At Mäd, our No.1 priority is helping clients #win. Of course, to do that, we need to work with them!
In the past, we had tried to build a sales team, mostly focussing on networking and pre-sales, but they simply could compete with our number of sales technique which is:
While it sounds paradoxical, it actually works.
We focus on our internal business machine, to get the best possible client results, and then let the rest happen. This is actually quite well represented in our business flywheel.
So you can see that more proof of great work leads to more interest, those interests become conversations, and then some of those conversations then become projects, and that’s pretty much how it works.
Find some key reasons why we believe the traditional sales model is outdated.
The first word here is important. People.
Even when we win work from the some of the largest companies (and feel free to check our Client List), we keep in mind that we’re often trying to help the people in-side the company achieve their objectives.
They are looking for a good strategic partner to get certain things done, they aren’t looking for a sales person to present a smooth presentation. These people are often far more interested in meeting with the actual people at Mäd that they will be working with.
“People don’t want to buy a quarter-inch drill, they want a quarter-inch hole.” Theodore Levitt
In fact, sales become less and less important the more mature a company becomes, and that is because the existing customer base is just, if not more, valuable that any individual new client that may come along.
This is because all of our projects are recurring revenue, this means that there is more value in the future for a current client that there was in the past, and we have to work hard to keep them happy and ensure that they are succeeding.
Of course, new business is welcomed, but it has to adhere to this model. The key here is to build relationships, often with smaller work first and then larger work later, and this takes far more commitment and time than the average sales person is willing to put in.
On an average year, we only have to “win” around 30% of the work that we already have to have a strong growth in revenue, and enough new work to keep things interesting and to rotate team members.
This is not a difficult thing to achieve over the course of a year, but of course, with a sales team, they need targets, and with a long sales cycle that can take three to six months for a prospect to become a client, it means that it’s not easy for a sales team member to show their worth right away.
Yes, they are, but we don’t have any of those.
Everyone works in client-facing productive roles as Mäd, or in support functions such as finance, administration, brand.
There seems to be a hate-love relationship with Account Managers from the creative teams in agencies, as is shown in the wonderful short book by J.W. Thompson.
My first issue is one of communication. We’ve written before about how scaling communication simply doesn’t work, as the number of connections and potential errors grows exponentially while the number of people grows in a linear function, which means that it is highly important to promote direct communication between the client and the people actually doing the job, and removing as many middlemen as possible.
This is now much easier the use of transparent project management tools that give everyone access to the information you need, and also the fact that you place the trust in the front-line team of designers and developers to speak directly to the client.
This means no more “I’ll go back and check with the team” discussions that often crowd meetings that are full of people that don’t know much.
While they are often the first to meet the customer and strike up the conversation, they have, ironically, the least amount of knowledge about how things are done inside a company. This can, to some extent, be caused by a lack of training, but it is often caused by the fact that the sales people don’t often visit the office if they are out networking.
This places them in a strange position in the company, where they are neither in nor out, and this can cause a culture rift amongst the team. This can be especially true for creative and professional services companies.
More dangerously, because of this, often the business development people don’t have a particular allegiance with the company, and it’s quite easy for them to “up and go”, which leads to mistrust and a loss of that special something that makes a workplace healthy.
We enjoy the fact that Word of Mouth is how we grow because it is a signal of a healthy business that is succeeding and managing to add value to the world, as otherwise, no one would spread the word!
Considering the fact that the only advertising we do is to find awesome new people to hire, and that we don’t pay commissions, it goes to show that the when there is a referral, it is a genuine one at that.
And because we’re not a venture capital funded organization, we can take our time to grow in a sustainable manner, and ensure that we are around for the long term.
The #1 sales tools is an irresistible and compelling offer, which we like to call the “Mafia Offer”. This is something that is discussed at length in Jim Collin’s book “Great CEOs are Lazy”, but it can be applied at all levels of an organization.
Essentially, it is developing such a good offer to a client that they would essentially have to be irresponsible to turn it down.
This is done by a continuous focus on adding client value and also building reusable intellectual property that can give significant advantages in terms of speed and cost so that we completely outmatch any competition.
However, it’s important that we don’t bother to keep our eye on the competition, but focus only the clients, and that the Mafia Offer stands on it’s own to feet. A Mafia Offer is not something that is better than the competition (which often is quite easy to do), but something that is great without comparison.
And in some ways, a compelling Mafia Offer doesn’t even have to be part of the actual client work. For instance, having a great company website full of information and case studies is also a Mafia Offer, as managers at our prospective client companies can use our website to convince their C-level executives to buy from Mad instead of another company.
The really amazing thing about not relying on the traditional sales model is that it builds an incredible protective moat around the business. After all, anyone with money could quite easily recreate what we have by purchasing dozens of iMacs and Macbooks, all the necessary software, and they have access to the same talent pool that we have.
However, what they don’t have is a long-standing history of client success, case studies, testimonials, and general good-will that means that there will be a constant stream of new business coming in, without us having to do much except deliver great work, every time.
Sales staff can be, at the same time, the cheapest and most expensive people in the company.
This is because often part of their compensation is via commissions, which means their fixed costs are low, but if they do start to bring in work, the commissions can often mount up and be significant. Generally speaking, commissions between 5% and 10% of revenue are quite standard, but it gets more difficult to track how it should work, and then you have to spend time negotiating and renegotiating contracts when things change.
For instance, should the commission be only for the initial contract with the client, or for the lifetime of the client relationship? These are not easy questions to answer, and there may not be a right answer that pleases all parties.
However, without having to pay commissions for new work, there is more money to invest back into improving our services, especially in terms of hiring key individuals for training and upskilling purposes, and investing in top quality equipment.
This allows us to keep 95% of our organization on client-facing roles, with the rest of administration
Although we don’t have a sales team, we do have a sales process, namely a CRM.
We have various stages that a prospective customer goes through, and we’ll go through them shortly, but the main point, is that the sales process is to qualify the customer as a good fit for Mad, not the other way around.
Our “sales” job is to educate our prospective customers, show them a taste of what they can get working with Mad by spending some consulting hours to showcase what we can do, and then let them sell themselves on the solution.
This means giving the prospective customer access to the various project team members early on, having them meet, and often do one or more workshops to fully understand the challenges involved in the potential project, and how we might deal with them.
We have the following steps:
- Unqualified – We don’t know this prospect, or we have not identified if they have a serious interest in purchasing from Mäd or moving forward with a project.
- Qualified To Buy – The prospect has committed to moving forward with the project in a given timeframe but has not yet chosen a partner for the project. They have enough budget to potentially buy from Mäd.
- Preparing Proposal – We have received a formal RFP (Request for Proposal) and are currently working with the prospect to understand their requirements and be able to price accordingly. This is often the stage where we are working with the client already in an informal manner to help them understand what they need to achieve.
- Proposal Sent – The prospect has received a formal priced proposal from Mäd.
- Closed Won – The prospect has signed a contract and awarded the project to Mäd.
- Closed Lost – The prospect has informed Mäd that our bid was not successful, or we have not heard back from the prospect after the three follow-ups within six weeks.
In the great book The Art of Closing, the author makes a great point that nowadays clients have the opposite problem than what they used to have before.
In the old days, prior to the widespread usage of the internet, there was a significant gap between the information knowledge of the potential customer and the salesperson presenting a solution.
Now, if a customer contacts you, it means that they have already done their research, and are probably quite well versed in the subject matter, but…they are now drowning in information!
The biggest problem now is not convincing a customer to buy from your own company, that part is a given, it is actually helping them to understand exactly what their pain points are, helping them to craft a vision for a solution, and presenting a high-level plan to help them move forward.
We’ve discussed this is a previous discussion on What are We Building?
The second problem is then overcoming the customer’s buying process, and making it easy for them to buy from your company.
The thing is that many people make the mistake in thinking that if you don’t have a sales team, you then can be disorganized in your sales approach, or that you take a laid-back attitude to it.
Quite the opposite…it is more important to be well organized and have a clear path towards buying from your company.
This includes having clear templates for NDAs and Contracts to showcase upfront so that they can be checked by the compliance and legal teams, and also ensuring that your case studies are numerous and well representative of the work that you do.