But I wanted to wait until we had a few miles under our belt with this new model. I also wanted to make sure that this story is more than show-and-tell! (Although, the positive response I got to the post on our experiences with Social Media indicates that many people so see value in these kinds of updates.)
The big news is that we are backing away from projects as our primary offering and, instead, favoring the delivery of an ongoing service.
The service is called Outsourced Sales Operations and it consists of us taking over the supervision and the ongoing improvement of our clients’ sales support teams – and providing the necessary technology and marketing communications.
I’ll explain what this means in more concrete terms in a second, but first let me tell you how we got here.
Great idea, no business model!
About 15 years ago I left a start-up (the Hudson Institute) to found Ballistix with a cool idea.
The idea was to apply division-of-labor to the sales function and to centralize almost everything: the origination of sales opportunities, the management of sales opportunities (and salespeople’s calendars) and all customer service and production-related activities.
This idea had paid dividends for Hudson. The year I left, we put 45,000 people through public seminars and generated tens of thousands of sales opportunities. A phone-based team, managed these opportunities and channeled prospects into salespeople’s offices, where they queued (like patients in a doctor’s surgery).
We started Ballistix with a focus on the promotional component of this model (initially, Ballistix was a direct-marketing agency). However, it quickly became clear that the real problem faced by organizations had nothing to do with promotion. The fundamental problem was that division-of-labor thing.
I was travelling the country (just Australia, at the time) evangelizing the concept of sales process engineering. We sold thousands of tickets to seminars and workshops every year – business people absolutely loved the ideas – but virtually no one implemented them!
As the direct-marketing industry became more competitive, we were faced with a choice, hunker-down and focus on direct marketing or figure out a new model that would enable us profit from sales process engineering.
From direct marketing to consulting projects
When we transformed ourselves into a consulting firm, my total knowledge of this new industry was what I’d read in the The McKinsey Way.
Initially we sold my time: every minute of it!
We then added some structure – we sold audits and delivered comprehensive reports. For starters, we sold these engagements for $6,000. As we gained confidence, we increased the price – and the size of the reports. (Our $35,000 reports were so heavy we had to monopolize an elevator for an hour or so before a presentation to send them aloft!)
Sadly, this upheaval in our business model had zero impact on the results we were producing for our clients. Executives loved their reports. But virtually no one implemented!
Ideas are chump change: the money’s in the implementation
The decision to sell implementation (instead of advice) was not an easy one.
But the implications for us (and our clients) were significant. Implementation projects were just as easy to sell as audits – and we were able to sell them for five-times more! And, at last, organizations actually started to implement sales process engineering.
I should add that it took a long time for us to learn how to deliver projects effectively. I could write a book on the challenges associated with internal politics and technology. And I’m sad to report that some of our more elegant intellectual constructs failed spectacularly upon contact with reality (for example, we quickly discovered that writing a manifesto for each client was not such a great idea).
We’ve spent the last five years or so fortifying our (implementation-based) consulting offering. We’ve standardized and codified everything, we’ve built a significant management-information system (which we integrate with each of our client’s CRMs) and, of course, we’ve expanded into North America.
And now, we’re changing everything again!
Why sell projects when you can sell services?
The truth is that we’ve been dreaming about selling services instead of projects for years now.
The benefits for our business are obvious:
- Clients relationships become annuities – rather than one-off transactions
- A larger number of open-ended engagements allow for more efficient scheduling (and more aggressive pricing)
But we’ve been starting to suspect that most (not all) of our clients would be better served with an ongoing relationship too:
- With ongoing contact, we can continue to optimize the performance of our clients’ sales environments
- An ongoing relationship will enable our clients to eliminate a number of redundant expenses (design and other creative services, inbound marketing (SEO, PPC, etc) and even executive coaching).
- An ongoing relationship will enable us to provide a total (hosted) technology solution, including CRM, business intelligence (MIS) and even web hosting.
Outsourced Sales Operations: the nuts and bolts
The scariest part about the transition to services was thinking about it!
When we put our team together for a day to brainstorm the new offering, we were amazed how appealing the proposition turned out to be – and how good the economics were (obviously, the short-term was our biggest concern).
Since then we’ve offered both project and service options to all of our potential clients – and been delighted that almost all have accepted the service option.
Here’s the basic proposition:
We will reengineer your existing sales function – in line with SPE principles – and supervise the operation of the critical sales-support team on an ongoing basis.
In addition, we will provide all promotional services required to generate the necessary volume of sales opportunities (including traditional promotional collateral and web-based promotion (inbound marketing, web video, etc).
We’ll also provide all sales-related technology on an on-demand (SAAS) basis, including CRM (if required), business intelligence and event- and lead-management.
Furthermore, we (well, yours truly, actually) will host a quarterly strategy review meeting, at which we’ll review the general operation of the sales function and plan (and monitor) special ongoing-improvement initiatives.
The great news is that the monthly fee for this service is almost half the monthly fee for our projects.
And, what’s more, in most cases, our clients reduce their payroll costs (by downsizing their field teams and moving many sales-related activities inside) – and they eliminate recruitment, promotional and technology expenses too.
Homework: thought experiment
If you are currently selling projects, maybe it’s worth evaluating the shift to services?
The economic advantages are obvious but there are many hidden advantages too. One thing we’re already discovering is that our new service model allows us to match the cadence of our change initiatives to our clients’ ability to absorb those changes. (Where previously the cadence was determined by a contract!)
If you’d like to know more about this service offering – or even if you’re curious how we’re packaging and pitching it – please use the contact form on this site to request an overview. (Just put the words “Service Overview” in the Message field.)
By the way, we are still offering projects on those (few) occasions that it really make sense to do so, but our intention is for projects to become the exception, rather than the rule.