Growth without reliance on aggressive sales tactics.
In the past, we had tried to build a sales team, mostly focussing on networking and pre-sales. But they simply couldn’t compete with our #1 sales technique:
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.
This is a model based on Amazon’s model for sustainable growth. More proof of great work leads to more interest, those interests become conversations, and then some of those conversations then become projects. The wheel keeps spinning.
Here are 8 awesome reasons you might want to follow suit.
1. People Don’t Want to Be “Sold” to.
The first word here is important. People.
When we win work from the some of the largest companies, we’re trying to help the people inside the company achieve their objectives.
They’re looking for a good strategic partner to make it happen. They aren’t looking for a salesperson and a smooth presentation. Smart clients are 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.
2. We Live in a Subscription Economy.
In fact, sales become less important the more mature a company becomes. The existing customer base is just as valuable, if not more, than any new client that may come along.
All of our projects are recurring revenue. 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 powerful relationships, often with smaller work first and then larger work later. This takes far more commitment and time than the average salesperson is willing to put in.
On average, we only have to win around 30% of the work that we already have to have a strong growth in revenue. We want just 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 with a sales team and this a long sales cycle that can take months for a prospect to become a client, it’s not easy for a sales team member to show their worth within 6 months.
3. Account Managers, Client Managers, and Account Executives are Sales People in Disguise.
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, and brand.
There seems to be a hate-love relationship (in that order) with Account Managers from the creative teams in agencies, as is shown in the wonderful short book by J.W. Thompson.
The first issue is one of communication. We’ve written before about how scaling communication simply doesn’t work. The number of connections and potential errors grows exponentially while the number of people grows linearly. It is so important to promote direct communication between the client and the people actually doing the job. Remove as many middlemen as possible, CC a little less in your life.
This is now much easier thanks to transparent project management tools that give everyone access to the information you need. You’ll sleep even better if you trust 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.
4. Salespeople are half-in, half-out.
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. It’s a tough pill to swallow but it’s true. This can, to some extent, be caused by a lack of training. But it is often caused by the fact that the salespeople 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. It can cause a cultural rift amongst the team. This is especially true for creative and professional services companies.
More dangerously, because of this, often the business development people don’t have a particular allegiance to the company. 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.
5. Word of Mouth Means You’re Doing Things Right.
We enjoy the fact that word of mouth is how we grow because it is a signal of a healthy business. If we weren’t adding value to our client’s world, 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 just goes to show that the when there is a referral, it is a genuine one at that. There is no better advertisement than an endorsement from someone you trust.
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.
6.Build a Mafia Offer and They’ll Never Say “No.”
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.
7. Building Your Moat.
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.
8. More Money for Customer Success.
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 education purposes, and investing in top quality equipment.
This allows us to keep 97% of our organization on client-facing roles, with the rest of administration.
The Results: Our Non-Sales Process.
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. But the main point the sales process is to qualify* if the customer as a good fit for Mad*, not the other way around.
Our “sales” job is to educate our prospective customers. Give them a taste of what they can get by spending some consulting hours to showcase what we can do. We 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, it’s unclear if they have a serious ability to purchase from Mäd.
- Qualified To Buy – The prospect has committed to a defined project but has not chosen a partner. They have the ability to potentially buy from Mäd.
- Preparing Proposal – We have received a formal RFP (Request for Proposal.) We are working with the prospect to understand their requirements to price accordingly. At this stage, we are already**** helping 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.
You can read our full process for bringing on board new customers over at our Standard Operating Procedures
The Real Problem is not Sales, it’s Understanding and Delivering.
In The Art of Closing, the author notes that nowadays clients have changed.
Prior to the internet, there was a significant gap of information between the potential customer and the salesperson. Today we’re almost drowning in data. Now if a customer contacts you, it means that they have already done their research.
The biggest problem now is not convincing a customer that your company is qualified, that part is a given. It is helping them to understand their pain points, crafting a solution, and presenting a high-level plan to help them move forward.
The second problem is overcoming the customer’s buying process, and making it easy for them to buy from your company.
Many people mistake a lack of a sales team with a disorganized approach. Quite the opposite…it is more important to be well organized, but on creating a space for people to buy, not to sell.
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