With the onset of digital communication it is now easier and much faster to establish your expertise with a target market. Search engines have leveled the playing field so that relatively unknown individuals and firms can become known even outside their physical region. Webinars have democratized public speaking, and blogs and websites give every firm a 24/7 presence. Add in video and social media and the budding expert can access a vastly expanded marketplace.
But these developments also open firms to much greater competition as well. You may find yourself competing with specialists whom you were never aware of. The impact is to raise the stakes on your business development strategy.
- Combined Strategies
It is common to combine different business development strategies. For example, networking and referrals are frequently used together. And on one level, a combined strategy makes perfect sense. The strength of one strategy can shore up the weakness of another.
But there is a hidden danger. For a strategy to perform at its peak, it must be fully implemented. There is a danger that by attempting to execute too many different strategies you will never completely implement any of them.
Good intentions, no matter how ambitious, are of little real business development value. Under-investment, lack of follow through and inconsistent effort are the bane of effective business development.
It is far more effective to fully implement a simple strategy than to dabble in a complex one. Fewer elements, competently implemented, produce better results.
Next, we turn our attention to the tactics used to implement a high-level strategy. But first there is a bit of confusion to clear up.
Business Development Strategy Vs. Tactics
The line between strategy and tactics is not always clear. For example, you can think of networking as an overall business development strategy or as a tactic to enhance the impact of a thought leadership strategy. Confusing to be sure.
From our perspective, the distinction is around focus and intent. If networking is your business development strategy all your focus should be on making the networking more effective and efficient. You will select tactics that are aimed at making networking more powerful or easier. You may try out another marketing technique and drop it if it does not help you implement your networking strategy.
On the other hand, if networking is simply one of many tactics, your decision to use it will depend on whether it supports your larger strategy. Tactics and techniques can be tested and easily changed. Strategy, on the other hand, is a considered choice and does not change from day to day or week to week.
10 Most Effective Business Development Tactics
Which business development tactics are most effective? To find out, we recently conducted a study that looked at over 1000 professional services firms. The research identified those firms that were growing at greater than a 20% compound annual growth rate over a three-year period.
These High Growth firms were compared to firms in the same industry that did not grow over the same time period. We then examined which business development tactics were employed by each group and which provided the most impact.
The result is a list of the ten most impactful tactics employed by the High Growth firms:
- Providing assessments and/or consultations
- Speaking on podcasts. radio, or other audio formats
- Digital ads
- Video blogging
- Marketing video
- Public relations (earned media)
- Networking at targeted conferences/events
- Keyword research/search engine optimization
- Networking on social media
- Nurturing prospects through phone calls
There are a couple of key observations about these growth tactics. First, these techniques can be employed in service of different business development strategies. For example number five on the list, speaking at targeted conferences or events, can easily support a networking or a thought leadership strategy.
The other observation is that the top tactics include a mix of both digital and traditional techniques. As we will see when we develop your plan, having a healthy mix of digital and traditional techniques tends to increase the impact of your strategy.
How to Create Your Strategic Business Development Plan
A Business Development Plan is a document that outlines how you implement your business development strategy. It can be a plan for an individual, a practice or the firm as a whole. Its scope covers both the marketing and sales functions, as they are so intertwined in most professional services firms.
Here are the key steps to develop and document your plan.
- Define your target audience
Who are you trying to attract as new clients? Focus on your “best-fit” clients, not all possible prospects. It is most effective to focus on a narrow target audience. But don’t go so narrow that you can’t achieve your business goals.
- Research their issues, buying behavior and your competitors
The more you know about your target audience the better equipped you will be to attract their attention and communicate how you can help them. What are their key business issues? Is your expertise relevant to those issues? Where do they look for advice and inspiration? What is the competitive environment like? How do you stack up?
- Identify your competitive advantage
What makes you different? Why is that better for your target client? Are you the most cost-effective alternative, or the industry’s leading expert? This “positioning” as it is often called, needs to be true, provable and relevant to the prospect at the time they are choosing which firm to work with. Be sure to document this positioning, as you will use it over and over again as you develop your messages and marketing tools.
- Choose your overall business development strategy
Pick the broad strategy or strategies to reach, engage and convert your prospects. You can start with the list of top strategies provided above. Which strategy fits with the needs and preferences of your target audiences? Which ones best convey your competitive advantage? For example, if you are competing because you have superior industry expertise, a thought leadership/content marketing strategy will likely serve you well.
- Choose your business development tactics
A great place to start is the list of the most effective tactics we provided above. Make sure that each technique you select fits your target audience and strategy. Remember, it’s not about your personal preferences or familiarity with a tactic. It’s about what works with the audience.
Also, you will need to balance your choices in two important ways: First, you will need tactics that address each stage of the business development pipeline shown in Figure 1. Some techniques work great for gaining visibility but do not address longer-term nurturing. You need to cover the full funnel.
Second, you need a good balance between digital and traditional techniques (Figure 2). Your research should inform this choice. Be careful about assumptions. Just because you don’t use social media doesn’t mean that a portion of your prospects don’t use it to check you out.
Figure 2. Online and offline marketing techniques
When, how often, which conferences, what topics? Now is the time to settle on the details that turn a broad strategy into a specific plan. Many plans include a content or marketing calendar that lays out the specifics, week by week. If that is too much detail for you, at least document what you will be doing and how often. You will need these details to monitor the implementation of your plan.
- Specify how you will monitor implementation and impact
Often overlooked, these important considerations often spell the difference between success and failure. Unimplemented strategies don’t work. Keep track of what you do, and when. This will both motivate action and provide a great starting place as you troubleshoot your strategy. Also monitor and record the impacts you see. The most obvious affect will be how much new business you closed. But you should also monitor new leads or new contacts, at the bare minimum. Finally, don’t neglect important process outcomes such as referrals, new names added to your list and downloads of content that expose prospects and referral sources to your expertise.
If you follow these steps you will end up with a documented business development strategy and a concrete plan to implement and optimize it.
Source: LEE FREDERIKSEN, PH.D. Who wears the boots in our office? That would be Lee, our managing partner, who suits up in a pair of cowboy boots every day and drives strategy and research for our clients. With a Ph.D. in behavioral psychology, Lee is a former researcher and tenured professor at Virginia Tech, where he became a national authority on organizational behavior management and marketing. He left academia to start up and run three high-growth companies, including an $80 million runaway success story.