Have you had multiple questions regarding growing your sales, which thus far you’ve been afraid to (or had no one to) ask?
Recently, we’ve run a 20-minute Q&A session devoted to this very topic. Missed it? No worries! See below for a transcript of some of the most frequently asked questions we received to our inbox, including my answers. Let’s see what these were.
How do you go beyond your sales network and referrals?
If your company is still a startup, or you’re just about to expand, you’re probably starting with friendly referrals and recommendations by previous clients and people you met at conferences. Networking works and it’s a great way to start.
Sadly, this technique can make you lazy and doesn’t develop sales competencies in you. You’re selling your product to people who already know you, or come from recommendations made by their trusted business partners. Thus, you’re not really selling to new, properly external clients. Besides, regardless of how much of a social animal you are, the list of friends is bound to end sooner or later.
What can you do, then? You can either start attending even more conferences and devote more time to networking (however, this is only a short-term solution), or open up to new, previously unknown people via inbound and outbound marketing.
Currently, pretty much everyone sticks to just writing blog posts. That’s great but inbound has a relatively short sales cycle and a long marketing cycle - the content has to be distributed and then you have to wait for results.
For starters, I recommend you devote half an hour a day to Quora. I’ve done this for a year and it generated over 100K views of our content on the platform. All I had to invest was my time. On top of that, the way people will react to your Quora answers will give you an idea of what the market needs and what topics are hot at the moment.
Outbound is another option and what works best is cold emailing done the RightHello way, of course. You can try to win leads this way on your own too, but frankly, you won’t be able to do it as fast and as good. After several years in the market, we simply know what works and what doesn’t.
Does outsourcing sales work?
Based on my experience I can definitely say it doesn’t. Let’s say you delegate the entire sales to an outsourcing company (assuming one exists at all). You hand over full responsibility for the most important department to a third party. That’s one thing.
Another - you’re losing touch with the market. No third party will provide you with the kind of feedback your salesperson will - what went wrong during the call, what was missing, what product-related issues were raised. This type of information has to circulate quickly in order for you to be able to react to it.
Moreover, an outsourcing company would work only with businesses that have very high margins, significant turnover, and are able to pay exceptionally large commission. Why? Because it would need efficient sales reps, who are a relatively rare, and so an expensive resource. They generate high fixed cost, and the income is unstable (seasonality in B2B sales is a separate issue I won’t be discussing here).
Also, for this kind of an outsourcing company to make sense, it would have to work only with businesses that have short sales cycles. That said, if you have high margins, major transaction worth, and short sales cycles, why would you share with someone, who sales for you? You can have your own, better, and cheaper resources in the form of a team of great salespeople.
Does it make sense to have clients who generate over ⅓ of your income?
Every client who generates major revenue is good for you in business terms. Unfortunately, he can be dangerous too. First of all, because he’s in a strong position for negotiations and it will be tough for you to deny him a discount or extend his payment deadline when he asks for it. Second, because he can have a major negative impact on your liquidity when, say, he goes bankrupt, or goes through some tough financial times himself.
Let’s say there’s an advertising agency with a dozen or so client. The biggest of them generates the said 33% of the revenue. Assuming there’s a sudden drop in orders from this major client, and you also don’t have financial reserves, your liquidity becomes strained. On top of that you have to account for the fixed costs (the agency employs people, rents an office, etc.).
So, your client had a 90-day deadline which he was unable to keep? That’s exactly how he endangered your liquidity. That’s why, when signing a deal with a new client, you have to pay particular attention to all the terms related to payment deadlines and your long-term relation.
Try winning various clients for your business. Consider both, their share in your income, as well as the industry they’re in. A new regulation in a particular industry may result in a sudden collapse in entities relying too heavily on clients representing that industry. That’s why it makes sense to have clients from different lines of business. If your client had more than a 5% share in that industry, you’ll surely feel the repercussions of the change. Don’t put all your eggs into one basket.