outsource

When not to outsource your sales, and why

By Matt Ball

If you work in a start-up then there’s probably a good reason for you choosing to do so. It may be that you have spotted a massive inefficiency in a market, a global issue that needs fixing to save the planet, you love the excitement and the thrill of working in a high-octane environment, or you simply adore craft beer. Whatever your reason, you will no doubt be on an exhilarating journey, and you want that journey to continue for as long as possible and be as profitable as possible. For that reason, sales will no doubt be a daily obsession for the business as a whole.

The question is, how do you sell lots of stuff very quickly, at a very low cost of sale and on an ongoing basis, so you can grow exponentially and become rich beyond your wildest imaginings? (Or save the world/humanity, and then do loads of TED talks…).

Many start ups take a “tooling up” approach to sales. In the same way that one might prepare for a fight in the car park of your local bar by hiring a group of mercenaries and gathering the appropriate hardware, start-ups frequently hire a motley crew of sales people of varying levels of skill and experience, furnish them with some sales tools (not always the best ones) and attempt to start selling. If you can see why this might not succeed then you may know where this blog is going…! In short: throwing resources at the problem is not the answer – a measured approach is required which is heavily dependent on the stage of development and expectations of the business.

Understand the stage of your sales maturity

To put it simply, different start-ups need difference sales models at different times. Start-ups can be segmented into three broad categories – Start-ups, Grow-ups and Scale-ups. Each is characterised by its capabilities and, most importantly, its sales model. If you know where you are and why,  you’ll be able to make informed and effective decisions on how to grow your business:

• Start-ups – Founder-led sales
• Grow-ups – Repeatable sales model
• Scale-ups – Self-service and channel sales

 

Take a look at your sales model and put yourself in one of the above categories, and then follow the suggestions below, and you should find your sales journey will be a great deal more successful than if you try to jump the gun and expand your sales organisation prematurely.

Founder-Led sales? Don’t outsource!

ChannelCreator speaks to many companies that are in founder-led selling mode. As difficult as it is to hear the advice, the suggestion is usually to “keep doing what you are doing, but with a few tweaks” and “don’t outsource or scale up your sales team”. But why is the start-up phase typically not the right time to bring in sales resources and professionals?

In start-up mode, a company will typically be establishing how the product fits into the market and looking for proof of value in that market. However sales discussions may have come about,  every one is an opportunity to pivot the product, reposition the solution to address a slightly different use case, or to  test a new price point or different pricing model. Only founders can make snap decisions in the pivotal moment of a pitch meeting, and these decisions might radically alter the direction and the value of the business.

At this stage, bringing in a sales team, or worse – outsourcing sales – requires your business to put mechanisms in place to limit what the sales team can sell and how, so the business isn’t exposed to unlimited risk. In putting these “stabilisers on the bike”, it removes all the agility and capacity to flex and change the model to suit market demand. Ideally you should be running a founder led sales model until you have your first 5 to 10 customers on board.

In the Founder-Led sales stage of development it may be worth bringing in a sales coach or non-exec director to guide your sales activities, but if you’re not doing it yourself then you’re probably missing opportunities to test new prospective approaches and models that could greatly improve your outcomes. ChannelCreator has developed its Augment service as a “Do It With Me” approach, enabling founders to leverage ChannelCreator’s best practices whilst maintaining control of the sales cycles themselves. There’s more on ChannelCreator’s Augment offering here.

Repeatable sales models: what to prepare before you hire

Once your proposition is “fully baked” it’s a great time to start expanding your sales organisation to reduce pressure on your management team and create a scalable business. Take the learnings from your first 5 to 10 customers, plus your Founder-led sales experiences, and create a sales handbook of the dos and don’ts, and a sales kit of all the collateral and sales assets needed to close a sale.

As part of this sales handbook, document your Ideal Customer Profile (ICP), and ensure you have a very clear idea of the criteria that define these ideal customers. How big are they? Which verticals do they function in? What technology do they use? How are they funded? Where are they based? What competitive offerings are they using? What are the titles of the people to whom you plan to sell? The better your ICP, the more successful your repeatable sales model will be!

Next, build out a plan and write it down. A Go To Market strategy outlines what you plan to do, and a Go To Market plan should outline how and when you plan to do it, and with what and whom. Five to fifteen pages is more than sufficient, but if you don’t write it down then it won’t be repeatable, and you will have nothing to measure your team against. Once this final piece is in place, you can go ahead and either hire some sales staff or outsource your sales.

ChannelCreator offers ICP workshop, GTM strategy and plan and creation of sales kits and partner programs as part of its Initiate Phase in any new project. You can read more on ChannelCreator’s outsourced sales services here.

Scaling up, creating self service and channel models

Once you know your ICP, you have a strategy and one or more people are implementing this, it’s worth considering a channel strategy to start selling with and through partners. These partners should be aligned with your ICP, and be a natural complement to your proposition – either in implementing your product, integrating it, or advising customers that your solution is worthy of consideration.

If your proposition is very well productised, you can also consider building an online sales machine for automatic billing and provisioning at this point, or use one of the many subscription management and billing platforms on the market to set this up. If you are considering this approach, remember to budget for a good level of inbound and outbound digital marketing to drive awareness of and demand for your product. You should also consider whether to start building a classic B2B SaaS sales team to work the funnel and drive customers rapidly to demo, trial and sale.

Once both of the above are in place, you are in an excellent position to internationalise aggressively. It is possible to do it earlier in the cycle, but at this stage ChannelCreator sees the greatest success as all tools, capabilities, processes and assets are in place, and these can be rapidly localised to new market requirements rather than needing to be developed from scratch.

Why is scaling a service-based business so hard?

ChannelCreator has worked with and advised many service based businesses (e.g. large scale software development houses) since 2007. One recurrent challenge that service businesses face is that services are highly consultative and therefore require a founder to be present to sprinkle some magic dust on the proposed solution to make it meet client requirements and also deliver a profit for the business. The big challenge here is that clients buy in to the founders of service organisations, and consider them to be part of the offering, without which they would not proceed with buyng the services.

Services companies tend to sell best when either the founders free themselves up to be highly focused on selling, or where one or more highly trusted, equity-owning sales leaders are allowed to learn the business over the course of 12 to 18 months, and are then able to make binding commitments on behalf of the business. At this point those sales resources effectively become pseudo-founders, and the management team scales to facilitate a greater sales capacity.

As a result, it is not recommended that sales are outsourced for service-based organisations. Instead, lead generation and partnership strategies can be created or fine-tuned to ensure a constant flow of high-quality referrals and leads to keep new business flowing, so ensuring that the founders do not have to spend large amounts of time prospecting at events, via phone and online. In these businesses it’s all about balancing the flow of new business, and delivering on your promises….

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