Bob Spence, business development specialist and co-founder of business development software firm 5next.io, offers some strategic thinking about how to maximise sales growth through effective networking.
Over the past two years, 5next.io interviewed 43 business development professionals across Poland, the UK and the US, searching for best practice in this role in the context of building international trade against the backdrop of Brexit.
We discovered that the biggest area of concern focused on the various methods of creating the right connections. Creating the right connections was identified time and time again as the key challenge business development professionals address on a day to day basis especially those working internationally.
Business development professionals understand that the right contacts provide introductions, insights, resources and commercial information, which in turn delivers the commercial results.
Business development professionals by definition of their role have to exchange business cards, attend networking groups, schmooze at mixer events, present at trade shows and connect online.
The view from Łódź to Long Beach California is that networking today is like “trying to sip a mouthful of water from a fire hydrant”! There is so much connecting taking place, one doesn’t know where to start.
We looked at what’s recognised as best practice. Time use has a key part to play. Business development is a time consuming process and the concept of the 80/20 rule plays its part in measuring return on investment (ROI).
The successful business development professionals were those looking at improving those ratios. Connecting to everyone on the most random basis was not a successful formula.
80% of your most valuable connections are generated by 20% of your effort.
We looked carefully at this ratio. The top business development professionals take these figures further; they look at the 80% of that 80%.
What we then have is that 64% of your results come from 20% of that 20%! This would mean that 64% of your most valuable connectivity is sourced from just 4% of your effort!
Now that would mean that 96% of your effort will give a 36% return – or 36% of your results are coming from 96% of your effort.
All of our feedback suggests that in terms of revenue results, our group under review recognised an ROI ratio that was closer to 64/4 than 80/20. This return came up almost exclusively with regards to international business development.
With this in mind, the management of networking actions is becoming more and more vital.
This dramatic fall in ROI is a by-product that of what can be called in networking ‘the age of similarity'.
This means meeting people with a similar offer, with similar skills, with a similar approach, with a similar education, with a similar benefit case, with similar arguments.
The on-line presence of business development is another 'look-a-like' area too.
Everyone is being equipped with the same business development tools
Everyone is trying to conduct business in the same markets that these tools open up
Everyone has access to the same training to use these tools
With that in mind, we began to define the concept of ‘social commercial comfort’ as the way we now evaluate new connections.
This model is a new consideration for business development. It's not about 'unique value proposition'; it’s about something different. We describe it as:
'The degree of social commercial comfort you are able to generate'
Because we live in an age of similarity with 'look-a-like' online presence and ‘sound-a-like’ offline presence, we need to communicate something more to raise our profile in our meetings with potential valued connections.
This requires the recognition of 'bespoke social capital' as well as 'off-the-peg commercial capital'.
What we mean is to think about what you offer as a connection beyond the corporate similarity offer referred to earlier and this is your bespoke social capital. Your ‘off the peg commercial capital’ is your company offer or your skill set. So rather than just be proficient with the art of the ‘60 second pitch’ can you communicate a different position in the following terms:
'This is the total value of being connected to me’
This is very different than what it is that you’re selling, or your professional position. Doing business across borders requires recognition of this approach.
‘Social commercial comfort’ is the value in having you as a connection beyond what you do.
So if networking is like ‘trying to sip water from a fire hydrant’ then to achieve better results and improved ROI the key is to network on a strategic basis. On that basis, you’re not looking to appeal to everyone or connect on a volume basis but on a select agenda and you have ‘social commercial comfort’ that is relevant to that audience.
Strategic networks deliver three unique advantages:
access to centres of influence
connectivity to appropriate contacts
When we make judgments in engaging and connecting we use public and private information.
These days, public information is easily available from a variety of sources, including the internet; but because it is so freely accessible, public information offers significantly less competitive advantage in business development than it used to.
Private information or personal information, by contrast, is gathered from personal contacts who can offer something unique that cannot be found in the public domain, such as:
the release date of a new product
unpublished expansion thinking
knowledge about what a particular buyer looks for in making a decision
Private information, therefore, can give the top business development specialist an edge.
Consequently, the value of your private information to others and the value of others private information to you will depend on how much professional trust can exist in the network of relationships. I refer to this as the level of social-commercial-comfort within your network.
It became clear that it’s worth considering how your networking practices can lead to one kind of network or to another type. Meeting many people on an ad hoc basis is unlikely to build a strategic web of connections in an efficient manner.
This is why strategic networking generates your ‘opportunity DNA’ which is essentially the framework that creates your back ground to your connections. Your ‘opportunity DNA’ is built from the most crucial contacts in your network—people you rely on for the exchange of private information, specialised expertise, advice and introductions.
Every business development professional we listened to saw their international network of connections as the vital asset that delivered the results and this was more so than any other consideration.