How Important Are You?

Published in: IPA Bulletin, May/June 2002

Technical Competence Is Only Half the

Picture for Business Development Success

We were recently contacted by a national graphic arts company, with a most unusual request. They wanted a proposal for training their experienced and traditionally successful sales reps to be more successful with major accounts, and in today's changing business environment. After two conference calls and a follow-up proposal, we received the award to develop their sales training curriculum for experienced and successful reps.

As you might guess, this is not a traditional sales training curriculum. As an overview, it's designed to guide their reps into becoming strategic resources for target customers.

What our industry looks like will ultimately be decided by buyers. Noteworthy graphic arts buyers have created a whole new set of criteria for evaluating and selecting suppliers. And whether a company's reps are or are not selling big dollars, there may be too little evidence they understand how to successfully pursue and win critically important new business in today's changing business environment.

A Falsely Deflating Picture:

Most graphic arts organizations have not noticeably changed the training they give their reps. Yet, there's little argument that buying organizations have noticeably changed their buying values, and processes.

Part of the picture is lack of known competent industry business development resources. Another part of the picture is company and association leadership. It's also becoming accepted that customer service reps are increasingly responsible for day-to-day maintenance and servicing of current accounts, a responsibility that historically required much of a sales rep's time.

With additional time potentially available for sales' reps to pursue new business, there's also the ongoing and even sometimes desperate need for new business. This condition leads to the nagging question, "What are our reps doing differently to win new business if they aren't intellectually equipped, organized, and focused any differently for winning new work?"

Compounding this scenario of suppliers needing new business is the ongoing trend of buyers working to consolidate suppliers, and generally speaking, changing to new suppliers less often. (Buyer seminars we conduct repeatedly generate testimony that buyers prefer to avoid the grief required to bring in new suppliers.)

The net effect of these market trends is increased competition, frustrated suppliers and company owners, and the sometimes false impression of decreasing total market demand.

As an added perspective, many graphic arts owners and senior managers "know in their gut" that business development skills and activities, which worked when they were beginning their careers, are no longer effective. Said somewhat differently, technical competence and acceptable social skills may get one past the receptionist for a first appointment. But professionals in key buying positions, regardless of their title, are clearly looking for performance and value from suppliers that are very different from traditional evaluations.

In effect, we've moved into a world in which producing acceptable quality product, on-time, at a competitive price is expected, and has become a condition of sale, rather than a motive for awards.

The more important question the buyer is predictably asking the prospective supplier rep might be phrased, "What do you have to offer us for improved performance that we need, and don't already have?" If the answer is either very little, or I don't know, that prospective supplier rep may find it most difficult to obtain a follow-up appointment, partly because the buyer doesn't have the time to "train the supplier."

To be effective in business development, a graphic solutions supplier's leadership needs to become involved in understanding which customers see the supplier as being important to them, which customers don't care whether or not they exist as a supplier, and why. Armed with this strategic information, a Supplier can begin "profiling" the customers it wants to pursue... and who it does not want to pursue.

A Strategic Focus

Peter Drucker is frequently credited with offering that the main purpose of a company is "to create customers." On that line of thinking, our industry would be well served to reorient its thinking towards "finding new customer applications for current production and technology resources."

To that end, buying organizations increasingly recognize that they can only reduce costs from suppliers so much, and that to develop a new, effective supplier costs money. The buying organization's CEO also knows that the main function of their company and his/her job is to ensure future revenues.

It's a "short distance" in thinking from that point to understand that the buying function is increasingly interested in finding suppliers who can have an impact on their company's performance, and particularly its revenues. (To a noticeable degree, we increasingly find the buying function reporting directly or indirectly to a marketing position, rather than finance.)

What we are slowly but finally coming to understand as an industry is that customers don't buy what they buy because it makes them feel good, or gives them hot flashes. They buy what they buy because it supports their performance needs, objectives and goals.

It is to this end that we, as an industry, need to become focused, if not obsessed -- business development, if not the most important function in a company, is at least as important as production and finance.

To be effective in business development, a graphic arts supplier's leadership needs to become involved in understanding which customers see the supplier as being important to them, which customers don't care whether or not they exist as a supplier, and why. Armed with this strategic information, a supplier can begin "profiling" the customers it wants to pursue, and who it does not want to pursue. This written profile should not only be reviewed with all key personnel, but also reviewed and updated at least every six months.

As an additional but critical step toward more effective business development, we recommend that an organization learn how to conduct basic research on its target prospects. Such background information not only supports success for initial account contacts and visits but also allows initial discussions to focus on the prospect's business conditions and performance needs, rather than the supplier's offerings.

Such background information also feeds a more correct "positioning" of the prospective supplier for potential opportunities to support the buyer's performance needs. In other words, first gaining understanding and agreement to the buyer's strategic objectives allows the prospective supplier to more correctly position his/her company to support those objectives and goals.

Information Resources

Most folks we work with confess they haven't been into a really good library in years. Others noticeably wince on hearing that we plan to take an evening and visit the local university's business school library, having first prepared the library's business section's supervisor for our visit. A helpful assistant at the information desk of the business section can be priceless for opening-up a radical new way of seeing how to develop one's company, or one's business development career.

Such moments are famous for changing sales careers, company performance, and working relationships between reps, owners, customer service reps, and customers. It's not unusual for a two-hour visit to roll into three to four hours, and to be repeated every two weeks or so. Many good public and university libraries also have Internet access for patrons, opening-up significant library databases of information to one's home or office.

For example, a good library should not only have Internet access, but access to databases like Information USA -- a relational database of over 100,000 public and private companies, published articles about those companies, and supporting performance information. In addition, most good libraries today have significant hard copy and electronic resources that support either the more contemporary North American Industrial Classification System, or the older SIC code. These hard copy and electronic information systems profile most organizations to a degree that allows "the searcher" to learn, literally within a few minutes, how many and which organizations of a certain business profile exist within: (a) the geographical distance you choose, and (b) within a specific profile of revenues, and number of employees. Additional information usually available includes key executives, phone numbers, addresses, and even sister companies.

Target Customers

Not all useful prospect information is ever at a single source. Examples of target customer information resources:

Good research library business section, plus a helpful information assistant,

• Prospect's sales literature,
• Suppliers,
• Employees,
• Associations,
• Current customers, and
• Internet

Note: while the above information resources may have appeared to focus on electronic media, be aware that hard copy information resources are often not only different from electronic, but contain useful information that's not available electronically. Additional information resources to pursue can include a prospect's sales materials (which prospective suppliers seldom read), suppliers, employees, and even current customers.

Summary

While contacting prospective new accounts is fundamental to developing new business, not all prospects and their potential revenues are of equal value to a supplier's performance. And just as certain current customers value your performance as a supplier more than other customers, knowing who and why they value your contributions can be critical for guiding your organization's selection of whom to pursue, and whom to avoid.

Whom we select to pursue for new business may be the most important decisions we make this year. It "drives" who we eventually serve as suppliers over the next year or two. It also drives our opportunities for business performance improvement.

To that end, our ultimate importance as graphic solutions suppliers emanates from our contributions to customers' revenues and improved performance. As supplier organizations, customer contact personnel, and as responsible owners and senior management, we need to recognize that how we utilize our resources to have an impact on customers' performance determines our value.

Everything we do needs to focus on supporting our contributions to customers' revenues and performance, and understanding what we might do to that end. If that's accepted, my next question is, "Who is to lead the process?"