Wake up and Smell the Opportunity!
Reprinted with permission from CPA Practice Management Forum
If your goal is to grow your firm and you haven’t considered a qualified business developer, you’ve tied one hand firmly behind your back. A business developer (BD) is a professional salesperson hired to sell your firm’s services.
The Big Four and top-tier firms have been using them for decades with exceptional results. Now the strategy has trickled down to ambitious mid-market firms.
With the average business developer, typically paying for himself or herself after a year, there’s little doubt in my mind that it’s a smart long-term investment.
When it comes to growth, we’ve squeezed every last drop of juice out of the orange over the past few years. We’ve cut extra expenses to the bone and we’ve dabbled in sales training programs. For many firms, it hasn’t been enough.
At the same time, we’ve seen a historic level of commoditization of service offerings that have exhausted our ability to sell value, especially because, as CPAs, we never really learned how.
In the absence of that knowledge, partners – even seasoned ones – mistakenly allow client discussions to veer into the direction of price. It’s a swampy area that, once entered, is difficult to navigate and even harder to steer out of.
It’s murky in there. Is the client a Wal-Mart shopper or a Nordstrom shopper? What’s the price expectation and what happens if you don’t meet it? That’s the problem when we focus on price over value. And it’s a slippery slope – a mistake the right professional business developer would not make.
What’s Holding You Back?
One of the biggest misconceptions that keep firms from hiring business developers is the idea that a salesperson needs to be a CPA or have significant technical expertise. Nothing could be further from the truth.
Primarily, a professional salesperson needs to know how to sell. Secondarily, he or she needs to know enough about the subject matter to be conversant with the client and to establish credibility. Especially at the start of the sales cycle, the focus is less on technical knowledge and more on the sales process and experience. It’s a complex dance that involves the development of trust and confidence – a relationship based on an alignment between what the client needs and what your firm can deliver.
Manage for Success
The degree of success your business developer can achieve is closely tied to how you select and manage this individual. Firms often use the wrong selection criteria and, not surprisingly, end up hiring the wrong person.
One big key to success is to seek a salesperson with vast experience in intangible solution selling, with transactions that are about the same dollar value and same sales-cycle length. Also, look for candidates who had good training in a large environment, as well as entrepreneurial success where they were not representing a well-known corporate name that could get them in the door.
It’s much easier to generate leads when you have a big-name bank on your business card, versus a lesser known CPA firm. Educate yourself (my website has lots of articles on the subject) about what to look for and how to manage a business developer.
Make sure your partners understand that, once a BD has been hired, the days of “lone rangers” doing their own thing while holding tight to their own leads are over. It’s not about who gets credit once you’ve got a business developer on board. It’s about creating an environment for success and driving optimal revenue.
Opportunity development starts with a carefully selected team based upon selection factors well beyond technical expertise.
Creating the right environment means supporting your BD with a robust pipeline process and a cooperative partner group putting its faith (and its leads) into the hands of your sales professional. Decide how your shareholders will interface with the BD and their role in ensuring his or her success.
As you would with any new employee, set firm expectations, such as charging the business developer with developing his or her own lead base. Determine and communicate how soon the BD will be expected to generate revenue. I recommend a ramp-up period of one to two years.
You’ll also want to design a solid job description and a compensation package compatible with going market rates. Cost justification comes by evaluating the number of average-size transactions the BD is likely to close in a year. Don’t be shocked if this calculates to a sum that’s equal to or above partner compensation rates.
Using the “S” Word
It’s a funny thing with accounting firms. While they will openly acknowledge the desire for “growth,” the words “sales” and “selling” are often distasteful.
Come on people. This economy – with hints of a thaw but still quite chilly conditions – is no time for semantics. If you’re a mid-market firm aspiring for growth, a full-time expert in driving revenue is a smart and strategic investment. Done right, you’ll outpace other firms that haven’t figured it out yet!