Actually, it’s more like “buried” revenue-generating opportunities. But please, read on.
Congratulations. You made the sale. Rang the bell.
You proved to the prospect that you and your company are credible and can provide beneficial solutions to their problems. You demonstrated that your products and services will make their lives easier, generate more revenue, improve productivity, grow hair…or whatever it was. Good for you. They are now a client. You’ve proved you could provide value and as a result, earned their trust and their business.
Now it is up to you and your support team to keep it….and you know that.
Or do you?
To answer that question StreetSmart, a business development firm, created a preliminary benchmark study designed to identify patterns and determine how well value and associated benefit messages were being communicated to clients and prospects. And to make sure sales opportunities weren’t being missed.
Turns out, senior management participating in the study admitted they didn’t do such a great job.
In fact…
Out of a possible 100 point total, the participants scored an average of 62.5. Or, in standardized report card-grading language, the equivalent of a “D-“. Not so good.
Don’t know about you, but if I brought home a “D-“ when I was a kid, it’d be a long time before I saw the light of day again. It’d be the equivalent of house arrest.
Anyway, back to the study. It had four, interrelated business development categories common to most businesses and non-profit organizations. Each category had five related sub-components to replicate the typical revenue-generating progression associated with the Business Development Continuum. Starting with attracting attention, to closing, keeping and expanding business.
Here are some of the areas that came up as lacking in the study and presented the biggest areas for improvement. All of which revolve around providing value.
• Measurable advertising, public relations and social media programs
• Establishment of client agreed-upon metrics with benefits analyses
• Regularly conducted internal and external client reviews
• Extended outreach programs
• Solution-based client and prospect ongoing outreach programs
To me, the most surprising thing about the study was the fact that these shortcomings were so widespread. All of these areas meant a lot of missed revenue-building opportunities. Opportunities that could have, and should have, been built on communicating and providing meaningful value for both clients and prospects alike.
Or, as Tamara Schenk, Research Director – MHI Research Institute states…
“The inability to communicate value messages is not only the single most important challenge year after year; it’s also the underlying cause of at least two other inhibitors. Those are the inability to attract new clients, and the inability to expand in existing accounts. Taken together, these three factors comprise 48% of the inhibitors to sales success.” You can read the rest of the summary here.
Here’s where the “buried” part comes in.
“The study pointed to areas that we talk about all the time, but seem to make slow progress. This guide provides a quick assessment of the major areas and I think could support focused attention to key deficiencies.” Healthcare Executive
Let’s face it, we can all relate to the Healthcare Executive’s statement. Because in reality, management may know their weak areas. They know they need to have things like quantified client objectives in place with regular outcomes reporting. They recognize the benefit of having ongoing and value-driven communications. They know it makes sense to have regular client review meetings. But they frequently have difficulty identifying and implementing corrective actions. Or at best, like the Healthcare Executive, “seem to make slow progress.”
Why?
Because management and those corrective actions usually run into a brick wall better known as “the normal demands of budgets and daily operations.”
Even if they find the time to navigate around that obstacle, in all likelihood they will encounter the extraordinary demands associated with reactionary, time-sapping services caused by things like “putting out fires.” And other things that are time bandits like “service creep.”
Those types of demands negatively impact profitability and productivity. Productivity which could be channeled into addressing those weak areas everyone acknowledges exists. They are the obstacles under which revenue opportunities get buried.
The challenge becomes how to uncover them.
While the overall rankings of participating companies were poor and fell into the “you’re not coming out of your room until you improve” category, ironically, the area of retention scored the highest. But, how could that be? With companies scoring low in communicating value, not providing measurable benefits, and not having regular client review meetings?
Upon further review the answer given the most was:
“We service the hell out of our ‘A’ clients.”
The above quote (in one form or another) was given by several study participants in follow-up discussions regarding their company’s high retention rate score. When questioned further, most participants admitted that the general directives given to not lose “A” clients at any cost did have a negative impact on the “B” and “C” clients.
Look, everyone knows it costs more money to get a new client than to keep an existing client. But what is the price paid for high and extraordinary levels of service? How much is too much? Is there such a thing as “over servicing” a client? At what point does a “retention-at-all-costs” approach lead to lost revenue, or even worse, lost profit? And how could that time be more profitably allocated?
Those are valid and oftentimes difficult questions which management at every company needs to address.
So, what’s the best way to go about it? Here are some takeaways from the preliminary study.
1. Confirm quantified client goals exist. Make sure the goals are realistic and that related value has also been quantified. Equally important, set realistic expectations and manage them. After all, you need something concrete to measure progress against, right? And be a “silo buster,” share the goals with all departments.
2. Revisit, revise or replace existing corrective action plans. Do whatever you can to make them work. But, if weak areas are still not being addressed, then it’s time for an independent team to provide a fresh perspective. An outside team will not be negatively impacted by emotion or internal politics and will work with you to develop the steps necessary to overcome the “we seem to make slow progress” syndrome.
3. Provide client updates. They don’t have to be elaborate. Just snapshots of accomplishments/milestones and/or concerns against previously agreed upon goals and objectives (see #1 above). Make updates available on a regular basis. You can also create a dashboard and make it accessible to clients for tracking progress against goals. Identifying concerns will help to ensure those concerns don’t develop into major problems. And it’s a good idea to have the updates or any reports come from someone in a senior management position and email it to the client. It will demonstrate your commitment and involvement level to your clients. And again, reinforce your value.
4. Conduct regularly scheduled client reviews at whatever frequency makes sense. Do them internally and informally first. Then more formally with clients and distribute an agenda prior to the meeting. On-site meetings with day-to-day personnel and senior management from both sides are best because a lot of “bonding” and relationship building happens face-to-face. But, if that’s problematic, then conduct a well-planned, well-executed and well-rehearsed virtual meeting. And make sure you send out follow-up reports no later than 24 hours after the meeting.
Of course there are more than four pieces to the puzzle. Many more. At StreetSmart, we typically expand those four steps with feedback gained from a proprietary diagnostic tool. The tool identifies strengths and weaknesses in major business development and revenue-generating areas. We then develop approaches to address weak areas and provide ongoing monitoring to measure outcomes.
The whole idea is to identify weak areas and come up with a realistic and manageable plan to protect and expand your revenue base. Whether you choose to do it yourself or use an independent firm to help…you just have to do it.
Summary and Follow-up Study.
If you’d like to get a free copy of the preliminary benchmark study summary with additional study details, click here. If you’d like to participate in the follow-up study, click here.
