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Having an effective business development process is very important to grow your organization. In this episode of Better Business Podcast, Randy Tucker shares insights on how you can actually streamline much of that business development process to grow your business much faster and more effectively.
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3 Main Challenges In A Business Development Process
Interviewer: So Randy, before we get into some of the specifics, can you share what parts of the business development process you typically see as inefficient in the businesses that you work with?
Randy: Well John, with every business, it’s a little different. But the main three that we see is;
- New lead generation,
- The call tracking that gives you the KPI’s i.e. the key performance indicators and feedback, and finally
- The quote preparation; the time that takes and the tracking of the follow-up to make sure that you didn’t just throw a quote out there and then kind of let it vaporize.
So, the three areas are new lead generation, the tracking of all those calls, and quotation preparation.
Streamline The New Lead Generation Part Of Business
Interviewer: Let’s dive in a little bit more into the lead generation side of things.
- What parts of the lead generation process seem to not be streamlined in a business, in a typical business that you encounter? and
- What do you do to actually help them streamline the lead generation part?
Randy: Well, it’s really more of a function, not necessarily a streamlining, but defining and making it a daily habit, creating the habit within the organization.
You know, let me give you an example.
- You’ve got an account manager who’s calling existing customers, speaking with them, trying to up-sell, etc.
- One of the things that I usually recommend to our clients is, when you’ve got an account manager that closes a new sale to an existing client, that account manager should have five to ten new lead generation calls.
- That is to fill that pipeline to get new customers into the pipeline. Measuring that is sometimes difficult.
Sometimes companies don’t have the measuring tools to measure, are they doing their five to ten? And
- Then there’s that third piece that you’ve got to get the account manager comfortable with and used to do it, because many account managers, especially the ones that have been around and they’re seasoned, they don’t think that they should be generating, or calling, new leads trying to fill the pipeline.
- They expect a telemarketing crew to do that. That’s just not reality in today’s world any longer.
Make The Quoting And Proposal Process Efficient
Interviewer: So, once they have those leads coming in and they’re working in their metrics, what’s the next step?
You mentioned the quoting and proposal process.
- Isn’t it pretty easy for a business to just, you know, generate an estimate and send out the proposal, or is there something that the audience may be missing in their business?
- How does the proposal process end up being inefficient, and what do you do to help that?
Randy: Well, one of the things that we see a lot is everybody, especially on the management team, assumes a proposal is a, you know, wham-bam, it’s done. Well, that’s just not the case.
- A quality proposal fully thought through with all the information in it can take 30 minutes to an hour to prepare in even the simplest of cases.
- We find that a lot of organizations use word documents, and they’ll copy and paste and pull documents together, etc.
- Again, very inefficient, and after it goes out to that new prospect or customer, it’s difficult to track and find.
We have a number of systems to generate proposals from pre-made templates. Let’s think about it.
- Ninety percent of the work you do is the same work you do on every proposal.
- It’s that extra 10% that really requires your thought and quality time.
- So, we have systems, one of them is called QuoteWerks and another one is called JobFLEX for the construction industry.
- You know, those things take time to prepare, especially in the construction industry.
- You know, there are variations on every template, or on every proposal.
- But by having starting templates, it saves a lot of time.
So again, having a good quotation or proposal generation system that’s meant for generating proposals is a tremendous asset to any business.
Have A Follow-Up Process In Place
Interviewer: Let’s dive into the follow-up process. So, once you’ve generated a lead and you’ve sent a proposal to that lead after speaking with them, what are some things that a listener may not be doing as effective as they could be during that follow-up and the tracking process to take that from a proposal that’s sent to a closed deal?
Randy: Well, I can’t tell you how many times I’ve heard account managers say, well I sent the quote ABC Customer, but the piece you don’t hear them say next is, and I scheduled a phone call so that I made sure that customer got that proposal.
One of the things that we put in to most environments and most companies we deal with is,
- If you send out a proposal or a quotation, the system will automatically generate a one-day callback that you’re going to check with that client the next day to make sure they got the proposal.
- How many times have you sent an email and you’ve said to somebody, oh, you didn’t get my email?
Well, if they don’t get your proposals, no business.
Start With Optimizing The Weakest Areas Of Your Business
Interviewer: So, between these three things of lead generation, proposal, and follow-up,
- How should the listener go about actually prioritizing which of these to focus on optimizing and streamlining first?
- How do they determine where the holes are in their business?
Randy: A number of different ways, of course.
- If you are a business that you have a lot of leads coming in and you just don’t really need to spend much time generating new leads, which is an ideal situation, not a lot of business like that. The bottom line is, traditionally, you’ll start at the new lead generation process.
- If you’ve got a lot of leads coming in, you don’t have to focus on that, then the next area to take a look at is that quote preparation. Do you have a system in place that can generate a quote?
And the rule of thumb that I use is it should take no more than a minute per $100 of quote.
- So, if you’ve got a $1,000 quote that you’re putting out, it should take you no longer than 10 minutes from absolute start to absolute end in the customer’s hands, or at least in their email.
So, again, it depends on where your weak areas are, where you perceive the weak areas to be. I got to tell you, in our client base, I would say at least 80% are, well, if the new clients come in and they want to talk about new lead generation, we work with them to generate a process to improve that new lead generation with their existing tools, usually, if we can.
Interviewer: I think that’s a really good rule of thumb, and we always appreciate trying to kind of share really specific action items with the listener, so I want to repeat what you said, that:
- If it takes more than one minute for every $100 of revenue in that proposal, then something can be done more efficiently.
So, I think that’s really helpful.
Use Performance Metrics For An Efficient Business Development Process
Interviewer: To kind of bring it home and to summarize, for a business that’s starting out now or is relatively new or doesn’t necessarily have really, really detailed processes and systems and infrastructure in place, and they’re starting from a somewhat clean slate,
- What are some of the key things that you would recommend they have in place so that they’re in a good spot with their business development being efficient?
- If you had a clean slate business to work with, what’s some of the key things that you would recommend they put in place today?
- The first thing they need to put in place is some performance indicators, some metrics. That’s really important.
- It doesn’t cost you anything in hardware or in software – it takes time.
- You need some metrics in place.
And I will usually sit down with a business owner or a management team leader and say, okay,
- If you want to generate X thousands or millions of dollars in revenue this year, how many invoices does that mean?
- What’s you profit margin on those invoices?
- How many times when you put out a proposal do you capture the deal?
And you basically work from the goal, the revenue goal, back to, how many times does that phone have to be dialed, or emails, or however you’re getting your leads in? That’s absolute first priority.
- You know, we don’t go in and say, well, we’d like to sell you this and that and this.
- We help them define those metrics that have to be met.
- Sometimes that means they are going to use the team that they’ve got, and
- They’ve got the tool, but about half the time, or maybe in 75% of the time, it requires some tools, and they’re not expensive tools, maybe, you know, in a subscription product that’s $50 a month kind of a thing. So, we’re not talking huge dollars.
Our philosophy is, help that customer build good revenues, profitable revenues quickly, and they’ll be back on your doorstep generating the lead themselves to you to get you do to more business with them. So, again, those metrics are key.
Interviewer: So, you would recommend basically for a business that is starting with a relatively clean slate to basically really get your numbers and your metrics ironed out and in place, and that will lead to those next steps. And I know that you’ve shared in other episodes, which we will link to, basically how to develop some of those metrics, what tools and processes are available to actually track those metrics.
And so, for the listener today that is really interested in moving forward on some of this,
- The first step that you really want to have in place is to streamline and optimize your business development process is to really know what metrics you need to track and what the targets are for those metrics?
Summary and Next Actions
Interviewer: So, to summarize some of the key things that Randy shared with us today,
The first thing is that having effective business development is really important for your business. That’s what’s going to grow your business and take your business to the next level.
Randy mentioned three areas of weakness that he typically sees in businesses.
- Lead generation – The first piece is lead generation, not having a really solid process in place for generating leads and quantifying how many of those leads actually need to be generated.
- Proposal process – The second thing that I think was really important is the proposal process. A lot of business gets really excited when they get a new opportunity come in and they get a request for a proposal that they don’t necessarily think through how efficient they’re being generating that proposal. So, Randy shared a specific rule of thumb, that if takes more than a minute for every $100 in revenue on that proposal, or on that quote, then there’s something that you could be doing more efficiently to generate that quote more efficiently.
- Tracking and follow-up – The next thing was tracking and follow-up. Once you send a proposal, that’s only one step of the entire business development process. Having a CRM system in place that automatically reminds you to follow up with the prospect that you’ve sent a proposal or automates that next step is really, really important.
For more information about how to apply today’s topic and much more into your business, visit the website at www.betterbusinesspodcast.com.
Thank you so much for your time today, Randy.
Randy: You’re welcome, Jon.[Image: http://www.freeimages.com/photo/862197]