Big ticket, B2B sales expert for the high tech market. Hardware, software, networking, Saas sales. Long time tech executive now teaching and consulting to some of the biggest names in technology. If you have all the revenue you need, you don't need me. I am also an expert and certified sales consultant for Miller Heiman, the gold standard in sales training. My work ranges from working with sales reps to sales vice presidents and CEOs and dealing with the basics of effective call planning and customer focused interactions, to closing big deals, to managing large accounts.
I have two successful tech IPOs and counsel CEOs on topics just like this. Here's my answer:
It depends on what they are failing at. If they fail at a project (substitute "company" if that makes more sense to you) that has a very high chance of success, then that's a red flag. But, if they fail at a project with a low chance of success -but, they embarked on it because if it was successful the rewards would be big - then no big deal.
I know it's difficult to calculate but you should always try to do an analysis like this:
Project A: 30% chance of success but $10 million return if successful yields an expected value of $3 million.
Project B: 80% chance of success but $3 million return if successful yields an expected value of $2.4 million.
The other half of the answer is, how did they fail? Did they fail because of outside factors that they didn't recognize or plan for? Did they fail because of lousy execution? Did they fail because they hired the wrong people? DId they fail because they misjudged the market?
Lastly, optimism bias has us believe we are better than we are and that we control our own destinies. WRONG. Outside forces play a much bigger role than we think. We've all taken on assignments that we thought we could knock out in a day or two but actually took a week.
The other thing about optimism bias is that we hold on too long and won't admit defeat. We all know people who fail to kill a project and throw good money after bad. When we think we're going to lose then we tend to do risky things. (There is a reason the betting on long-shots goes way up at the race track as the night goes on - people are willing to take on more risk in an attempt to avoid losing.)
John Reel has it correct. What value will he bring? If he closes the deal and brings you a real client, then he's worth 20-25%. If he brings you a warm, unqualified lead, then 2-5%.
Then, the question is for how long do you pay him? If he wants to be paid for the lifetime of the client, then it's much smaller (10-15% assuming he closed the deal versus 20 - 25%) than if he wants a one-time payment for bringing the client. If he wants lifetime, then HE is responsible for renewals. If you are doing the renewals then he doesn't deserve lifetime payments.
From your perspective you need to ask "what is my cost of acquiring a customer". I'll bet it's a lot higher than you think!
In my world of big-ticket, B2B, complex selling, 20 - 25% is very reasonable.
Before doing any more outreach you must truly understand why your customer buy from you. Have you had 1 on 1 conversations with your clients asked them why they bought initially and why they continue to buy from you? Do you know the value you are bringing to them? (it might be that you are easy to do business with, you're the cheapest or you have the widest range of services.)
MAJOR FLAW, most companies think they know and the dont't bother asking. Don't do this! Go and have the conversation.
The reason for doing this is that once you know? Then you can go find people who want that kind of value. For example, if you are expensive but do great work, don't bother chasing the prospect wanting the cheapest solution.
So, make your outreach more focused and more targetted. Qualify ruthlessly and win more of the deals you pursue rather than chasing everything.
This is a good example of the kind of problem my clients have relied on me to solve for 20-yrs.
Imaging you are sitting on a beach and really thirsty for a beer and your buddy said "Hey, I'm going to get a beer, do you want one?" Then picture two scenarios, the first is the only option to get the beer is at a fancy resort. In the USA you'd probably be okay in telling him "as long as it's less than $10, yeah, get me one."
The other scenario is that the only place for the beer is a small grocery store. In that case you'd tell him something like "as long as it's less than $5, yeah, get me one."
Given the same need (thirst) why would you spend twice as much from one vendor than another? The other is the perception of the vendor.
You need to decide whether to market yourself like a high-end resort or a low-end grocery store. This is called branding.
Either can work but you have to be consistent in the way you brand yourself and go to market.
First, be crystal clear about what business you are in. "Customer sales and service" is ambiguous. Are you an outsourced sales organization? An outsourced helpdesk? I suggest you focus on ONE of those, build a business based on that and then go the other.
It's interesting that your service "helps tech/online businesses acquire and retain more customers" yet you are asking for help in acquiring and keeping more customers! What advice would you give yourself?
You answered your own question when you said "I built it for me, but feel that it has commercial viability for many others."
Other than what you said, what problem did you design it to solve? Who are "many others"? What problem do they have?
Why not cruise the Excel forums on the MS support site and see if others have that problem? Enlist some of them to help you find how to market it?
I can't tell you how many times I've written an answer like this before. Never confuse equity and ownership with employment. Although many people have both, they are not necessarily joined at the hip.
Is your question related to what your partner is not doing as an employee or as an owner? As an employee, he can be fired for not performing his duties. An owner can't be fired unless he's an employee. Hopefully you have a partnership agreement that deals with relative duties and what happens if either partner doesn't fulfill his duties.
Do you have a board? If so, then they can intervene. If just you and he are the board, then I'd hire a mediator to help you get through the crisis.
If you don't have a partnership agreement and mediation isn't successful, then, yes, dissolve the company, start a new one and hire a lawyer to draft a bullet-proof partnership agreement. $10k is small money to pay for peace of mind and for a successful company.
There are a lot of good answers here. But, the issue is with qualifying. What you have is a complex sale and in a complex sale, where you deal with many buying influences who have different opinions as to what the optimal solution is as well as the urgency of the problem needing fixing.
There is one quick tip I will give you. And, that is, in your initial discussions ask them bluntly a question like this (use your own phrasing and style): "I know this process might take a while because there are a lot of people involved on your side. Can I count on you to keep me informed as to what's going on?"
Nine out of ten will say yes. Then, when you call, you can leave a message that says "Hey Joe, you agreed to keep me informed as to what's going in. Please return the call to let me know." Their guilt will probably prevail.
Is it foolproof? No, but it will increase your odds of getting a call back.
I also ask a question like this: "I find that when people call me they fall into one or two camps. The first are people who are just shopping and looking for information but aren't really looking to do something. The other is people who really want to solve a problem and want to do something relatively soon. I'm happy to spend some time with you either way, but can you tell me which camp are you in?"
One last thing, you might need a sales methodology for complex sales such as Miller Heiman's Strategic Selling. It's geared towards your type of selling situation. If you want info on this, let me know.
You didn't say what kind of company you have. My experience is with tech companies where the sale is very complex. So, I will give you my thoughts from that perspective.
Pay them a base of what you'd pay a mid-level person at your company. Then give them HUGE upside potential. I've seen software startups pay $50k base and $500k OTE. If your person makes half a million bucks and is the highest paid person in the company you will be wildly successful.
A great book to read is "Selling the Wheel" which is a parable about a tech startup (the guy who invented the wheel) and all the various ways to make sales.
You ask two questions:
1. How to find the "decision maker"
You make a potentially dangerous assumption here. Understand that there may be many "decision makers". Most of them can say no and nix the deal, but (usually) only one of them can say "yes" and the sale will happen.
Is your sale simple or complex? If simple, i.e. there is only one person involved in the buying process, then all the answers here are correct. If your sale is complex, i.e. there are many people involved in the buying process then you have a very tricky problem as each of them may have a different perspective on the business problem, the way to address it and how important it is.
2. Ideal Customer profile
What you describe, "companies based on revenue, geography, etc" is the target market, it is not the ICP. The ICP talks more about the issues and problems that you solve. So, an ICP within a target market would include factors like:
- Companies who are growing rapidly and who struggle with communications among remote employees
- Companies who require up-to-date information to employees while out of the office
- Companies who face tremendous pressure to grow despite a down market
I deal only in the world of complex sales. If you want to talk about selling this this world, then contact me. If you are in the simple world (not that that is a bad thing) then one of the other experts will be able to help you much more.