New Money vs. Old Money: A Lesson in Business Development
In high society, there was a widely held concept of new money vs. old money. If you were lucky to harken from “old money”, you were deemed cultured, more socially acceptable and ultimately, more elite. However, in the world of business, NEW money is your most important marker of success.
Business development has long been a misunderstood concept in business. Some business leaders hire “marketing” staff to bring in business. Others will hire “sales” people to build relationships.
While both groups provide essential business services, it is only when new business closes and revenue is accounted for that true business development has occurred.
I work with clients, in my coaching practice, that will use terms like marketing and sales to describe the same activities. While both lead CAN lead to new business, most of the time my clients are not using either technique with any effectiveness. Let me explain what true business development looks like.
Marketing, on some level, is the start of your business development cycle. This could be as simple as a social media campaign or as purposeful as building networking relationships through organizations or associations. Marketing accomplished three key factors in the business development cycle.
- Attraction – Provides awareness to your target audience that your product or service exists. You can do this through social channels, networking or more traditional tools such as radio, TV or print.
- Sift – Not everyone you attract is a potential customer. A marketing strategy should vet the audience you attract to determine ideal prospects.
- Educate – When you have a potential client or customer that is educated on what you do and how you do it, this saves time in the sales process.
Sales is building the relationship offline. This could look like a phone call or video chat with a contact from your online portals OR it could be a contact made through networking or referral. While we would all like to believe that you can just make “easy” money from the internet, most of those “easy” purchases checked reviews, talked with someone they knew or even called to talk to a representative. They looked and needed human validation. Sales is about human validation or in simple language – Know, Like, Trust. The sales process is fairly straight forward.
- Know – Make sure you understand the client’s needs and wants. Make sure they understand who you are and what you provide
- Like – Once you have determined the best product or service to meet the client’s needs, you offer it. Basically, you are saying “I think you will LIKE this. It will meet your needs.”
- Trust – The client either agrees and “trusts” you by closing the sale or they don’t and say “no”. If they ride the fence, then you didn’t do a great job with the Know and the Like stages and have to return to see where the issue lies.
If you follow this simple process, NEW money in the form of new clients and customers will come. Yes, you will have others that say “no” or “not right now”. Keep the relationship open. Follow Up and further relationship development always leads to other NEW business either at a later date or with future referrals. Never rely on your current client base only. Those dollars will give you a false sense of security.