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I’m running a research project to learn how, and to what extent, professional services firms are using traditional sales. If you want to participate in the survey, or know someone who should, here’s the link.
How can we explain a 30% drop in breakfast cereal sales over 15 years?
We’d better ask the people who aren’t buying breakfast cereal.
It turns out that dishes are the culprit. Dirty dishes, to be more specific. According to a New York Times article, millennials
are a generation of would-be cereal eaters who won’t be. And their stated reason for not eating breakfast cereal?
It’s the dirty dishes. They’re too inconvenient.
So, like any good capitalist would, Kraft (now Mondelez) began to make a breakfast cereal biscuit called Belvita. Just open the package and eat up – no dirty bowl or spoon to rinse.
Personally, I don’t get it. But my opinion doesn’t matter. The breakfast food market changed, producers asked what was causing the changes, and they responded. The market spoke.
Listening is critical to selling anything.
Which brings me to a quick update about the research I’m doing.
I’ve received about 40 survey responses and conducted 8 one-on-one interviews with owners or Principals of professional services firms between 11-200 employees. It’s too early to make declarations about results, or to give you prescriptive advice, but here’s what I’m learning so far.
The ability to scale sales is directly correlated to your intellectual property, market awareness, and the tangibility of your service.
Let’s pull apart each idea here.
I wrote an article and recorded a podcast episode about the inherent difference between selling products and services. The more tangible your service, the easier to sell. Products are tangible, so they’re easier to sell (and buy). As an example, selling SEO services to local businesses is quite a bit easier than selling custom-built internal software to giant companies. Before I started this research project, price seemed to be the cause: SEO is relatively inexpensive, software development is relatively expensive. But Teslas are expensive, and they’re not that hard to sell to the right market. Same with Rolexes, Apple computers, single-family homes, or any number of expensive, premium-priced, or luxury products. The key thing here is that they’re tangible and well-understood.
Which leads us to market awareness. The more your market understands and is exposed to what you’re selling, the easier the sale. Of course, there are reasons you don’t want to be seen as “just another (blank)” by your market because that puts you in a commodity position. The tradeoff, of course, is the cost of education and explanation: to be different, you must be less understood, which constrains your ability to scale up sales and marketing. So you might say “no, we’re not just another software development shop,” which leads your potential buyers to ask “then what are you?” The cost of your marketing and sales rises as a result.
Enter intellectual property (IP). IP acts to both make your service more tangible and different. Meaningful IP could be any variety of things: content (ahem!), technology, process, trade secrets, and more. The key thing here is that IP is indivisible by nature, meaning you can duplicate it infinitely without harming the next person’s consumption. So the Colonel’s secret recipe at KFC can be used on infinite chicken pieces, but a chicken thigh can only be eaten once. (Sidenote: always go for the dark meat. Reply directly to me with your hate mail.)
My thinking continues to evolve on this subject, though it feels like I’m onto something here. Let’s go back to the early results of my research study. Most successful professional services firms get the majority of their new business from three sources:
- Word of mouth and referrals
- Direct outreach and sales
- Advertising, conferences, and events
One thing I’ve learned in the conversations I’m having is that firms find it really difficult to scale sales. In particular, firms that do custom engagements struggle to build a viable sales team. No news there.
The #1 cause of that struggle is the difficulty in communicating their service and their uniqueness. No IP makes it about a thousand times more difficult. I’d add to that, though, that the definition of “sales team” is critical in understanding what to expect, and therefore how you’d build one. The more modular and specialized the sales team, the easier to define their roles and contributions. That’s another topic for another day.
What I haven’t found much of is completely autonomous and self-contained sales teams that operate without the support of firm Principals. And how could they? Business is a team sport, especially when it comes to selling services. The key is in setting up the right systems to support sales within well-defined roles.
Key takeaway: firms that are able to communicate IP that’s both easy to understand and different are more likely to ramp sales and reduce acquisition costs.
More results to come…
Question for you today: do you have any IP that you use in your sales process? What effect does it have?