Monday, June 20, 2011
There are many large companies that rely on an in-house sales staff to drum up business. Maintaining a strong in-house sales force can be expensive because you have to pay salaries, insurance and other benefits as you would with any other employee. You incur high costs before you may see any positive results. An alternative to having an employee-based sales team is to have outsourced sales driven by independent sales reps.
In today’s economy, many businesses do not have the means to support a full-time sales staff. They certainly want to do all they can to attract new business, but they must be a little more creative. Setting up an independent sales force that will accomplish the same goal of increasing sales and bringing in new customers is not as simple as it may sound.
Depending on the type of company or business you are running, an outsourced sales force may or may not be appropriate. For instance, if you have a very specialized product where technical knowledge is essential and your sales people must be very fluent in all of the latest technology; it can be very difficult to find qualified independent sales reps that can handle the job. A company may need to hire and thoroughly train a sales force so they can effectively present the company’s products before potential clients.
On the other hand, field sales can easily be handled by well rounded independent salesmen that have experience in a number of different areas of sales. If you can sell TVs, mattresses or payroll services, you probably can sell air-conditioners, tires or cell phone services.
An independent sales rep is almost always paid on commission. When he or she brings in business, they are paid an agreed upon commission. Instead of receiving a W-2 form showing their taxable income, an independent sales rep receives a 1099-MISC form and is considered an independent contractor who is responsible for paying their own Social Security and Medicare taxes. In return for giving up control over the sales rep, a company is not forced to pay taxes, insurance, healthcare or other benefits, all of which can add up to a substantial sum of money.
Another advantage of hiring independent sales reps to drive company sales is that they often cover territories that do not get covered by an in-house staff. Some independent salesmen may have 5 or 10 different product lines they represent and run in very different circles than would normally be associated with your business. Their contacts can be invaluable for generating new business. As long as you find a competent professional, both big and small businesses can benefit by engaging the service of an independent sales representative.
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Friday, May 1, 2009
For most business owners, the concept of a perfect sales force is a moving target. With new product and service announcements, shifts in regional priorities, and evolving vertical market requirements, the result is an ongoing source of anxiety, and a drain on even the most efficient organization’s bottom line.
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Monday, December 1, 2008
In fact, insider information when it comes to B2B sales is sought after information (not that insider stock trade aren’t). We have seen terms like ‘trigger selling’, ‘timed selling’ and other similar expressions to denote knowing the right time to actually sell to a prospect. But, what about when a sales professional at a company has insider information about an upcoming sell. Let’s say you are selling security software or services to a company. You hear that they are sick and tired of their current telephone provider and are looking to switch vendors. Is this insider information? What could you do with this information? If you had a VoIP division you would certainly email someone about this opportunity. This represents an excellent referral opportunity.
If I told you that you could list your clients opportunity on Salesconx and make some extra money, is that something that you might be interested in? (Please note that this should be read with the voice of Bob Ryan of Entourage). And why not? This information is extremely valuable. Think about what a VoIP vendor would have to pay to generate the qualified lead and opportunity that you are now a party too? The PPC for VoIP is around $5. With a 1% conversion rate, that would equal around $500 (3% would be $165). Use an appointment setting firm or telemarketer and it could cost you $250-$1,000 for the appointment. In short, companies are spending $90billion per year to find qualified prospects and drive revenues for their companies (of course we could expect this number to come down but 80% of $90billion is still enough). Armed with the information that a company is indeed “in the market” for a product or service should be worth as much (if not more) than your standard qualified lead.
Now, how about pulling this insider information out of your client? Why not ask your client what other pains they might be having. Don’t think for a moment that an investment banker (the few remaining) isn’t sitting down with the CFO or CEO and asking them where their pains are. The objective of course is to ascertain where the investment banker could play a role in driving revenues for his company. Most their activities revolve around advice and introductions. Why not become the investment banker for your customer? Find out where are their pain points and help them find solutions to solve those problems. In today’s economic turmoil driving some extra revenue is certainly something we all want.
Wednesday, September 3, 2008
Prospecting 1.0 moved us onto the “internet superhighway” with online seminars (webinars). No longer limited to an in-person seminar in multiple local cities (can anyone else say 10 city seminars in 4 weeks?) the Internet allowed us to produce an online version of our in-person seminar. These of course became so dry that we supplemented the rather poor attendance with recordings that became available ‘on demand’. Prospective 1.0 eventually led to Podcasts and who (other than me) doesn’t want to listen to selling training materials on their iPod?
Web 2.0 has created a more open approach to the Internet, in particular user-generated content, blogs, podcasts, social media, review sites, Wikipedia, etc. Prospecting 1.0 has clearly benefitting from Web 2.0 trends as companies are using the social networks to drive business (certainly the recruiting industry and consultants are benefitting from social networks). Sales 2.0 brought together discrete marketing and sales tools into a single framework (think Salesforce.com, WebEx and Genius) and thus the Sales 2.0 sales force leverages the activity from Web 2.0 venues (such as Blogs) to deliver leads to the sales team. Web 2.0 was a real paradigm shift as consumer-oriented venues (Facebook for instance) are being leveraged for businesses. Companies started thinking about their social media coverage the same way they measure their public relations (print) coverage. But there has not been a shift in the way that prospecting occurs – it is very much the same formula; response to lead to qualified lead to warm lead to hot lead to opportunity to hot opportunity to deal. Many people have written about these steps (from Miller Heimen to Siebel) but let’s assume these are pretty much the steps. Web 2.0 has given more ways for responses to occur – from clicks, to blog posts, to downloads and web responses. These build on the direct mail response leads from the early 90s but in the end are still just responses. Shouldn’t the Internet be able to shift the way that people prospect for business the same way the recruiters now fish for candidates across LinkedIn?
Prospecting 2.0 is the new trend in allowing buyers to reach decision makers without the need for the first 3 steps of the marketing equation (response – lead – qualified lead). This is actually the most costly area of the marketing process. Think of how much you spent on your last Google PPC campaign and how many qualified leads were generated from that campaign. Think of how much you spent to exhibit at your most recent tradeshow and the number of qualified leads that were generated from that event. Web 2.0 has created an environment where one could easily leverage what we will call human capital. This started with eBay (albeit Web 1.0) where your ‘stuff’ is valuable because there is someone willing to purchase it. Prosper.com created a marketplace where your liquid cash can be ‘sold’ for higher interest rates because there is someone willing to pay a premium for a loan. More recently expert networks have become a common place where professionals could earn extra money (often referred to as an honorarium) by speaking to companies looking to leverage their knowledge (check out glgroup.com). Prior to an expert network a company would have no alternative but to hire a consulting firm whose analysts would serve as the industry experts on the desired subject. The analysts would do their research gathering information on their own and sifting through the bits and pieces to come up with their own conclusions that they would share with their clients for a very hefty fee. Online expert networks (the Web 2.0 flavor) bypass the analysts and consulting firms connecting the company directly with the industry expert.
Prospecting 2.0 works in a similar vein. Rather than a company using Google or other traditional marketing tools to drive responses, leads, etc. they bypass them by going directly to the source of the opportunity. They do this by creating a marketplace for referrals driven either by the buyer (of the qualified leads) or the seller. Companies like Myndnet, LeadVine and ThePerfectNetworker allow buyers to literally publish their lead request and the fee they are willing to pay for the referral. Companies like Inquisix and Passitto take the sellers approach by allowing a seller to list their referral or contact opportunity and allowing buyers access to their connections. Companies like Salesconx do both buy and sell introductions to decision makers. Are they working? It is probably too early to tell as a sector, but $10 billion will be spent in 2008 by businesses in the US on lead and opportunity generation. Checking out these companies sites, it isn’t just small businesses using these services. Myndnet has a few listings from Netscout, Passitto has a law firm, and Salesconx has Administaff, MessageLabs and Berlin Pacific. Companies of all sizes are faced with the constant struggle and desire to grow. In a day and age when every dollar counts, isn’t it time for Prospecting 2.0?
Monday, July 7, 2008
It is no surprise that trying to sell in a tough market is one heck of a challenge. Think of the opposite – just how easy it was to sell when everything was going great. Companies buy to either (a) drive revenue or (b) cut costs. Y2K, Sarbanes Oxley, SEC and HIPPA compliance are long gone (unless you are one of the lucky ones) so forcing a company to spend money to get into compliance isn’t an option for most of us.
In sports, it is common for one team to be struggling against a far better or more prepared opponent. Yet somehow, time and time again the underdog emerges victorious. Something happened during the game to allow the seemingly defeated to emerge victorious. Perhaps there is something there for us to learn and emulate.
Here are some suggestions for surviving during a tough selling period:
- Pull the goalie or go for the goal. In a hockey game it is common for the coach to pull the goalie and replace the goalie with another offensive player in the hopes of getting a goal in the final seconds. Pull out all the stops and go for that “big” account you’ve been talking about. Think huge (bigger than big) and try to get a piece of business that never in your wildest dreams you ever thought you would get.
- Full court press. Spend as much time as possible on site with your client. Participate (for free) at creative meetings or strategy sessions. Take people out to lunch. Learn as much as possible about where your client is headed to and weave your way into those projects.
- Switch pitchers. The market isn’t going to change overnight so whatever you are doing today needs to change accordingly. Try a whole new approach to your service or offering.
- Go for the interception. What similar service is your target buying from someone else? Why not focus on stealing that piece of the business from one of your competitors. All is fair in love and war. There is only a finite of business that your client will transact so why not shift some money your way. You may need to discount it highly but squeezing more money out of the same client is far easier than landing a new one.
- A walk is as good as hit. Not everything you do needs to be a homerun. Just try to make a sale no matter how small with a new client. Think about what you could offer a client that is easy to buy – keeping it very simple. Filling your plate up with singles is much better than having no one on base.
While we all hope that the market turns around soon, we are all in this for the long haul and having the stamina and fortitude to make it through the storm successfully will make you feel like a winner.
Monday, June 2, 2008
You have a great product or service to sell. You know the pitch back and forth and are prepared to handle any objections made by the prospect. All you need now is a prospect. Knowing full well that the right person isn’t going to pick up the phone and call us – how do you get in front of the right people?
We all make cold calls or, in the web 2.0 vernacular, send out blind emails (not spam). We certainly want to make the most of our lead generation time. Marketing is always concerned (or should be) with the return on investment (ROI) of marketing spend but how about the ROI on sales time? Who is measuring whether the time spent on the phone prospecting is actually paying off in revenues? If reaching the wrong person is a sure fire way to not drive business, then reaching the right person will certainly move the ball forward.
Aim High – why not set your targets on reaching out to the best possible prospect first? Go for the homerun! Find out the person’s name by using Zoominfo,
Stop and Ask for Directions – when you are talking to any prospect, why not ask them to steer you in the right path? Start by stating upfront that you know he/she is not the person you should be talking and then ask for the right person. If you are able to engage a person in a conversation then have them help you. Talking to an administrative assistant or a subordinate – ask them when the best time would be to reach the prospect.
Think Out of the Box – let’s be real, whatever you are selling the chances are that someone pitched the very same thing to your targeted prospect within the past 30 days. If not then you got a hot one. Why not think about a different pond to fish in (enough metaphors). If you are selling small business benefit services why not pitch to local accountants that serve small businesses? If you are selling web design services why not introduce your services to local computer stores?
Buy Your Way In – larger companies spend a fortune in marketing getting their service/product in front of the right people. According to the American Marketing Association, $90 billion was spent in the
Knocking down doors is a hard business, especially in a difficult marketplace. If your company’s marketing department isn’t driving leads for you then you have to do it yourself. The good news is that we (all of us sales guys) have done it before. We all have good days and bad days. The key is always persistence, staying on top of leads and following thru.
Thursday, May 8, 2008
We can talk about writing press releases, taking out ads and sending out mailers. But, think about it - in tangible terms, how are you going to get those first ten customers? Your first few customers are so critical to your success because they:
- Legitimize your offering, demonstrating that yes, there is indeed a market for your products and services (“dogs eating the dog food”).
- Provide valuable feedback to help you improve your business operations.
- Give you real testimonials and referrals.
- Pay the bills (let’s not forget about that one).
Let’s assume for our purposes that you are not blessed with a brand name like Pepsi or Jack Welch. If that was the case, then simply cold calling a potential customer would suffice. There are a number of ‘old school’ ways to find potential customers in your immediate network – the “warm market”.
- Personal Contacts – friends and their friends, school connections, fraternity brothers, club members, church and so forth.
- Business connections – former employers, employees and customers. Your personal vendors - lawyers, doctors, accountants, insurance agents, mortgage brokers, bankers, real estate agent, contractor and so forth.
After you have built your list of contacts, send them all something letting them know about your new business. Keep in mind that you aren’t necessarily soliciting them to be a customer but rather, you are informing them that your new venture exists and with that knowledge your contacts could either decide to become a customer themselves or refer folks that might be interested in your product or service. Make it really simple for them too; what problem are you trying to solve and how do you solve it. When should you be brought into the situation? A colleague/friend is going to refer business to you in the hopes of them looking good to both you and the prospect.
In order to attain your first customers, you are relying on the trust that you have built (ideally) with your personal relationships, friends and family. While this method will hopefully drive business, if your business does not directly align with your contacts then hitting them up for business will be futile.
What better way (presumably) to launch your new company than to leverage the power of the Internet to get your first 10 customers. The (now) classic steps are:
- Build your website.
- Optimize it to be visible within search engines.
- Launch a pay-per-click campaign with text and banner advertisements.
- Tweak the messages to attract your audience.
- Weed thru the clicks to find quality leads.
- Close business.
While this seems extremely straightforward and easy to launch – it is still difficult to get your first customers this way. We surveyed 800 small businesses at the end of 2007 and most of them were concerned about upfront costs on any marketing program.
While the internet will help you drive people into your store, when they look around they aren’t going to see pictures of satisfied customers – because there aren’t any. As they look around for accolades from your biggest clients, all they’ll find is smoke and mirrors. Of course you could get lucky and convince your site visitors to buy your service but this could take quite a while. It is no wonder this approach is often called the ‘spray and pray.’ Think about it; you have allocated a significant amount of money (that you likely don’t have) into Google and PPC advertising in the hopes that one of the hundreds of people who will click on your advertisement will convert to a customer. It could happen…but can you rely on it for your first ten customers?
The New Way
With the proliferation of social and professional networks, there must be a better way of ‘finding the right person’ to buy your product/service. And, isn’t that what all this marketing is really about – finding the decision maker who could authorize a purchase or trial of your product/service. The “old way” as described above, finding the right person was by leveraging your immediate network. The internet way says: broadcast your message to as many folks as possible and someone (hopefully) will be the needle in the haystack.
But, the new way, and ideally the most cost effective and efficient method is to harness the business relationships of others to find the decision maker. Here is a good visual – if you were to launch your company and have 50 independent sales people ready to promote your product/service would that be a better approach to finding your first ten customers? Think of the power of having an army of people trying to open up doors for you the “master salesperson” to close the deal.
Social and professional networks have really gotten the ball rolling on this approach. Think of your ideal decision maker – the head of sales training at a company with more than 100 sales reps, the head of marketing at a consumer good company or the CIO of a retail chain. Now, why not tap into your professional network (whether it’s LinkedIn, Xing, Ning or others) and ask them to make introductions for you to your target decision maker. I know some folks on LinkedIn (like Moshe Weiss) who have 17,000 contacts in his ‘network’. Surely, the type person that you are looking for could be found in Moshe’s network. Getting these networked folks to make introductions for you shouldn’t be too difficult even though you don’t actually know them. How, you may ask? Would you ask 50 independent sales reps to go out and find customers for you without compensating them? Of course you wouldn’t. So why not offer the same compensation you would offer an independent sales force – on performance or based on success.
Let’s assume that you stand to earn $50,000 from landing your first customer for your new product or service. If you hired a sales executive they would expect commission of 5%-7% on top of a base salary. So why not offer $5,000 to anyone that could bring you a customer. Maybe it is a residual payment of 10% of the monthly revenue. Think of what it is worth to you to get that customer and what it would cost you to drive that lead yourself – PPC ads, telemarketing, etc. Add on top of that the cost of commission to a full time sales executive. It certainly sounds far less expensive to leverage a 3rd party sales team that to build one yourself – especially if you are only paying for success. Outsourced sales and telemarketing is a huge business that usually incurs upfront fees or monthly minimum commitments. They could be very effective but it requires an investment in time and money.
Leveraging the networked folks seems like a winning combination; a broader reach than your personal contacts without the cost exposure of a full blown internet marketing campaign. Let’s not forget that money is a great motivator so why not offer money to help drive your business. I generally don’t like the whole favor business – the quid pro quo of you doing this for me and I’ll do this for you. I prefer, here is what I need and I am willing to compensate you accordingly.
So here is the question; if I was looking to meet someone you know professionally and compensated you for making the introduction a percentage of any revenue I generated from the relationship – would that create more of an incentive for you to make the introduction? That would make you the middleman just like the role of a real estate broker or even an investment banker. Now if you could only earn the fees of an investment banker – wouldn’t that be something?