No magic ratio - Office klaxons - Greatest bang for buck - The hard earned elixir of trust - But, never outstay your welcome!
My current essay thread, within the wider Climbing Mount Audacity series, aims to guide professional service firm leaders through the challenge of building a systematic sales capability. The importance of which I describe here. Before getting into the more technical guts of this topic, previous blogs looked at the importance of inculcating a winning sales attitude and developing effective communication skills. This week, I explore another critical sales-related question asked by all PS firms: to hunt or to farm?
So, how do you get the balance right between time spent hunting (winning completely new clients) and time spent farming (winning more work with existing clients)? For the start-up entrepreneur, the question doesn’t exist; it is just a case of gaining the first client (or two). Thereafter, however, and certainly for mature businesses this apportionment of selling-based time, energy and monies is really critical.
To hunt or to farm?
Well, there is no magic ratio but what I would say is this: the common mistake is to overly skew towards hunting. This is probably for a number of reasons. We all love the thrill of the chase. A new client account sounds the klaxons in the office and triggers team-wide adulation of the successful sales person. It always feels like a fundamental milestone for an ambitious business. At an individual level, it satisfies our professional desire for career variety and challenge. Perhaps, also, we are overly wary of the reputation-based risk of overstepping a line at existing clients: that of succumbing to the Big Firm malaise of landing and expanding. It seems easier, therefore, to focus sales activity in completely new directions.
What is often under-valued in all of this, however, is the asymmetry of the effort-to-reward equation between the two categories of sales activity. You will always get a far greater bang for your (time/effort) buck when farming relative to hunting. This is for a number of reasons that are worth explicit acknowledgement.
With existing clients, you have had the opportunity to impress them with your actual values and service excellence as opposed to a rhetorical promise (you told them you go the extra mile on your website, now they know this for real). The hard-earned elixir of trust is there. It may be, for example, that you have now transitioned your delivery team to an optimal point of leverage (less senior time, more junior time) as a result of iterative delivery success. That is, the client relationship is such that they now just trust you to put the right team in place to deliver the requirement; whereas, in the early stages, they were all over the minutiae of this team composition and over-demanding of senior time.
In short, long-standing clients are often more profitable than the newly won accounts. Furthermore, you have far greater, indeed privileged, insight as to the issues facing your existing clients and where you can add further value. You may also face less competition here; if you are a known entity, you may even have become the default preferred supplier.
So, for all these reasons, do not underestimate the healthy balance of effort that should be directed at farming. Of course, there is an ethical point to be supervised here. You will deserve their full opprobrium if you ever start pointing them towards contrived need statements or value-less offerings. At the firm I founded, Moorhouse Consulting, we rigorously challenged ourselves, in this regard, with our never outstay your welcome value. The point I am making is that there are often very real, legitimate future support needs at your existing clients and you need to be as proactive in the pursuit of these as you do in the hunt for new clients.
So, what’s next?
Next week, I will continue my focus on selling and how to build a sales capability with a look at a core process you will need to embed: the contact categorisation pipeline. There will be much to impart – including a free tool to help you calculate the sales activity ratios that apply to your business.
Hopefully, you’ll join us on this journey. It’s totally free, and you don’t have to be a Method Grid customer (though you’re more than welcome to sign up for a free trial here).
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