There’s a thin line between business development and providing free service

Business Developers often fall into a dangerous trap; during the course of working on a business opportunity, they end up providing the lead with enough free advice to the extent that the value of subsequent paid services has diminished substantially.

This stems from the fact that throughout the sales funnel’s various stages, the business developer is eager to demonstrate his/ her firm’s extensive knowledge of the subject matter, and by that risks one or more of the following:

Dispensing advice that is not built on sufficient research and analysis

Leads and prospects often challenge the business developer to provide his/her quick recommendations in terms of what can be done to rectify a given situation. The business developer – compelled to impress the lead – makes a few quick suggestions that are derived from previous projects.

While this tactic may work in some cases, it also often backfires as each case is different, and as such requires a unique solution. The correct answer would be to state that sharing a recommendation in the absence of a thorough understanding of all the relevant background won’t be practical, but that this will be addressed during the course of the project that is to be awarded.

Sharing too much advice that is valuable and impactful

If you’ve been doing what you do long enough, chances are that you have one or more solutions readily available for most situations you come across. While sharing those with the lead or prospect may impress the other side, if you go too far in terms of number and details of recommended solutions, you may actually end up have given your lead enough information to get started with implementing these without the need to pay you for your services.

This is particularly the case when the lead is unusually difficult during the sales cycle and demands more and more information in order to be convinced in that he/she is about to make the right choice. This will also entail multiple revisions of proposals which are now becoming more and more customized and tailored until they reach a point where they have become actual plans.

The correct course of action here is to focus – in your proposal – on the approach and methodology you will use to provide the lead with what he/she needs to demonstrate that you are qualified and experienced in this kind of work. Stay clear from offering free advice and focus on showing the other side that you know exactly what needs to be done in order to design the best solution. And if necessary, start showing off your arsenal of references and previous clients for whom you’ve done similar work, and invite the skeptical lead to contact any or all for references and feedback.

Help a lead in phantom-shopping or validating another proposal

In some cases, a particular lead has his/her mind already set on another service provider and is now using you to verify that the price obtained from the other party is fair. Some will even go as far as using your proposal to drive down the other one a bit further. In both cases, you will most likely not end up getting a contract, but will have wasted a lot of time and energy in vain.

At other times, you may determine – sometimes after weeks – that the lead is not really serious about acquiring the particular service he/she is discussing with you, but merely shopping around to find out how much it would actually cost. Again, no contract but a lot of wasted time and energy in vain.

To avoid all of the above and more, you must design your sales funnel and business development processes diligently and effectively. Foremost all, this includes pinning down how much time and energy you are willing to spend with leads during each of your sales stages, and when it becomes time to drop it and move on. Again, if you’ve been doing this long enough, you will have a reliable understanding of how long each sales stage should reasonably last, and when you start risk falling into one or more of the pitfalls stated above.

Equally important is the element of qualifying your leads as early as possible. This is usually your second sales stage right after opportunity identified, and which is where you will spend a good amount of time trying to figure out to what extent your lead is serious about actually acquiring the service in discussion. You should also do a lot of background checks and talk to other firms you have good relations with. If the general feedback is “yes, we’ve spent some time on a proposal for them a while ago, but that never materialized”, you will know that it is now your turn to validate a decision that has already been made, or provide someone with an update on the prevailing market rates for this service.

Keep in mind though, business development is more of an art than it is a science. As such, there are no clear guidelines you can buy and follow. Rather so, you must learn to trust and follow your instincts. If your gut-feeling tells you that there’s a solid chance for you to win a contract – even if all signs indicate otherwise – go for it. In other cases, if everything looks great but you have a funny feeling that you can’t shake, consider moving on and risk dropping an opportunity that seems promising otherwise.


About the Author

Pinnacle Business & Marketing Consulting is a results-driven boutique consulting firm that specializes in providing clients with practical and pragmatic solutions to their business and marketing challenges.

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2 thoughts on “There’s a thin line between business development and providing free service

  1. Pingback: A typical set of Sales Stages for your Sales Funnel | Pinnacle Business & Marketing Consulting

  2. Pingback: What you should expect from your Clients | Pinnacle Business & Marketing Consulting

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