Should we hire a sales or invest more time in our online presence?


13

We are a small software company with a process automation product. To do more sales, we would like to compare following options for next year:

  1. Hire a sales guy. Someone capable of doing cold calling, prospecting, closing deals. That will take 6 months or so. Expected 4-5 new accounts, value each 20.000+ $. Local market only.
  2. Build an online presence. Be active on blogs, twitter, create newsletters... and focus all our efforts on selling subscriptions though a Saas offering of our product. Expected 40-50 new accounts, value each 1000 $. Worldwide market.

In terms of development, costs are more or less equal: our product is already webbased.

What are your thoughts?

Marketing Sales Saas

asked Dec 25 '09 at 18:28
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Frans
66 points
Top digital marketing agency for SEO, content marketing, and PR: Demand Roll
  • Could you explain a little more why a sales person would generate 20K/account but online you would only get 1K/account? – Dane 9 years ago
  • So the sales person would only (barely, if that) pay for his own position? Sounds like a no go. – Tim J 9 years ago

6 Answers


16

What you are talking about is something we've struggled with a lot over the past 10 years. We call it our "go-to-market strategy." For most of that time, we've used a strategy similar to your second one. We call it "signposts in the marketplace", and the idea was that if someone was looking for the kind of thing we do, we wanted it to be easy for them to find us. So we wrote a lot of articles, participated in industry discussion forums, ran a blog, sent email news letters, spoke at conferences, etc.

This has worked fairly well (we grew from a $2 MM revenue company to a $10 MM company in about 5 years). But we found it difficult to predict our revenue, since all of the business we received was "in-bound". We had no idea how many people would call us in a given month, and there was no way to reliably increase the number of people that called us. Writing more blog entries had no effect on the number of calls.

In 2008, we changed our go-to-market strategy with a huge focus on cold-calling into companies we thought might need what we sell. Over the past 18 months, we've made thousands and thousands of cold-calls, hired new sales people, and spent a small fortune in sales training and coaching. Sadly, I must report that we haven't gotten much more predictable. We still get in-bound leads, and our sales people are better at closing those leads, but we still aren't very predictable. The cold-calling hasn't been that successful in generating new business.

What seems to be working best is a hybrid approach. What we've found is that when we do a webinar or other kind of marketing event like we used to, we get people to sign up and we get their contact information. Then we have our sales team call into those accounts, following up with the attendee and learning more about the problem they are trying to solve. Some people call this a "warm-call" since the person you are calling is already familiar with your company or product. We've been having much better success with this approach than with marketing alone or cold-calls alone.

So our go-to-market strategy in 2010 will be investing more in the lead-generation activities (webinars, seminars, tradeshow booths), doing less passive marketing (blogs, etc.) and following up via cold-calls with anyone who attends one of our events.

answered Dec 26 '09 at 00:50
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Michael Trafton
3,141 points
  • +1 for in depth, real-life experience. – Jeff O 9 years ago

5

To expand on Michael's go-to-market strategy, it really depends on your market place and customers. I agree with the Hybrid approach but you should ask yourself some questions to better understand the marketplace. Questions like:

  • How do our competitors sell to customers? Knowing this can save you a lot of time. Usually, customers in a particular marketplace like to be sold to the same way.
  • Is your product part of a larger system or service? Sometimes doing a system sell, where you combine with other complementary products, works well. You just have to figure out how your product is used.
  • How did you get your existing customers? You can talk to your existing customers and ask them how they found you. Even probing a bit on their customers/competitors can give some valuable insights.

Another thing to consider is an outside sales rep company. They can be cost effective since you only pay them when they sell product.

answered Dec 26 '09 at 02:03
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Jarie Bolander
11,421 points

1

Start by doing both on your own. You will be in a better position to qualify a salesperson candidate when you know first hand what is needed and how well this person should perform. When you have software and/or services in the $1000 - $20,000 level, I would not put it on my credit card without talking to a "sales person" and getting some type of demo and a lot of questions answered. I also want to make sure this company has the support infrastructure in place to provide adequate support.

answered Dec 26 '09 at 06:03
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Jeff O
6,169 points

0

do both. focus both efforts around acquiring a few deals through traditional and online methods. don't spend time comparing. both paths work - but differently and ideally together.

focus locally on sales and then also use newsletters, LinkedIn, FaceBook, Twitter etc. to create a network of larger national/global conversations. come up with a focused list of target companies / individuals as well as the universe of companies in your sweetspot. then narrow in your efforts (seems counterintuitive i know) and you will begin to see the marketing message focus in and you will see around the clutter in the market - and the market will see you.

hybrid - i would do both to start and build out from there with sales as local only and online as open national/global.

answered Jan 9 '10 at 08:20
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Christopher Mengel
89 points

0

Both. Don't view these issues as binary. Your online presence will drive awareness while you direct selling will drive reference accounts and adoption.

At GoToMyPC / GoToMeeting, I ran enterprise sales AND online sales. There is always a natural conflict between these sales channels, but they are also highly complimentary.

Do both simultaneously, to the extent your budget will allow it.

answered Jun 1 '11 at 10:11
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John Greathouse
119 points

0

Ideally you want to do both: Why limit your number of sale channels?

You mentioned that cost are almost the same, but what about time frame? A sales person can get result in a few months, whereas it could be argue that the online strategy will take longer to reap results.

I run a web agency, and we try to reach our clients through as many channels as possible:

  • networking
  • salesperson
  • online
We hired a salesperson, and she's on the road most days of the week. Before we can have someone full-time on the online marketing side, one of our designer is spending more and more hours on online marketing (twitter, blog, etc..).

Both channels bring different types of clients in terms of revenue.
The more sales channels you can have, the better.

answered Dec 26 '09 at 08:00
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Guillaume Justier
786 points

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