Business development: the well-kept secret of fast growing B2B companies
B2B technology companies such as Salesforce and Hubspot are known worldwide for their impressive growth.What do they have in common? They are all companies that use business development on a massive scale.
According to a 2018 Xant Business Development study business development is even the primary source of new customers for more than 80% of high-growth technology companies: prospecting brings in 38% of the sales pipeline, against 24% for marketing.
In this article, we would like to give you the keys to help you achieve strong growth through business development. First of all, we will recall why this growth model is so powerful in B2B.
Why is business development the growth model of the most successful B2B companies?
In an era where many companies focus almost exclusively on inbound channels, business development is one of the only models that effectively addresses the issues of growth-oriented B2B companies.
Reaching your target audience
Not every business is suitable for what you have to sell! And not every suitable company makes a financially attractive prospect. It is also necessary to reach out to the contact who can make a decision affecting all or part of the company. Convincing a b-level employee with no decision-making power will therefore have little impact.
This is why it is essential, in B2B, to go and find the prospects that interest you. There is no point in casting a wide net, you have to be precise, and use sales and marketing acquisition channels that will allow you to target them precisely.
This is where the advantage of the business development strategy lies: you determine which companies to contact and which decision-makers in these companies you will contact. It’s hard to be more specific than that!
On the other hand, inbound techniques cast a wide net, trying to attract the prospect without knowing them or understanding their needs. These techniques eventually generate leads, but only a small percentage of them are genuine qualified prospects, and the point of contact often turns out to be a b-level employee with no decision-making power.
Moreover, you don’t sell a B2B product like you would an Internet subscription. Because of its price and complexity, a B2B product by its very nature requires a verbal exchange with a prospect. You have to understand their needs before offering your product and explain how it will meet them.
This level of listening and personalisation is impossible to achieve on a website (where the experience is the same for everyone), email (too cold) or other marketing channels.
The channel to be prioritised is therefore direct contact such as the phone, which will allow a consultative approach: questioning, listening and discussing, before talking about a solution. Depending on the subject, the issues for your prospects may be numerous. Discussing proactively beforehand will help you understand their problems and present your product as a real solution.
Meet the hidden side of the market
When the product you are selling is an innovative solution, the prospects coming directly to you through your marketing actions only represent 5% of the market. The majority of your market does not yet know that your solution exists, you are not yet a commodity that everyone wants, but an innovation that you are trying to impose.
Your prospects need to be educated! Making them aware of their needs and understanding the value of your solution is essential. The only effective way to do this is to proactively go out and meet them: every prospect you meet and convince gains you market shares.
This is even more necessary today than it was ten years ago: driven by the pandemic and technological advances in the field of AI, innovation in the tech sector is constantly increasing. New players have emerged: where in the past there were only a few big players, SaaS solutions have now multiplied and market shares are reduced.
It is becoming harder to capture the attention of prospects and to sign new customers! In order to fight against this increasingly numerous and aggressive competition, it is essential to act proactively and to go after deals using outbound business development techniques.
Get your prospects before the competition does
Business development techniques can help you create awareness among your prospects: the consultative approach allows for awareness of a need that they may not have expressed or experienced before.
By contacting a prospect, you identify their need and offer them a relevant solution. In this case, you are “the doctor who diagnoses the disease”, a commitment is already created with your company and your product, and the risk that the prospect will compare your solution with those of your competitors is reduced.
However, when you are in contact with prospects who have come to you via your marketing activities or your website, you are in a sales relationship where the prospect has the power. In fact, your prospect will most likely have contacted all of your competitors in order to obtain a proposal from each of them. He will thus be in a position of strength and use the competition to obtain the best offer and the best price. You therefore lose control of the sale and have little chance of closing it in good conditions.
Establish a manageable and scalable growth model
Another key advantage makes business development the favourite acquisition channel (80% of new customers according to a 2018 Xant study) for high-growth B2B companies: its scalability.
A good Business Developer can generate 10 qualified leads a month, with a 20% closing rate. That’s potentially two sales per month, per BDR. And what works with one BDR works with 2, 3, 4… years after years. This is what makes business development an excellent long-term growth engine.
Despite an optimal website, impactful advertising and attractive newsletters, it is impossible to turn 100% of the market into Inbound leads. However, it is possible to turn 100% of the market into outbound leads: you just have to contact them all until they answer you.
Creating twice as much content will not bring you twice as many qualified leads. Calling twice as many relevant decision-makers from your core target companies will bring twice as many sales appointments for you. It’s as simple as that!
When your business grows, it is essential to rationalise costs and control your growth model: if you double your budget, you double your revenue. This is what the outbound business development model allows.
Now that we understand why the most successful B2B companies use business development as a key growth model, let’s explore how they make it work.
In fact, the outbound business development model, although inevitable for any growing B2B company, is difficult to master and can sometimes require a lot of trial and error (sometimes up to a year of testing).
How do the best B2B companies use business development to drive growth?
As we have just seen, the effectiveness of B2B business development has been proven! We will now discuss the methods for implementing this model efficiently.
Differentiating outbound and inbound sales
The roles of outbound and inbound sales representatives are very different. While the inbound salesperson is responsible for selling the product to an already qualified prospect, the outbound salesperson starts from scratch. He has to hunt down his prospect and create the need. The two roles are very different and require different profiles and mindsets.
An outbound salesperson is able to work on inbound leads, but runs the risk of wasting time on unqualified leads and losing motivation. Separating the Outbound and Inbound teams allows them to be more specialised and increases overall performance.
Separate listing preparation and prospecting
On average, a Business Developer spends ¼ of his time doing research: finding companies, contacts of decision-makers, etc. However, his role is not to research but to prospect!
This confusion in roles can then lead to procrastination and loss of concentration: it is common for a BDR to get lost in unnecessary research. It is not actually necessary to know much information about a prospect before calling: a name, a company, a phone number. All other necessary information will be provided by the prospect during the conversation.
Moreover, this research work can be carried out upstream by an employee without sales skills, and therefore less expensive. Splitting the tasks that way makes it possible to increase the performance of a Business Developer by allowing him to concentrate on what counts: sales prospecting.
Increasing the performance of a Business Developer is of major interest! A more efficient sales person makes more sales, is more motivated, and participates in a unifying work environment and a dynamic of personal achievement.
Focus on cold calling
In companies, top management can receive up to hundreds of emails a day. So how do you stand out? By calling them!
And yes, although very effective, the phone remains the least popular channel. It is also the toughest channel! Where emailing tools have democratised the mailing process, on the phone, it’s all about the human touch. And tech won’t change that. That’s what makes cold calling a less competitive channel: only the brave dabble in it!
The phone is also the only channel that allows a real exchange with your prospects. B2B business is based on complex issues and deals that can amount to tens of thousands of euros. It is impossible to convince a decision-maker with an email of a few sentences! (a longer email won’t be read anyway) Only a phone call can challenge a prospect and change their awareness of their need and perception of the solution, in other words, move them forward in the buying process.
Finally, the phone also allows you to navigate through the company, which helps you to understand the overall structure and needs as you talk to different people. Not to mention that making a call can get you in touch with your prospect in one click, as opposed to several minutes spent writing an email that may never be read!
So how do you set up cold calling effectively? Let us share with you some of the tips that work for our clients:
- Implementing “power hours“
In other words, time slots devoted to the phone, and nothing else! Work in sessions of 1h30, 2h, for short but intense efforts. During these slots, no long emails, no exchanges on Slack or Whatsapp, no research, but only the phone, for optimum focus. We also advise you to use a dedicated prospecting tool rather than a CRM (too much information and unnecessary data).
- Calling, a lot
In sales prospecting, you need volume to get results! We recommend a target of at least 100 calls and 2 hours of call time per day. Call each prospect twice: the second call triggers the prospect’s curiosity and the response rate is much higher.
- Building a flexible script
In sales prospecting, the goal is not to pitch, but to create a conversation. To be effective, your script must be constantly improved and remain flexible: not totally scripted, not totally improvised. Favour open-ended questions (how do you do it?) to engage your prospect in the conversation and get insights on their issues and needs.
- Persist !
Business development and Cold calling is for the bold! Call on mobile phones, call several times, etc…
Understanding the role of the BDR
A common mistake is to confuse the roles of the BDR and of the AE (Account Executive). The role of the Business Developer is to help the company meet more targeted prospects in order to get to know its market better and increase its chances of selling its product.
In short, a BDR must allow the company’s AEs to meet a maximum number of prospects. A booked meeting with the decision-maker of a company that meets the required criteria and who is curious is a mission accomplished for the Business Developer.
This is why it is important to keep the BDR focused on sales and not on lead nurturing: the more they focus on prospecting, the more effective it will be. The transformation, on the other hand, will be carried out by the Account Executive, whose mission is to transform qualified appointments into SQL (Sales Qualified Lead) and then into opportunities. To learn more about the role of the Business Developer, visit our article on the subject.
Offer a competitive salary
A good Business Developer has a considerable impact on a company. His role is immense, he detects opportunities that could change the trajectory of your company. He is a bit like your human Google adwords! A good BDR profile also has an unbreakable spirit, and is a true vector of good mood and energy for the company.
It is therefore important to offer a fair and competitive remuneration! Fix commissions on indicators that depend on them, such as the number of qualified meetings booked (rather than on those that are outside their control, such as the number of closed deals), to keep your business development department satisfied and motivated.
Continuous supervision and coaching
The position of Business Developer is a junior role: it therefore requires more supervision by nature: a framework, fixed hours, a collective work rhythm. In B2B business development, you are also limited by office hours. You must therefore free up these time slots for cold calling!
We advise you to set up a specific schedule, with pre-determined call times and regular reports (daily/half-day). It is also important to coach the Business Developers on an ongoing basis, monitoring calls to reframe and correct if necessary, and set an example to inspire and motivate.
Establishing a “hard working environment”
This is the point that may not be appreciated! In France, the function of Business Developer is still practised too casually. The average number of calls made per day is 50, whereas it is 100-150 calls per day for our American or British colleagues.
Of course, quality is important, but cold calling is a numbers game: twice as many calls made means twice as many chances to meet your prospects! You have to push hard: it is therefore essential to create an environment that encourages them to push themselves harder, to be energetic and motivated. To learn more about the importance of the mindset in sales, visit our article on the subject.
As you will have understood, the success of these companies is not a mystery, but due to the implementation of an effective and constant business development strategy!
Want to achieve the same results? Write to our CEO Ephraïm Bismuth to find out how to adapt the business development model to your company!
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