One of the hardest things for a small / emerging company to do is grow sales while servicing clients (or delivering your products) while keeping control on operations, human resources, finance, and what little time you might have for a personal life and family. When I founded my last company, Xtiva, a B2B sales compensation software platform for financial services, the key was to develop strategic alliance partners from the very beginning.
We sold back-office software to financial services firms throughout the U.S. Our target market included approximately 3,500 brokerage firms that used an in-house solution, either spreadsheets, or their own legacy applications. From the beginning, we wanted to reach this target audience without having to hire a lot of expensive software sales executives. In the beginning, when Xtiva had just 3 employees and 3 clients, we approached one of the main industry participants, Bear Stearns, that had about 300 brokerage firm clients at the time. We suggested forming a marketing alliance whereby we would provide their clients with preferred pricing and technology integration.
In exchange for Bear Stearns being able to tell their current and prospective clients that they negotiated preferred pricing for Xtiva’s products, we received significant marketing and sales support. They agreed to have us attend their client conferences as vendors in the exhibit hall (the only vendor offering our solutions). We wrote articles in their client newsletter. We were on their web site. We trained their salesmen and account managers and had regular meetings with them to keep them updated on our products and services. We developed Bear Stearns-branded materials for their salespeople to distribute to their prospects. We even received their client list so we could create targeted sales campaigns. Lastly, Bear Stearns performed billing and collections on our behalf so we never had outstanding receivables from their clients.
Over time, Xtiva developed similar relationships with other major alliance partners including Broadridge, First Clearing (then, a division of Wachovia), National Financial Services (a Fidelity Investments company) and RBC Correspondent Clearing (a subsidiary of Royal Bank of Canada).
Xtiva continues to look for and implement strategies and partners that could further their reach in the salesforce. In addition to channel partner strategy, Xtiva outsourced lead generation to a specialized consultant in the market space. They provided him with their top 100 “wish list” of potential clients for which they did not already have a relationship. The consultant had many years of experience in cold-calling into financial services firms on behalf of software vendors, both as an employee and as a consultant. For about half of the base salary of a dedicated sales person, and $250 per meeting, Xtiva engaged a highly-experienced individual who handed off warm leads to our salesforce who then took over and ran the meetings, proposals, ROI analyses, etc. Another strategic implementation tool that we employed was to have a dedicated person performing the demonstrations. Salespeople, although they obviously know the applications’ features and benefits, are not always product experts. They are paid to close business. In Xtiva’s case, the sales engineer was is someone who had been a client services rep for several years and became responsible for all new client training.
As such, her client support function was backfilled with a cheaper resource to free her up to do all the demos so the salespeople can focus on the solution selling and closing new sales. The bottom line is Xtiva was able to have 5 full-time salespeople trying to get to 3,500 prospects and they were 100% productive.
A few other tidbits/suggestions for growing sales on a budget:
- Eliminate printing hardcopy sales collateral. Convert everything to PDF format for e-mail distribution and placement on your website.
- Avoid mass mailings. They are an inefficient use of resources (time and money) in a business-to-business market.
- Go to a few, very targeted industry shows. In most cases, align yourself with partners/exhibitors as part of their booth so you do not have to pay the exhibitor’s fees (which can be as much as $25,000).
- Retain an outsourced public relations firm for a fraction of what it would take to do that work in-house. They assist with press releases and getting articles in front of the reporters at the industry magazines / newspapers in your space.
- Avoid advertising and the unnecessary associated costs. Targeted selling has a much higher ROI.
- Hire salespeople that have industry experience only.