Nem White Paper Spring 09

WHITE PAPER

SPRING 2009

Relationship Management REDEFINED... How to use the ‘sheepdog’ approach to relationship management … quietly bringing your clients and referrers towards you to generate astonishing new opportunities within your own business.

Abstract After primarily conducting research into the relationship between SMEs and Business Banks it became apparent that the generation of significant volumes of new business in the Professional Services sector relies upon a different process and structure than is generally accepted as the norm.

We call this process, the VALUE™ cycle. The following questions emerged as significant contributors to the successful

What is the difference between transactional sales generation and VALUE™ opportunities? When does the ‘Professional Services’ sales cycle actually start? What are the elements of a VALUE™ referral? How important is simplicity in an effective new business approach? When do the VALUE™ referrals replace transactional sales?

Traditional new business development techniques tend not to distinguish greatly between selling products and gaining referrals. The VALUE™ approach to Relationship Management adopts ‘sheepdog theory’ to countermand the traditional organic growth tenet, “Concentrate on your prospects”; and replace it with,

“Have your prospects concentrate upon you.”

outcome: © Copyright 2009 Non Executive Management Pty Ltd. Phone: 1300 857 636 Email: [email protected] Web: www.nem.net.au

WHITE PAPER

SPRING 2009

What is the difference between transactional sales generation and the development of VALUE™ opportunities? Transactional sales tend to come from existing customers seeking additional and/or alternative

VALUE™ opportunities are generated by interactions based upon ‘open questions’ … designed to

focuses upon exploring the relationship … and then encourages the customer to think about his/her

services from you; as a direct result of positive interaction with your

encourage customers to discuss life through their own eyes; and

own business opportunities and discuss them with you.

business ... or from the efforts of sales staff.

subsequently uncover previously unknown opportunities.

The VALUE™ process is a little like sending the dogs behind the sheep and bringing them quietly

While these transactional sales are

Rather than the traditional

welcome, they seldom lead to either previously unknown new business

concentration upon the presentation of sales oriented features and

towards you ... rather than yapping at them from the front (with obvious

opportunities or referrals.

benefits, the VALUE™ method

outcomes).

When does the ‘Professional Services’ VALUE™ sales cycle actually start? The Professional Services VALUE™ sales cycle commences with a detailed grading of existing relationships. Until now, businesses relationships have usually (but incorrectly) been graded transactionally, i.e. by (a) their monetary value to the company; either current or potential and (b) the strength of sales interfaces. In other words, ‘A’ clients are deemed to be the most significant clients and ‘D’ clients are the least significant. In this new paradigm, shaped by behavioural psychology rather than avarice, relationships are re-graded to reflect their propensity to add genuine value to an on-going relationship.

‘A’s = Clients with whom you have a strong personal relationship; allowing you to make contact at any time.

‘B’s are far more likely to provide business and to pass on referrals. These become the source of quality business activity.

‘B’s = Clients with whom you have a strong business relationship based upon mutual respect.

‘C’s are clients of both lesser transactional value and personal engagement. They tend to be unreliable sources of both business and referral until they have grown into ‘B’s.

‘C’s = Clients with whom you have a limited relationship based upon some level of business activity. ‘D’s = Clients you do not know particularly well or with whom you have not yet engaged in proactive contact. The strength of this psychometric grading is the fact that: ‘A’s are unlikely to respond to traditional sales approaches and, if they do respond, outcomes are likely to be unreliable and/or negative.

‘D’s are contacts at the start of their passage through to ‘C’ then to ‘B’. Each grading requires a particular approach which is further facilitated by a VALUE™ tool. When the operation of this tool is mastered, the process becomes both remarkably simple and extremely fruitful.

© Copyright 2009 Non Executive Management Pty Ltd. Phone: 1300 857 636 Email: [email protected] Web: www.nem.net.au

WHITE PAPER

SPRING 2009

What are the elements of a VALUE™ referral? While referrals have long been regarded as the most reliable and strongest sources of new business, little has been known about the science behind gaining them until the initiation of a nem-backed Doctoral Research programme. Referrals fall into two categories external and internal. External referrals are proffered by clients and contacts who wish to recommend your services to colleagues and associates. Internal referrals are generated by clients and contacts who recognise internal requirements … and the need to discuss these additional needs with

After gaining entry to this relationship-oriented association, participants become members of a

between your client, yourself and the outcome.

you.

“Trilogy of Trust”.

“Trilogy of Trust” members exit the realm of ‘pecuniary or mercenary

Good clients operate in a

In the case of external referrals,

When properly undertaken,

on each other and communicate

this relates to the relationship between the referrer, the client and yourself. In the case of internal

transactional sales’ and enter a new domain centred upon ‘attracting business’ from fellow, like-minded

with each other.

referrals, it relates to the relationship

professionals and individuals.

surprisingly similar manner to good friends. They help each other, rely

How important is simplicity in a VALUE™ new business approach? “There is a certain majesty in simplicity which is far above the quaintness of wit.” Alexander Pope 1688 – 1744.

Effective change management demands simplicity in all things. Earlier, more complex VALUE™

decreasing stress and anxiety by at least 50%.

paradigms revealed a poor take-up rate until stripped-down versions were

produces clear measurements of effectiveness in both individuals and

found to be not only more clearly understood by all operators but more successfully implemented as well.

teams. These, in turn, allow management to pre-set Key Performance Indicators (KPIs) and

It is not unusual for VALUE™ practitioners to immediately increase

gain a valuable insights into new business productivity.

VALUE™ methodology also

the worth of new business lead activity by well over 60% … while

© Copyright 2009 Non Executive Management Pty Ltd. Phone: 1300 857 636 Email: [email protected] Web: www.nem.net.au

WHITE PAPER

SPRING 2009

When do VALUE™ referrals replace transactional sales? The business of generating VALUE™ referrals is quite different from the processing of transactional

VALUE™ meetings are designed specifically to generate business previously unknown and usually

create ‘reverse sales’ whereby your client and/or network identifies opportunities and passes them to you.

sales. In general terms a transactional sale is based upon a known piece of

unexpected. Both internal and external referrals relate to business not

These referrals, or ‘reverse sales’, are based upon synergy rather than

business e.g. a call from a client requesting information which is likely to lead to a sale.

evident from currently known information.

generally accepted sales techniques and are additional to existing sales.

In this context, the VALUE™ or ‘sheepdog’ technique is designed to

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© Copyright 2009 Non Executive Management Pty Ltd. Phone: 1300 857 636 Email: [email protected] Web: www.nem.net.au