Challenges in Increasing Revenues for Analyst and Professional Services Firms
Scenario, small analyst or professional services firm (or individual) wants to increase revenue and scale the business. Assumption that hiring a sales rep will help the company grow, fund new hires, increase compensation, allow providers to do billable work, remove the possible awkwardness of selling, and any of a number of things that come from adding revenue.
- Hire an inside rep eager to smile and dial looking to earn themselves and their firm some money. Process inbound orders, make outbound calls, prospect, chase etc.
- Hire more person who has direct experience in calling on accounts, managing client relationships and handling larger scale deals.
- Hire a hybrid sales and marketing type to drive business, deal with inbound calls, follow up on leads and clean up what the analysts refer.
- Outsource process(es) by partnering with a 3rd party
Pros and Cons
Option One: Naïve to think that cost will not be a determining factor for a smaller firm and lower cost inside reps may be attractive due to affordability. They can do the necessary but thankless job of cold calling, prospecting, chasing and screening. And while outbound is considered gauche in some marketing and sales circles, the constant contact with accounts and prospects, if done properly, simply cannot stop because inbound is current.
But, reps need training in the vertical(s) the firm serves, the products and services the firm offers and the multitude of ways customers use them and that last point is rather important in selling high value content and services. Oh, they need a place to work from as well. If the company is virtual with a team of people scattered about (very common today) and home office is literally someone’s home office then adding someone like this is unlikely to work.
Have an office location? Okay, perhaps this may make sense but is there enough there to keep them socialized, supported and connected with something other than a phone? And who is taking responsibility for managing their time? Generating their leads? Providing product information? On-going training?
And can the firm deal with the frequent turnover that inside sales tends to experience?
Managing staff means someone isn’t billing and this is a hidden cost that firms don’t necessarily account for. If partner/owner billable rate is $10,000 a week for someone with real experience then even a day per week of management and support sets them back up to $80,000 a year.
Low cost? Maybe time to rethink that.
Option Two: Senior people, on the other hand, can add a lot to the firm in terms of professional representation, understanding customer wants, needs and how customers use the products. They can more effectively communicate with the firm’s analysts or management/partners and can bring ideas to the table for new product or service concepts. Experienced people can also point out flaws that junior people may lack the confidence or understanding to expose. Their learning curve is far more limited provided, of course, the sales person has any related industry experience.
But, while the senior person may require a lot less management they still require support in some capacity. I have never met a successful sales person who is afraid to make a call or ask for a deal but how often does that happen when they are performing tasks that a lower level staffer can and should handle? Paying the premiums associated with experienced sales person is a waste of money without proper support to maximize their true talents.
And while compensation structures should include adequate incentives for successful performance, experienced people don’t normally work on straight commissions or low base with high upsides unless there is a seriously compelling reason for them to do so. Does the firm have established accounts? If so then handing the rep a book of business mitigates the commission issue. Asking them to focus on new business development? Not so much.
Option Three: Bring someone aboard who can run a marketing program that generates quality inbound traffic and leads and works to convert them as well as the referrals that the analysts create. It would entail blending roles related to revenue generation, marketing and customer service. And, while more costly than the first option, the cost of hire is still significantly less than the $120K plus a year sales professional that still needs a support person.
For this to work out though the position is one that needs to be staffed with someone with relevant experience and those skill sets still don’t come cheap and nor should they. People who grasp the nuances of professional services marketing are valuable commodities and more so if they have worked in analyst related fields. They can handle your marketing, they can represent the firm and they can leverage the analysts for sales assistance as needed.
Option Four: Go the agency route and retain an entity to perform some or all of the functions for your firm. They do the prospecting, marketing, selling and drive the engagements and serve as an adjunct to the firm without the employees, training, office, or other overhead.
But, how best to go about this? They can attack it piecemeal by selecting services from different firms but this creates multi-vendor management issues and now more time spent on non-billable items. PR firms, ad agencies, digital marketing, strategy and outbound firms all bring skills to the table but their rates can be rather substantial and it is unlikely that they have direct experience in what analyst firms do or their knowledge it is peripheral at best. The firm ultimately winds up funding the agencies’ knowledge curve and that can be ridiculously expensive.
The choices and associated issues set forth above have been vastly oversimplified for the sake of discussion. Firms do not operate in a homogeneous fashion. The verticals they serve, the product lines they carry, the nature of the analysts and the standing of the firm all serve to create unique situations. What might make sense for one firm simply won’t fit for another. Making a decision to increase sales is an obvious one but it won’t be as simple as just hiring a sales rep and problem solved. In fact, it can lead to other issues that can be time consuming, distracting and expensive.