146 - A Unified Theory of Business Development Strategy (2021)

A business is simply a system of value creation. It's like a machine that continues to kick out more and more value, at least it should. In expertise and applied knowledge work, driving value requires people, processes, tools, and applied effort. Your business development strategy will determine how much value you can drive and to whom. If you Google around enough, you'll see a lot of good and bad technical advice on generating more leads and sales for your firm. What's missing is a unified theory of business development that ties it all together. In this episode of the Surfdone Cell podcast, you'll get precisely zero tactical advice, go ahead and shut it off now if you want, but instead what I'll present is a total comprehensive framework for thinking about your entire business development program. One that works today and one that's flexible enough to grow, change, and adapt to your firm as it changes in size and complexity. So, to be clear, this episode will tell you how to think about your business development strategy, but not give you prescriptive advice on what to do. Let's get into it. Welcome to the Surfdone Cell podcast. I show about revenue strategies for creative firms, consultants, and independent experts because your expertise won't sell itself. I'm your host, Liston Witherl, and I'm on a mission to make 100 million people world class ethical communicators because the world needs more good people. Yes, even in business. If you like what you hear, go ahead and sign up for my email newsletter at surfdonecell.com and get my top 10 podcast episodes and articles right when you sign up. Now let's start first things first. What is business development? Well, I want to start with a quick definition because different people mean different things when they talk about it. I'm using business development to mean the sum of all strategies, tactics, and activities used to acquire new clients and expand existing ones. In lots of other settings, business development describes a sub-category of sales designed to create partnerships as marketing and sales channels. I am using the term "more broadly" here and in the same way it's used by agencies, professional services firms, and many consultants who are allergic to uttering the word "sales". Now, here's where business development often goes wrong. The problem with business development strategies is that they're too complicated and filled with scattershot unrelated tactics. My goal here isn't to make them simple, but rather to simplify. The complication stems from a lack of clarity and focus. Without clarity, you'll lose sight of an overarching goal and add rather than subtract from your strategy. Of course, your goal is to acquire more clients and become more profitable, but that's a goal of every business and naturally brings up the question of why anybody should buy from you instead of the countless market substitutes available to them. Delaying an answer to this question will lead to heaps and heaps of useless tactics, poor execution, and utter confusion for you, your team, and your clients. And another point to make. If you're attempting to compete on price, you can just stop here. Shut it off. You don't have to keep listening to this episode. There's lots of valuable advice I can give you in other episodes, but competing on price? While it's a viable business strategy, it is not one that I want to cover. Low pricing must be coupled with compromises on service or quality, and here I will advocate neither. If your goal is to achieve market leadership with premium pricing while remaining nimble, this article speaks directly to your acquisition strategy. This leads us to the final problem of mismatching. Your business development strategy must closely match the available strategic options inherent in your position. Tom Miller, friend of the show, and an actual friend, presented a model for how firms grow based on the nature and positioning of your firm. The three types of firms he's identified are these. Boutique Generalists, Crafty Horizontals, and Systematic Verticals. Boutique Generalists are firms that maximize opportunity and rely on word of mouth and referrals, typically within their own close networks or geography. These firms are not known for solving a specific problem or for working in a specific industry because their model is based on word of mouth referrals and traditional networking. Crafty Horizontals. These firms specialize in a problem but not necessarily in industry and rely on client results and public demonstrations of expertise to grow. Yours truly is a Crafty Horizontal. And for Crafty Horizontals, due to their problem focus but not industry focus, distribution of their insights can be a hard challenge to overcome. So dear listener, thank you for listening and helping me distribute my expertise. Finally, Systematic Verticals. These are firms that specialize in a particular industry vertical and target their marketing and expertise based on the needs and clients in that industry. That strength can also be a weakness because it places a constraint on their serviceable market and subjects them to their chosen industry's economic forces. If you'd like more background on Tom's client acquisition model, I urge you to read his excellent and free book it is linked in the show notes. Now it is time to look at the business development strategy stack. So I started this episode with the premise that your agency is simply a machine that creates value for your clients. That's it. At least, that's how my nerd brain thinks about everything. If you're not familiar with systems thinking, here's an introduction. A system is a series of interconnected parts that produce predictable outcomes. The implications of this way of thinking are paradigm shifting, but unfortunately, we don't quite have the language or tools to adequately describe it. All you need to know is that your business development strategy must be created in recognition of it being a system with constraints and interrelated components. That's it. While I advocate for better marketing and selling, these ideas miss the nuance of the strategy. That might nudge you to address symptoms rather than root causes. With that, I want to give you an overview of my Unified Theory of Business Development Strategy. If you want to see this as a picture, make sure you click through to the link in the show notes to the article on my website that has this full image so you can see it and see how all of the parts relate. But here are the main parts. Your positioning and point of view is the story and purpose of your business and how it's different from the glut of other options in the market. Then you have three components under there. Marketing, it's how you tell your story and how you'll generate leads, sales, for those few people who are interested in working with you, you'll help them make an informed decision about whether they should engage with you, and delivery to serve your client over the life cycle of the help they need from you, which may include subsequent repeat sales. Now I'll cover each component of your strategy separately. First we'll talk about positioning and point of view. The purpose of positioning and point of view is to provide a clear choice to the market and to act as a North Star for every business decision you make. I'll use marketing firms as a starting place to understand the positioning layer. Let's start with the obvious. Marketing is a broad topic. Within it, there are tons of specialty areas and none of them imply expertise in all aspects of marketing or even in more than one area. An agency may specialize in marketing strategy but not tactical execution. An agency may favor offline marketing or digital marketing but not both. And drilling down into just digital marketing, an SEO firm may have technical chops, but lack the ability to create and publish exceptional content that ranks in the first place. And the firm that creates exceptional content, they might be ineptive promoting or ranking it. It's a big world. And no matter how deeply you go into any line of service, you'll see that there are dozens if not hundreds of choices available in the market. Which begs the question, every perspective client is asking, why you? Your firm positioning strategy is the backbone to your entire business development plan. I'll give you two examples. Jonathan Stark is a solo practitioner. Shout out to Jonathan, another friend of the show and another actual friend. His core positioning strategy and point of view is expertly summarized in just four words. Hourly billing is nuts. This positioning strategy permeates every aspect of his business, telling him what to make, how to charge, never hourly of course, and what to build next. Now let's look at a firm. The firm's positioning touches every decision made about marketing, selling, and delivery. Yes, the firm has a variety of services typical of a marketing firm, but that doesn't help anyone pick gold front over other companies. So, the firm has a variety of services typical of a marketing firm, but that doesn't help anyone pick gold front over other companies. options. The story about category design is the starting point for every strategic question the business answers through marketing, into sales, and on to delivery. It's important to note here that your positioning and point of view works best if it stands for something and therefore excludes lots of some ones. Now the marketing process. The purpose of the marketing process is to express your positioning and point of view in a way that generates highly qualified leads. There are three components to your marketing process. Traffic, message, and channels. Traffic is required so people can be exposed to your positioning. The right amount of traffic and traffic from the right people is the stuff of whole book volumes. But you need a steady stream of people that is enough people to be exposed to your company and your core message to give your marketing a chance to work. Which brings us to your message. It needs to stop people in their tracks when they hear it. That's a tall order. The more you can gain and keep someone's attention, the more chance you have of landing a new client. This leads to related questions about which channels you use to deliver your message. Channels are for distribution and the right ones drive success. Choosing your channels wisely is a core question of your overall business development and marketing strategy. If you're attempting to solidify a thought leadership position, then you need to write, speak, and publish regularly. That's what I'm doing. On the other hand, you may attempt event marketing as a way to reach a small, tight-knit community and position yourself and your agency at the center of it. That's the marketing process, traffic, message, and channels. Now, let's turn to the sales process. The goal of your firm sales process is to help your prospects make an informed decision about whether to work with you. There's too much emphasis on conversion and close rates. When in reality, they're both lagging indicators of the quality of your marketing and overarching positioning decisions. Of course, there's plenty you can do to improve your sales program. I recommend you start with my SDS method as a primer. It's linked in the show notes below if you don't have any sales process to speak of. Your sales process has three main components. Talking to the right fit clients, the offer you make, and the sequence of steps you use. Your sales process starts with finding the right clients. It sounds incredibly obvious, but your ideal client isn't a "business owner" or "B2B" companies. That excludes almost no one. This again harkens back to your positioning and point of view because inherent in your positioning is a choice about who you should work with. Set a different way, you must filter out all of the bullshit, which is to say filter out all but the best prospects. Some of that has to do with the qualification questions you ask. Some of it has to do with call planning. Some of it has to do with good old fashion research before you speak to someone. And your offer is at the heart of your business. You can kind of think of it as the "fulcrum," the focal point of everything that you do before it and after it. Your offer should be a reflection of what your clients need your help with, your positioning, your marketing, how you'll deliver a solution that you're exceptional at, and how it'll help your clients. Which is why the path to improve your offer may be to improve your product, your marketing, or your overarching positioning. Your offer exists to reinforce it all and prompt your prospects to make an informed decision and heads up productizing your service can vastly improve the quality of your offer. And finally, your sales process itself exists to support your prospect's ability to make good decisions. Which is to say, the right prospect should sign contracts with you and the wrong ones should leave your sales process immediately. Without the process in place, you'll experience unnecessarily long and unpredictable cycles. Which doesn't always translate into fast cycles, which by the way is a highly subjective term, fast to me may not be fast to you, but it does mean the right process will make your sales process the right length. And your process should always include value-based selling and value-based pricing. Now let's turn to the delivery process. If you market well, people will be interested in hiring your firm. If you sell well, people will actually hire you. Now it's time to deliver on your promises. Delivery is a process that can do so much more than just hand over the goods. You've heard people say, quote, the best marketing is a good product. And to some degree, that's true. What it misses is the intention you can build into your service delivery. You can increase the value your clients get and the opportunities your delivery itself can provide for your business development program. There are three components to your delivery process. Product, service, and life cycle. The product you deliver is contagious, or at least it should be. It's contagious internally to a clients company because they'll look good until other people about how valuable your agency has been for them. And it's contagious outside your clients company because they'll tell their friends and colleagues about how great of a job you're doing. The mechanism and amount of value you deliver can be built right into the product and so can the shareability of it. When you hear people say, do great work, it discounts the planning you can put into your product to elevate the value you deliver and therefore increase the chances of word of mouth referrals. Now to your service. The quality, speed, and ease of using your service can inspire referrals too. This is so underrated. For some reason, most agencies are so focused on deliverables that they don't think enough about the customer experience. And yet, if you've ever hired a plumber, you probably rate them separately on metrics like speed and ease of working with them in addition to how well they completed the job. Your service, not just your deliverables, is a business development tool. Give people a great experience. Last up in delivery is life cycle. Your client life cycle tells the story of what someone needs to buy from you. This is tied directly to your positioning and point of view. For example, you may have a point of view on how companies in your market mature overall or how they mature in the particular aspect you solve. I have one here at Surve Don Cell that is both a point of view and a life cycle and a way that tells me how I can engage with you and tells you how you can engage with me. Here's the life cycle. You create a point of view and position that clearly differentiates your firm. You begin to tell that story to increase traffic through the right channels. You have a sales process designed to target the right people with the right offer and then you deliver a product and service that's contagious, elevating your client through the entire life cycle of their improvement, selling them more of what they need along the way. Of course, if I were more enterprising and had some more time, I could sell products aligned exactly with each of these life cycles. Like number one, how to position your firm and create a point of view. Number two, how to demonstrate your point of view through marketing and networking, how to tip to Philip Morgan consulting if you want to learn about that. Number three, how to build a sales platform that increases your price's efficiency and scale. I can help you with that. And number four, aligning product, service and life cycle delivery to organically feed your pipeline. Don't worry, I'm working on it, but you get the idea. Organizing your delivery of product and service into a larger story will help you feed your business development program while, and this is important, delivering compounded value to your clients. Now, before I wrap this episode up, there's something that I have to address. And that is helping you move beyond the funnel metaphor. I've avoided the funnel metaphor because it implies chronology. First, this happens then that happens than the other thing and how comes a new client? The idea is definitely useful. It's a model. But the reality of your business development process is much more convoluted and indirect. Most people will go to your website before reaching out, but not always. Most people find you through a channel you're intentionally optimizing, but not always. Most people will go through your standard sales process start to finish, but not always. Your business development program is ultimately a collection of small bets you place to grow your profitability. My friend Philip Morgan, who I mentioned a second ago, has written about small business bets and the upside of them. You get to adjust your bet as you receive feedback. So you can think of it more like a stock portfolio that you can adjust, de-risk, and reallocate over time. The sum of all of these little bets is each of the areas laid out in this episode and that's your business development program. Unfortunately, hard as you work on building a perfect funnel, your average lead will rarely cooperate perfectly with it. Instead, we know the components that drive business development, the right people are aware of your firm, they understand, they know they have a problem you can solve, so they learn if they should work with you, and then get increasing value over time when they do. That's the process. What I've attempted here is to tell you how it works together, so you can begin building a strategy that works for you. So here's where to begin with your new business strategy. Your new business strategy might feel like a beast, but it should be relatively simple. I mean, I've covered a lot here, but my approach to business development is less than two pages for a multi-million dollar company. And it moves sequentially through these five steps. The goals you want to accomplish, the strategy you'll use to achieve your goals, how you'll measure those goals, the tactics you'll use to drive those metrics, and then you can keep a monthly or weekly scorecard to see how close you get. Hat tip to Dave Gerhardt and DGMG marketing for some inspiration on this front. But whatever you do, get started and be intentional. And if you'd like help building a business development strategy at your firm, I would absolutely welcome a conversation you can head over to my website, hit that contact button and get in touch with me. That's it for this episode of the ServDoncelle podcast. I am your host, List in Witherl, founder and creator of ServDoncelle, and I hope you have a wonderful day.