How to Effectively Develop New Business

As the economy worsens, advertising revenues in every medium shrink. It’s a sad fact of life that at the moment a businesses most need advertising and sales is the very time it can be least afforded.

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Communication for business development purposes is a very specialized area. When I was a bank consultant, one of the first things I did after signing a contract with a bank was sit down and review the written communications pieces sent to clients, prospects, and to strangers. The purpose of a business development letter is to create prospects. The purpose of a sales letter is to sell your company and its products to prospects. Most marketers confuse the two. There is a business development letter and there is a sales letter – two separate things. Many marketers (or business owners who do their own business development) think a business development letter sells products. It does not. Instead, it sells the expertise, credibility and reputation of the organization and/or of the individual with whom the prospect will be dealing. A business development letter makes people want to hear about products and services – and that is achieved via sales letters and sales calls. Most bank marketers I worked with did not understand this. Even the most sophisticated bank marketers in New York, San Francisco, Dallas and Chicago did not understand. They thought business development and sales letters were the same thing. The first and most basic rule of business development communication is this: The recipient of a letter is not a prospect to whom something can be sold. He or she is a stranger. To become a prospect, a response to a business development effort – letter or telephone sales call – must be received. If you are mass marketing low-cost products, you can make sales to strangers... but it can be a very expensive effort. The second rule: Business development letters talk about the recipient and that person’s needs. The closer you target your market segment, the greater will be the readership of the letter. You establish your credibility and get a positive reaction by proving you know about and understand the prospect’s needs. A sales letter talks about your company and your products and how they fill client needs. Sales letters are sent to prospects, not strangers. The biggest mistake marketers make is to try and turn business development letters into sales letters. To give you an example from my own experience, the best private banks in the country specialize by client occupation. Physicians, accountants, lawyers, corporate executives, small business owners, and entrepreneurs/independent business owners were all targeted for business development. We narrowed our definition of segments served. One private banker served the needs of surgeons only. Another served non-surgeons. The same was true of CPAs and lawyers… small, independent firms were handled by one banker, CPAs at large firms were handled by another. Corporate executives were handled by one private banker and independent business owners were handled by another. Each group’s problems are different. Our business development message to them was designed to deal with their needs, not our products. Thus, the more specialized we could be, the more specific we could get about their needs. That means we could then write sales (not business development) letters to them to more effectively sell them on becoming private banking clients. Viewing market segmentation, business development and sales as three distinctly different parts of a process is as effective for companies selling office furniture or computer equipment as it is for private banks. Know your market segments. Find out what motivates them. With most successful business people, “time is money” is almost always a motivator because most successful people are very busy. How do you communicate that message? It is an art to write an effective business development letter. It is difficult to explain the business advantages you offer while talking about the letter’s recipient… someone you’ve never met. The temptation is to talk about you and your products – a guaranteed way to get the letter thrown away. Talk about the person reading the letter and what they need and your letter gets read. Business development letters need to drip with credibility. For example, you do not on the one hand say “Your time is money,” and on the other hand say, “…and I’d like to stop by your office during business hours to waste some of your time.” Instead, you tell a time is money person you will be glad to meet them early in the morning, before the business day starts. One of the major New York banks -- one whose name you would easily recognize -- did a huge advertising campaign for private banking. The lead line kind of said, “Now that you’ve made it, maybe you’re ready for (our) private banking department.” What better way to say, “We, the big, important bank think little old you may be important enough to bank with us.” Not exactly a theme designed to stroke the ego of the customer (and successful people have strong egos). Such an advertising tag line is very effective at letting people understand just how arrogant one is. Our surgical specialist private bankers were very effective business developers. One reason is because these specialists offered to meet with surgeons at the hospital, for coffee before surgery began. That usually means very early in the morning. It is often the only peaceful time of the business day for successful surgeons. Another mistake made in both business development and sales letters is to promise high quality customer service. People make buying decisions (especially about services like banking) on the basis of expertise, not customer service. The more profit potential a client has, the less they respond to sales letters that promise quality service. Everyone promises quality service. The worst provider of customer service in the world promises quality service! Profitable customers expect quality customer service and won’t do business with you if they don’t get it. It’s like being an airline that sells its services by saying “We promise that our airplanes fly.” When you offer customers quality service – when you make it the centerpiece of your sales letter – they know you don’t understand that people buy expertise. They buy quality. They buy “time is money” products that help them save theirs. In the private banking profitability reports I did annually for several years, one of the questions asked was “What is the dominant theme of your business development efforts?” It never failed. Banks that answered the question “Qualify customer service” were half (or less) as profitable as those who answered “Banker expertise.” If you have done a good job of market segmenting your prospective client base – if the occupations of those to whom you are writing are known – there is one rule that gets good business development results. For independent business owners (and that includes physicians, surgeons, lawyers and CPAs who own their own, small practices), start the letter with the word “you” and make “you” the subject of 75 percent of your sentences. Be sure your letters to both prospects and customers stroke the recipient’s ego, not your own. How can you do that? Count the number of times “you” rather than “I” is the subject of all of your sentences. The ratio should be 60-40 or 70-30 – in favor of the recipient. How do you do this? Here’s one example from a letter to Dear Mr. Jones: “I am happy to announce that ABC Company is making available specialized accounting services for health care professionals. This new service makes it possible for ABC to eliminate costly errors and ensure that when your invoices arrive at an insurance company’s office, you will be promptly paid.” Rather, try this: “Like many health care professionals, you may have found it difficult to find accounting services familiar with all the medical procedures you perform daily. One small error in a listed code can be costly to you. Errors mean insurance providers will not pay you for services provided in a timely way… or possibly not at all.” By the way, it is a very good idea to train those who talk with prospects and clients to do so in a way that strokes the other guy’s ego. It’s actually fun to have sales meetings where people are graded on their ability to talk from the client’s rather than their own or the company’s perspective when describing and selling products.