Business Development (which is the posh modern description of sales, it seems to me) is the buzz word in many businesses and perhaps needs to be examined.
Many august consultancy companies have run surveys of the amount of effort needed to build sales through new customers as against developing the existing customer base.
Conventional wisdom has it that the usual ratio is between 7 and 9 times the effort in order to achieve the same level of activity and that means a vast amount of work both externally and internally.
That quadrant so beloved of consultants, the Ansoff Matrix (http://tutor2u.net/business/strategy/ansoff_matrix.htm) looks at the four general routes to market: existing products into existing markets, new products into existing markets, existing products into new markets and finally, new products into new markets.
My old sales mentor, Phil Copp, the Sage of Wythenshawe, used to analyse his working year on the basis a sort of reverse 80:20 rule. For example he would plan for say 30 calls in a week of which 24 were to existing customers and 6 to potentials. Phil was a very wise man and knew where his best efforts would bring success.
Another survey says that we only obtain, in general, around 40% of the available business from our existing customers, simply because they frequently don’t realise that they can deal with us for a range of products or services and not just one. Law firms and accountants are classic examples of this problem.
So what can we learn from that? It is certainly not the customer’s fault; it is up to us to use every possible method (and there are plenty available these days) to make sure that our existing customer base knows what we can offer across the board.
It’s time to change their perceptions.