great b2b marketers in 2022 – understand that business development is not all about new clients

If you search business development on the internet, you will find that most of the references and discussions are about client acquisition. Many textbooks and easy read business books also tend to focus on new client acquisition.

While new client acquisition is important for most businesses, it is not, or at least should not be, the primary focus of business development. The focus on new clients in B2B business development is akin to the focus on advertising in marketing more generally. It is narrow and not likely to maximise performance or profitability.

Consider these B2B statistics:

  • 78%of B2B marketers say that referral programs generate good or excellent leads.
  • 60%of marketers say that referral programs generate a high volume of leads.
  • 54%say that referral programs have a lower cost-per-lead than other channels.
  • 67%is the additional amount repeat business customers spend in months 31 – 36.
  • It costs 5 timesmore to acquire a new customer than retain an existing one.
  • On average, loyal customers are worth 10 times more than new customers.

While these statistics will vary from region to region, industry to industry and business to business, they demonstrate repeat business and referral potential. The potential of referral and repeat business, in turn, highlights the potential of focusing not on sales – but customer lifetime value. Initial sales are all about enquiry and conversion rates while maximising customer lifetime value involves also focusing on:

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  • The average sales per customer.
  • Repeat business rates.
  • Referral rates.

Focusing on customer lifetime value is the key to maximising profitability. Driving margins, the average sale, repeat business rates and referral rates are the:

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  • Customer experience.
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The product, customer experience, and value must meet or preferably exceed customer expectations to maximise customer lifetime value. The keys to meeting or exceeding customer expectations are:

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  •  

Relationships enable the business to get close enough to customers to understand their needs, tailor the offering to address those needs and reinforce to the customer the satisfaction of their needs. There also needs to be a willingness on the part of the business to be truly customer-focused and deliver outcomes that meet or, ideally, exceed customer expectations.

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Many B2B enterprises employ specialist business development managers. Very often, these specialist business development managers focus on just two aspects of the customer relationship:

  •  
  •  

More often, these business development managers are also focused on:

  •  
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Focusing on enquiry and conversion, projects and revenue are inconsistent with the requirement to establish relationships and maximise customer lifetime value. Maximising customer lifetime value requires a focus on:

  • All the drivers of customer lifetime value.
  • Customer – or relationships ahead of projects.

Focusing on lifetime value and relationships requires an account management approach to business development. Maximising customer lifetime value requires account managers to take responsibility for business development and broadening the definition of business development to encompass all stages in a potential relationship. Account managers will ideally:

  • Identify and convert the customer.
  • Develop an understanding of the customer that enables margin and average sales maximisation.
  • Ensuring delivery of a products and customer experience that will drive repeat business and referral.
  • Follow up and relationship development that provides feedback and enables customisation of the product and experience where possible.

Central to the account management approach to business development are:

  • Focusing on the customer.
  • Expertise
  • Responsibility

While many businesses talk about being customer-focused, few are. Most businesses operate in a manner that suits the business and rely on the intuition of management to determine what the customer will buy, how much they will buy, what they will pay, and the experience required. Being truly customer-focused involves:

  • Getting close enough to the client to see the world from their point of view.
  • Working with the customer to identify their needs and wants.
  • Co-creating the customer experience and perhaps even the product.

Moreover, being customer-focused involves enabling the customer to demonstrate the pathway to and work with you to deliver the maximum customer lifetime value.

This, in turn, requires a relationship managed by a person with the expertise required to understand the client and customise the experience and product to meet or exceed their expectations. Sales skills are rarely, if ever, enough if the customer lifetime value is to be maximised.

Even in environments in which flexibility is limited, the co-creation of the customer experience and indeed the product offering to exceed customer expectations is perhaps the most powerful tool in the arsenal of B2B marketers. Co-creation is all about working with the customer to customise the product and especially the customer experience, which in turn:

  • Aligns the delivery with expectations.
  • Fosters a relationship that maximises the customer’s lifetime value.

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It has surely been established that customer lifetime value is maximised only when a relationship/customer focus is in place that drives conversion rates, margins, average sales, repeat business, and referral rates. That being the case, it is concerning that while the majority of B2B businesses have a business development strategy, it:

  • Is rarely fully documented.
  • Rarely fully addresses all issues.

Is your business development strategy fully documented?

What is your strategy for maximising conversion rates, margins, the average sale per customer, repeat business rates and referral rates?

While most businesses understand that business development staff need a customer relationship system with relevant software, they rarely ensure these staff have a documented strategy and a clear view of their role in implementing that strategy. Research suggests that such a strategy should have two parts:

The overall business development strategy reflecting all critical issues.

Account manager sub-strategies to address individual differences.

The overall strategy needs to address:

  • Objectives
  • Markets
  • Branding
  • Lifetime value.
  • Training
  • Priorities
  • Budget

Individual account manager sub-strategies need to address:

  • Objectives
  • Markets and decision-makers.
  • Strategies and tactics.
  • Resources
  • Budget

The overall strategy might be developed by senior management, while the sub-strategies should be developed by the account managers and signed by senior management.

I have a model that readers can secure by emailing johnc@lincintegrated.com.

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The final issue to be addressed here relates to the use of social media in business development. Social media can be a powerful tool for business development if used appropriately. It is essential for business development or account managers to have:

  • A presence on key social media platforms, including Linked In and Facebook.
  • A high quality and customer-focused profile on each platform.
  • Links to and from social media pages to the business’s corporate page.
  • A solid base of connections with whom relationships can be developed.

Connections are important but need to be relevant. While most business development and account managers have a profile on Linked In and Facebook, few have an ideal profile. While links are often in place, most corporate pages are average at best.

It is, however, important to note that:

  • Connections on social media are NOT relationships.
  • Connections on social media rarely lead to business.
  • Posting on social media rarely leads to business.

Significant science demonstrates that social media connections are not enough to establish a relationship. Ask yourself – how many of your connections on Linked IN or Facebook could you call tomorrow and have a coffee with. If you cannot call them tomorrow and organise a coffee in short order – you do not have a relationship, and the likelihood of securing business from them is low. Posting is good, but only to raise your profile – building awareness – and engaging interested parties – to start a conversation.

In B2B business development, social media is most important as a tool for:

  • Identifying and understanding targets.
  • Securing and leveraging contact details.
  • Making calls easier through awareness.

It is essential that your social media presence is monitored with a view to:

  • Responding to approaches.
  • Engaging people who view your posts.
  • Better understanding who is who.

Social media has a vital role to play in business development – largely in terms of commencing the process of initiating the process of developing a relationship.

GREAT MARKETERS…

  • Great B2B marketers in 2022 prioritise customer lifetime value.
  • Great B2B marketers in 2022 prioritise relationships over projects.
  • Great B2B marketers in 2022 develop and implement a documented strategy.  

RECOMMENDED READING

ANOTHER INSIGHT

ACTION

  • In B2B business development – prioritise lifetime value over sales.
  • In B2B business development – prioritise relationships over projects.
  • In B2B business development – replace your BD manager with an account manager.
  • In B2B business development – replace business focus with customer focus?
  • In B2B business development – develop two levels of strategy – group and individual.

QUESTIONS

  • What is your B2B business development strategy for maximising conversion rates? Is it documented, and do all staff clearly understand its implications?
  • What is your B2B business development strategy for maximising margins? Is it documented, and do all staff clearly understand its implications?
  • What is your B2B business development strategy for maximising the average sale? Is it documented, and do all staff clearly understand its implications?
  • What is your B2B business development strategy for maximising repeat business rates? Is it documented, and do all staff clearly understand its implications?
  • What is your B2B business development strategy for maximising referral rates? Is it documented, and do all staff clearly understand its implications?
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