b2b sales

Over the past month, I have been obsessing and diving deeper into research from Daniel Kahneman and Amos Tversky – specifically Daniel Kahneman’s Prospect Theory (of which Kahneman won the Nobel Prize in Economic Sciences in 2002) and their research on loss aversion.

Despite this research being out for 20+ years, I believe that most sales and business development professionals are practicing outdated methodologies. Up until now, these professionals were able to achieve some semblance of results with brute force tactics. They still race to the bottom to see who can provide a product or service cheapest, or cycle through business development representatives instead of building relationships with prospects and then pass that prospect to someone else and potentially other people on the team to try and get a deal signed. Or they are spending money on Google Ads or other ads with the hope of booking conversations. 

With the tightening of spending by companies and increased private equity scrutiny around how budgets are spent, I believe that a gap is widening between business development professionals who understand this information and those who don’t.

And business development isn’t just isolated to professionals in sales. It includes anyone looking for a job, or trying to convince dotted line team members to get their work done in the manner they want it, or any behavior change that one may want to see in another person.

Loss aversion is the concept that people will do more to avoid pain than gain pleasure. 

From a business perspective, this means that professionals would rather do more to avoid getting fired than to do something that could make them a hero and swiftly work up their company’s organizational hierarchy.

Here are some examples:

A company has decided that they need consulting services to improve their performance and operational abilities. They have a $100,000 budget for this service and have appointed a leader in the organization to decide which consulting company to go with. 

Outdated perspectives would assume “If I can deliver more than what they are asking for in my proposal and come in way under their budget, they would have no choice but to choose me and my consulting firm.”

That perspective would be wrong.

Why?

Because the decision-maker in this scenario didn’t choose to pursue this consulting. In fact, if it were up to them, they likely wouldn’t change anything about the way the business operates. Why? Because change represents time and energy and as long as that decision-maker continues to get paid by their company, they aren’t exactly incentivized to change the way the company operates. 

However, because the company appointed them to make a decision, they are essentially forcing this decision-maker’s hand. They are essentially saying “if you don’t make a change in this area, we will make a change for you.”

This decision-maker also doesn’t see a dime of savings from the budget allocated for this service. Therefore, if you are a consultant and you come in $1,000 under budget or $50,000 under budget, this doesn’t really affect the decision-maker because as long as the project is under budget, that is all that matters to them.

The number one factor that the decision-maker is contemplating in terms of who to hire for this consulting work is “who represents the least likelihood of getting me fired.”

That is it! And if they can get away with stalling the decision and ultimately get to no decision without putting their job at risk, that is their number one option. 

When people share the adage “nobody ever got fired by hiring Deloitte (or KPMG or Ernst & Young or whoever the largest, most dominant competitor is in your market)”, they are referring to the simple fact that they represent the status quo. If Deloitte does a bad job and the executive team is dissatisfied, can you really fire the person who hired Deloitte knowing their reputation? Not as likely. Or, if you go with a smaller, lesser-known consultant and they do a bad job, when going with a Deloitte was an option for them (and within budget), is it easier to justify firing the person that decided to make that hire? Much more likely. 

This can also be applied to people seeking a job. If you are a candidate with a lot of experience AND you fall within budget*, you are much more likely to land the position compared to someone who doesn’t. Taking a risk on a candidate you like but who doesn’t have the qualifications creates risk for the business. If that candidate fails or leaves, in a post-mortem, we can observe “were there flaws in our hiring process?” 

*Caveat on falling within budget. From a hiring perspective, this is oftentimes subjective based on assumptions as to how much a person will cost to bring in. Some candidates have heard the feedback “you are just too experienced for this role” or “this role would be beneath your capabilities”. This is oftentimes HR speak for “we assume we know how much you are going ask for in terms of salary and we don’t have the budget to afford it so as opposed to going through fruitless negotiations in which we think we know we can’t meet your salary demands, we might as well end the interview process short.”

The same holds true for getting a dotted-line team member to change the way in which they behave so then you can get your work done more effectively. If you are waiting on another team member or entire department to get work done in a specific way and they consistently come up short, elongating the time and energy it takes for you and your team to complete the work, your respective mid-level managers might jump in and try imploring their respective teams to be more amenable to the change, but this oftentimes doesn’t work. 

Why?

Because a mid-level manager isn’t going to fire one of their teammates for not adjusting their work output to make it easier for a team in a different department to get their work done. As long as the incentives and metrics they are being measured against are consistently achieved, it is really hard to achieve a behavior change.

However, if the person who wants to see the behavior change from the other team can quantify the financial impact this extra time and energy has on the bottom line (perhaps they can say that they wouldn't need to fulfill an additional headcount because they are that much more efficient) and then take that information to the CFO and the CFO determines that this minor behavior change from the other team is a much less painful adjustment than the financial costs of hiring an extra team member to account for this, you can bet that the behavior change is about to be permanent.

Therefore, if we are business development professionals, we need to think differently about how we make ourselves more attractive to our prospects. This starts with understanding who feels the pain that you can relieve the most. It is then followed up with having high proximity to those decision-makers in an environment that shows off our knowledge and capabilities but not in a way that seems braggadocios but rather a humble way. I will be writing a second part to this article to elaborate on solutions, but if you are interested in this topic in the meantime, send me a message on LinkedIn.

The atmosphere of a small consulting company shifted as Mark, the VP of Sales, walked into the conference room with a determined look on his face. He had just finished a call with a big prospect, who expressed frustration over the lack of personalized service and the impersonal nature of recent interactions. This wasn't the first time Mark had heard such feedback, but today, it hit him harder than ever. The constant cold calling and transactional nature of their sales approach were no longer cutting it. Something had to change.

Mark had long relied on traditional methods of sales outreach. Cold calling had been the backbone of their strategy for years. But with the rise of technology and changing customer behaviors, fewer and fewer prospects were answering calls from unknown numbers. Mark knew it was time for a new approach, one that would not only capture attention but also build lasting relationships.

One evening, while attending a business conference, Mark found himself in a conversation with Laura, an influential business leader known for her innovative networking techniques. Laura introduced Mark to the concept of executive mastermind groups. These groups, she explained, were designed to bring together like-minded professionals to share insights, solve problems, and build meaningful connections.

Intrigued by the idea, Mark began to envision how such a group could transform his own company's approach to sales. He realized that building genuine relationships through structured networking opportunities could not only enhance client satisfaction but also drive long-term business growth.

Cold calling had been a staple in sales strategies for decades. However, the effectiveness of this method has significantly declined. With people becoming increasingly protective of their time and privacy, answering calls from unknown numbers has become a rarity. This shift in behavior highlights the need for more innovative and effective networking methods.

Relational selling focuses on creating and nurturing long-term relationships with clients. Instead of viewing each interaction as a transaction, relational selling emphasizes understanding the client's needs, providing value, and building trust. This approach aligns perfectly with the concept of executive mastermind groups, where the primary goal is to foster deep, collaborative relationships.

Determined to make a change, Mark decided to implement executive mastermind groups within his organization. Here’s how he did it:

One of the pivotal aspects of executive mastermind groups is the emphasis on fostering a collaborative environment. This collaborative spirit is crucial for several reasons. Firstly, it allows for the sharing of diverse perspectives and experiences, which is invaluable in today’s fast-paced business world. When professionals from various industries and backgrounds come together, they bring unique insights and solutions to the table. This diversity of thought leads to more innovative ideas and approaches, helping companies stay competitive and ahead of industry trends.

A collaborative environment builds trust among members. Trust is the cornerstone of any successful relationship, and in the context of mastermind groups, it enables open and honest communication. Members feel comfortable sharing their challenges and seeking advice without fear of judgment. This openness not only strengthens the bond between members but also leads to more effective problem-solving. When trust is established, members are more likely to offer genuine support and constructive feedback, creating a safe space for personal and professional growth. 

By nurturing a collaborative environment, mastermind groups become more than just a networking tool; they become a powerful engine for sustained growth and innovation, driving both individual and organizational success.

The introduction of executive mastermind groups brought about significant positive changes for Mark’s company. Here are 5 key benefits:

2. Increased Knowledge Sharing: The diverse backgrounds and experiences of the group members resulted in a wealth of knowledge sharing. This collaborative environment fostered innovation and helped members stay ahead of industry trends.

3. Improved Business Performance: The mastermind groups provided a platform for members to discuss challenges and brainstorm solutions. This collective problem-solving approach led to improved business performance and growth.

4. Expanded Network: Members gained access to an extensive network of professionals, opening doors to new opportunities and partnerships.

5. Personal and Professional Growth: The mastermind groups offered continuous learning and development opportunities, contributing to the personal and professional growth of each member.

Two years after the implementation of executive mastermind groups, the landscape at the small consulting company transformed. Mark's decision to shift from cold calling to relational selling through these groups had paid off immensely. Client satisfaction was at an all-time high, and the company experienced significant growth in both revenue and reputation.

Reflecting on the journey, Mark realized that the key to success lay in the power of relationships. By embracing innovative networking methods and focusing on building meaningful connections, he had unlocked new potential for his team and his company. The era of cold calling was behind them, and a new era of networking had begun.

In the end, it was the ability to adapt and embrace change that made all the difference. Mark's story serves as a testament to the power of relational selling and the transformative impact of executive mastermind groups. For business leaders looking to stay ahead in a rapidly evolving landscape, the message is clear: invest in relationships, and success will follow.

In part 1 of this 2-part article, I wrote about the psychology of why decision-makers make decisions to hire or not hire certain professionals for work. In a nutshell, people will do more to avoid pain than to gain pleasure. One implication of this is that decision-makers aren’t necessarily going to choose the cheapest option if they already have a pre-approved budget, nor will they choose the option that promises the highest upside. 

The decision-maker will choose the option that represents the lowest risk of them getting fired.

Therefore, if we are in business development, whether that be we are looking to sell our products or services on a B2B level or get hired by a company for employment, we need to position ourselves in a way that demonstrates that we are the low risk option for the company to choose.

How can we do this?

First, identify the risks. There are 3 core risks that decision-makers weigh when making decisions:

Financial risk represents the risk that the money spent with a consultant or contract will be a bust. The more a person charges, the more risk the buyer must weigh when making a purchase decision. But as outlined in part 1 of this article, if a buyer has a pre-approved budget, there is little practical financial risk if the proposal comes in under budget. 

This leaves time and reputation as the two biggest factors business development professionals must overcome to build trust and close the deal.

Time risk represents the total amount of time it will take to implement a solution and the time it will take others at the company to deviate their normal behavior to this new behavior a consultant is prescribing. If a consultant is selling change management consulting, the time is the amount of time it will take to achieve the desired result. If a person is looking to get hired for employment, this is the amount of training time required to develop a self-sufficient and productive team member. For most decision-makers, this unknown intermediary period is the risk they are worried about. 

The pivot point centers around the credibility of the person proposing this change. They need to demonstrate to the decision maker that their plan is achievable within the proposed timeline. If someone promises too short of a timeline without much proof or track record of achieving that, then it represents high risk. If someone shares a timeline that is too long, much longer than the buyer has patience for, then it represents high risk as well because there is no chance of meeting expectations. The only success condition would be over performing expectations, and that’s a prayer, not a plan. The person doing business development needs to find the middle ground.

Reputational risk is the amount of people being impacted by this decision-maker’s decision. If a decision maker hires a consultant that only impacts the work of a few people then the reputational risk is relatively low. But if the decision-maker is making a decision that will impact everyone at the company, there is high reputational risk. If they hire the wrong person, or if the person hired does a bad job, it reflects poorly on them, increasing their chances of getting fired or losing credibility for making a poor choice. 

When people share the adage, “nobody ever got fired for buying IBM”, it truly holds a lot of weight. Even if it costs more, decision-maker’s are seeking the lowest risk option for whom to do business with.

Therefore, if we are a small to medium-sized consulting company looking to get business (or a candidate for hire that doesn’t have a ton of experience), we need to do things to de-risk the decision for the decision-maker.

Unfortunately, there isn’t a credit rating check for one’s credibility. Sure, people have references, but nobody is ever going to list a bad reference for themselves.

Therefore, if we are looking to develop business, we need to be creative about de-risking the financial, time, and reputational risk when it comes to deciding who to hire. 

The more someone spends time with another person, the more comfortable they feel with that person. If a business development professional can spend more time with a prospect, they build rapport and connection to that person.
2. Follow Through

Do what you say and say what you do. If a business development professional says they are going to do something or deliver value in some way, they better do it.

How can consultants achieve this with their prospects?

One thing my team at Ambition In Motion has done for consultants is help them set up their own executive mastermind groups. An executive mastermind group is a group of leaders coming together to work through a challenge. The consultant facilitating the group isn’t there to solve their challenges, but rather create a safe space for leaders to discuss their challenges and work through the challenges together. This builds trust through proximity, and it’s also a low-risk decision for the decision-makers. 

This has been incredibly helpful for consultants because it oftentimes creates an opportunity for them to engage with a prospect before they are ready to commit to a bigger contract for more services. And it keeps the consultants from seeming like door-to-door salesmen when an opportunity for partnership arises. 

For example, a consultant might propose their services at $20,000 per month over a 6-month period and incorporate 50% of the company to achieve a certain result. 

Without trust, it will be incredibly hard for a consultant to land this deal. 

The prospect might say “I am interested but follow up with me in 3 months.”

Will this lead to a deal? Maybe. But a lot of things can happen between now and 3 months. 

Instead, the consultant can offer the prospect the ability to be in their executive mastermind group and offer a helpful service now while building long-term trust. 

Financially, the group is much more cost-effective than their consulting services. 

Time-wise, the group represents a much smaller time investment compared to the consulting services.

Reputationally, the group only involves them, the decision-maker and nobody else at their company.

Participating in an executive mastermind group represents a low-risk option for the decision maker to be around the consultant more and assess the consultant’s ability to follow through. Furthermore, the group gives both parties a chance to learn more about each other. It won’t always be a perfect fit, and this also helps the consultant avoid over-committing as they learn more about prospective companies and their needs.

And, over time, if the prospect feels trust with the consultant, it will be a very low risk proposition for them to hire the consultant for expanded services. The key to this method’s success is the mutually assured benefits for both parties throughout the process. 

If you are a consultant, executive coach, or anyone in B2B sales and would like to learn about setting up an executive mastermind group for yourself, reach out to me on LinkedIn and I’d love to tell you about it. 

Through serving as a leader of an executive mastermind group, advisors broaden their industry knowledge and gain paramount perspectives that enable them to provide experienced guidance to members of their coaching groups. By learning from surrounding perspectives, executive coaches can provide first-rate, credible advice built on a wide range of experiences.  

 

To grow a business as an executive coach, it is imperative that professionals effectively establish trust and credibility. Demonstrating credibility as a potential coach can be daunting because credibility is dependent on individuals varying judgments and interpretations. 

 

To develop business based on experience, professionals should work to understand the components that construct others' perceptions of an individual's credibility. Credibility is proposed to be composed of three components- competence, character, and compassion.  

 

Competence 

Professionals generally establish competence through explicit knowledge and understanding of technical topics. In the workplace, competence is generally measured through accuracy and the ability to demonstrate a thorough knowledge of the subject matter relevant to an individual's role. In forming relationships with prospective participants, appropriately demonstrating competence can be challenging. Individuals are quick to judge and can be easily offended by overbearing or “know-it-all-all” behaviors. Executive coaches must rely on their own past experiences or past coaching experiences to establish their expertise in a specific subject matter when connecting with a potential client.  

 

Character 

Individuals present character by exhibiting their moral compass.  In the workplace, individuals are given opportunities to demonstrate their character in situations of ethical dilemmas. When engaging with a prospective client, coaches should be intentional in building a relationship and effectively pivoting coaching styles to best fit each individual. In speaking to potential clients, executive coaches can show character through honesty, respectfulness, and accountability. However, coaches must be deliberate in their decision-making because a poor impression of character is extremely difficult to reverse. 

 

Compassion 

Compassion is commonly demonstrated through empathy, understanding, and general concern for others. For executive coaches working to grow their businesses, compassion is a vital element to success. In the inherently interpersonal relationship of coaching, it is crucial for coaches to demonstrate compassion in order to grow their business. Individuals seeking guidance and advice value authenticity and genuine interest from their advisors. In the workplace, compassion can be shown through flexibility and understanding or overall care for colleagues. Executive coaches have the responsibility of expressing compassion and support as participants navigate unfamiliar circumstances and problems.  

 

To better explain the benefits of executive coaching experience and the impact of credibility, consider Lori. Lori recently transitioned out of her industry position to follow her passion for coaching. Lori has started an executive mastermind group and leads the group with guidance and structure from Ambition in Motion’s executive coaching licensing opportunities. Through leading her own executive mastermind group and serving as a coach for professionals across industries, Lori has significantly broadened her understanding and experience, enabling her to become a better coach.  

 

To best elaborate on the importance of experience in building business, here are 3 potential streams from which Lori could grow her business and how varying relationships will impact her credibility as an executive coach: 

 

1- Existing Connections 

Lori’s business as an executive coach may grow from existing relationships such as members of her old firm, college classmates, or industry peers she has connected with over her career. Through these existing relationships, Lori’s authority and experience are likely recognized so Lori does not need to establish herself but must work to maintain the credible reputation she has developed. Additionally, in an existing connection, trust has likely been built between Lori and the client, which is a crucial part of establishing a productive coaching relationship and can be a challenging relationship to develop. 

 

2- Referrals  

A common source of new clients for businesses are referrals from peers or colleagues. When engaging with a referred potential client, Lori likely has the advantage of good praise from their mutual connection that referred the prospective client. However, Lori is still responsible for establishing her authority relevant to the industry and circumstances of the potential client. In the circumstance of a referral, Lori has the benefit of a connection that speaks to her character and compassion so, Lori should focus on establishing her competence in the individuals industry to best build her credibility. In addition to building credibility, Lori should focus on establishing a trusting relationship to best advise new participants. 

 

3- Cold Clients  

Cold clients are clients that do not have any mutual connection or referral to a business. Although daunting to most professionals, finding new clients without a previous connection is a crucial component of growing a business. In interacting with a new potential client, the onus is on Lori to establish all three aspects of her credibility and build trust. In the instance of connecting with a new potential client, Lori should focus on communicating the interpersonal-focused aspects (compassion and character) to build trust. Building business through this type of prospect may be challenging because it takes time to develop the trust that is paramount to a successful coaching relationship. Once Lori has established a connection with a prospective client, she can shift to demonstrating her competence in coaching the individual within a specific role or industry.  

In guiding members through new circumstances and experiences, executive coaches build better businesses based on expertise and diverse perspectives. Through providing advice and guidance to their clients, coaches continuously develop their skills and competence, enabling them to grow their businesses. The development of executive coaches and their businesses is exponential; through serving one client, executive coaches are able to learn new ideas and techniques that will improve the guidance given to other members.  

 

Executive coaching requires patience and business development can be a challenging process. However, serving as an executive coach builds experience that continuously improves credibility. From gaining new perspectives, executive coaches can apply diverse approaches to problem-solving in turn, expanding their expertise and business. 

In the consulting industry, expertise and analytical skills are paramount in building a client base, however, these technical competencies cannot overshadow the importance of relationship management. While vast technical knowledge is critical in delivering effective consulting services, maintaining strong relationships can be the difference between winning and losing clients. Recognizing the importance of cultivating and maintaining meaningful relationships serves as a crucial step for creating a strong client base. 

Developing strong relationships with clients takes consistent and substantial effort. Dedicating time to build rapport increases trust, develops a mutual understanding, and sustains the relationship for future projects. 

Clients are more likely to engage with consultants that they trust and have established credibility. This trust is established through many transparent interactions over an extended period of time. While building trust takes a considerable amount of time, clients will more actively seek services and confidently implement strategies from consultants they trust. 

Building trust is partially contingent on technical skills since such skills allow for quality deliverables and a sound knowledge base. Although these skills establish credibility, a trustworthy relationship expands beyond skills and is achieved through dedication to consistently deliver quality services promptly. 

2. Enhanced Understanding

Understanding the scope of a project can be achieved simply through a conversation with a client. Developing strong relationships takes this understanding further by delving into the client's needs, challenges, and aspirations. Truly understanding a client involves working to grasp the client’s organizational culture, business operations, and industry at large. 

By spending time with clients and initiating conversations about broader motivations, consultants can identify conflicts and opportunities that may not have been initially apparent. During conversations, actively listening and carefully posing questions to provoke deep dialogue allows consultants to gain an enhanced perspective on the client's needs. Through a deeper understanding, consultants can provide more targeted strategies and increase client satisfaction. 

3. Relationship Longevity

Creating a long-term partnership with clients is the key to success as a consultant. Providing consulting services to a client isn’t limited to one project. Clients are more likely to reach out to consultants they’ve previously worked with for future consulting services. With an established relationship, there are added benefits of an understanding of the business functions and more efficient integration to the problem at hand. 

In addition to collaborating on multiple projects, long-term relationships allow for increased advisory roles within the decision-making process. When consulting with a client for an extended period of time, they are more receptive to advice and will be more inclined to seek external insights from their consultant on more important issues. This increased involvement within an engagement is only achieved through a strong relationship and immense trust. 

While the importance of strong relationships may appear evident, cultivating strong relationships often proves more difficult. Time and many interactions are necessary to build and maintain relationships, but implementing effective strategies for approaching client relationships can help expedite and expand upon relationship-building efforts. 

Consistent communication with clients works to build comfort and an increased sense of accessibility. Consultants can leverage communication to establish proximity with clients build rapport and establish connections. Regular updates and check-ins allow consultants to stay informed of current projects and the needs of clients or potential clients. 

It can be difficult to stay up to date with former clients or potential clients when not currently collaborating with them. While reaching out on a regular basis may be sufficient in maintaining a relationship, groups such as executive mastermind groups can allow consultants to regularly interact with potential clients and initiate natural conversations about current challenges and changes. 

Following through on commitments is a cornerstone of establishing strong relationships with clients. When consultants make promises to clients, it’s important to deliver on these commitments in a timely manner. Whether it's communicating updates or larger project deadlines, honoring commitments is a crucial way to build trust. 

When following through on commitments, establishing realistic expectations and deadlines are key components. Consultants should be transparent about the level of detail and timeframe they can reasonably complete tasks for their clients. Failure to deliver on commitments or extending deadlines can cause strain on relationships and break previously established trust. 

Consultants work with clients to support their needs, so the ability to adapt to the changing needs of clients is vital for consultants. Willingness to be flexible with deadlines and approaches is greatly appreciated by clients. 

Flexibility not only entails adapting to adjusted timelines but also considering client feedback and making adjustments accordingly. Taking into account changing client needs and prioritizing what’s in their best interest demonstrates that a consultant truly values and understands their clients. 

The strength of client relationships directly impacts the success of consultants. Strong relationships increase client retention rates for consultants because clients are more likely to seek future services from consultants they have an established relationship. With a previously developed understanding of the client’s business functions, consultants can more effectively transition onto new projects without lag time. Not only can strong relationships generate additional projects with former clients, but satisfied clients will be more inclined to provide referrals generating more business. 

In addition to retaining clients, strong relationships provide a competitive advantage. When choosing a consultant, clients are more likely to choose a consultant they have previous positive experiences with and consultants with established credibility. With a competitive consulting market, strong relationships serve as a powerful differentiating factor from competitors with lower prices or comparable capabilities. 

Risk mitigation is another added benefit of strong client relationships. Clients who are comfortable with their consultants may share potential concerns or problems earlier on than those who are unfamiliar with their consultants. Comfortability with addressing concerns allows consultants to proactively address problems and mitigate additional risks from problems being identified later within the project. Risks can also be mitigated through addressing conflicts between consultants and their clients. If a contentious or difficult situation arises, clients are more likely to be cooperative with consultants they have a strong relationship with. 

When seeking consulting services, clients have many options to consider. While technical skills and expertise are important for providing quality services, strong relationships serve as a key differentiating factor. By consistently communicating with clients, following through on commitments, and adapting to evolving client needs, consultants can establish powerful relationships that increase retention rates, develop a competitive edge, and mitigate risks. The impact of implementing strategies to cultivate client relationships is profound and can positively shift consultants' success. With a highly competitive consulting market, consultants must invest in establishing and maintaining strong client relationships.