During a recent Ask Alan webinar, the owner of a B2B professional services company said she had a sales problem: she was finding it difficult to win new business. Revenues had been flat for a long time. What did I suggest?
I asked if she thought the issue was around converting prospects, not attracting enough new ones, or a bit of both. She said not attracting enough new prospects.
I explained that I call this a marketing rather than a sales issue. 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.
I keep all microphones on during these sessions, so anyone can chip in, and there was a chorus of agreement from around our virtual table, all of whom were B2B professional services businesses of one type or another. This was evidently a common issue.
Manufacturing businesses inherently understand the need to open many distribution channels to get to their target market, such as direct (e.g. website), indirect (e.g. retailers), 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 said 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?
The business coaching company Shirlaws, with whom I was involved for a number of years, arranged these concerns into five areas:
Trust: will this person treat my clients like I do?
Control: will they do anything to undermine my relationship with my clients?
Quality: what's the quality of the advice / service like?
Consistency: the person I've just met seems OK, but what about the rest of their team?
Time: will I be wasting my time building this relationship?
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.
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. Once again, my alma mater arranged the potential benefits into five areas:
Revenue: your client spends more with you as a result of their advice.
Loyalty: your client thinks more highly of you for making the introduction.
Referrals: what it says on the tin!
Knowledge: gaining a better understanding of your client.
Protection: keeps the client relationship in the loop.
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.
I hate having to throw cold water at moments like this, but I'm a believer in Radical Candour, so it had to be done: I said "this takes several meetings, usually over months, to work, so be patient. I suggest we revisit this on a regular basis over the months ahead, and see how you get on".
So if this is something that resonates for your business, give it a try, and let me know how you get on.
Better still, come along to one of my free Ask Alan webinars, and I'll guide you through the process.