BD In The Age Of AI (Sold With AI - Edition 12)
Pipeline Creation is the hardest revenue problem today. There are a few fundamentals that reduce it to just being a 'hard' problem (from being the 'hardest' problem). This post outlines the same.
(Note: For some of the earliest recipients of this newsletter who used to receive a personal email from me, I have now consolidated everything on this Substack channel instead. It is easier for me, and I believe for you as well.)
Introduction
Business Development, or more specifically Pipeline Creation, is undergoing a fundamental shift. Driven by the changes that have accelerated over the past couple of years, it is clear to most that the usual ’cold outbounding’ is past its shelf life.
This post is part a blueprint and part a set of fundamentals for building ‘cold outbound’’s future versions. It is probably more relevant for mid-market or enterprise selling than SMB selling.
Role of a BDR
What is the true role of a BDR, one may ask?
It is to talk about the problem that you solve (and to some degree your product) in a manner that is contextual for that given customer. If it is not contextualized and personalized, it is not BD, it is just plain marketing.
Fundamental Truths
There are a few fundamental realities *related to the current environment* that need to be understood first. We will call them the Fundamental Truths.
Everyone has information overload today.
Most leaders have a severe lack of time, given the pace of work today.
There are 5X more solutions for every problem than 10 years ago.
You cannot outrun the inherent friction that a channel has come to develop.
People do, till they can.
Not all, but a lot of segments have a ton of shelfware.
The need for positive ROI is crucial. And here to stay.
Let us explain these a bit more.
Information overload: Unlike 10 years ago when the current mass-market, SDR based BD motion took shape, people have 10X more information coming at them. Hence more information cannot be the answer.
Lack of time: Just as there is more input, research shows that the output is much higher too. It implies that people (especially leaders/buyers) are trying to accomplish many more goals today, and hence have much less time to invest per goal.
5X more solutions: This is related to the first point. For example, in Sales, Conversational AI is available not only from Gong, Chorus etc. It is now offered by Zoom, Microsoft and many more. Gen AI has definitely opened up the possibilities, so did consolidation earlier as well as the general ease with which data is available.
Inherent friction: You can write the most personalized and intent based email, but still have only 1 in 10 chance of being opened, and 1 in 100 chance of being responded to. As Dr. Howard Dover explains in ‘The Sales Innovation Paradox’, you cannot do anything about the friction that is at play at the channel level itself. We see this specifically at play in cold email and calling today.
People do, till they can: Mass BD became easy and doable, and there was no penalty for it. So people easily defaulted to it. Now there are penalties attached to it, and the results are next to none, so people will have no option but to evolve.
Shelfware: Not just the funding boom, but the broader growth boom of the last many years led to a ‘grow at any cost’ mindset and increased demand for tools. Tools got purchased faster than they could be made operational. Even if buyers have critical issues, they are still hesitant to buy more till they can get rid of the shelfware lying around.
Positive ROI: This one perhaps applies more to SaaS. Just as ‘grow at all costs’ was the mindset for the last few years, ‘become profitable’ is the mindset right now. And here to stay, at least to a degree. Hence the need to have high perceived ROI, even during early outreach, is crucial. Buyers are unlikely to explore just for the heck of it.
These factors necessitate a different approach to BD aka Pipeline Creation, especially cold outreach. It is not wildly different, but it does meaningfully change from the current approach in some ways.
The New Approach
Basics of prospecting still are - catch them, engage them, interest them.
A really good reason: Given buyer’s information overload, reach out only if you can first find a very good reason to reach out (Eg: they said something on social media, their CEO said something, they showed intent, multiple competitors bought you and so on).
Omnichannel is the only channel: Email from someone who has commented twice on your posts is more likely to be opened. But giving information in email is easier than over social. Or getting a meeting over a call. So stop thinking by channel, think only omnichannel.
Channel priority: Channel fatigue is real. Omnichannel doesn’t mean each channel is equally good. Remember this:
DTD (done to death) Channels: Email, Cold Calling
Overdone Channels: Conferences, Text/SMS
Juicy Channels: Social, Gifting, Influencers, Partners, Referrals
(Video, Audio work well with some people, usually DISC “I” type personalities)
Gestures and experiences: Give your BDRs a budget to offer these (to gift a book, offer a paid local dinner etc.). Have RevOps support it. Turns out, people still value gestures and experiences.
Needs and Wants: Marry the needs of a company (intent, technographics etc.) with the wants of a buyer (prographics, personality etc.). Most companies do only one, and get sub-optimal results.
Leverage New Channels: Assign a few partner, customer, influencer relationships to each BDR. Let them generate value from them instead of lying around with centralized teams.
Partners, social, word of mouth referrals - let each become a channel.
Leveraging existing customers and users: BDRs barely ever touch existing customers and users. Those are goldmines in your yard. Tie incentives to make it easier to leverage them.
Leverage Tailwinds: Every segment has some tailwinds (AI in Humantic AI’s segment for example). Discover yours, and leverage those.
Teach Research: Most BDRs suck at researching well. Teach them how to use ChatGPT for researching 10Ks and 10Qs, or Linkedin posts, or use tools that make it easy.
Conclusion
Mass cold outreach will likely not go away, but it will possibly become something similar to SEO - technical, specialized, and commoditized. It will become a less consequential channel for many segments that do not have established demand. For those where demand is established, it will still continue to drive meaningful revenue and will likely even be consequential. However, the competition will be fierce.
I wrote this post in January 2024 as a blueprint for BD in 2024 to help some of our customers. However, most of the points ring as true today when we are getting into the last quarter of 2024.