What I learned in 2020 (from a BD perspective) - Part 2
I recently participated in a panel discussion around sales and business development and what the difference is between both of those positions. I certainly could write another blog about that subject and there are certainly many definitions of what a salesperson does as opposed to a business development professional. For the purposes of this blog, my definition of a salesperson is someone that takes a “top of the funnel” lead and works that lead through the sales process including qualifying to needs analysis to close. I know I’m oversimplifying this a bit. On the other hand, a business development person is responsible for building relationships with prospects and partners, writing thought leadership, hosting events and a myriad of other relationship-building activities…again, I’m oversimplifying but you get the idea. As we got further into our discussion, we started to talk about how to measure success with business development professionals. It was an interesting conversation. I realized early on when I started my practice that many companies have trouble measuring the activity and value that a business development person brings to the organization. In some cases, I’ve seen they don’t measure anything at all! Not a good practice.
Just like in any position in your company, business development professionals need specific goals and activities that are expected of them or they will be set up for failure. First of all, as a business owner or CEO, having those specific activity goals will help you measure their success (or failure) and help you coach them to their potential. Even more importantly, the business development professional needs those measures to stay engaged, know what’s expected of them and what they need to do to be successful.
In my experience, when it comes to a pure business development person (not responsible for closing the business), activity goals and outcomes are a key measure. In addition, revenue goals based on their activity should be used to ensure they stay focused on the end game…closed deals. As far as activity goals and outcomes are concerned there are a number of things that you can measure. First of all, you need to understand what activity is driving leads and ultimately driving revenue. It can be different depending on your industry. Activity goals for business development professionals can focus on:
· Number of centers of influence meetings they attend in a given period of time
· Number of referral meetings they attend
· Number of virtual or in-person networking events they must attend
· Goal on content strategy such as social media posts or blog posts
· Number of in-house or education events they host in a year
· Developing a plan with quarterly check-ins
· Number of trade shows they attend
As for outcomes, each of these activity goals should reflect outcomes that pertain to your industry and their success. For instance, if they attend 10 COI meetings in a month, then the expected outcome is 3 leads. Again, there are a number of activities based on your industry that drive leads and help drive your brand. Once you know the key activities set goals in collaboration with your business development team member to ensure their engagement and achievement.
In regard to revenue goals, and again, every industry is different and has different sales cycles so giving an annual revenue goal for an accounting firm can look much different than that of a web development firm. The revenue goal is probably the trickiest to develop because business development is all about building relationships. Building relationships, especially with new prospects and partners takes time and you need to invest time in order to build trust. That amount of time can vary depending on the industry, it could be six months, it could be eighteen months. You, as the leader, need to understand and accept that. That needs to be addressed up front with every new business development hire. If your expectations are too high and you don’t give that person the time they need, both of you will be frustrated.
In addition, a true business development person is not closing the business so your measure should focus on the leads that the business development person has brought in and the percentage of those leads that have closed. If a business development person brings in a hot lead and the closer can’t close the deal, that can be very frustrating for your business development person especially if they have some of their compensation tied to closed deals. If that’s the case, there needs to be clear communication and clear expectations from the beginning with both the business development person and the closer. There are definitely varying degrees of how to structure their compensation but that’s for another blog. For purposes of this blog and to keep it simple, giving your business development person a revenue goal based on the number of leads they have directly impacted and are driving to the sales funnel can work and can keep them focused on driving revenue. However, one thing to consider that can make this tricky are leads that come into the organization because of the outreach that your business development person is doing in the marketplace but isn’t directly tied to them because the prospect goes through the website (for example) instead of through your business development person. In this case, making sure that your business development person is using your CRM effectively is crucial since that can track activity and specific prospects.
To ensure your business development professional is set up for success, I will share with you what my executive coach taught me and that is you must have clear communication, clear and reasonable expectations routed in data and an accountability plan. If you can deliver those three things to your business development person, both of you will be much happier and you’ll see better results because you’ve set clear activity goals for them that you can measure with outcomes, you’re communicating with them often and you have an accountability system to coach them to success. Also, if you’re going to measure the success of your business development person, let them do their job. Too many times, I see CEO’s or business owners pile unrelated tasks on the business development staff member that keeps them from building relationships and doing their job. If you want to leverage their ability, let them do what they do best; build the brand, build relationships and bring in qualified leads.
