One of the first steps in a successful business development outreach campaign is determining the type of client to target. Most firms don’t really know where to start with this process. One of the biggest issues in creating lists is understanding how data is compiled that creates the lists.
As an example:
- Privately Held Companies. Most privately held companies do not disclose their revenue. The database companies use other techniques to estimate the revenue, but normally any revenue reported for a privately held company is generally materially incorrect. Instead, they use estimates of the number of employees, which is generally captured by self-reporting of companies, through surveys, or by reviewing other data such as Form 5500’s that list the number of participants in a plan for a business.
- Employee Benefit Plans. This information is fairly accurate because it is taken from the publicly filed Form 5500. Generally, there is an 18-month delay in the reporting.
- Non-profits. This information is also very accurate. The current revenue and assets are reported on the Form 990. Again, there are some delays in the reporting.
- Publicly Traded Companies. This data is also fairly accurate since transparency of their financials is required.
Here are a few tips to help you effectively target prospects.
- Look at Your Current Client Base. The best option is to first narrow down which type of service and industry your firm excels at. For example, if your firm provides client accounting services for not-for-profit organizations, that would be a good place to start.
- Determine Your Most Profitable Clients. Design your prospecting program to play into those strengths. If your best clients are $10M to $50M, try to tighten your outreach into only the prospects that meet that criteria. Also, not all industries are the same. Focus on the ones you know best and feel can be the most effective in. What Else Makes Sense? Looking at your firm’s capacity is key. If you have tax or audit staff that have capacity at periods of the year, begin getting them involved in a client mining program. That will build their selling skills, add value to the client, and increase firm revenue, while moving the firm’s mindset into more consulting. Finally, designing the “sell”. What is the message you want to send to catch their attention? Do not talk about your quality or history. Talk about what you can do for them. Try to hit their pain points.