Business Development
I Don't Want Your Referral Business - Said No One Ever
It’s not uncommon for one business development person to call one of their fellow agency partners and ask if it’s OK to send a prospect or customer their way. I’ve gotten the call more times than I can count. The sad truth is that, when I do get that call, I know at that moment that I have not done my job.
Of course I want a partner to send over a warm lead! Were that not the case, they wouldn’t be much of a strong partner. Perhaps it is just a matter of double checking to make sure, or giving a fair heads up. On the other hand, perhaps that’s my failure to communicate our business’s needs to someone who can help.
Why Referrals are Awesome
Before getting into how we solve the situation above, let’s look at why referral business is so important. From the perspective of someone who leads business development for highly technical digital marketing services, I can say without hesitation that the relationships we have with our partners are one of the most important parts of our ability to generate new business.
First and foremost, referral business brings in better customers at higher close rates. If you’re selling professional services with a consultative sales approach, you’ll likely agree that a warm introduction trumps a contact-form submit any day.
Beyond the partner providing a vote of confidence for your company, and warming the prospect up to your solution, the partner sending the business your way is screening the business for you as well. If you have shared clients in the past, there’s a strong chance that a good customer for you them is a good customer for you.
Sharing Details to Solve the Problem
When meeting someone in my industry, the first thing I want to do in a networking situation is to understand their business. Find the answers to basic questions: what services or products they offer and, importantly, if they are a competitor. From there I like to understand what types of companies they work with and what industries do the focus on. Finally, I love to understand how they generate new business.
The first reason why I like to dig in to these areas is that it fundamentally helps identify a strong partner. Second, it’s a great way to build a connection and foster a real exchange of business ideas.
If you feel nervous about digging in so early, remember that business development folks usually love talking about this stuff. With that in mind, and because I too love talking about this stuff, I’d like to create an opportunity to provide answers to these questions myself! Most importantly, I want them to know what type of customers we’re looking for.
Strong Partners Understand Your Business
Once you share each other’s business motivations, you’ll understand what will make each other successful. When you understand these drivers, you understand basic business needs, especially the need to generate new business. That shared mutual understanding should fuel the desire to help, and the desire to grow.
Everyone should want strong referral partners. Make sure that these partners know your business and know what you need to succeed. A strong partner will see that growing together is a worthy goal that can be achieved with strong communication. That way, no one needs to ask if it’s OK to send referral business over. And if someone ever answers “No, I don’t want your referral business” the chances are that one of you has bigger problems on your hands.
The Environment of Business Development vs Sales
Sales are the ultimate panacea. We’ve heard it before and in many ways it’s true: “Sales cures all ills.” Since recently moving into a primarily business development role, this point has been more clear to me than ever. Not only does it keep the lights on, but it also allows hard work to be rewarded, investors to keep capital flowing liquidly, and the limits of innovation to be pushed forward. But is it really the sale that creates that environment?
Although sales enables this to happen, it is business development that creates the environment. There are some great posts out there about the difference between business development and sales. Blog posts by Seth Godin and Andrew Dumont are a good place to start. What I am saying here is nothing new, and a recent opportunity I had to make some smart business development choices highlighted the difference.
With an opportunity to help a prospect cross the finish line and become a customer, I was naturally happy to close. Typically I wouldn’t be involved in a client making a payment, but they had a few last minute questions about our terms and I was pulled in before payments were processed. In this particular case, the environment in which this sale was happening was built with the help of a partner who we work with regularly. Suddenly I was faced with pushing the sale through, or taking a step back and considering what kind of environment that would promote. Had we built the confidence we champion with this customer? Were we serving our partner well by simply stepping aside and letting their customer enter our system without that trust? I held back, and, instead of passing them on to our billing department, I had a few long conversations with our new (soon-to-be) customer to build trust.
Focusing on making a sale would not have created an environment of success. Sales provides some very powerful medicine, effective against most business ailments. Without a long view, however, there are side effects and complications. Business development is that long view towards creating an environment in which the business can be successful outside and in.
Customers will come and go, but a strategic view along with strong partners help create an environment of more than sales enablement. This environment supports the long-term health of a company, and strengthens customer retention. A good sale is like a blip on the radar, but business development will create more blips, bigger blips and an environment where a business can thrive, create a strong team and push innovation forward.