During one of my recent webinars, the owner of a B2B professional services company said she had a sales challenge: she was finding it difficult to win new business. Revenues had been flat for a long time. What did I suggest?
She said the issue was attracting enough new prospects.
I explained that I call this a marketing rather than a sales challenge. My definition of 'marketing' in the B2B space is all activities that attract prospects to having a conversation, and 'sales' is converting them into paying clients.
She went on to say that she and her team had worked hard on activities such as social media, advertising, putting on events, PR, and asking their existing clients for referrals. They had also tried networking with non-competing professional services companies, and although there were often warm words, no referrals were ever forthcoming.
There was a chorus of agreement from around our virtual table — this was evidently a common problem.
Manufacturing businesses inherently understand the need to open distribution channels to get to their target market, such as direct (e.g. website), indirect (e.g. retailers, importers in other countries), whereas professional services companies often do not, or if they do, they believe it isn't possible.
So I asked the participants to imagine that we were on the board of a breakfast cereal startup; we had a fantastic new product that was fast becoming popular with our online community; if only we could get it out to a wider audience. What could we do to get it stocked by one or more of the major retailers?
They chimed in with lots of suggestions:
"we have to get them to taste it"
"they'll need to make enough margin"
"they'll need to visit the factory"
"we'll have to show them we can be trusted on food safety"
"they'll probably want to run a small pilot at one of their smaller stores"
"they'll want to know how much we're going to spend on promoting it".
I asked "can you see what's in common about these points?" After a while they realised these were mostly concerns that needed to be overcome.
I explained this is no different from the concerns a potential referrer feels when you approach them — think about how you feel when someone approaches you. No matter how impressive they seem, how likely are you to refer them to your best client?
Would you feel comfortable that they would give them an excellent service? That they won’t undermine your relationship with them? That you can trust them, and the rest of their team you haven’t met, to treat your best client well?
In the same way that a buyer at a major retailer has concerns that must be overcome in order for them to stock the product, it's vital to overcome similar concerns of a potential referrer. Only when they have been overcome, will the referrals flow.
This takes time. In my experience, months of gradually building up trust.
How about the other side of the equation, in other words the benefits for the referrer? In the breakfast cereal scenario, the answer's obvious: sales and profits for the manufacturer and the retailer.
However in the B2B professional services world, the answer isn't so obvious. It could mean that your client feels grateful to you for making the introduction, or that they spend more money with you as a result of the referred supplier’s advice. Another benefit could be that you gain a better understanding of your client and you have a stronger connection to them.
As I finished explaining this, there was excitement around our virtual table; several business owners, including the person who had asked the question, said they wanted to try this approach out ASAP and see what happens.
If you would like to have a conversation about changing your company, I'd love to hear from you. Just fill in your details on the Contact page and we'll arrange to speak.