A recent headline in the Financial Post (The huge job opportunity in Canadian tech) highlighted the shortage of qualified Sales Professionals in the Tech market and many of the reasons why Tech companies Use Enterprise Sales as a Service.
“The current innovation boom hasn’t just created outsized demand for IT pros; it’s created an equivalent demand for salespeople.”
This phenomenon not only applies to established tech companies, but to startups as well. Compounded by a mass exodus from Sales of seasoned professionals who have become disillusioned with Sales Culture and the management styles employed by many in Sales Management. The gap they have left has not been filled by the next generation, who often perceive Sales as a function that lacks integrity and which is not a valid profession or valued career.
The good news is that Sales as a Service companies like Toronto based huerdo are offering a new sales model specifically designed for business to business tech companies. Sales as a Service allows you to outsource all or a part of your Sales operations to a company that specializes in tech Sales, Sales Management, and Sales Process. According to Mat Tarbuck their CEO:
“Employing salespeople is a risky business! Costs can mount up quickly, and your return on investment may never materialize. To a large enterprise this can mean lost revenues and missed targets, but to a startup, it can be a matter of life and death. This is why Sales as a Service is so transformational!”
So in this blog, we are going to look at the Top 5 reasons tech companies are turning to Sales as a Service.
1. Business to Business Salespeople Are Becoming a Sort After Commodity
As has already been discussed, there is a gap that is not being filled by the next generation. Some of this is due to peoples’ perception of Sales as a career, but also the compensation and sales process models employed by many tech companies. There has been an industry-wide shift from using costly yet proven salespeople, to engaging cheap unproven talent straight out of school. The model is churn and burn, and sees young people come into the profession who are expected to learn on the job and somehow figure out how to succeed. The sales process model adopted in these situations is aggressive and leaves little to no time for nurturing and coaching the new hires. If the new hire fails to make targets, then they are let go. Alternatively many become frustrated with the struggle and lack of support, and quit, when in fact with better coaching they could have been the next “Michael Jordan of sales.”
This approach to Sales demonstrates why salespeople are becoming harder to find. People who are thinking of coming into sales hear the horror stories of this churn and burn approach, and quite logically are put off. Experienced salespeople are either priced out of the market or do not want to be a part of a sales culture that does not put the end client at the center of their decision-making process.
2. Most Companies Are Not Good at Sales (Sales is a Headache)
Let’s face it; technical people Found tech companies. They are great at developing and supporting a product, but pretty lousy at selling it, and realistically don’t want to be a salesperson anyway. There is a point during every company’s existence where they realize they have to sell. It is a matter of life support! At this juncture, they can decide to go down the traditional route of hiring a Sales Manager, employing Salespeople and figuring out how sales will work for them; or they turn to an outside agent to help them with the process. Even companies that have had a sales organization may realize that it is too much of a headache to maintain (see number 3), and may look outside their organization for alternatives that will alleviate some of this pain.
3. Employing Salespeople is a Risky Business
Hiring, training, developing, motivating and expanding a successful sales team can be daunting. Nevertheless, the most important thing to remember is that your salespeople are your brand, so handing this responsibility off to inexperienced sales leaders or the ‘wrong’ salespeople can significantly damage your organization financially and damage your brand in your chosen marketplace.
The UK’s Recruitment and Employment Federation found that businesses hire the right employee in only two out of five roles. While The Harvard Business Review found that 80% of turnover is due to bad hiring. As your salesforce amounts to a significant part of your public image, then it is essential that you do not fall foul of bad recruitment. Even with this knowledge, most sales managers do not leverage a proper hiring process to reliably identify good sales people that are proficient and are a cultural fit for their team.
Accenture found that 42.5% of sales reps take ten months or longer to become productive enough to contribute to company goals – But can you afford to wait that long? In the Tech startup world revenue targets are linked to company value. Faced with a chicken-and-egg situation – faster and larger sales would come with more experienced and proficient salespeople, and be investing in the right support for continuous revenue improvement. That said, most startup sales leaders don’t know how to achieve this quickly and perceive that success is a volume-game, to make good on the revenue expectations they have set; hence they default to the current model of hiring cheap, and burning through salespeople like they are going out of fashion! And so they are!
Unfortunately, even as a sales manager who recognizes that a churn-and-burn approach isn’t optimal, there are also “professional” salespeople who are not proficient and therefore rely on a one year’s grace period to earn a living, then rotate to another company in a sales position. It typically takes a minimum of a year to determine if your sales hire is a good fit or not, and another six months after that for that salesperson to leave your business. So the impact of hiring a salesperson like this is also fraught with hidden challenges.
Experimenting with salespeople can cost you a lot more than just salary. Undoubtedly you will have assigned quota based on the assumption that your new hire will succeed. If they then fail to reach that number, that opportunity has gone – and most importantly many of the people at the prospect organizations they contacted, now have a poor impression of your organization and brand.
4. Marketable is NOT Saleable
Many startups begin by limiting their marketing message to Small and Medium Sized Businesses (SMB) in the belief that this will get them their first 100 new customers at a lower cost of entry. This messaging leads to some traction, and they grow in confidence. The result of this is that they invest more money in the same marketing message with the hope of gaining even more traction – instead of investing in their sales brand. So when revenue growth pressures increase, the smaller sales transactions that have “kept the lights on,” will begin to slow down; as just doing more of the same, results in higher customer acquisition costs.
To be “Saleable” you need to create a message that shows the impact your solution has had on existing customers. Saleability means that a sales team representing a solution or service, must be able to articulate a Point-of-View, demonstrate the Top Value Drivers, and uniquely differentiate their product through appropriate proof points. The reason that many industry pioneers have NOT gone on to dominate their market is because they have not taken the time to develop a strategy for making their product saleable and hence cannot articulate their sales relevancy or sales brand. Instead, smart competitors come into the market, promote a robust “saleable” message and brand, which out-sells the original pioneers!
Once you have realized you need to be Saleable, the next question must be, how do I get there?
5. The Ever Increasing Pressures to Grow
There is constant pressure on companies to grow. It may come from investors, the urge to go to IPO, or the need to meet analyst’s expectations. Unfortunately, this leads to bad decisions when it comes to Sales. It may sound obvious, but more salespeople do not equate to more revenue. In fact, without proper Sales Management, Sales Process and coaching the opposite is true, a fact borne out by the current trends in the tech space today.
Sales as a Service companies provide fully managed sales teams that can take your product or business to market, in either the short or long-term. They allow tech companies to get feet on the ground quickly, that bring credibility and impact to prospects immediately. The majority of Sales as Service companies are founded by experienced sales leaders who can provide you with the right mix of sales talent to successfully get your product in front of prospective customers with the right message, and who can efficiently impact lead generation and close rates. They are Sales focused, competent in the activities that are necessary to generate leads, garner them through the sales cycle, negotiate with value, and ultimately close the deal. In simple terms, Sales as a Service is a significant growth enabler that reduces the time and risks associated with getting your product in front of the right prospect and achieve those organizational goals.