2016 crw - keynote session: driving best practices in business development
TRANSCRIPT
0© 2016 FMI Corporation
Driving Best Practices in Business Development Specialized Carriers & Rigging Association
Gaylord National Harbor | September 22, 2016
1© 2016 FMI Corporation
Business Development - Industry Context
6
23
49+
11
25
6.8x‘07
32%
‘90
‘82
‘75
Ninth year of growth
Prosperity amidst uncertainty
Uneven recovery
Energy, Industrial, Civil Infrastructure Demand
7
64
Magnitude of
Downturn
Duration of Downturn
Years to Rebound
# of Downturns
since 1964
Prior Three Industry
Downturns
‘75
‘82
‘90
‘07
‘75
‘82
‘90
‘07
US Recessions
Residential
Non-ResidentialTotal E&C
3© 2016 FMI Corporation
Our company ________ has the right amount of
the right type of work with the right customers to
meet our strategic goals
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Intentional or Accidental?
How much of our success is merely a reflection of a sustained recovery?
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305 CEOs, Presidents, Owners, Execs
73% less than $100 million
36% less than $25 million
82% regional
15% national
3% international
69% profitable
31% break-even or loss
Construction Industry Research
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Who Is Responsible for Business Development?
Driver
Joe
Foreman
Phil
Bus Dev
Ken
CFO
Bob
CEO
Richard
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‘The work of understanding what the customer
values and systematically delivering that value
over the life of the relationship’
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Market Truths
• You are perfectly designed to get the results being
generated
• Courageous decisions are based on facts
• What facts do you need to go all in?
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Market Success
Strategy Built on Facts
Our Vision for the Future
Climate Competition Customers Our Company
Exe
cu
tio
n
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Competitive Assessment Built on Facts
• Where are competitors
positioned in the mind of
customers?
• What do other competitors
promise and deliver?
• How can you
differentiate?
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For ‘best of class’ contractors, business
development is central to the company’s overall
strategy.
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48% of the companies we surveyed have NO
formal business development plan tied to the
strategic direction of the company
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Your Company’s Go-to-Market Strategy is Driven by
Strategy = Revenue x Time
New Customers Existing Customers
and/or
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Share of Wallet or Market Share?
Potential Customers
Se
rvic
es C
usto
me
rs B
uy
0
100%0
100%
Market Share
Share of Wallet
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What Does it Really Take to Win?
Go-to-Market strategy
Focus/persistence
Favorable markets
Customer demand
Project win strategy
Pricing for profit
Competitive advantage
Skills and processes to execute
Talent to deliver
An eye for the future
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Mid-size firms ($100MM to $500MM) spent less
as a % of revenue than small or large firms and
paid a price in terms of lower hit rates and thinner
margins
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What Do Customer Really Want?
• ___ Quality Work
• ___ On Budget
• ___ On Time
• ___ No Surprises
• ___ Personal Attention
• ___ Dependability
• ___ Returned Phone Calls
• ___ Good Communications
24© 2016 FMI Corporation
These are Basic Customer Expectations
Quality Work
On Budget
On Time
No Surprises
Personal Attention
Dependability
Returned Phone Calls
Good Communications
Nothing on this list will ensure your market position or continued
favor with customers….
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Customer Research
• Market Size and Forecast
• Company Image Analysis
• Customer Buying Practices?
• Customer Satisfaction and
Loyalty
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A Key Difference of Opinion
Believers: 80% of firms believe they provide superior service
vs.
Achievers: 8% of customers agree
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Why You?
The number one source of competitive advantage
contractors in our survey: REPUTATION.
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The real value is how your reputation and
relationships translate into specific value for your
current and potential customers
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Three Key Questions
1. Which are the best customers and projects for your
company?
2. How do you get pre-positioned to win the right kind of
opportunities?
3. Why should the customer pick you over the other good
contractors?
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1 out of 10 of the least profitable firms we
surveyed listed price as their number one
competitive advantage
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Competitive “Sweet Spot”
Your Strengths
Your Weaknesses
Competitor Strengths
Competitor Weaknesses
Customer
Needs
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Give the customer a reason to pick you….
The best contractors know their value proposition at
a market segment, key customer and project level
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At Which Do You Excel?
Operational Excellence
Product Leadership
Customer Intimacy
Source: The Discipline of Market Leaders, Treacy & Wiiersema, 1995, Addison-Wesley
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Getting Positioned to Win Today
• Quick-turn
• Price-based
• Highly competitive
Or
• Higher expectations
• Longer sales cycles
• Multiple touch points/decision makers
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In the last downturn, the least profitable firms
spent more on business development as a % of
revenue than the more profitable firms
did....thoughts?
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Who are the Right Customers?
• Which customers are you most successful with?
– Who will pay (a little bit) more for what you do?
– Which customers do you make money in the field with?
– What size and type of projects are your “best”?
• Location
• Delivery methods
– Who values your contribution and your team?
– Who provides you with repeat work?
– Have the highest probability of winning?
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Meeting the Customer Where They Live
• Who knows best what the customer wants?
• Why are we so reluctant to ask?
• What would it take to create the organizational capacity?
• How are you really different than your competitors?
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Getting Feet on the Street
• Reasons to meet
• Set realistic expectations of networking
– Give them a mission + 5 questions
• Teach them to ask “good” questions
• Share the 80% rule
• Provide tips to start and stop
• What to do with conflict?
• Timing is everything
• Don’t save the skills
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Questions are the Answers
1. What are your sacred cows?
2. How has your business changed in the last two to three
years?
– How have your customers’ expectations been changing?
– What do you need to do now to better meet customer
expectations?
– What kind of competitive pressures does your company
now face?
3. What are the key drivers of your capital improvement
plans/budgets?
46© 2016 FMI Corporation
Questions are the Answer
4. Tell me about the best contractors you work with
– What are they good at?
– Where can they be a little bit better?
5. Tell me about your perception of our company
– What do you like?
– Where can we improve?
– What impact would that (improvements) have on you and your team?
– What else do I need to know to better meet your objectives?
– How can we be of better service to you?
47© 2016 FMI Corporation
In the next downturn, your ability to connect
existing relationships in to new business is
essential
48© 2016 FMI Corporation
A Total Company Effort
Driver
Joe
Foreman
Phil
Bus Dev
Ken
CFO
Bob
CEO
Richard
An effective repeat customer strategy means engaging everyone in your
organization in the effort….
49© 2016 FMI Corporation
In the last downturn, firms with no full-time
dedicated business development staff saw their
repeat client work decline
51© 2016 FMI Corporation
W. Chris Daum
President and Chief Executive Officer
FMI Corporation
5171 Glenwood Avenue, Suite 200
Raleigh, NC 27612
(919) 785.9264
www.fminet.com