Sales, Account Execs & Business Developers

So what’s the difference? Well unless you’re in a billion dollar company – chances are there’s huge overlap. Most businesses don’t differentiate, and tend to use the titles interchangeably. The differences are not so much the roles, but in where business is found.

Sales is opportunistic. Selling skills involve being able to help people make a decision to purchase, and directing them to the most suitable purchase. Retailers are filled with sales people, addressing the opportunities which walk in the door. The derogatory term used is “order-takers”.

Account executives in their purest sense are managing existing clients – and mining those accounts for additional opportunity. Vertical account mining means getting the client to spend more, while horizontal mining is leveraging the position of incumbent provider to get business from elsewhere within the organization – usually other departments. Many companies I’ve worked with call this type of selling “farming”.

Business developers are the “hunters”. They are finding new, high potential opportunities. Much of what they do is building a relationship, so that when need arises the client will come to them. Most businesses will have a sales force where everyone fills some part of each of these roles. Most business developers are still expected to manage the accounts they land, rather than hand them off. And everyone is expected to be able to close opportunistic business (although it frequently goes to inside sales).

Almost every business owner or manager I’ve known has worried that their sales team tend to become “order takers”, when they want hunters. What they really need is the optimum mix of behaviour. Sales skills are crucial for both account executives and business developers. But opportunistic sales should be siphoned off to an inside sales role when this takes more than 30% of the person’s time.

The 30% rule holds fast for business development as well. Almost everyone is comfortable managing existing accounts – but most measure their success in account retention, rather than account growth. Even in this role, business development skills are required for account mining.

Almost all sales people will tell you that they hate cold-calling. I say “Tough”. You need to build your relationships to move beyond the need to talk to strangers. Saying you need to start there is like asking to be handed a million dollars seed money in order to start investing. You need to earn that right. And whether or not you enjoy it, or enjoy closing deals, these are required skills for all level of selling.

To be an effective farmer, you must know how to hunt those initial accounts, and how to keep them growing. To be an effective hunter, you must be able to leverage the learnings from existing customers – a depth of knowledge you usually only gain by farming.

The next time you are introduced to a salesperson or account exec or business developer, try to assess if they really have all of these skills. If they do, think about hiring them.

I know it sounds too good to be true, but it IS true. If you’re a service provider selling third-party products, you could qualify for thousands of dollars in free marketing. The secret is Co-marketing.

Co-marketing is when a supplier helps a dealer market their product by providing marketing dollars. I've been on both the giving and receiving end of co-marketing in the past. When I worked at Siemens, we had agreements with all our top dealers. Paying them to advertise our brand was an important part of our marketing strategy.

For example, let’s say a dealer specialized in Siemens fire prevention systems. It wasn’t uncommon for us to pay a portion of the dealer’s trade show fee if he openly promoted our products e.g. “Proudly offering Siemens products at our service booth.”

Don’t Call Us… We’ll Call You (How to Qualify)
Co-marketing is an incredible opportunity but there’re a few hurdles to get through first. Step one is understanding that the supplier will call YOU. And only if you qualify. The trick is to make your company eligible so you get the call.

I’ve worked with lots of clients who specialized in specific product lines but didn’t realize they could be eligible for co-marketing dollars. In these cases, we helped them review their existing marketing so they could meet the right sales targets to qualify. Whether or not a company qualifies, is always based on sales levels, and having a product supplier strategy to maximize your potential for co-marketing dollars is critical.

I recommend clients forget about splitting their spends and focus on a single product line. For example, a service provider can say “We have access to three product lines, but this is our main line and here’s why we recommend it…” Focusing on a single product line can generate better prices by the provider and the resultant co-marketing funds will let you take your marketing to the next level. Imagine entertaining clients at a hockey game in your own private box? Or a round of golf at an exclusive course?

If the idea of cutting down your product lines is scary, consider the huge brand benefit you’ll get by aligning with a major provider rather than looking like a jack of all trades.

You got the call, now what?
I make sure that my clients understand how important it is to work closely with their purchasing partners. When I was at Tyco, we always partnered up our marketing and purchasing to develop strong product supplier strategies. We also maximized the amount companies like Panasonic might pay us to co-market. This technique works well for small companies too, with the added benefit that they build credibility and look larger when aligned with a massive brand.

The bottom line is that co-marketing dollars provide smaller companies with incredible marketing opportunities, but it’s not easy to be considered. If you’re a service provider, it’s time to start thinking about how to qualify. Our newest client can’t believe that his marketing is happening for free, and Growth Path will make sure he qualifies for every penny he can get.

A Quick Response

After Kim’s last blog, I had a few clients ask about businesses that are operated based on ‘homerun clients.’ These are businesses that will land clients that make up the bulk of their business.

Similar to the formula in Kim’s blog, I recommend these business look at their three-year run rate and find the average. Then look at their pipeline for the first quarter or two and compare it to the previous year’s pipeline. If their pipeline is full – great, they can take on a bigger growth target. If it’s empty, they know they’re going to fall short the first quarter so to set an unrealistic target will simply put them behind the 8-ball from the get-go.

I know it’s a lot more work but these formulas are critical to understanding your business and your industry over the long term. If you have more questions or comments, feel free to email or simply drop me a line! - Kevin

As we near the end of January, you’ve probably set your sales goals for 2012 but how do you know if you’ve set realistic targets? Realistic goal setting is an area where most clients fall down. The issue is that setting extravagant sales targets erodes their value as a business planning tool, for budgeting and forecasting.

Last year we grew by 25%, this year we’ll grow by 40%!
After a good year, it’s human nature that sales managers will want to increase the revenue target.  And why not? Onwards and upwards, right? Wrong.

The catch: Oftentimes a single source of referrals or a one-time client can lead to large amount of business in a single year. Basing your sales targets on a single client or stream is risky. What happens if your client goes out of business or changes direction? Meanwhile your company has spent based on that number…yikes. That’s why it’s important to know your businesses baseline and grow from there.

Here’s the fail-safe formula Kevin uses with Growth Path clients:

1. Review all your business over the last two to three years
2. Delete any one-off projects, business that are downsizing or have shifted gears from your baseline and take an average of what’s left
3. Look at where your business came from over the last two to three years
4. Delete any one-time referrals or sources that have disappeared from your baseline and take an average of what’s left
5. Take a look at how quickly your sector is growing (e.g. 8% nation-wide)
6. List new accounts or sectors you’re targeting and the growth in those areas
7. Take your average baseline (step 2 and 4) and increase it by the average growth in your industry and your client’s industries. Add business you’ve already booked. That should be your new sales target.

This formula eliminates the guess work and provides a reality check for what’s really happening in your business and your industry.

Why shoot for less?
Successful organizations need realistic goals that people believe they can achieve. While it’s true that some sales people respond well to a big audacious goal, many will look at an unrealistic goal as representative of management’s disconnection with reality, and start job hunting.

Making the business case
Most sales staff can’t imagine presenting lower sales target to their managers but there is a way…

It’s important to show management what business or sources of business have disappeared and what’s not replicable. The next step is to immediately show how you’re rebuilding the pipeline in those areas where you’ve indentified steady growth. It’s about working hard to fill pipeline and managing your manager’s expectations.

The important thing to remember is this strategy is great for management.

Consider this: When sales people have realistic targets, management is able to budget and spend properly for the year. So forget about inflated targets. It’s easier to plan based on what we know is going to happen vs. what we dream might happen. This honest approach to planning will keep both managers and staff happy over the long run and that’s key to strategic growth.

Since Kim posted Too Much Too Fast, we’ve received a few questions about customer or client satisfaction surveys. For the record, I think customer satisfaction surveys are more effective when measuring satisfaction over time. For example, you survey at the beginning of a campaign and then at the end to see if you’ve moved the needle. They are not a good starting point for owner-managed businesses - maybe not for any business (although I recognize how some marketers may want a baseline to validate their changes). 

But when it comes to actually doing something about falling customer satisfaction, it’s easier for small businesses to keep in touch (and boost satisfaction) using the five tactics Kim wrote about. I prefer to measure customer retnetion - which is the goal, rather than customer satisfaction, which is merely a signpost. A 75% satisfied customer who receives the proper attention is likely to be a 100% retained customer. I hope this helps and keep your questions coming!