The Four Criteria of New Business Success

Written by ChuckMeyst2015 on . Posted in Blog Posts, Business Development

It’s not your job to win more new business says today’s Guest Author Blair Enns

It’s your job to win the right new business. That means engagements that meet the following four criteria:

1. A proper-fit client that takes you one step closer to the strategic vision of the expert firm you are building
2.At high profit margin
3.With low cost of sale
4.And your firm positioned to have the greatest possible impact

Let me unpack each of these criteria and then give you some options for improving your new business performance across all of them.

Proper-Fit Clients
Whether you acknowledge it or not, you reinvent your firm one new client at a time. You should have a vivid and wildly important goal off in the distance that you are navigating toward. It’s a detailed vision of the expert firm you are building, and each new client is a step toward or away from that vision. No vision means no standards about what client engagements it makes sense for you to take on. A vision that is continuously compromised by a leader that keeps making exceptions for clients because of revenue or “the portfolio” is ultimately hollow and dispiriting to the larger team. A top-down vision is required and each new client engagement should be a measure of how serious the firm is about that vision. The vision exists or it doesn’t. It’s meaningful or it isn’t.

High Profit Margin
Profit margin is like power in the relationship in that it only diminishes with time. The new business person or team sets the profit standard with the very first sale, properly expecting that it’s all downhill from there. (The only question is the steepness of the slope.) Winning business on price while hoping to make it up later, or on volume, is not a valid approach for an expertise-based business. Profit diminishes as you move from the expert practitioner position in the relationship to partner status and then quickly to vendor. The slide is inevitable so it’s your job to start high with the first engagement at a price and profit level higher than the overall average you’re targeting.

Low Cost of Sale
Of course nobody wants higher costs than necessary but a low cost of sale is vital because it signals other more important things. Are you seen as the expert practitioner or just another vendor? Vendors have high costs of sale, low profit margins and lack the high ground required to challenge the client’s thinking. Your cost of sale is a barometer of the relationship and its power dynamics, which will ultimately play out in the engagement itself, impacting your ability to create value for the client.

Positioned for the Greatest Impact
The sale is the sample of the engagement to follow. To have the greatest impact on your client you must be allowed to lead. If you are not allowed to lead in the sale then you will not be allowed to lead in the engagement. That’s why winning a pitch or in any way winning new business while playing the polite, compliant rule follower is not good enough. You cannot be a good soldier in the sale, dutifully following orders, and then suddenly try to become the general in the engagement. That’s the definition of a coup. Rather, you should be navigating the sale in a way that sees you seamlessly take the lead, with the client allowing you to move naturally and unthreateningly from the vendor position to the expert practitioner position.

That’s what they teach in Win Without Pitching.

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