Business Development — a Basic Primer for Designers (2019 version)
Hire good sales people and pay them well.
I don’t care who you are, what you do, or how many Instagram followers you have. Before you start a company, think through who will handle your business development and relationships.
A few months after we started Raft, I returned to Munich for a client project. During that time I had lunch with the two former Business Development leads from frog Europe. I remember it vividly because of what I had already learned since leaving frog. We met in an Italian restaurant and shopping center called Eataly. They had already arrived and sat down by the time I got there. When we greeted each other, the first thing out of my mouth was an apology. I apologized immediately because I had no inkling or idea of how difficult their job actually was. Until starting Raft and doing business development myself, I had no idea how much work was put into business development and how they were the centerpiece that made frog run.
If you have not thanked your business development person lately, stop reading this now and send them an email explaining your appreciation for them.
I found in frog and in other companies there could be a built up disdain for the business development (BD) team. They could be painted as only in it for the money. Or unaware of what the design teams did and how they worked. There would routinely be conversations around “how could the business development team sell this program, it’s horrible”. Let’s set the record straight and illuminate this now — a lot of BD and sales people know exactly what designers and other professions do. The truth is, sales is hard and if you can make a sale, you do it. That’s how you sustain revenue and grow.
I want to breakdown everything I learned. I want to explain to anyone who has never done BD why it’s difficult and why, alongside culture, it’s the most important part of running your company. I want to shed light on why arguments between BD and teams happen, how they can be avoided, and how designers can better understand the difficult position of those on BD teams.
This article is a little “stream of consciousness” as are others, so please be patient
It’s also worth noting, that over the course of years, I not only started to understand more about BD, but also Raft’s context and situation in relationship to BD. Given we were a new company and had a very limited network, we had to think both different and conservatively about how we handled business development. Realistically we had to be conservative at all times with Raft, because we needed to ensure its success. The limited variables we had to work with (e.g. network, knowledge, capital) trickled into our BD style. We would get even more conservative as I tried to extend my network and realized how difficult it could be.
“So um… how are things going?”
This is how I started most conversations with potential clients in our first year. It was also about all I had in my conversational repertoire. Yes, it was that bad! I had no idea how to engage with current clients, potential clients, or even simply people to network with. I had to start from zero, about building and maintaining relationships. If I can learn, let me assure you, you can as well!
To start, let’s back up and explain what [I’ve learned] BD is and why it’s important to your business. This is from my first person point of view leading Raft’s BD efforts for four years and eventually building it to a multi-million euro company. It’s one view — please get others if you are starting a company. I also want to stress how lucky I felt during those four years. If you want to really learn about sales and BD, there are plenty of books, buy a few of them.
If you work in-house, this is most likely known as Product Sales. Sometimes companies will separate Pre-Sales, Sales, Sales Consulting, and Business Development / Relationship Managers. For this article, and my very simplistic knowledge, let’s assume they are the same. If your company is under 20 people, then you can perhaps assume the same.
In my very green perspective, BD is building and maintaining value-based relationships with individuals. These can be co-workers, associates, and friends. These relationships can later turn into providing services to that person to solve their business problems when needed.
I don’t think about business development as companies, but individuals. You win work from individuals. Not companies.
I tend to think this is an important distinction. You can’t build a relationship with a company. It has no memory, it doesn’t care about you, and you can’t actively help it. As a consultancy, your projects help individuals accomplish their objectives for a company. Your work makes individuals look good, and hopefully it will be a long lasting relationship.
One of the best pieces of advice I got around business development was “The more you’re in the office, the worse you’re doing your job”. This is because your job is to create, cultivate, and grow your relationships. You don’t do that in your office. It’s also nice to express that business relationships can turn into friendships. While I discuss this topic in a more dry manner, relationships with friends can have more nuanced and fun dynamics.
Over time, I started developing my approach to business development, which focuses on a sliding scale of engagement, from general awareness of Raft (basic networking), to providing them potential free business ideas or analysis (foot in the door).
It looks a little something like this.
1. Checking-in / sharing out — The lightest touch. This is for people I’ve known for some time and have positive relationships with. This is usually an email to see how they are doing in their role and check on what they have been up to lately. I may also share some of our recent work.
2. Providing useful information — We have a small enough network that, most of the time, I can keep people in mind. However we do use a basic CRM tool for organization. As I do my weekly readings of articles online, I’ll make notes for what articles may be interesting to different individuals based on our past conversations. This will provide me an opportunity to connect with them. Remember being top-of-mind is always critical, and this helps show you’re more than simply standing-by, but you are thinking of them. It also shows you don’t only provide value when someone pays.
3. Providing customized information based on their questions — I love to ask people what is keeping them up at night or what difficult questions they need to answer. I then try and put together some ideas on what is causing this or how they could solve it. My goal isn’t to provide them with all the answers they need, but rather show we are capable of thinking from their perspective and focusing on their needs over simply making some mock-ups or showing our process. We make it all about them.
4. Providing actionable information — If we can provide them with customized information and then provide them with actionable plans they can put into place right after reading, that is the best. It shows we can provide value quickly, think of their needs, and determine actionable solutions to solve their identified problems. This is discussed more below in giving away your ideas.
I am aware this may completely conflict with how some people believe design and providing services should be approached. Let me be clear that I’m not telling others what to do, but explaining my approach and what I found worked for Raft.
Of course, no matter what end of the sliding scale I aimed to work on, the goal was always to think longterm / long-game and building relationships that were about delivering value, fun, and interesting content. Try to avoid networking only to network — have fun with it. Actually have a relationship!
Think of all business development as partnering for the long term.
BD is the creation of long-term value based on individual relationships. Many people think in terms of programs or projects. They ask, “what can that person give me to work on right now so I can make money”. This is short term, and the complete opposite of the strategy you need to think about, deploy and maintain. Like friends, business relationships exist on the long term and are built on trust. In a company like Raft that doesn’t have any brand image or appeal, trust and individuals build out the cornerstone of our relationships. Trust takes time to establish. With MasterCard, it was 3 years of conversations before we found the right program. While for Facebook it was simply a few weeks based on an old coworker connection. Always think of building relationships and a network as a long term activity. Otherwise a lack of patience will kill you.
Always be patient and think long term.
One of the most valuable aspects of business development I’ve learned is to always make it about them — whether them is a potential, current, or past client, or simply someone you want to connect with. Learn to focus on their objectives and needs.
Many design consultancies or agencies will say “We do…” or “We did…”. It’s far too common to see slide presentation with “We put users first” or “We understand latent user needs”. I agree that presenting credentials can be very important, if not critical, in gaining trust and showing experience. Showing the companies you’ve previously worked with lends credibility. However the best is if you can work it into something that is about them. Present their problems back to them, with clients you have worked with who had similar situations. Don’t dwell on it, but show competency. People will ask questions if they want to know more, you don’t need to spend 30 minutes patting yourself on the back. Get to the part about them.
In the past I was told to always “say something smart”. Always have something on hand to show off your wit and intellect. Show that you’re worthy of working with them. I agree with this, but only to an extent. It’s impossible to know every industry and to say intelligent things about every industry all the time. Also, chances are the person you’re talking to knows their industry better — and you will come across as condescending telling them basic trends or problems in their industry. Therefore it’s more about engaging in a richer conversation on their industry, and not trying to teach them something “new”. This requires good conversations skills, not trying to know everything.
What I’ve shifted to, is understanding how to be a better adviser for clients, which means asking a lot of good questions. It means my conversation, listening, and engagement skills have become much more important than my ability to showcase wit. I’ve found many times clients want someone good to spar and converse with, as much as they want someone to make them look good inside their team.
However I have had clients who I’m in business development conversations with tell me directly “We know the questions, we need the answers”. In this case it’s shifting into getting them what they want. Never tell someone who just expressed their needs, “we’ll get there”, and then return to your story. Your goal is to provide them with value to fulfill their needs within their objectives.
Go ahead, give away your ideas, they’re worthless anyway
One way our cultural principles have been tied to the way we work, is how we simply give away ideas during the business development phase.
We’ve done videos, mock-ups, and full business analysis papers in order to win and bring clients on board. I’ve run into multiple design companies who resent this behaviour. They see it as giving away work for free, and this is where we split in our mindset. New designers who would come into Raft would be aghast that we would give away work. From working within the industry for over two decades, I can confidently say we’ve never given away something that hasn’t been thought of before. And the idea that a client exclusively used any ideas that we provided in their final output is a bit arrogant. Even if they did, I honestly don’t care. If we’re able to solve major problems by simply providing some ideas, we’re charging much too little.
To remind everyone, we’re in a commodity space — you have to differentiate. If you’re a new company and no one cares about you, getting a foot in the door with a little extra work is 100% acceptable to me.
And to get this out of the way, everything you have thought of has been thought of before. Sure there are exceptions, but assume that 99.9% of your ideas are not new or original. Ideas are worthless, execution is everything.
You may ask, if no ideas are original, then what are clients paying for? That’s simple, they are paying for a solution that meets their objectives. Often times this isn’t the idea. It’s the ability to execute an idea within their organisation. To be clear, sometimes they are paying for ideas. I’ve had clients simply ask to come and help them brainstorm and give them new ideas because they are so focused on their own products, they may miss outside perspectives. This is entirely fair. However, again, they are not paying specifically for the idea. They are paying for your ability to challenge their minds in new ways, and then have their teams act on those new thoughts. If you come up with 20 new ideas the team has never seen and thought is amazing, but then they can’t do anything with them, what value have you provided? Zero.
An incomplete list of 5 common BD issues
Let’s look at some of the situations I’ve found myself in running business development and how these have sparked difficulties with the team. Luckily in a small company such as Raft I have the time to sit down and explain how all of these situations happen. This explanation usually calms any disputes, but it doesn’t lessen the overall burden on the team that may occur during the program.
- “Right now”
One of the worst things is having to respond to client’s needs of “right now”. I’ll unapologetically say that many clients we’ve worked with are not extremely organised. They often lack a coherent planning road map and shift priorities at a whim due to something along the lines of changing Objective Key Results (OKRs), executive intervention, or even a book they recently read.
The difficulty that arrives with client’s shifting plans, is when they need something done, they need it done now. Not in six weeks when you have a team available. It may have taken 6 months for them to make a decision, but once that decision is made, it must start immediately. I’d like to imagine if we were a famous well known brand being featured in Forbes and FastCo we’d be alleviated from these issues. However, in talking with other companies, it seems this isn’t the case and everyone suffers from this problem.
Driving business development at a small company, it’s imperative to learn how to handle these situations. This could include anything from the tone at which you respond, to how you build a schedule, and to needing to drag your feet in responding and negotiating.
These situations often take creative methods of staffing and billing. With clients, we’ve found that money almost always plays a role. You’d be surprised how fast people are willing to wait for a few weeks if you give them a 50% discount for the first month. Most design consultancies would balk at this time of negotiating. On our side, I understand we’re in a commodity business. While I’d like to believe we’re special, there are plenty of other companies who could be hired and could do a reasonably close facsimile to our final output, or potentially a better output, which is worse for us. Therefore when aiming to get work, negotiating means a lot. If a company can save thousands of euros by simply waiting a few weeks, I’ve found most to be quite accepting in that trade off.
On “right now”, this type of immediate request can put a heavy stress load on the design team. Often our teams were always working on a program — our utilization rates were usually in the 80–90% range annually. We didn’t have down time. We had the luxury of always being busy. When an immediate program would come in, it would often mean having individual designers split time on programs and overloading them with assignments. We always tried our best to have each designer focus on a singular program, but sometimes being on multiple programs couldn’t be helped.
It’s also good to note this type of immediate (“right now”) request will become worse in Q4 of any year. For designers or readers who are unaware, clients have annual budgets. These budgets often coordinate to calendar years. I’ve always been told when in corporate, your goal is to spend 103–105% of your annual budget. Yes, you should spend more than you have. This is because corporations are always looking to cut costs in areas where they can save. If a team doesn’t spend their budget, they run the risk of losing it during the following year. Therefore in Q4 of any given year, teams will look at their budgets, look at what work is needed, and then send out a signal of “right now” to consultancies to spend their last bits of annual budget before the end of the year.
As the reader, you may ask, why didn’t I simply turn down these requests if we had work. Two critical reasons. First, as an independent company, we knew we were in a game of chance, and that eventually luck runs out. Therefore take all the chances you can get to build up working capital in the bank to be safe when hard times hit. Second, if you turn down a program, it allows another company to take it and build a relationship with the client. That means they may take the next one as well. I tend to see our industry in terms of competition and zero sum. I may love other companies. I have friends at companies who I consider great friends, while at the same time being direct competitors. However, I’ve found it important to separate friendship and business. In another article, I said some of the best advice I got [which came from a competitor] was that the better friends you are, the more paperwork you need when starting to work together. Never let business rest on a friendship, or one is bound to crumble.
The very real truth is that there is only so much money within client’s budgets. Either you get it, or someone else gets it. And the more someone else gets, the larger they can grow and the more they can do. This decreases your chances of moving forward or growing larger. It’s an aggressive way to look at the industry, but it’s also a pragmatic way. Those who tell you otherwise are either lying to you, or lying to themselves. It’s easy to say “there is enough client money for everyone”, but if that were the case, other companies wouldn’t go out of business or need to bring in external investment.
For “Right now”, if this situation happens, you can Ask
- What exactly is needed right now? How can you prioritize to start with the minimum needed if you’re tight on resources?
- What can you do within their time-frame and budget that meets their prioritized goals? How can you create a phased program so value is delivered both short term and long term. How can you provide immediate wins?
- What can be prioritized to a later date?
- How can you negotiate to either have the client wait, or break the program into phases so you can staff it properly without overloading your team?
2. Understanding *business needs (as a design consultancy)
This one is huge. It’s a point of pride and even placed in our cultural principles. At most design consultancies the number one topic that is [not surprisingly] design —meaning “ is the design good?” At Raft, our number one topic is business — meaning “is our design work the right thing for the client’s business”.
Design means nothing if it doesn’t serve a business function. We’re not in the business of altruism or pure aesthetics. We’re in the business of solving client’s problems. Clients problems are directly connected to their business and organisational objectives. Once you understand this, you reflect on your design work in new ways. It’s no longer completely about the user, but rather the user and their needs are placed within the needs of the business. If you dispute this, think why consulting arms of companies like Capgemini, McKinsey, or Deloitte have expanded near exponentially while pure design houses like IDEO, frog, DesignIt, and others reach a cap at around 1000 employees. Business matters.
When you’re working with clients, or answering an RFP, or trying to build relationships with business owners — talk in their terms, not yours. Talk in their needs and solutions, not how your design will look beautiful. Talk in terms of their organisation and their values.
In fact, we believe so much in adhering the client’s style, we built a cultural principle around it. — “We shepherd work within an organisation. We do not romanticize ideas.”
This was our fundamental rejection of the hero of most other design companies — the idea. Rather our hero is the ability to bring our work into client organisations and have them find business success. This means we always need to be focused on understanding their organisation and culture. Not pushing our own. No matter how good your ideas, if they can’t be absorbed into a client’s organisation, you have delivered zero value. I’ll repeat that because it’s a clear fact most companies ignore— unless the client uses your ideas, you have delivered zero value.
Ask
- What did clients ask for? Are we responding to that? Are we preparing to answer their problems first?
- What do we think is the right thing for clients and their business? How can we align that with their ask?
- What is the business value that you are delivering within our design work?
3. Client schedules
Similar to having client requests that are needed “right now”, designers should be cognizant that clients don’t always have time or money to get “what is best”. Even if you think 24 weeks is needed, they may only have budget for 12 weeks. Or a deadline in 8 weeks. Therefore, you have to look towards what you can solve that provides the most value for their problems within that time-frame or budget.
If you’re saying “of course client needs and our desires don’t always align”, you’re one of the few who understand this. Most designers operate somewhere along these lines when working on a proposal:
“We need 24 weeks to do this design work. Anything less will mean the design is horrible and I don’t understand why we would even do it!”
Then of course that can be complicated by designers who want to re-write the brief. Somewhere along the level of…
“In order to do the ultimate job we will need 36 weeks. I know while the client only asked for 5 updated templates for visual design in 8 weeks, but they really need an overhaul of their entire website”
You can challenge the client — and in many times you should. But there are two general rules of thumb to follow. First, if you want to do something different, provide what they asked for first, and then what you think would work better — as an extra. Second, if the client’s deadlines are much shorter than you think is needed, it can be discussed, but think of what could be done, within that time-frame, to the best of your teams’ ability.
As a first step, always give the client a proposal for what they asked for. I don’t care if it’s useless. Do not come back with what *you think is important first. Come back with what *they think is important, then show what you think might work better. You’re solving their problems, not your problems. If you believe you can make a better proposal, then do that once you have delivered what the client asked for. Many times clients may not have thought through a wide enough scope of work or what is possible, so it can be positive to come back with your suggestions as the consultant. But don’t ignore theirs. Otherwise you risk immediate derailment and confusion.
Second, aim to deliver what they asked for within their timelines. Their timelines aren’t always the best. They may be often rushed. Instead of pushing back saying it’s impossible, explain what can be done within that timeline. Provide them a foundation of what can be successful and ensure you’re presenting it always in a way in which you can be successful for them. Again always remember, it’s not about you. It’s always about them.
If it’s impossible to deliver what they need within their timelines, have that conversation early. You never want to walk into a pitch saying “We can’t do what you wanted within your timelines, instead here is how we can do it within our timelines.” Always communicate up front, right away, what is possible, and not possible.
As a rule of thumb, my answer is always “yes”, and then break down what I can accomplish by when, and under what circumstances. But in the rare situation where I know the design team can’t meet the client’s goals, I let them know right away. The worst thing you can do is delay an unsatisfying answer. Have tough conversations early and over communicate. It’s that simple.
During your business development conversations, you should always ask “what is your timeline and budget”. If it’s uncomfortable talking about money, get over it. You can’t run a company without being able to openly discuss money with clients, procurement, and others.
Ask
- What is your schedule? When do you need to start and what are critical dates?
- What are the points of flexure within your needs and schedule?
4. Client budgets
Budget is almost always difficult. I’ve had multiple clients simply refuse to give me numbers. This may be because they have a larger budget, but don’t want you to assume you can take it all, or because they have almost no budget. Or they simply don’t want to show their cards during negotiation. If clients refuse to provide budget, I usually say “programs of this nature we’ve done in the past often run €X — €Y amount”. This will then allow you to gauge their response. If they have too little budget, this is usually an easy way of getting them to admit that. Otherwise you can assume it’s within their budget. If you don’t like to assume, you can always ask “Is this in line with your expectations”.
It’s important to understand the clients generally have a set annual budget they are pulling from. And usually you are not the only vendor. Therefore what is often best, is if you can work on planning their budget in future years. This works well for clients you have good relationships and longer tenure with. If you’ve worked with a client for a year, coming into budget planning, ask what they want to accomplish in the following year. Offer to help them scope what they want to accomplish. This can also really help with your companies planning as you will have an idea of what you can expect in the upcoming year.
As a small company, or a new company, most of the time, the client budget won’t be what you’re hoping for. If you’re used to million dollar contracts coming from larger global consulting companies, I’ll tell you these are rare. When you’re new and no one cares about you, it’s hard to be brought in as a game changer and command larger sums of budget. That being said, the more you work, the sooner you build a strong portfolio, the more you do marketing, and the more you bring value to the client, the larger the sums you’ll be able to command. Realistically the last one, the more value you bring, will ultimately determine how fast you can grow within a clients company or organisation. They aren’t spending money for designs, they are spending money for solutions to solve their objectives. Provide them with that, and you’ll find you get brought back more often.
Ask
- What is your budget?
- [Ask internally] If we can’t solve everything, what can we solve given their budget? How do we prioritize that in the best way to solve their needs?
5. Starting to understand procurement
This is where new design companies, and designers in general, often get caught off guard. This entire time you think you’ve been negotiating with your client. You believe you’ve won the deal. You think you’ve agreed on that great rate.
Enter procurement.
Let’s start with this — procurement is not evil. They are not your enemy. They are there to ensure the client gets the best deal possible. They are there to negotiate. Unless you are brought in at the executive level, be prepared for procurement to grind down your rates.
The most difficult part I’ve found with procurement is maturity on the definition of design. We discussed earlier that design, especially UI design, applications and websites, have become a commodity space. Procurement will have an internal rate card which they judge you against. If you are over that rate card, be prepared to explain why you are over. As a company that also looked at strategy and business analysis, we were often much higher than typical UI production design companies. We would find ourselves haggling with procurement explaining we were not a production house, but rather design as a business analysis tool, more akin to a strategy firm. That didn’t matter, all that mattered was our website said “design” first.
If you are developing a new design services company, think about how you are labeled. Not simply for your clients, but for this type of situation. Determine who you are up against and how you look when viewed objectively.
Also look to negotiate based on topics like duration of the contract or the amount. We routinely give 3% and 7% discounts for longer or higher amount contracts. You’re usually asked for a standard 2% discount if the invoice you submit is paid within 10 days. I always accept this as I’ve never seen companies actually pay within 10 days. Usually payments are made on the last possible day of the invoice period. Be prepared for that as well.
As a small company, you’re in a tough spot. You have little recourse in terms of if a client doesn’t pay or takes too long to pay. We’ve experienced client’s who will take months to pay. Don’t be surprised by this. Plan for it — save some money in the bank for payroll. Plan time to chase invoice payments.
Ask
- What is your companies rate card?
- What are your typical rates within your industry?
- How can we make our rates more attractive based on contract duration or volume?
Side note: Do your research if the company is in a different country. Their rates may differ based on local rates. In general we have no problem getting full rates in San Francisco, but had a difficult time in Europe.
There is obviously so much more to be written and discussed.
As mentioned, there are a multitude of books written on this topic. My goal here was to cover some of these issues from a small design consulting POV in hopes to help others in the same or similar position. I’ll continue to share more as we go.
Next articles to read
Claps are welcomed! We also have more articles on the story of Raft, a small Amsterdam design consultancy.
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