Did you take a look at http://www.softwareceo.com/forums/showthread.php?t=3113?
Categories: Sales and Distribution
First of all this is my first post on here. Have been reading through the forums, and have wasted almost an entire day just reading everything.
I have a company that I just joined as Executive Director. The company has existed since 1998, but basically only as a part time venture. In that time we have been fairly sucessful as far as part time goes, building several websites, but we have been most sucessful in building software to run on stand alone kiosks in museuem envrionments. Our main problem is that we can't seem to keep sales people, and the ones that do want to stay don't produce. Not too sure what we are doing wrong for them. We let them set thier own hours, and pay 20% comission as soon as the contract is signed. There is a bonus system in place as well when certain numbers are reached. I am essentially the only full time employee now. The President/CEO has another job that he is under contract to do with an option to resign for a few more years (unless I can get this thing up and running with enough steady income).
I am not taking pay in this company at the present. I am however going to be given a percentage of ownership as compensation, with a steady paycheck to arrive hopefully in the near future. I declined a paycheck in order to help get it built up faster. There is virtually no overhead expenses for this company (home based), and consists of the President, myself, a graphics designer, and a sales person (whom is married to the graphics designer, but not doing so hot right now...)
Anyways: We have a problem with sales and keeping good sales people. I believe our next step is to look into outsourcing our sales department. This should help us get off the ground with sales and build up our client base. I would like to know your experiences with outsourcing sales, and what to look for and what not to look for.
Thanks! Lots of good reads on these forums!
There are a lot of companies out there that outsource sales.
Ah...Ah ... I've seen a lot of people outsource tele-marketing, but relatively few who have outsourced actualy sales functions.
Do you mean telemarketing?
Sales outsourcing - www.memoryblue.com - this is still my best answer. I don't know of anyone who does the whole thing - but you could ask them if they'd consider it.
I think you need to find someone like yourself that is motivated to help the company succeed and work on commission only. We have been able to do that successfully, so I'm speaking from experience. It's best to keep sales in house and work to build an outline of your sales process before you consider outsourcing it.
There are great potentials out there in parents that have kids in school or others that are homebound (if your sales does not involve travel, meetings, etc.) Even your local senior center might produce some experienced people looking for a project they can believe in. Don't overlook the experience, dedication and work ethic of the 55+ crowd.
Also a higher percentage of commission (when commission only, I do 50%, they need to make a nice living too) and doing all of the marketing for them so that they have warm leads. Creating good marketing pieces of your existing installations, including case studies that will appeal to counterparts in the museum industry. Working with current clients to make connections with prospective clients. There is a lot that can be done on the management level to increase your sales reps success. The more successful they are, the more they will stay.
I lay all of this type of stuff out in my job postings and I use Craigslist. They need to be passionate about what you're doing before you even interview them.
My favorite quick read book to jumpstart you: How to Become a Marketing Superstar by Jeffrey Fox. I believe it all comes back to your marketing techniques and tools. Sales is much easier to satisfy if you're marketing correctly.
What I meant was that there are a lot of companies that outsouce sales as a service ...Well, that's what I am trying to clarify. I don't agree necessarily.
Yes, there is a lot of telemarketing that is outsourced, espesically to qualify potential leads, but I see that more of a marketing than sales function. Dialing for dollars.
Sales itself, where someone builds a relationship with a customer, where they persuade, educate, faciliate, guide and help a customer, etc... that typically stays in-house.
Can you provide a specific example?
Side stepping the outsourced sales issue for a moment - do you know why keeping (good?) sales people has been a problem? Have there been exit interviews, or long term staff who knew the departing salespeople, or some other means of determining why people have not stayed?
Before trying to plug the hole with an external wrap I think I'd like to know the reasons behind the problem. It may well be that an excellent candidate or new hire became less than enthused with the terms of their employment, lack of infrastructure, marketing support or other missing resources.
Time to play Mr. Monk goes to the Museum and solve the death of a salesman case. ;)
Ken Beam, The VAR-City -- "Channel Start-Up Specialists since 1995" Phone: 972.240.8793 or firstname.lastname@example.org
Ken makes a good point. I'll add that the first successful salesperson is typically one of the founders. Once you've blazed the trail and know the process, you can hire people with the right skill sets, teach them the process and coach them through the learning phase.
Sales is hard. That's why good salespeople make so much money. Most people can't do it.
The best are probably not going to take the deal you are offering.
I don't know of anyone who provides 'outsourced' sales. I don't think there are a lot of companies that do it.
I'm not an expert but is not the reason that no one provides "outsourced sales" is that the companies who provide that function are instead called "distributors"?
I have long since lost track of this but I know as IBM was downsizing they tried using "contract sales people" (usually just-laid-off employee sales people) that they called "Agents." It was part of the Business Partner program. Not sure how it worked out but I suspect it didn't.
For the sake of discussion, a Google search on Outsourced Sales turns up some companies who say they will do the telemarketing & will put feet on the street.
Here is one example:
I would NEVER outsource our sales, because of the relationships that we build and the referral business we are building; however, there are these types of options out there and it is an interesting discussion.
Charles - that's a good point! They are called VAR's or resellers. I just hadn't thought of it that way.
They are often refered to also as 'order takers' by those who count on them to make sales for them. The software publisher has to make the first $10M in sales, then they might have a shot at getting the channels interested.
(The $10M was arbitrary - maybe a channel expert could give us a better gage of 'readiness.')
To clarify, they are not called VARs or resellers - distributors sell to VARs and resellers.
In regards to being order takers, that's old school misinformation.
If they don't drive new business opportunities (generate otherwise non-accessible incremental revenue) for the ISV: they are not Value Added Resellers (VARs), they're simply retailers. Storefront or online, little difference from a delivery point of view. There are sharp distinctions and it's important that all resellers not be lumped into the same bucket.
In this case it doesn't appear that that would be a good option without getting tangled in the deep Consultant/Agent weeds.
I'm still strongly of the mind that there's too much emphasis being placed on alternative sales channels without further encouragement towards looking at the causes and source of the sales position vacancy. If there's something critical missing within the sales administration/management of the business it will only be magnified by applying an external 3rd party wrapper.
Ken Beam, The VAR-City -- "Channel Start-Up Specialists since 1995" Phone: 972.240.8793 or email@example.com
there's too much emphasis being placed on alternative sales channels without further encouragement towards looking at the causes and source of the sales position vacancy. If there's something critical missing within the sales administration/management of the business it will only be magnified by applying an external 3rd party wrapper.Sounds right on! You can't necessarily solve a problem by shoving it off on someone over whom you have less control than an employee. Some problems we can -- we don't know how to dry-clean a pair of slacks ourselves, so we outsource the problem to a professional dry-cleaner. But if there are problems in the saleability of your product -- and there probably are (no offense) if you are just starting out in the market -- then outsourcing the sales function won't solve them, any more than outsourcing the coding would solve a problem of poor software design.
I am a "non-salesperson." I am one of those people who once said "I couldn't sell something to save my life." Scratch me more than about a quarter inch deep and you find a programmer. But I firmly believe that every entrepreneur starting a company to sell any business software HAS to swallow their pride and their geekiness and get out there and SELL, at least to start. If you can't look someone in the eye and tell them that your product will solve their problems and they ought to part with their money in return, how do you expect some person you just hired to do that? And yes, when I started my company, I practiced what I am now preaching.
I just went back and re-read your original post. I confess I am guilty of replying to the previous replies and not to the original post.
Have you tried selling the product? Have you gone out on sales calls with the graphic designer's spouse? Why doesn't the product sell? (Or -- why can you sell it and they can't?) THAT is the problem you need to solve. If the problem is that you are hiring the wrong people, then outsourcing might solve that, but hiring the right people is probably a better solution. If the problem is anything else, then outsourcing is irrelevant to the problem, no?
If you can identify the problem (and I don't pretend to know what the answer is -- this is not a rhetorical question) or at least get a little closer, then come back here and say "my sales team has a problem with _____" and SoftwareCEO has the resources to help. If you can't identify the problem, then at least identify the symptoms better than "they fail and quit."
You're not alone. I used to work for a company whose sales model was
- Hire a bunch of salespeople
- Turn them loose
- Fire them for non-performance
- Repeat as necessary.
And make sure that you're doing adequate marketing to support sales. Without that, I would leave too. A nice thing is that you have the graphic designer on staff that can make some very nice things ...
That sounds like a great start! It was good that you were able to talk to the previous salespeople and find out what the issue specifically was. And, you're right, you would have had to create the materials anyway. Much better to create them and try to get the people back who were already trained on the product. They will be much more loyal than an outsourced company, especially when you ask them what the issues were and took corrective steps.
I hope that you'll let us know how things are going as they progress!
If you look into the history of selling, you'll find that John Henry Patterson, the founder of NCR, faced the same problem as your company does LDOBIE.
The short version is that he had a retail shop, no point of sale cash control, bought a cash register and realized it's value, bought the rights and founded NCR, successfully sold cash registers himself, hired sales people, and found that they failed.
Many entrepreneurs stop at just that point - after one or multiple attempts to move beyond dependence on the owner as the main sales person.
JHP did not quit, though. He decided he should document what he did to sell. He wrote it down as a system, and conducted the first formal sales training.
Wikipedia says, ┬?Based on a 16-page handbook written by his brother-in-law, Patterson established the world's first sales training school on the grounds of the NCR factory campus at Sugar Camp in Dayton, Ohio.┬? Selling Power Magazine did a piece on the history of selling systems several years ago, too. The publisher recognized Patterson as the father of modern selling. A more complete history of selling, Birth of a Salesman: The Transformation of Selling in America, by Walter A. Friedman, provides a really comprehensive background if you really want to geek out on the topic. I did.
Today, you don┬?t necessarily need to work as hard as he did, since the science of selling and selling systems have advanced and are available for sale. You don┬?t have to invent, just find what┬?s out there and tailor it to your company and market.
Since your founder/owner can sell, then it can be sold!
The question is how? The process is as knowable as a football offensive system or a recipe to make pancakes, and somewhere in between in terms of complexity. Your founder, however, may not be able to tell you because he may be doing it intuitively. Have you ever tried to teach someone how to tie a tie?
You may need more ┬?marketing┬? and more of the things the prior sales people are asking for┬?
HOWEVER, beware. They may or may not know what is needed. After all, they didn┬?t sell anything. When sales people ask for things, like literature, lower prices, more features or a web page, they are more often crutches. If they don┬?t know how to sell, you will never give them enough crutches.
My experience as a sales consultant leads me to guess that the problem is lack of a defined and repeatable system and people who are trained in the system and good at executing it.
You can spend a ton of money and time doing things that don┬?t address the real issue, the core weakness.
I suggest a definitive diagnosis prior to treatment.
P.S. I will allow that some nice brochures could be part of the final, complete solution.
P.P.S. But if that was THE answer, we'd just print them and mail them - and sit back and take orders.
P.P.P.S. Patterson┬?s guys complained forever about lack of brochures, S.E.'s, trial units, a proposal writing team, the need to lower prices, the need to add features, competition from the entrenched abacus and various popular home grown systems, the need for more marketing since no-one new their brand, more leads, and the fact that the demo units were so darned heavy!
When it comes to hiring sales people - one more thought. A poor sales person tends to need a lot of help, so a lot of people get involved in their repeated failures and the entire organization's well-being is adversly affected.