The perils and rewards of an ‘anytime anywhere approach to business development’

The era of choosiness is over with companies casting their nets wider in terms of business development and trawling new and existing markets for whatever business is available. Businesses that once turned their nose up at particular kinds of work have had a fundamental change of heart and are prepared to take whatever is going. But for some this is working out better than others.

The ‘anytime anywhere’ approach to business development:

Lost revenues, lost customers and slowing sales have resulted in a less

discriminate approach to business development. The shotgun has replaced the rifle, as companies target what would previously have been considered smaller, lower margin and less glamorous projects, or customers. Indeed, just like a Hoover (that is the brand of vacuum cleaner) sales teams are looking to suck up whatever opportunities are available.

The traditional boundaries between markets and segments have been leaped by suppliers in search of whatever business might be available. In an ‘anytime anywhere approach to

business development’, they are knocking on new doors and entering new markets, or segments.

Is the age of the specialist over?

In the boom years companies were afforded the opportunity to focus on the business that was most

attractive to their business. In a buoyant market they were able to focus and specialize, cherry picking customers that best suited their business. For many these trends have been reversed with companies backtracking from specialist to generalist, boutique to supermarket and nice to mass market supplier.

In many cases the commercial

imperative is simply too great and casting the business development net

wider is not a matter of choice, but there clearly are downsides. The ‘anytime anywhere’ approach often requires that companies move out of their sales and delivery comfort zone. It may also mean diverting from a tried and trusted business formula to one that is risky and less unfamiliar. It may also require a move away from the company’s core competence, or those areas in which they had unique and specialized skills, processes, knowledge and tools. This can have long term consequences for the company in terms of competitive advantage, marketplace reputation and investor appeal.

The reality is that good times or bad, some

business is just not right for your company and its bottom line. Perh

aps it entails lower margins, excessive travel, more intensive support, too much learning, or too much risk. It may also have consequences in terms of longer sales cycles and higher sales costs, or an impact on conversion rates, staff motivation and so on.

Let us return to the hoover, or vacuum cleaner analogy. Plug it in and eventually the bag gets full, but if you are picking up the wrong stuff then perhaps the hose will get stuffed and the filter will become clogged. The same can happen with indiscriminate business development efforts.

For years the advice was focus, is that now ‘old hat’?

After years of advising companies to specialize, we are slow to let go of that advice even if the economic conditions might immediately suggest that diversification into new markets and segments is required. That is because

what we call the ‘anytime anywhere approach’ to business development with its stretch into new markets, segments, new products and services can present challenges. Let us take an example:

‘We will go anywhere anytime’ said the sales director of an early stage technology company clearly under pressure to meet sales numbers. At the time we were putting the finishing touches to a sales campaign aimed at major North American hardware

vendors and until that point I had felt quite enthusiastic about the plans. At the mention of ‘anytime anywhere’ I immediately felt uneasy, it smacked of desperation and that is an ingredient that I know often impedes clear thinking.

All of a sudden the sophistication and accuracy of the target list and the sales strategy was drawn into question. If the company’s proposition appealed to everyone everywhere then too many principles of high value selling were being compromised. As it turns out the campaign had limited success so the manager availability to travel anywhere anytime did not get called on too much.

You can be average at a lot of things, but only exceptional at a few:

You can be average at a lot of things, but only exceptional at a few, and if you are lucky world beating at one. The challenge is to find what that particular niche, or talent is and to focus on, nurture and develop it. For companies, as well as individuals that discovery can require quite

a bit of experimentation along the way.

Another client of ours arrived at

strategic cross roads in terms of its target customers and projects for the second time in two years. After an intensive phase of project delivery, the consultants were both exhausted and frustrated. They were faced with the reality that much of the work they had been winning was neither profitable, nor enjoyable. It was once-off in terms of revenue and rightly, or wrongly was perceived by clients to be of a lower value. Bottom line it was not the stuff of which our clients could grow a sustainable business.

This was not the first time the company had arrived at this realization in its 3 year history, having last year closed a subsidiary business upon which it had previously placed high hopes. Would the third redirection of its focus pay-off? The reality for the managers was that it represented one last calculated gamble.

On the positive side the consultants believed they had found their niche, having invested significantly in developing specialized skills and knowledge in a particular field that they considered to be on the rise. They were undaunted in their determination to specialize in an industry of generalists and had committed their time and money to developing specialized knowledge, processes and skills in this new area.

Now almost every strategy book I have ever read would suggest that our client’s ability to strategise was fundamentally flawed. To get it wrong once, is misfortunate, but twice surely that is careless? Well, perhaps it is not, as clearly the sweet spot eludes many companies and is as much stumbled upon as discovered.

To Hover, or Not To Hover - Some Final Considerations:

There is no question that a trained athlete can compete in a variety of different events, the 600 meters, triathlon and perhaps even in the pool. However, almost every athlete has his, or her sweet spot – an event that suits them best, offers the greatest chance of success and the greatest enjoyment. The more the athlete focuses on the sweet spot, the greater their relative advantage in will be. Similarly, while most musicians can play several instruments, each has a favorite and that is probably the one for which he/she is most skilled.

So as you shape your target list for next quarter’s sales campaign and perhaps in the process reshape your companies market strategy, proceed with care. Remember the danger of trying to be everything to everybody, or seeing the whole world as your market. Even if next quarter takes you away from your sweet spot, don’t loose sight of where and how your company’s long term success will be built.

Faraway hills are always greener and that is another reason for caution in respect of adjusting your focus in terms of business development. It can be tempting to move out to new markets, or segments when the going gets tough. However, there is a danger that if you make that you will make a decision to refocus before you have adjusted your sales process and indeed the overall sophistication of your sales approach, as well as your proposition, to reflect the changed conditions for your present target market.

Is the economic storm blowing you off course, or helping you set a new direction?

Some people see an upside to the downturn, can you?

I had a conversation yesterday with a director in one of Europe's most successful professional services companies. It is clear that in spite of the present sales related challenges being faced, the company’s management team can see an upside to the downturn.

There is a precedent, with the director pointing to a previous setback, that in hindsight propelled their business forward. The company clearly expects that this downturn will, in the fullness of time, represent another important turning point for its business.

A crisis can be a strategic turning point.

Like many companies, this client of ours has had day rates cut by 10-15% percent. However such is the state of the domestic market for its engineering related services that contracts can now only be won if they are discounted heavily, with many companies in the industry being prepared to price at a loss to stay in business. Much less so our client, which has a diverse international profile of clients – the result of internationalization drive that was fuelled by a previous shock. The director explains:

‘We lost a major contract a number of years ago, but that turned out to be as much a blessing as a curse. The contract was so large that it would have kept our entire organization busy for more than 3 years and would have kept us completely focused on delivery with no time for business development. In the end the project never happened, but its loss, in hindsight, was both a blessing and a curse. That is because it accelerated our search for new business internationally. Today we are in a much stronger position as a result.

Setbacks can propel you forward.

I can see this present setback as potentially having the same effect, in other words causing short term pain, but ultimately benefiting our organization. I do believe that most companies will be in a stronger position at the end of the present economic turmoil, that is if they can respond to the challenge and stay alive amidst the turmoil.

Pointing to a multi-million project just won in the Middle East and a full domestic order book for the next quarter, the director emphasized the downturn is causing pain but will benefit his business in the longer term. ‘It will accelerate our strategy for the future of our business – a global focus on higher value more profitable work and the use of strategic partners for the rest’.

The downturn illuminates where the value is.

‘We want to focus on where we have a unique competence, where we can add most value and where the money is to be made. That is the high level project scoping, conceptual work and overall project leadership'.

'What today is the bulk of our business – the day to day delivery and implementation and labour intensive, but less profitable elements of major projects will be delivered through strategic partners in the future’ he explained. That will require a shift in our focus, as well as our skills and perhaps in our team’ he concluded, but will represent the foundation for the next phase of our growth'.

Setting direction, or simply being blown off course?

Clearly some people see an upside to the downturn, can you? Could the global slowdown represent a strategic turning point for your business, pointing you on a new course that ultimately will ensure greater long term success?

Is the slowdown illuminating where your organization can add greatest value to its customers, or highlighting those most profitable and weatherproof areas of opportunity for your business?

Maybe the present economic storm is not blowing you off course, but helping you to set direction. In this respect the ancient saying holds true ‘tempests and storms make for great pilots’.

Why Success Requires Strategic Focus

Where companies look for growth has a major bearing on the level of success they enjoy. This is simply a recognition that not all markets offer the same potential for growth.

Those companies that grow fastest do so by carefully choosing where they will compete – they steer themselves strategically into those market niches and segments that are most attractive and amenable.

They don’t seek to have the best solution in the marketplace overall, but do have distinct advantages in meeting the needs of particular groups of customers.

Why Strategic Focus is Important

Here are the reasons why you should focus on particular customer groups, or segements:

1. Your sales and marketing can only stretch so far, so you have to focus your efforts on those customers that can deliver the greatest success. The fact that for most companies 20% of their customers deliver 80% of their profits means that too much sales and marketing activity is focused on the wrong customers.

However, even if your resources were unlimited no company can be all things to all people. So inevitably you must therefore make choices about the customers you want.

Indeed, one of the greatest opportunities to increase the effectiveness of your sales and marketing is to tailor it to specific segments and niches. For example, instead of having one piece of marketing material, or sales presentation for all the industries and sectors you are targeting, tailor it to each significant segment and niche in turn.

2. Some customers are easier to win than others, being more attracted to your solution and more amenable to your sales efforts. Even if everybody needs your product, or solution, there are some that need it more, have specific requirements and can pay more for it. So it makes sense to seek them out.

3. Every company likes to think that it's industry, or segment is different. So they will quickly ask if you done work for others like them? They want to know that your product/solution is specifically suited. They will listen carefully to see if you understand their industry's trends, language and challenges.

Being a specialist (or at least being seen to be specialist) is important because customers think the needs of their business and their industries are special. The big bank, for example, will not be impressed if you experience is with credit unions.

4. A distinctive advantage does not come from being the absolute best, but from being better at meeting the specific needs of particular customer segments. That is because the needs of customers and the way they buy generally varies by sector, location, company size, stage of development, etc.

Successful companies are ordinary companies, but with a clear focus on a key market segment(s) where they have a distinctive advantage. Once they choose their ideal customer they are not afraid to alienate others in tailoring their proposition and message exclusively to that group.

Why focus can be difficult

For most managers the need to focus on the right market segment(s) goes undisputed, however the reality is that many companies struggle in this area.

• Too many companies try to be everything to everyone, but that dilutes the appeal of what they offer. They fail to recognize the unique differences and particular needs of different customer groups and are vulnerable to competitors as a result.

• Too many companies don't segment their market to identify the most attractive / amenable group of customers and don't tailor their proposition and how it is sold accordingly.

• Others make the choice but focus on the wrong segments with disastrous results. Focus, or segmentation, is not just about customers, it also means choosing your competitors, margins, and so on. Hence the importance of making the right decision.

• The main reason for getting the focus wrong is an insufficient understanding of potential customers needs, or competitors. The next is an impatience to get results accompanied by a concern that the chosen market may not pay sufficient dividends.

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