Brand Magic - Our New Business Development Process
Business development is defined as the tasks and processes concerning analytical preparation of potential growth opportunities and the support and monitoring of the implementation of growth opportunities. It is related to the all round development of a particular business which makes it enriching and fruitful.
Business development is a mixture of commerce, business and organizational behaviour theories but its role is the establishment of a long-term value factor for an organisation from the point of view of markets, customers and their inter–relationship. The business developer collaborates and integrates the knowledge and feedback from the organisation’s specialist functions e.g. research & development, production marketing and sales to assure that the organisation is capable of implementing the growth opportunities successfully. The business developers are both analytical tools outlined below in the strategic process and the business plan.
We believe that to develop a successful strategy that will improve your market position and ultimately improve your bottom line, there needs to be a review of the business with a view to developing a strategic business plan that will drive the business forward over the next 3 to 5 years. To have a successful new business strategy, there is a need to review the business as to where it is now - what are the core competencies and possible competitive advantages over competition and who do we target to achieve this growth strategy?
Therefore, we believe there is a need to have a process that critically reviews the business, and then generates strategic options to growing the business, critically evaluating the options and then implementing the chosen strategy (what needs to change to implement the new strategy).
The section below shows the process from start to finish, but the ability to facilitate and to keep the team focussed upon the end results is Brand Magic’s competitive advantage!
The second element of the process is Brand Magic. With over 25 years experience in a variety of businesses that use creativity, innovation and the ability to bring the team on board to implement the strategy is that added value or magic we bring to the process.
Strategic Process of New Business Development
The process is divided into four phases:
Phase One: Situation Analysis
This section sets out to understand the external environment with a view to establishing the key drivers of change in the world and within the industry and related industries. From this will fall a list of opportunities and threats facing the business. It also sets out to understand the company’s internal environment, clearly defining its strengths and weaknesses. From this ‘SWOT’ analysis, an identification and prioritisation of the key issues facing the business can then be assessed.
An analysis of the current strategy can then be carried out with a view to establishing how well it addresses the key issues identified for the business.
Key tools in this area include:
What is happening in the world economy sets the context for businesses, but economic developments are influenced by political, social, technological, legal and environmental factors. The objective of carrying out such an analysis is to determine the key environmental influences on that company and to examine the impact of external influences.
Porters Five Forces:
Michael Porter claims that there are essentially five forces which determine the underlying structure of an industry i.e. rivalry between existing players, the bargaining power of buyers, the bargaining power of suppliers, the threat of new entrants into the business and the threat of substitute products. Each can have a positive or negative effect on an industry structure by making the industry either more or less competitive. It is possible to determine the overall level of competition and therefore the overall attractiveness of the industry by examining each force and the balance between them. The collective strength of the forces determines the ultimate profit potential in the industry.
The Lifecycle Analysis:
An important part of analysis is to establish the stage an industry is at – birth, growth, maturity, or decline. A business can determine its position by exploring the features of each stage and comparing these with their own situation. The key skill here is to anticipate the oncoming stage in good time to as to influence the strategy of the business e.g. a company might be mature and drifting, and a reassessment of its direction may be needed to prevent further decline.
Porters Value Chain:
The value chain is a methodical approach to analysing and developing competitive advantage. The chain consists of a range of activities that create and build value. The output from this exercise is the total value delivered by the company. The 'margin' in the Porters Value Chain diagram is the added value. The company is shown split into 'primary activities' and 'support activities.'
These are the capabilities that are critical to a business achieving a competitive advantage. The key to the analysis here is recognising that competition between players is as much a contest for competence mastery as it is for market position and strength.
Prahalad and Hammel suggest the following three factors that help recognize core competencies in a business, in terms of what the core competence should achieve.
- Provide potential to a wide variety of markets.
- Makes a significant contribution to the perceived customer benefits of the end product.
- Is difficult for competitors to replicate.
The McKinsey 7s:
The McKinsey organisation model identifies seven interrelated dimensions that determine organisations effectiveness – strategy, structure, systems, skills, staff, and style and super-ordinate goals. It is important to understand the strategic interplay between the elements. The seven s’s are interconnected. As one is changed, it will have an influence on the others.
For example, if the strategy of an organisation changes to adopt a much stronger customer service focused approach, this is likely to result in the need for further training of employees in developing skills required to achieve this. Equally it might impose a change in structure and systems to support the new strategy. It may even have an impact on the values and style of the organisation.
Phase Two: The Strategic Options
The first step here is to establish if the current strategy adequately address the key issues identified.
Future scenarios should be developed with a view to establishing what the future might reasonably hold and have a reasonable probability of occurrence. This assists in ensuring that the business develops a reasoned strategy that is consistent with the current environment. One scenario is eventually chosen and should be the most likely and ideally the most desired.
Every company faces a huge number of options as to how it can deploy its resources to compete in the market place. There are three main types of strategic decision a firm has to make.
1. Generic strategy decisions. (Porters generic strategies)
According to Porter, superior performance can be achieved by three generic strategies - cost leadership, differentiation, and focus. Failure to pursue a particular generic option can result in an organisation being ‘stuck in the middle’. Firms in this position are likely to be the least profitable in the industry
2. Decisions covering alternative growth options/ directions. (Ansoff’s matrix).
This useful tool outlines the options for a firm in terms of which market it intends to operate (the present or a new one) and whether, in terms of its products it will work with existing products or develop new ones.
3. Decisions about alternative growth methods – some alternative sources of growth -
- Joint ventures.
Phase Three: Option Evaluation
Johnson & Scholes propose a two-stage process of strategic choice. First a shortlist of suitable strategic options should be drawn up. These options should then be screened for suitability and acceptability.
Suitability: How does the anticipated strategy fit the circumstances the business now faces? Does it make the most of its strengths or avoid weaknesses, while dealing with threats in the environment?
Feasibility: From a practical and pragmatic point of view, how will this strategy work? Can it be implemented? Are their adequate resources available?
Will implementing this strategy be acceptable, adequately profitable and deliver growth? What are the risk factors?
Phase 4: Implement the Chosen Strategy.
This last step should be aimed to ensure that the chosen strategy can be implemented, will work and is as essential to case study learning as the analysis and choice of the best solution. Concepts that will help in this regards include:
McKinsey 7s: As noted earlier, all of the seven s’s are interconnected. As one is changed, it will have an influence on the others. And that if one of the S’s changes then each of the other S elements must change to some extent, what changes need to be made?
Leadership planning and development within the organisation.
Timescales - time management, planning, optimising teamwork, etc.
Managing change through projects. Offers a cross-functional approach and through the use of project management techniques will provide a manager with ready-made techniques.
Business Development Summary.
To develop an effective new business development strategy this must evolve from the overall strategic plan of the company. If the strategic plan is not clear the business development plan will suffer from a conflict of interest internally and ultimately the company will not achieve its goal.
The function of sales is to sell products or services directly to the end user or client, whereas the function of business development is working through the channels or partners to make sales happen to clients.
1. Business Development – Company Life cycle.
A person can be having a great degree of knowledge as well as a strong network that is eager to close deals with clients. But it can be harmful for a company’s well being. Sometimes marketing team emphasizes only on lowest prices. They forget to pay attention to engineering and quality aspects. This casts an ill effect on the company’s reputation. The effect will depend on the company’s life cycle. There are three life stages in a company’s life and not every employee is suited for every stage. The three life stages are:
- Scouting– This is the preliminary stage of a company. At this stage, business development deals with identification of various entry points to market. Various leverage points are identified and the concerned internal team is provided with feedback of market analysis. The key skills involved here is collaborative work with the product and engineering teams.
- Testing-At this stage, the business developer will close a few open deals in order to test the assumptions made from the market and input various findings. Analytical skill sets for setting up a measurement framework is required. The framework will depend on the company’s mission, strengths and vision.
- Scaling– After the data is gathered from each and every deal, a path is laid down for goal fulfillment. After this, business development is all set to start closing for deals. An entire support system for future activities is created.
2. Look for the right opportunity.
The contacts with whom you are dealing must be cross checked as well. Dealing with the right person is very important. This practice leads to an unwanted wastage of time. It is very important to identify the potential clients with whom you can do business. Scanning of the market for fruitful associations is vital before you start dealing with prospects. If this step is omitted, you will find that you are already drained out, yet no positive associations have been made. Focus on those clients who actually matters to your business rather than digging your head in unwanted ones.
3. Listening, Observing and asking the right Questions.
When you are speaking for more than 50 percent of the time, you are actually talking 10 times excess. Your job is not to blurt out everything, but understand and probe the client’s perspective, his problems, issues, type of work done, time taken etc. Be an active listener if you really want to develop your business. You will always be a favorite vendor in a competitive economy if you hone your listening skills.
4. Focus on your client’s requirement.
Don’t present what you are offering. Present what the client needs. Do not talk about your offerings. Instead, listen carefully the client’s requirements and preferences. If you listen carefully to your clients, you can modify your own pitch to match the client requirements, which in turn increase client satisfaction rates. Always pay a keen attention to the clients’ issues so that you customize your offerings as per his needs. If a client fails to get what he desires, then the chances of doing business with him again is minimized. He will not select you as his business partner and instead look for other prospective partners.
5. Be Important.
It is a well known idea that important people love to deal with other important people. Be active within your business associations to be part of those organizations that fulfill your business needs and where you can interact with prospective clients. You can offer volunteer services to industry experts to gain visibility as well as to capture high value targets. You can climb the corporate ladder to gather the desired prestige in your concerned industry. If you succeed in doing so, the successive orders are bound to flow in your company. Remember, people like to deal with the creamy layer or the winners in their respective areas of expertise.
6. Main motto: Client Satisfaction.
There is nothing in the world which is worse than a furious client. Not only does it spoil the relationship of yours with the client, but it is also harmful to your company’s reputation. Forget about everything else and fix your client’s problems first. If you take a quick action once your client’s complaints about an issue, you will make an enthralling impression on your client. You will get applause from your client and your name will be circulated in your industry members. Remember to practice empathy when dealing with clients. Place yourself in your client’s position and feel his problem. By doing so, you will be effectively nurtured your business.
7. Provide excellent service.
After you successfully influence your clients and get business from them, it is time to make them happy with your amazing services. Stick to the deadlines fixed with your clients. Be a perfect guide throughout the whole process. If you succeed in making your clients satisfied, they will be offering you repeat business as well as new business opportunities. Who knows, you may be rewarded with something exceptionally good.
8. Qualitative vs Quantitative approach.
Many businesses focus purely on qualitative business value proposition and give less importance to the other factors, but this is not a wise idea. This plan has a high probability of failure and is quite difficult to achieve. There is also a minimal probability of the market to pay higher for a premium service. The market is not ready to spend extra bucks even if they get improved user experiences and better services. As a result, the quantitative aspect of the business increases the chances of success. Creating competitive and low prices will surely attract more clients. This in turn will maximize your revenue generation.
Time management is a crucial skill that every business owner needs to know. It is all about prioritizing work. Important work needs to be done first and less important jobs can be done later. You can also have a great business idea in the silliest of time. Managing your time wisely is one of the most crucial tasks, especially when you are a business start-up. Balancing time between operational activities and business development activities is an art which you need to master. This can be done only when you spent less time on useless stuff and allocate more time to vital tasks.
10. Innovation at its best.
Innovation is the best way to be at the top of the competition. When you offer your clients something unique, then there is a high probability that your client will do business with you. Everyone prefers products or services that are new to the market. So why don’t you go out of the box and have some awesome ideas? Offer your clients something that no one else is offering. Innovation may involve new methods, ideas, workflows and process flows, which will be beneficial for companies.
The role of business development is extremely crucial in the first stages of a new business. This phase decides the fate of your business. If you do it well, you will taste success soon or else it will take your business to a downward direction. You need to identify the winning concepts for your business. You have to brainstorm ideas in order to be successful in developing your business. Start looking for new niches for promoting your products or services. You can also apply your skills to a new field which can be beneficial. You can also search for existing product lines and offer a cheaper version of the same product. When you are doing a mix and match of ideas, it won’t disappoint you in achieving your goals.
The "pipeline" refers to flow of potential clients which a company has started developing. Business development staff are assign a percent chance of success, with projected sales-volumes attached to each potential client in the pipeline. Planners can use the weighted average of all the potential clients in the pipeline to project staffing to manage the new activity when finalized. Enterprises usually support pipelines with some kind of customer relationship management tool or database, either web-based solution or an in-house system. Sometimes business development specialists manage and analyze the data to produce sales management information. Such management of information could include:
· reasons for wins/losses.
· progress of opportunities in relation to the sales process.
· top performing sales people/sales channels.
· sales of services/products.
For larger and well-established companies, especially in technology-related industries, the term "business development" often refers to setting up and managing strategic relationships and alliances with other third-party companies. In these instances, the companies may leverage each other's expertise, technologies or other intellectual property to expand their capacities for identifying, researching, analyzing and bringing to market new businesses and new products. Business-development focuses on implementation of the strategic business plan through equity financing, acquisition/divestiture of technologies, products and companies, plus the establishment of strategic partnerships where appropriate.
Business development is to be thought of as a marketing tactic. The objectives include branding, expansion in markets, new user acquisition and awareness. However, the main function of Business Development is to utilize partners in selling to the right customers. Creating opportunities for value to be ongoing in the long-term is very important. To be successful in Business Development, the partnership must be built on strong relationships.
If your sales pipeline is behaving more like a clogged drain than a map to business success, it’s time to create a more effective sales pipeline management strategy. First things first. Identify what’s clogging the flow of your pipeline. Clear through stagnant sales and increase performance. Review your existing customer base and start to segment and analyse accordingly (Pareto Analysis).
Here are 7 tips to boost performance right away:
1. Get Your Sales Team on the Same Page
Miscommunication between sales team members is a waste of precious time. You and your colleagues should know exactly where each prospect is in the sales pipeline, from beginning to end. An effective CRM tool eliminates guesswork, and the entire team believes and trusts in the information. A solid sales process with clearly defined stages is the best framework for effective pipeline management.
2. Give Away Value
Clients do not want to buy anything from a pushy salesperson. So stop selling. Instead, connect with your prospects by giving them value. How can you make their work easier? Show them how to solve a problem. How can you help them stay ahead of the competition? Educate them on the newest tips and tools. Build a genuine relationship and become a trusted consultant. Give value away for free (or at least in exchange for an email address). The more value you give prospects up front, the more your prospects will smoothly convert down the pipeline.
3. Ask and You Shall Receive
The more you follow up and ask, the more you increase the probability of making a sale. Don’t you have stronger relationships with friends or family members you contact regularly? The same is true in sales. Make it a daily habit to set reminders on a calendar app or jot down a list of prospects to call and email. Pick up your phone and give your prospect a call. Ask how their children are doing. Remember, the goal is not to be a salesperson. You are an individual making a genuine connection with another human being.
4. Navigate Your Time
The time it takes to close a deal can span from here to eternity. Flexibility is expected, but uncertainty is the enemy. Plan ahead and map out how long the deal flow should take based on prior experience with other clients. Establish a definitive end date that allows you to navigate the sales pipeline and remove unnecessary ambiguity. You can strategize when to speed up or slow down activities.
5. Increase Conversion Rates on Your Forecasts.
Like a weather forecast, the sales forecast can be unreliable. Approaching your pipeline like a weatherman is inefficient because you are focusing on factors – close dates, the amount of money you’ll make from the sale, statistics – that do not directly influence conversion. Forecasts should be used in connection with your current situation analysis to improve end results and help move prospects quickly through the sales pipeline.
6. Have One System
Too often, a business is reliant on multiple solutions. Mental notes, spreadsheets, notes, and a CRM system you grew out of years ago create a jumble of confusion. Consider the power of consolidation. Use the kind of lead management system that ensures you have a CRM to integrate contacts, accounts and sales opportunities in one place.
7. Task Manage Like a Boss
“I have two kinds of problems, the urgent and the important. The urgent are not important, and the important are never urgent,” goes the famous quote from President Dwight D. Eisenhower. You know about the power of follow-up communications. But whom should you contact more frequently? How do you decide what and who is more important? You have a limited amount of time each day to allocate to each task. Identify which tasks or follow-ups demand your immediate attention, and get those conversions that are inches away from your grasp.