Latest / What is Business Development? / Episode 99: What is Business Development?...BD BOK Deep Dive: Chapter 15 How to Boost Growth via Your Customers

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Episode 99: What is Business Development?...BD BOK Deep Dive: Chapter 15 How to Boost Growth via Your Customers · What is Business Development?

• 0:00
  Speaker 1: Okay, let me ask you a question. Should business development
• 0:03
  Speaker 1: involvement just end the second of prospects signs the contract
• 0:07
  Speaker 1: the moment that agreement is secured, are you supposed to
• 0:10
  Speaker 1: just move on, you know, grab your commission and dive
• 0:12
  Speaker 1: right back into the next hunt.
• 0:14
  Speaker 2: It's a common mindset, it is.
• 0:16
  Speaker 1: But if that's your standard operating procedure, you are almost
• 0:19
  Speaker 1: certainly leaving the easiest, most predictable revenue just sitting on
• 0:22
  Speaker 1: the table. We explored this through a LinkedIn poll referencing
• 0:26
  Speaker 1: the Business Development Body of Knowledge, and the response from
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  Speaker 1: the bid community was I mean, it was overwhelmingly decisive.
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  Speaker 2: What were the numbers?
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  Speaker 1: Eighty eight percent. Eighty eight percent of respondents said yes
• 0:39
  Speaker 1: and emphatic yes. That BD has to stay involved long
• 0:43
  Speaker 1: after the initial sale. And that makes perfect sense, it does.
• 0:46
  Speaker 1: The rationale is irrefutable. I mean, look at the numbers
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  Speaker 1: you share with your own leadership every quarter. The probability
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  Speaker 1: of selling to a brand new prospect, it's notoriously low.
• 0:56
  Speaker 2: We're talking five to twenty percent on.
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  Speaker 1: A good day, exactly five to twenty. Now compare that
• 1:01
  Speaker 1: to selling to an existing, established client.
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  Speaker 2: Oh, it's a completely different game. That number just jumps
• 1:07
  Speaker 2: monumentally to a win rate of sixty to seventy percent.
• 1:11
  Speaker 1: Sixty to seventy we were talking about a massive revenue Multiplaiyer.
• 1:14
  Speaker 1: So this deep dive is all about understanding how to
• 1:17
  Speaker 1: capture that multiplayer how to transform BD from you know,
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  Speaker 1: a short term transactional hunter roll into a permanent strategic
• 1:27
  Speaker 1: growth shepherd. Okay, let's unpack this.
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  Speaker 2: Right, and that is the core strategic tension in so
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  Speaker 2: many organizations right now. Historically, expansion after that initial sale
• 1:35
  Speaker 2: gets shoved over to operations or you know, account management
• 1:39
  Speaker 2: customer success staff.
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  Speaker 1: But their focus is different completely.
• 1:42
  Speaker 2: Those teams are fundamentally focused on execution and fulfillment, not
• 1:46
  Speaker 2: on complex opportunity structuring and closing. And when you leave
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  Speaker 2: those high probability expansion sales to people who lack that
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  Speaker 2: specific b D expertise, you get what the research calls
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  Speaker 2: revenue leakage.
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  Speaker 1: Revenue leakage.
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  Speaker 2: It's all the unrealized potential of a deep client relationship.
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  Speaker 2: So our mission today is to dive deep into the
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  Speaker 2: specialty that's specifically designed to capture that potential customer development.
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  Speaker 2: We're going to analyze the specialized framework, the governance metrics
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  Speaker 2: and the cross functional power required to turn your existing clients,
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  Speaker 2: the ones you already fought so hard to win, into
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  Speaker 2: your company's primary and most reliable engine of growth.
• 2:26
  Speaker 1: Okay, let's start with the cost of that disengagement, because
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  Speaker 1: if you're in that twelve percent who think BD should
• 2:32
  Speaker 1: walk away post sale, the body of knowledge highlights exactly
• 2:35
  Speaker 1: what you're sacrificing. You're ignoring that seventy percent win rate.
• 2:38
  Speaker 1: And it's so much more than just missing one expansion contract.
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  Speaker 1: It's systemic failure exactly. You fail to grow the account
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  Speaker 1: because the staff tending it they just don't know how
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  Speaker 1: to structure an expansion pitch. You fail to get that
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  Speaker 1: critical product feedback you need to stay competitive, and.
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  Speaker 2: The relationship just decays over time.
• 2:55
  Speaker 1: It does. You end up with higher customer churn, higher
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  Speaker 1: acquisition costs, and you completely miss out on critical referrals
• 3:02
  Speaker 1: and you know, organic word of mouth growth. These are
• 3:06
  Speaker 1: valuable relationships, just hemorrhaging revenue.
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  Speaker 2: All because they lack a skilled developer attending to their
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  Speaker 2: health and growth. And while the role is kind of
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  Speaker 2: emerging for modern bead teams, the concepts behind it are
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  Speaker 2: really robust. I mean, customer development as a formal strategy
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  Speaker 2: started back in two thousand and five, that far back,
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  Speaker 2: oh yeah, with Steve Blank's foundational book, The Four Steps
• 3:29
  Speaker 2: to the Epiphany, and then it was popularized globally by
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  Speaker 2: air Crees in twenty eleven with the lean startup.
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  Speaker 1: Oh okay.
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  Speaker 2: The customer developers mandate is intentionally broad and powerful. They
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  Speaker 2: serve as the customer's ombudsman, their primary advocate through the
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  Speaker 2: entire relationship, and the goal is always, always make that
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  Speaker 2: customer overwhelmingly successful.
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  Speaker 1: Okay, Now, wait a minute. You said they have the
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  Speaker 1: authority to influence changes across the entire corporation. That sounds
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  Speaker 1: great in theory, but practically speaking, how does one bed
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  Speaker 1: professional convince a skeptical CFO or maybe an overwhelmed head
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  Speaker 1: of engineering to fundamentally pivot their roadmap based on just
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  Speaker 1: one or two clients.
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  Speaker 2: That's the critical difference. See. Unlike a product manager or
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  Speaker 2: a customer success manager, who are inherently product centric and
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  Speaker 2: often lack real organizational leverage, the customer developer starts with
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  Speaker 2: a unique advantage.
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  Speaker 1: What's that trust?
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  Speaker 2: They close the deal, they are responsible for the long
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  Speaker 2: term profitability of that asset.
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  Speaker 1: Ah, so They're not just asking for.
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  Speaker 2: A change exactly. They present validated data on risk mitigation
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  Speaker 2: and revenue identification. They translate customer success into market validation.
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  Speaker 2: So if the CD tells the CFO, look, we must
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  Speaker 2: pivot the pricing model because our perceived value is sinking
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  Speaker 2: and this affects our sixty percent probability pipeline that carries
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  Speaker 2: organizational weight that a typical CSM simply doesn't have.
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  Speaker 1: Okay, So if their authority hinges on validating and mitigating risk,
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  Speaker 1: how does that translate into actual tangible steps for growth.
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  Speaker 1: Let's talk about market validation TAM, Sam som. How do
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  Speaker 1: those concepts influence what the customer developer does next?
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  Speaker 2: Excellent point, And we shouldn't think of this framework as
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  Speaker 2: some academic checklist. It's really a logical, phased approach to
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  Speaker 2: reducing resource risk.
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  Speaker 1: Okay.
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  Speaker 2: It begins almost counterintuitively in the customer discovery phase. This
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  Speaker 2: is typically where a brand new product starts. You're selling
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  Speaker 2: to the initial innovators.
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  Speaker 1: First two and a half percent of the market, right.
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  Speaker 2: Exactly, that tiny slice. And the developer's mission here isn't
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  Speaker 2: revenue scale. It's extreme candor. It's gathering raw unfiltered feedback
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  Speaker 2: to determine if the product addresses a valid problem in
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  Speaker 2: the total adjustable market the TAM.
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  Speaker 1: So if the problem isn't real or the product just
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  Speaker 1: doesn't solve.
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  Speaker 2: It, you stop immediately and you save millions.
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  Speaker 1: But if the problem is valid, but you realize your
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  Speaker 1: company's capabilities can actually serve that entire market, you move
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  Speaker 1: to the next step.
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  Speaker 2: Right precisely that transitions us into customer validation. That's the
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  Speaker 2: growth phase. The focus here is scaling past those innovators
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  Speaker 2: and monitoring success metrics to confirm the serviceable adjustable market
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  Speaker 2: or SAM. This is all the customers your corporation can
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  Speaker 2: feasibly reach with you know, existing or easily obtainable resources,
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  Speaker 2: and you have.
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  Speaker 1: To validate that the SAM is actually big enough to
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  Speaker 1: sustain your growth targets.
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  Speaker 2: You have to If it proves sustainable, then you finally
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  Speaker 2: hit customer creation, the expansion phase. This is where you
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  Speaker 2: validate the serviceable obtainable market the SOM.
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  Speaker 1: Okay so, the SO is the piece of the pie.
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  Speaker 2: You can actually get the subset of the SAM you
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  Speaker 2: can actually convert with your current near term product and
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  Speaker 2: sales capabilities. The customer developer is in essence, stress testing
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  Speaker 2: the scalability of the entire operation.
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  Speaker 1: And if you find during validation or creation that your
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  Speaker 1: SAM or your SOO is just too small, that's when
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  Speaker 1: the customer developer drives what Eric re is called the pivot.
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  Speaker 2: That's it. And a pivot is not a random change,
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  Speaker 2: It's a structured course correction designed to test a new
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  Speaker 2: fund na mental hypothesis. That's the key. If the customer
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  Speaker 2: developer's metrics show the market just isn't there, they leverage
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  Speaker 2: that deep customer feedback to influence a corporate pivot toward
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  Speaker 2: a different feature set, a different pricing model, or even
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  Speaker 2: an entirely different customer profile.
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  Speaker 1: And that pivot has to be powered by something.
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  Speaker 2: It has to be powered by a validated growth engine.
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  Speaker 2: The BD research outlines for primary engines as defined in
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  Speaker 2: the Lean startup all powered by your existing customers. Okay,
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  Speaker 2: do they word of mouth from your biggest fans, product
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  Speaker 2: usage so virality that's baked right into the product itself. Advertising,
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  Speaker 2: But only when the lifetime value is high enough to
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  Speaker 2: pay for net profitable ads and of course repeat purchases
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  Speaker 2: for subscriptions or consumables.
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  Speaker 1: And if you can't validate one of those engines.
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  Speaker 2: The business must pivot again.
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  Speaker 1: So once that engine is humming along in the growth
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  Speaker 1: and expansion phases, the customer developer then governs two crucial
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  Speaker 1: sets of metrics, Customer Value management CVM and the Customer
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  Speaker 1: Health Score or CHS. Let's take CVM first. This is
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  Speaker 1: the ultimate measure of relationship sustainability. The formula is simple,
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  Speaker 1: but I think really profound. Customer value equals benefits minus.
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  Speaker 2: Price, benefits minus price.
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  Speaker 1: This whole process has three phases, value discovery during activation,
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  Speaker 1: value delivery during conversion, and finally, value realization during the
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  Speaker 1: success phase. You have to monitor this because value is well,
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  Speaker 1: it's fluid.
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  Speaker 2: And this is where we need to bring in a
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  Speaker 2: concept that's critical to this entire conversation, which is the
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  Speaker 2: value triangle. The value triangle, every healthy customer relationship relies
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  Speaker 2: on the equilibrium of three factors scope resources, which is
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  Speaker 2: price and time and expected benefits.
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  Speaker 1: Okay, so if any one of those gets out of whack, the.
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  Speaker 2: Whole thing is at risk. If a customer changes the
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  Speaker 2: scope without increasing resources, or if sales over promises the benefit,
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  Speaker 2: you get a value triangle to skilibrium.
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  Speaker 1: And the CD's primary governance metric is tied directly of this.
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  Speaker 1: It's the Customer Value Benchmark CORECT.
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  Speaker 2: This measures the customer's perceived benefit of your solution versus
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  Speaker 2: your competitors. The formula is your perceived benefits divided by
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  Speaker 2: their perceived benefit.
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  Speaker 1: And if that benchmark dips below one, it's.
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  Speaker 2: A flashing red light. It demands immediate modification to your product,
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  Speaker 2: your pricing, or your service design. It means your value
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  Speaker 2: just isn't measuring up.
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  Speaker 1: And here's where engagement becomes pure measurable revenue. We talked
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  Speaker 1: about the power of that ongoing relationship. There was a
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  Speaker 1: twenty seventeen study cited in the BD research that found
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  Speaker 1: that customers who simply took the time to answer a
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  Speaker 1: feedback survey, just answer to survey, just answered it. Compared
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  Speaker 1: to those who didn't, they spent one hundred and thirty
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  Speaker 1: one percent more with the company over the next twelve months.
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  Speaker 2: That is an incredible statistic.
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  Speaker 1: It's amazing, isn't it. Just The act of asking for
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  Speaker 1: feedba before you even change a single thing generates that
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  Speaker 1: much more value.
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  Speaker 2: It absolutely does. It speaks to that fundamental human need
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  Speaker 2: to be heard and respected in a partnership and that
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  Speaker 2: power is what the customer developer shepherds across the enterprise.
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  Speaker 2: The CD guides the customer through that whole value chain,
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  Speaker 2: often starting as the initial business developer, and this demands
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  Speaker 2: intense cross functional collaboration, so they're working with everyone everyone.
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  Speaker 2: With marketing, the CD provides refined customer attributes to sharpen
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  Speaker 2: your ideal customer profile your personas they make sure content
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  Speaker 2: creation is hitting the right pain points. In selling, the
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  Speaker 2: CD provides feedback to improve conversion, but critically they also
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  Speaker 2: correct those value triangle equilibrium failures.
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  Speaker 1: So when the sales team maybe over promises.
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  Speaker 2: A bit, the customer developer steps in to bring perception
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  Speaker 2: and reality back into alignment, often preventing expensive delivery failures
• 10:45
  Speaker 2: later on, that makes sense. They feed product development with
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  Speaker 2: timely customer insights to keep the value prop unique, and
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  Speaker 2: they collaborate with pricing and contracting to optimize terms and models,
• 10:55
  Speaker 2: all to maintain that value equilibrium and maximize profit.
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  Speaker 1: All of that continuous engagement feeds directly into the second
• 11:03
  Speaker 1: core metric, the customer health score.
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  Speaker 2: The CHS right the probability metric for churn versus loyalty.
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  Speaker 1: Which aggregates things like product engagement, how often they log in?
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  Speaker 1: Staff engagement, how often they talk to your teams? Content engagement,
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  Speaker 1: are they reading your stuff? And finally, community engagement referrals advocacy.
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  Speaker 2: It's an entire system designed to keep the bead pipeline
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  Speaker 2: perpetually full.
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  Speaker 1: It really is.
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  Speaker 2: But growth isn't just about nurturing the successful clients. It
• 11:32
  Speaker 2: sometimes requires a calculated exit. Right, we have to address
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  Speaker 2: the necessary, if uncomfortable function known as customer pruning or
• 11:41
  Speaker 2: planned customer termination. If that trusted value exchange is broken
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  Speaker 2: beyond repair. Termination is really the only strategic option that sounds.
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  Speaker 1: Like a really difficult conversation for any professional to have
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  Speaker 1: to manage. When does it actually become necessary?
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  Speaker 2: There are three conditions that usually compel termination, and the
• 11:57
  Speaker 2: CD needs to spot them proactively. First is that breake
• 12:01
  Speaker 2: and value triangle di equilibrium we talked about.
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  Speaker 1: So scope creep. Without more resources.
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  Speaker 2: Exactly, it will inevitably lead to financial loss for you
• 12:09
  Speaker 2: or brand damage from poor delivery. Second is simple failure
• 12:14
  Speaker 2: to honor contract terms like non payment of course. And third,
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  Speaker 2: and this is maybe the most strategically important, is excessive
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  Speaker 2: customer retention costs CRC.
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  Speaker 1: So the cost to keep them is more than their worth.
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  Speaker 2: Precisely, if the total cost to retain them support, account
• 12:30
  Speaker 2: management training eats away at the profit margin until it's
• 12:33
  Speaker 2: zero or negative, that relationship is destroying value. It has
• 12:37
  Speaker 2: to be terminated.
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  Speaker 1: So what's the CD's role in that termination.
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  Speaker 2: Their mandate is to orchestrate an equitable and orderly termination.
• 12:45
  Speaker 2: You know, if the corporation is just exiting a market,
• 12:47
  Speaker 2: the CD is responsible for proactively advising the customer, even
• 12:51
  Speaker 2: making introductions to capable partners or competitors who can take over.
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  Speaker 1: So it's about preserving the brand and the relationship.
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  Speaker 2: Even as the contract concludes.
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  Speaker 1: Yes, so what does this all mean for you, the
• 13:00
  Speaker 1: business developer listening to this. It means your role doesn't end,
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  Speaker 1: it scales. You transition from a transactional fee collector to
• 13:09
  Speaker 1: a strategic growth executive focused on maximizing the value of
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  Speaker 1: your most precious assets, your existing client base.
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  Speaker 2: We've covered the entire life cycle today, all driven by
• 13:21
  Speaker 2: the data and frameworks within the business development body of knowledge.
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  Speaker 2: So let's synthesize this down to the three most important takeaways.
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  Speaker 2: Take Away one the revenue multiplier. You must focus BD
• 13:32
  Speaker 2: resources on existing clients. That sixty to seventy percent probability
• 13:37
  Speaker 2: of an expansion sale just far outweighs the five to
• 13:40
  Speaker 2: twenty percent chance with a new prospect. Customer development is
• 13:43
  Speaker 2: the specialty designed to capture that and eliminate that expensive
• 13:46
  Speaker 2: revenue leakage.
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  Speaker 1: Okay, it's number one, what's number two?
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  Speaker 2: Take Away two? The new BD mandate Customer developers hold
• 13:53
  Speaker 2: cross functional guiding and governing roles. They act as the
• 13:57
  Speaker 2: customer's ombudsman, synthesizing feedback across discovery, validation, and creation to
• 14:03
  Speaker 2: drive essential pivots or optimize growth. Their authority comes from
• 14:06
  Speaker 2: their responsibility for that asset's long term profitability.
• 14:10
  Speaker 1: And the final takeaway.
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  Speaker 2: Take away three, Governing value is critical. You have to
• 14:15
  Speaker 2: use the customer value benchmark your benefits over competitor benefits
• 14:18
  Speaker 2: to actively monitor the perceived value of your solution. And
• 14:21
  Speaker 2: remember that statistic the power of human engagement. Customers who
• 14:24
  Speaker 2: simply answer a feedback survey spend one hundred and thirty
• 14:27
  Speaker 2: one percent more with you. Engagement is quite literally revenue.
• 14:31
  Speaker 1: That dedication to value really is the key, and we
• 14:34
  Speaker 1: see so clearly that be the involvement has to continue
• 14:36
  Speaker 1: because customer value is calculated as benefits minus price, which
• 14:41
  Speaker 1: leads us to our final thought for you to chew on.
• 14:44
  Speaker 1: If the customer developer consistently provides high value AD market insights,
• 14:48
  Speaker 1: thought leadership, risk mitigation, and absolutely no additional cost of
• 14:51
  Speaker 1: the client, how does that dedication and relationship fundamentally change
• 14:55
  Speaker 1: the customer value equation for your most profitable accounts, locking
• 14:58
  Speaker 1: out the competition for good. Thank you for sharing the
• 15:01
  Speaker 1: business development body of knowledge with us and diving deep
• 15:04
  Speaker 1: into this critical specialty. Until next time,