If you want to grow revenue, do you need to improve your sales capabilities? Not necessarily. In fact, of the nearly two-dozen professional services firms I’ve had the privilege of getting to know over the past few years, only one of them had a sales problem. For the rest, the real challenge was that their otherwise qualified business developers – whether they were partners or dedicated salespeople – didn’t have enough qualified opportunities to sell to. In those firms, investing in sales would have been like buying a better tractor to harvest a field that didn’t have any seeds growing in it.
Professional services firms don’t like to talk about selling. In fact, in a number of professions, there are strong professional norms and codes of conduct against direct solicitation. Instead, they talk about business development or client development, catchall terms that include all the activities firms invest in to generate new business. But while related, sales and marketing are different tasks, and by focusing on the wrong ones firms risk investing time and energy in an area that’s unlikely to help them.
You can think of business development as having two parts:
- Demand generation (marketing) – sparking interest in your services from a potential buyer and shaping their impression of your offering.
- Demand fulfillment (sales) – working with a prospective customer to demonstrate your ability to solve their challenge and designing the right solution for their needs.
In other words, business development combines activities related to making people aware of your practice and its offerings with convincing them that you have the right solution for their challenge. From a client’s perspective, you can think of these two activities as search and selection.
Partners in professional services firms often see themselves as having a sales challenge. But when I ask what percentage of qualified opportunities they win, the numbers are impressive – often 60%. When clients know them, clients choose them. The problem is that there are too few opportunities coming in the door. And that’s a marketing problem, not a sales problem.
This is both a relief and frustration to many business developers. It’s a relief because many of the “sales” activities that seem so foreign to leaders in professional services actually come naturally to them. Years of professional practice have taught them how to build relationships, explain a situation, and persuade others. Transactional sales activities don’t work in a professional services context, but relationship-based and strategic selling activities do.
At the same time, it’s a challenge because marketing professional services is time-consuming, rife with uncertainty, and involves exercising a different type of muscle.
Consider the following activities that I’ll classify as marketing, although marketing obviously involves many more:
- Meeting new people within your existing clients
- Cross-selling or introducing your clients to additional practice areas
- Growing your network at professional events
- Writing thought leadership materials
These activities are harder for professional partners to spend time on. To start with, they’re almost always non-billable, and not directly tied to an incoming opportunity, so it’s hard to justify the time spent. Second, they all have a very uncertain payoff. You put in the work today, but you won’t see the results for months or years, if ever. Finally, these activities are additive with each other. It’s not enough to do a “little bit” of marketing, you need to do a lot of it.
Recognizing when you have a marketing problem instead of a sales problem is an important first step in growing your revenue. Most firms under-invest in business development training, so it’s best to focus on where you need the most help. This goes doubly so for new hires and support staff. It’s also much easier for support staff to assist with marketing than it is to have them lead a sales opportunity. And most importantly, marketing has a delayed return on investment; you need to do it for a while before you see results. Waiting too long to focus on marketing because you’ve over-invested in your sales capabilities only delays when you get to realize the results.
Business development is a broad term that often leads to confusion among professional services leaders about what activities their business leaders actually need to undertake. Separating out activities that help clients find you from those that help clients choose you can help you invest your resources in the areas you need it most.