Despite the travel restrictions in place, Takeoff Partners portfolio company Videoly has taken on the task of seeking growth in North America. It is working, and now the startup is opening an office in Toronto to take things to the next level.
Very often, professional services suffer from the “feast and famine” phenomenon where there is always either too much or not enough work. Developing the company’s sales team helps to prevent this and grow the business, however there are several pitfalls and challenges that need to be taken into consideration. While our portfolio is heavily focused on B2B SaaS companies, all of us at Takeoff Partners have also been involved in professional services companies or sales of consultancy services. This is the first part of a two-part article series where we share our learnings, focusing on practical organizing of professional services sales.
Disorganized sales inevitably lead to unprofessional practices, there is no reason to sugarcoat it. While good salespeople can often thrive and succeed even in a disorganized environment, it is still vital for all growth-seeking consultancies to work out how to organize the sales function professionally.
There are many reasons to this, including the fact that it helps avoid the “feast and famine” phenomenon.
Most importantly, professional, organized sales functions ensure that the company genuinely owns the client relationships – because the other option is that they are owned by a single salesperson and lost if that person moves away from the account or the company.
Here are our three key tips on how to organize sales in a professional services company.
Tip 1: Clearly separate hunter and farmer roles from each other
Hunters and farmers is a popular sales term referring to hunters who find new leads and farmers who nurture existing clients. Hunters are usually interested in the quantity of sales and like to close as many deals as fast as possible. Farmers tend to build lasting relationships with clients and cultivate customer loyalty.
As these ways of selling are different, there should be separate work positions for these types of salespeople. Even in a small consultancy, at least the hunter role should be assigned to a salesperson who only focuses on new sales. This is the only way to ensure there is a steady flow of work coming in.
- It is worth remembering that sales cycles tend to be rather long for professional services, so despite the name, in this line of work the hunters are more in the business of “marinating meat until tender” rather than simply catching prey. Doing this successfully requires operating in a systematic way, which is much easier to organize when the role is centralized to one person. Spreading this work to several people is inefficient on many levels – it increases administrative work, usually prevents effective utilization of digital tools and can lead to lost opportunities due to lack of consistency.
- Taking care of existing clients could be either the responsibility of consultants or designated Account Manager(s), depending on the size and industry of your organization.
Tip 2: Make sure the entire organization supports new sales
At best, new sales are based
on three, fully utilized elements:
1) A functioning inbound lead system (marketing)
2) Active outbound sales
3) Personal network of the company’s senior stakeholders
- Senior members can have a specific responsibility of creating new leads. Depending on their expertise and use of time, they could also take the whole responsibility of a single sale.
- Arranging sales support is important. The salesperson makes an initial analysis of the needs of the customer and takes them through the sales process. Relevant experts then participate in analyzing the needs of the customer in a more specified way and offering them a deal, and often commit to executing the project. It is important that the ownership of the sale stays with the salesperson who is responsible for guiding the client through the buying process.
- Marketing should be integrated to sales and account management because the message directed to future and existing clients is important. Marketing is not a separate entity but supports sales and account management; it should create concrete leads and build thought leadership that also keeps the existing clients engaged and committed.
In the second part of this article series, we further expand on what involving the entire organization requires from a strategic point of view in order to be successful.
Tip 3: Organize account management according to each customer segment
All professional services companies should strive to create ongoing customer relationships and create ways to tie customers to long-term contracts. The starting point for how to achieve this is to organize customers into segments. This can be done in a variety of ways, for example:
- Customers according to current size / profitability
- Customers according to growth / profitability potential
Typically, the most optimal model is to centralize the most important clients to a Key Account Manager who will need to manage at least 1 MEUR annual revenue, presuming that client account size can be grown by at least 10% annually.
The role of the Key Account Manager is to:
- make sure the clients are happy
- make more sales to existing clients
- manage the clients of the organization
Often, it makes sense that the consultants handle the accounts they are currently delivering work for, as long as they are not key accounts in a Key Account Manager’s portfolio. Project Managers or Client Managers can also be assigned some of the existing accounts, provided they have interest and capacity and can be given some upskilling if necessary.
Leadership is what makes the difference
This article handles organizing sales of professional services purely from a practical perspective. That alone is naturally not enough. Any restructuring of the sales function needs to be centrally led and managed.
The second part of our series, to be published later this summer, focuses on this same topic on a strategic level, suggesting long-term initiatives and policies to support a professional, results-driven sales team.