As a person who enjoys the fruits of business development, one of the most effective ways to waste my time is to ask me to start cold-calling for new business. There are several more effective ways to grow new business. In my world, the lowest return on my time invested is cold-calling. Rarely does anyone ever develop a long-term relationship from cold-calling. Cold-calling may work better for a one and done business, but, for most of you reading this, there are far better, more effective ways to develop valuable business relationships.

Back in the day, I can remember the phone book being thrown at me and told “here is your lead list, now start cold- calling!” But times have changed. That’s not the most effective way to generate new business.

“Not everything that counts can be counted, and not everything that can be counted counts.”

Some managers like to have someone cold-calling because they can manage the process by monitoring the number of calls and evaluate progress. Make 100 calls a day, set up five appointments, close one deal, and then you can figure your “close ratio.” How depressing! It’s busy-ness development—not business development. Good luck with that.

Do you really think you can establish a long-term relationship from a cold call? If it’s that easy to get that client from a cold call, then how easy would it be for someone else to cold-call them and take that client away from you? Cold-calling makes you feel good because it’s activity and it’s better than doing nothing (not much better, but better). The truth is you’ll never be satisfied with the results.

Cold-calling sets the table for who can be cheapest! The client you’re calling doesn’t know you, so you feel the need to WOW them with a great price. You know, we’ll buy our way into that business and show them how good we are. Now that’s a business model for success … not.

And when you sell at a cheap price, then what you’ve communicated to your client is “The only way I can earn your business is to be cheap,” because I’m not very good, or I don’t know how to sell my product or service so I’ll sell cheap! Really? Really? By now you should know how I feel about selling cheap: when you’ve got nothing else to sell, you sell a cheap price!

I can’t complain about something unless I offer a solution, so here it is. If you’re looking for results, then here is one of the most productive ways I know to spend your business development time.

1. Resolve to chase relationships and not projects!

• When you chase projects you come across as someone who’s only interested in yourself, and not your client; what you’re communicating is that you’re only interested in the client because they have that project. When your client feels that you are there to serve them, then you bring real value to the relationship.

• If you’re chasing the project for the project’s sake, more than likely the team has already been established, and you’ve just wasted a bunch of time chasing something you never had a chance at in the first place.

Take the following steps:

2. Have your accounting department print a list of every client you did business with for the past year, with the yearly revenue of each one.

3. From your client list, add up the total revenue your company did for the entire year from each and every client.

4. From your total revenue, figure out what 80 percent of your total revenue is.

5. Now, starting at the top of your client list, add the revenue from each client until you hit the 80 percent of your revenue amount.

6. Last, draw a line on the page under the client that reaches 80 percent of your total revenue.

Welcome to one of life’s irrefutable laws, the 80/20 rule.

• Do the math and I guarantee 80 percent of your revenue comes from 20 percent of your clients. Eighty percent of your problems come from 20 percent of your clients. If you have a sales force, 20 percent of all your sales force accounts for 80 percent of your revenue. I could go on and on because the 80/20 rule is one of life’s irrefutable laws!

• So where should you spend your business development time, money and efforts? That’s right, figuring out and understanding the 80/20 rule. The goal you should have is to build your 20 percent!! It’s so easy!!

• Which group will demand more of your time, the 80 percent of your clients? The 20 percent are clients that are happy and repeat clients. The 80 percent are typically where the problem clients are. Develop more clients that would fit into the 20 percent and watch your company increase its revenue and increase profit, because you’re dealing less with the “problem clients.”

• Focusing on growing the 20 percent—the low-hanging fruit!

• Now if you’re thinking, “I know, I’ll just get rid of the clients on the 80 percent list.” Aaahh … no … wrong answer! Because the 80/20 rule is irrefutable, it’s the law!!! The rule will always exist. If you tried to get rid of your clients that make up your 80 percent, then you’ll create a much smaller list of clients on the 80/20 list. You need to manage your clients, because until you learn to manage your 80/20 list, your 80/20 list will manage you!

Growing Business from Your 80/20 Client List

1. Look below the 20 percent list of clients and look for:

a. Clients that you would like to do more business with; and

b. Clients you already have a good relationship with.

Then focus on those clients that already know you and build that relationship deeper. Take them to lunch and ask them, “How can we be a better partner for your business?”

You don’t have to worry about growing your business by adding brand-new clients! Your list of clients that will bring you more business is easily within reach; they’re on your balance sheet already!