Fractional business development

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As technical, highly-engineered products get increasingly complex, acting as a technical partner to your client can set you apart. Identifying, analyzing, and resolving challenges prospects and customers are having creates sustainable and highly profitable net new revenue. This is the core of business development.

Business development (BD) requires a strategic approach to business development. Fractional business development has emerged as a game-changing concept, offering engineering firms the opportunity to tap into specialized expertise and drive sustainable growth.

 

Working on a whiteboard creating a business development strategy.

 

By leveraging the power of fractional business development consulting services, companies can unlock new opportunities, optimize their operations, and achieve their business objectives.

 

The Need for Fractional Business Development

 

The Problem

Consider this situation: your team has created a disruptive product to solve a major problem in an underserved market. You know you need to grow, so you’ve brought on sales staff to pound the pavement and capture initial sales from early adopters.

This is not sustainable, and revenue varies wildly. You know you need to educate the market, develop thought leadership, and create a product portfolio to serve a broader customer base. Several questions arise at once:

  •       What other products should we develop?
  •       How do we create and cultivate new customer relationships?
  •       How can we make a dent into the large industry leaders’ share?
  •       How do to explain what we’ve done to as many people as possible?
  •       How do we get our long-term customer nurturing BD efforts aligned?
  •       How can we develop a strategy for marketing and content to create an inbound engine to match our direct outbound?

 

The [first part of the] Solution

Business Development aims to seek and resolve organizational problems and opportunities that lead to innovative solutions that generate long-term value. As a result, BD accelerates growth metrics at all points along the sales funnel: top-funnel leads, mid-funnel pipeline opportunities, and bottom-funnel conversions.

BD can accelerate growth by adding to these areas, making it an efficient and smart investment for high-growth companies. They are market experts, adept at competitive analysis, SWOT’s, technology evaluations and opportunities, new market segment identification, and everything in between. They are best suited to direct marketing and communications a deep knowledge of the business landscape.

BD is absolutely essential to creating sustainable growth for your growing company, as it inspires confidence and trust with new prospects and the industry while strengthening those relationships.

 

BD looks outside your company to inform internal activities.

But hiring a high-quality full-time BD representative can be expensive.

You’ll need someone with direct or translatable experience to your industry. That level of BDR can command a total comp package of $300,000 or above, depending on region.

It’s usually too big a step from knowing you’re ready for long-term growth to being able to afford someone experienced—and great—at it.

 

A man giving a presentation with a team paying attention at a meeting table.

 

How could you afford A-list talent at an annual spend 25-30% of a FT hire…BEFORE bonus and benefits?

Enter Fractional Business Development.

 

What is Fractional Business Development?

Fractional business development (FBD) is a model where companies engage with experienced business development professionals on a part-time or project basis, usually for 6- or 12-month engagements. The primary goal of BD is sustainable growth…and the degree of sustainability is measured by pipeline.

Fractional BD experts bring a wealth of knowledge, skills, and industry insights to the table, providing strategic guidance and support to help engineering firms navigate complex business challenges. By working with a fractional business development consultant, companies can access top-tier expertise without the need for a full-time in-house hire.

Fractional differs from in-house, as the scope is usually better defined and easier to stick to. Full time BD reps (and even managers/directors) tend to convert into ambitious salespeople during tight revenue periods. It solves a short-term pain, but drains the fuel from the long-term growth engine you wanted to begin with, stalling momentum.

 

Strategic Benefits of Fractional Business Development for Engineering Companies

Fractional business development offers numerous advantages for technical engineering companies.

Some key benefits include:

  1. Cost-effectiveness: Engaging a fractional consultant eliminates the need for a full-time salary and benefits, making it a more affordable option for many firms. You get all the expertise, but for a time period you choose.
  2. Flexibility: Fractional engagements allow companies to scale their business development efforts up or down based on their specific needs and budget.
  3. Diverse expertise: Fractional consultants bring a broad range of experiences and insights from working with multiple clients across various industries.
  4. Fresh perspectives: An outside consultant can provide an objective viewpoint and challenge existing assumptions, leading to innovative solutions and strategies.
  5. Team growth: bringing in a fractional BD partner instantly expands team capability. They bolt on skills that complement what your internal team member already do well, compounding the efficiency and quality of output.
  6. Thought leadership: A well-known Fractional BD partner can help you gain visibility through their network.

 As an embedded, retained resource, Fractional BD is uniquely suited to [finally!] deliver external insights to create internal strategy.

 

Fractional Business Development vs. Agency

Traditional agencies have been an historical way companies added skills without [full time] headcount. But agencies have several enduring problems:

  •  Like a distributor, they are very price-sensitive. They are motivated to use lower-cost talent to support the overhead cost of multiple services offered. The more they want to grow, the more services or work they need to take on. Junior team members or freelancers are often assigned to client accounts after senior agency leaders secure the business.
  • Agency team members often do not have industry expertise, even if their owners do. Engineering companies can tell this difference immediately.
  • Given this cost challenge, agencies experience frequent turnover of the working team. Fractional partners are the resource, and they’ll always be there for you.

 

Real-World Applications of Fractional Business Development

Identifying Growth Opportunities

One of the primary roles of a fractional business development consultant is to help engineering firms identify and capitalize on growth opportunities. This involves conducting market research, analyzing industry trends, and assessing the company’s strengths and weaknesses. By gaining a deep understanding of the firm’s unique value proposition and target market, the consultant can develop targeted strategies to drive business expansion.

Is a market in need of a significant problem to be solved, but unsatisfied with the existing options? THIS is how Fractional BD can help you find that hidden gold and build a strategy around it to build a pipeline for sustainable revenue.

 

Yellow-faced Rubix cube on a yellow background.

Developing Strategic Partnerships

Fractional business development consultants can also help engineering firms forge strategic partnerships and alliances. By leveraging their extensive network and industry knowledge, consultants can identify potential partners that align with the company’s goals and values. These partnerships can open up new markets, provide access to complementary resources, and enhance the firm’s competitive advantage.

These partnerships can often defray development or CapEx costs by aligning efforts between partners with common goals.

Positioning and Value Proposition Refinement

Effective sales and marketing are critical for the success of any engineering firm. A fractional business development consultant can help optimize these efforts by developing targeted marketing campaigns, refining sales processes, and identifying new channels for lead generation.

By implementing data-driven strategies and best practices, the consultant can help the firm attract more qualified leads, close more deals, and increase revenue.

New market entrants joint the fray all the time. But it shocks me when I continue to hear companies touting “best technology” or “best people” as the “UVP.” These features, even if true, aren’t differentiating enough anymore (if they ever were). Every company should feel they’ve got the best team.

Fractional BDs can help you find and exploit the gaps to mine and polish what truly gives you an advantage.

New Product Development (NPD)

This is perhaps the biggest benefit of FBD, though most companies haven’t realized it yet.

The current state of NPD is usually one SME or leader (providing voice of the technical customer) and a room full of executives or directors. The “NPD roadmap” they develop is often a regression to the mean of that discussion. The group (with good intention) hears the feedback from the SME, and agrees on a path forward.

The problem with that approach is that it incorporates nowhere near enough feedback from the market. A comment I heard in a meeting like this once was “we’ll let them know what they need.” This is the result of an insular culture NOT a customer-led NPD effort. You can guess how it went.

Obtaining qualitative discovery research is a critical element enabled by Fractional BD; from there, quantifying it to direct NPD efforts is a next-level benefit.

Using their market knowledge and expertise, expert fractional BDs can secure and lead customer discovery interviews.

These discussions uncover pain points and perspectives from customer interviews (often to the customers’ delight). From there, the FBD partner quantifies a forced comparison against market alternatives (and each other if needed) and can create a polished strategy.

Case Study: Regal Ware

How to Incorporate Fractional Business Development

To implement FBD, the first step is to identify ideal opportunities for engagement – it’s got to make sense for both sides.

 

Stages of Fractional Business Development

FBD breaks down into three primary stages: analysis, planning, and execution.

Analysis consists of market research, competitive analysis, detailed discovery and pain point identification, market segmentation, and strategic vision.

Planning is developing the product and marketing strategies, along with NPD roadmap. Once the external research is done, planning defines what the internal teams should work on, based on internal and external research.

Execution is the creation and delivery of assets: refined UVP/positioning, thought leadership content pillars, voice-of-customer and competitive assessment summaries, and a content strategy framework to create an inbound engine to match active/outbound BD efforts.

These stages allow an FBD leader to identify new business streams and carry you through the first order, generating capital to bring the BD function in-house following the FBD engagement.

 

Step-by-Step Guide to Effective Implementation

Once you’ve made the smart decision to invest in FBD, the first step is to align groups to the approach – BD is the hub connecting departments together and the company to its goals. It will identify and define the HOW your business will achieve the long-term objectives.

Identify clear goals. These could be new or expanded:

  •       Macro revenue growth over a designated time period
  •       Development of a new product to solve a known pain point or new regulatory constraint
  •       Formation of strategic partnerships to expand into a new segment
  •       Improve product development speed and efficiency
  •       Enhance profitability of existing product lines

 

Once the company goals are known, engaging a fractional business development partner can kickstart the repeatable process:

  1.  Market and internal research and analysis (SWOT is a great format here), using as much data as possible to draw conclusions and recommendations.
  2. Establish FBD goals that align with the larger business goals the company has set. These goals could be a bottoms-up analysis that meets or approaches the top-down initial business goals. They can also include product development guidance, customer acquisition targets, or new segment identification and sizing. These goals lead to defining key performance indicators (KPIs) for the BD plan. Ensuring alignment at this stage is critical.
  3. Identify and qualify leads to build pipeline. Pipeline is the key to long-term, sustainable growth, and a primary function of BD.
  4. Build customer relationships, direct thought leadership content and marketing collateral, and present to customers while building relationships
  5. Measure and report against KPIs.

 

How to Set KPIs and Align Execution

KPIs tell the company how the BD effort is going and whether they’re likely to hit the targets. Ultimately, KPIs are agreed between the company and FBD. Examples can include:

  •       Marketing conversion rate
  •       Market share improvement
  •       Customer acquisition cost
  •       Revenue growth rate
  •       Profitability improvement
  •       Customer lifetime value (CLV)
  •       Customer satisfaction (qualitative)
  •       Market satisfaction gap (indicating from-to of legacy approach to new BD-driven solution)
  •       Customer churn rate (attrition)
  •       Pipeline growth
  •       Pipeline velocity through sales funnel

 

Navigating Common Challenges in Business Development

 

Tackling SME-to-Market Alignment Problems

Too often, SMEs think they know the market and can propose “can’t miss” solutions. The view is often legacy perspective, formed when they were earlier in their career and learning the first lessons of the market.

Internal alignment, especially with high-caliber SMEs, is tricky. The best approach is to use data, conducted from real VOC discovery, and develop it into market satisfaction gaps (this concept was created by Dan Adams and is called New Product Blueprinting). Generating converged direction taken directly from current customer feedback determines how important the problem is to solve, and how well existing market solutions address the issue.

An FBD expert with technical expertise is uniquely suited to conduct this research and develop these satisfaction gaps, creating an air-tight case to recommend to management. Customer perspective should outweigh even the best SME point of view.

 

Dealing with organizational lag in adopting optimized the fractional model

Organizational lag, or inertia, is one of the biggest hurdles to implementing FBD. It’s the “do nothing solution,” which costs nothing (on the surface) and requires no time or resources.

The time and resource part is true, but compiling an impactful market analysis, SWOT, and competitive technology review can quickly and definitively show the opportunity cost of inaction. This is a powerful tool to show an executive team.

 

Solutions and feedback loops essential for alignment

BD can be a communication pathway internally and externally. FBD is especially effective, as they can act as a neutral arbiter for information received from and suggestions given to the customer. FBDs have great relationships with most stakeholders, making it easy to ensure communication between the internal and external teams.

Talking on speakerphone while working behind a computer.

Building consistent brand and problem awareness amidst strong competition

Another primary function of BD is to create brand awareness. With 95-98% of a market NOT looking to buy, putting the customer top-of-mind and keeping them there ensures they’ll be the first call when they want to pull the trigger. This is why relationships matter so much: it could be 6 months, 1 year, or more before the customer is in buying mode.

With a current and sharp view of the market, FBD reps should at least inform marketing efforts, which should focus only around customer pain points and how to solve them (not company awards and volunteer day photos – no one cares).

The best FBD partners can handle content strategy creation, leveraging the UVP, positioning, and messaging they created. Building a content plan around those leads to brand trust and authority building. 

 

Future Landscape of Fractional Business Development

Emerging Trends

  • Fractional partners are a growing trend, and business development is right in stride with that movement.
  • AI is making it easier than ever to collect and summarize data to direct activities. This is a good thing!
  • Customer focus is everything – more relational, less transactions. Customers are expecting customize experiences and products. Integrating personalization into NPD while protecting commercial off the shelf volume manufacture will separate good from great.

This will lead to a de-globalization (or localization) of markets being served in the way they want, not a global standard

  • Strategic partnerships get more done with less. A core function of BD, this will continue to evolve to uncover new revenue and profitability opportunities
  • Sustainability – global regulations continue to tighten – this is also good news. A push for sustainable solutions is an opportunity for innovation, like renewable energy, EV charging strategies, and technology developed in ethical and environmentally-responsible ways.

 

Predicted Shifts in working methodologies

The agency model could be in trouble if it doesn’t adapt to provide higher-level expertise to its customers. The pandemic has made [nearly] everyone more comfortable with remote work, and by extension, the opportunity to source the best talent available has never been better.

FBD optimizes this trend by maximizing the talent value for the investment. BD itself will become more important as many newer startup companies prioritize sustainable, long-term viability. And with subscription models becoming the norm, FBD retainers provide predictable support over a dedicated time period to minimize on- and off-boarding.

 

 

Predictions on how hybrid-working structures may increase

The correction from a mostly in-person to a nearly all-virtual workforce has led many companies to adopt hybrid work structures. For BD, there is no substitute for a face-to-face meeting to build the relationship. But the ease of virtual connection alleviates the burden on BD reps, extending their reach while improving their quality of life through less travel.

 

Conclusion

Fractional business development is a powerful tool for technical engineering firms looking to drive growth, expand their market presence, and achieve their business objectives. By leveraging the expertise of experienced consultants, these companies can access the strategic guidance and resources they need to succeed in hyper-competitive markets. Whether it’s identifying new opportunities, creating strategic partnerships, guiding NPD and content efforts, or optimizing sales and marketing, fractional business development services can create sustainable growth for engineering firms years after their engagement ends.

 

Frequently Asked Questions (FAQ)

  1. Q: Is “fractional” just a fancier word for freelance?

A: No, but some use it that way. “Fractional” conveys a seasoned professional, providing executive direction and consulting expertise for only a fraction of a full-time hire. Freelance is more of a transactional relationship, where the engagement focuses on tasks done or time spend vs. impactful business results.

 

  1. Q: How do I know if fractional business development is right for my engineering firm?

A: Once you reach the point your business is generating revenue from multiple clients with a product the market has accepted, FBD is a great option. It can begin developing sustainable growth economically, and your FBD partner can educate your team and develop processes for when you are ready to add full time BD reps.

 

  1. Q: What should I look for in a fractional business development consultant?

A: The two most important factors to consider are vision and experience, in that order. Vision is innate; an FBD leader either has it or they don’t. Experience doing what you want them to do is also critical. Some more expert on the outbound/customer engagement side, some on the strategy and marketing direction, and some in NPD. It’s up to you to determine which skills are most important, next-most, and so on.

 

  1. Q: How long does a typical fractional business development engagement last?

A: FBD is an investment in the long-term growth of your company. For effective FBD, a 1-year program will let them entrench in your business, measure and optimize approaches throughout the time. 6-month engagement is the minimum if budgets are constrained, but the relationship and having the FBD come up to speed is essential and can’t reasonably be done in less time than that to deliver transformational results that last 3- or more years after the engagement.

 

  1.  Q: How can I measure the success of a fractional business development engagement?

A: The KPI section above provides guidance for what to measure; in general BD delivers pipeline. Ensuring you measure the from-to state of the pipeline—including number of customers, qualified leads (purchasing competitive products or who are new in market), and segment expansion—in addition to bulk dollars identified is a table stake success factor.

 

About the Author

Adam Kimmel has over 20 years’ experience as a new product development and R&D engineer. He leverages this experience and degrees in chemical and mechanical engineering to guide and advise technical companies on marketing and product strategy.

He has helped internal and external clients identify growth opportunities, develop strategic partnerships, and direct their marketing and content strategies. Adam’s passion for sustainability and solution advancement inspires him to engage with client partners deeply to help the world.

Contact Information

To learn more about how fractional business development can benefit your engineering firm, contact Adam Kimmel at akimmel@askconsultingsolutions.com or visit askconsultingsolutions.com.

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