Tyre kickers or real customers?

Assessing new clients and (carefully) keeping the tyre kickers to a minimum is a major challenge for businesses. A young, hungry start up business just doesn’t have years to wait for that next deal. Partner in sustainability consultancy Shaper Group Nick Palousis “definitely” restricts the time he spends with potential new clients. There are no hard and fast rules, rather the time investment is decided on a case-by-case basis.

Shaper Group works with private companies, government and non-profit organisations, advising on sustainability strategy. As this kind of consulting work is relatively new, many potential customers have extremely limited knowledge of sustainability. This kind of scenario can trigger endless rounds of meetings, client queries and conversations before any formal work arrangement is settled. Some clients take more convincing than others.

“They want to become sustainable but don’t know how,” says Palousis. Some weeks Palousis will spend 80% of his time on new business development, other weeks only 20%. If cashflow is looking strong for three to six months, more time can be spent speculating on customers that might not convert.

Shaper Group has experienced so much tyre kicking in the past few years that “we are finely tuned to whether someone is going to buy or not,” says Palousis, who can spot a client with a real drive for their sustainability services. With these clients it is more straightforward to discuss budgets and fees and get to work.

For Palousis, a critical indicator of the potential of the business relationship is whether the contact at the organisation dealing with the Shaper Group has genuine access to decision makers. “Sometimes we find a great potential business but it turns out, the place is overwhelmed with bureaucracy so it’s hard to access a decision maker and/or a budget.”

With other potential clients, there is long-term potential in the relationship so it’s worth spending longer periods of time building up trust and demonstrating the value of the services Shaper offers. “They need to know what they are buying before they can set a budget,” he says.

In other situations, Palousis can smell a department looking for a “home brand” sustainability service or, most irritatingly, just another quote. “They try and use you as one of three quotes,” he says, having already decided on another provider. “We don’t want to be that extra quote.”

Entrepreneur and social media strategist Lara Solomon is not a fan of time wasters either. Solomon has a list of questions ready for new customers to assess their potential.

“I try to limit my time to one hour free and then they have to pay, so they can kick my tyres at a cost,” she says. Her questions are based on “ideal” customer profiles and the capabilities of the business. Shaper Group’s Palousis says that potential customer profiling centres around current business performance, their market share and their reputation. Companies looking for a greenwashing service are quickly dropped. “We won’t go down that track,” says Palousis. “And we select clients based on longer-term work rather than a single transaction.”

California-based consultant David Brock’s strategy for vetting potential new clients includes “vicious disqualification” (how’s that for calling a spade a spade?) to help determine whether the customer has a need to buy. Brock has consulted to a range of Fortune 25 companies (as well as the National Australia Bank locally).

“Too often, we see sales people chasing bad deals, wasting the customer’s time and the resources and time of their company. We actually focus sales people on ‘vicious disqualification’ rather than qualification, focusing on high quality opportunities the customer is very serious about.”

Brock defines a real customer as someone with a genuine, pressing need. “That is, they have a problem or opportunity, they are committed to spending money to solve the problem and they are interested in considering your solutions or products,” he says.

Lara Solomon has recently shifted from running product-based businesses, including a successful venture selling Mocks (mobile phone socks) to the service industry running social media strategy firm Social Rabbit.

One of her biggest frustrations with tyre kickers is that they never know what they want. With the service industry, this is a critical area where new business development can get time consuming. “I am not sure where to draw the line. I think that comes with experience,” she says.

A critical reason to ration time spent with tyre kickers is so that business development time is invested wisely. Shaper Group is a sustainability advisor to the prestigious Geneva-based World Economic Forum that hosts the Davos summit each January where Bill Gates, Warren Buffett et al congregate to discuss world affairs. This WEF endorsement has been highly useful in building corporate networks and credibility and makes getting meetings with CEOs a lot easier.

“Now we can get a meeting in two days instead of six months or never,” says Palousis.

Shaper Group also hosts drinks in capital cities and many Shaper Group staff speak at conferences and write articles on sustainability.

Melbourne photographer James Braund has decades of experience meeting new clients and pitching for projects.

“If it is only on price, I’m looking for the door,” he says. His approach to new clients is to establish whether there is a meeting of minds and if he is going to get along with the client. This rapport is essential, as photographic work tends to be intense and short-term. “The old gut is usually a good indicator,” he says.

Industrial design firm Design + Industry has more than 8,000 clients in its database, one full-time sales manager and three staff who work in client relationship management. Design + Industry works with offshore and domestic clients, a ratio of 30:70. Over the past two decades, Design + Industry chief Murray Hunter has learnt that a new lead might go cold and then three years later they come back and bang, he has a major commission.

“You can’t speed this process up,” he says. “Right now we are finding that people want to be nurtured.” This means re-quoting on proposals, chopping and changing job requests. However with overseas clients, Hunter is currently favoring a strategy where he quotes as soon as he can. “That turns them on or off,” he says.

Hunter estimates Design + Industry’s pitch success rate is around 50%. He credits much of this success to the marketing package that “validates and enforces what we do, in particular the website and the firm’s reputation backed up by more than 100 industry awards the firm has won”. (All that time-consuming form filling can pay off.)