Birth of a SalesmanPosted on Wednesday, July 2nd, 2003 by Joseph C.Panettieri
Birth of a Salesman
(Photo by Patrick Harbron)
You don’t need a sales team to successfully sell your products and services. In fact, many entrepreneurs have discovered virtual sales teams—and they don’t have to pay them a dime.
Clayton Banks runs a media business with fewer than 10 employees. Yet he influences powerful trade associations, attends gala black-tie events and even rubs elbows with former president Bill Clinton.
Each time Banks shakes hands with a new ally, it creates another potential revenue stream for his Manhattan-based company, Ember Media (www.embermedia.com). Founded in 1998, Ember Media produces multimedia CD-ROMs, Web sites and marketing materials for Fortune 500 companies, colleges and nonprofit organizations.
Instead of hiring a dedicated (and costly) sales force, Banks depends on his reliable network of trade associations, business executives and freelance Internet experts to recommend Ember Media’s services. Through this virtual sales team, Ember Media has won lucrative five- and six-figure contracts with PepsiCo Inc., Showtime and VH-1, among other major companies.
Ember Media’s sales strategy isn’t unique. Faced with unpredictable cash flow and an uncertain economy, many small-business owners rely on virtual sales teams to boost revenues. These ad hoc teams typically include freelance consultants, strategic partners, suppliers, trade associations and outsourcing relationships.
Building a virtual sales team isn’t easy. Potential pitfalls include unpredictable business partners, unreliable trade associations and unresponsive outsourcing relationships. But the potential upside is attractive. What follows are four examples of companies that have leveraged virtual sales teams.
Ember Media has worked closely with industry associations to secure paid sponsorships for an educational CD-ROM featuring president Clinton. ? Sequel Data Systems Inc., a small technology consulting firm in Austin, Texas, leveraged a strategic sales partnership with Hewlett-Packard to generate record first-quarter revenue.
Sky Media Corp., a minority-owned publisher in Manhattan, joined several trade organizations to increase its annual revenue more than 25 percent last year.
Store24 Inc., a chain of convenience stores in New England, partnered with one of its major suppliers—Pepsi Bottling Group—to design and launch an e-commerce system that boosted the chain’s profit margins.
When Banks launched Ember Media in 1998, most of its initial rivals were advertising heavily and signing strategic partnerships with glitzy dot-com companies.
Instead of running toward the Internet spotlight, Banks worked in the shadows and developed strong relationships with lasting industry organizations, colleges and Fortune 500 firms. For instance, Banks serves on the board of directors for the National Association of Minorities in Communications (www.namic.com), or NAMIC.
Imagine competing with nearly one million entrepreneurs who sell the same product that sits in your inventory. You think your company has a tough sell? Try selling insurance. Of the 800,000 life insurance agents in the United States, 90 percent are independent, according to eAgency Systems Inc. (www.eagency.com) of Newport Beach, Calif. “You see signs for Allstate, State Farm, Prudential and other insurance agencies on every street corner,” says Bill Leary, an independent insurance agent in Atlanta, Ga., who has switched carriers three times in seven years because of ever-changing cost structures. “Delivering a lower quote than my competitor across the street isn’t always an option, so I’m always looking for outside expertise that will give me a competitive edge.”Two popular options for help include the National Association of Independent Insurers (www.naii.org), an organization that represents more than 700 member companies, and the Alliance of American Insurers (www.allianceai.org), a Downers Grove, Ill., organization that has more than 340 member businesses. Both organizations are advocates for hot public-policy issues, such as terrorism insurance, asbestos liability reform and health-care cost inflation. “Even if you don’t sign up as an official member, both groups provide worthwhile literature and trade magazines for the small-business owner, like me,” says Leary. “I stay informed and I keep my customers informed. That builds loyalty.” New technologies can further strengthen customer loyalty. Enter eAgency, which develops wireless systems and Internet software that speeds communications between customers, agents and carriers. One early eAgency adopter is Allianz Life Insurance Co. (www.allianzlife.com), which is rolling out eAgency’s online applications to 150,000 independent agents and financial planners. In many ways, eAgency’s online software provides insurance agents with a virtual sales and information tool. Customers can use the Internet-based service to inspect various coverage options, personal account information and other data without contacting a sales agent. The agent, in turn, has more time to find, educate and serve new customers. With 800,000 competitors, independent agents certainly could use the extra time.
Smart move. While competitors and other Internet consultants have fallen on hard times, Ember Media continues to work closely with NAMIC’s influential partners. Through NAMIC, Ember Media recently reached out to President Clinton, who agreed to appear on a CD-ROM that serves Historically Black Colleges and Universities. The CD-ROM includes paid sponsorships from several Fortune 500 companies. The sponsors eagerly signed on Ember’s dotted line when they heard of president Clinton’s participation.
The NAMIC relationship isn’t Ember Media’s only claim to fame. Says Banks: “We’ve had a strong referral system in place since Ember’s inception in 1998. Our independent contractors and referral personnel simply recommend Ember Media based on our portfolio and reputation.”
Still, freelance Web designers, programmers and contractors can be a fickle bunch. Banks uses three tricks of the trade to keep this virtual sales team loyal and motivated. First, he works with the same freelancers whenever possible. Second, he invites his trusted network of freelancers to work within his Manhattan offices. Third, he includes freelancers in key social events. Says Banks: “These steps allow our freelance personnel to feel more attached to Ember, more compelled to praise our work and more apt to refer clients to us.”
One prime example: During Ember Media’s holiday party, Ember’s staff and freelance team impressed a key financier. Over time, Banks says, the financier may help Ember Media to “scale its business” even higher. In another prime example, Banks mingled with trusted freelancers and peer contacts at a cable industry holiday party, where he ultimately secured VH-1, the music video network, as a first-time client.
While Banks loves to mingle among large crowds, some entrepreneurs prefer a one-on-one sales relationship. Such is the case for Don Richie, president of Sequel Data Systems Inc. (www.sequeldata.com)—which has hitched its entire sales wagon to Hewlett-Packard.
“By aligning with only one strategic partner, our customers and HP always know where we stand and that leads to more business,” says Richie. “HP gives us great field support and fantastic marketing tools to seek out new business.”
At first glance, Sequel’s complete reliance on one partner is fraught with risk. HP faces intense competition in the marketplace, and Sequel’s customers scrutinize any move it makes.
Take a closer look, however, and you’ll discover that HP is rewarding staunch allies like Sequel Data. For instance, HP’s partner organization continually funnels sales and customer leads to Sequel’s offices in Austin, Texas. Moreover, HP offers marketing tools on its Web site. The online resource kits allow partners to design and print simple direct-mail flyers, refresh other marketing materials and launch advertising campaigns.
When it’s time to complete a request for proposal, Sequel and HP often team up on customer visits. In most cases, Sequel provides the consulting and integration expertise, while HP describes how its evolving product portfolio can meet the customer’s business needs.
In the first quarter of 2003, Sequel booked two multimillion-dollar customer deals—eclipsing the company’s revenue for all of 2002.
Reliable Sales Leads
While Sequel succeeds in the Digital Economy, many virtual sales teams thrive in Old Economy markets.
Just ask Sky Media Corp., a 37- person company that specializes in publishing and print advertising. Sky Media is one of New York’s fastest-growing minority-owned businesses. The company’s flagship product, the Spanish Yellow Pages, enjoys 40 percent profit margins, according to Advertising Age magazine. Sky Media founder and President Eddie Cruz says company revenue grew more than 25 percent in 2002—to more than $3 million.
How has Sky Media reached such heights during the economic slowdown? In addition to using telemarketing, fax broadcasting and direct-mail campaigns, Cruz says his participation in three key groups—the Manhattan Chamber of Commerce, the Long Island Hispanic Chamber of Commerce and the United Association of Entrepreneurs—fuels much of Sky Media’s revenue stream.
“Those groups give us the ability to access a database of members who, for the most part, are qualified advertising buyers for our directory,” says Cruz. “But finding the right database doesn’t guarantee success. We live in the information age, but the very essence of business is still relationships.”
Cruz also keeps a close eye on the Long Island Association, or LIA—which represents more than half of Long Island’s workforce. Through the LIA, members can attend sales-training seminars, marketing tutorials and business development roundtables. One of LIA’s biggest perks, the Member-to-Member program, provides discounts on technology, financial and advertising services. Think of it as a preferred bartering system for companies that join the LIA “club.”
Some vertical markets have yet to embrace strategic partners and new technologies to build revenue. Consider the plight of independent convenience stores. Most of the nation’s 132,000 convenience stores are owned and operated as a single-store business or franchise, according to the National Association of Convenience Stores (NACS). Many of those stores still use pencil-and-paper systems to track inventory and monthly sales. Without modern computers, storeowners often fail to spot sales trends on their own shelves. Rarely, if ever, can they quickly adjust inventories to minimize slow-moving products, maximize exposure for hot- selling items and lift revenue.
Many storeowners are turning to their suppliers and NACS to solve this business quandary. In one prime example, NACS, Pepsi Bottling Group and Professional DataSolutions Inc. (a technology integrator) designed an e-commerce system for Store24 Companies Inc., which operates 80 convenience stories in New England.
The new system, which uses off-the-shelf PC technology and a secure Internet connection, routes electronic merchandise invoices between Pepsi Bottling Group and Store24. The stores import the data into a financial application that can monitor accounts payable, accounts receivable, payroll, product inventories and so forth. Store24 expects additional suppliers to tie into the e-commerce system over the next few months.
Neither Professional DataSolutions nor Store24 (recently acquired by Tedeschi Food Shops) disclosed how much the e-commerce system cost. However, a source who consulted on the project says Store24 expects the system to pay for itself within 18 to 24 months. “Store24 will spend less time filling out paper forms for their suppliers and more time analyzing sales data for hidden patterns,” says the consultant. “Here’s a simple example: If Pepsi sells best with Doritos on Sundays when the New England Patriots are on the road, you can bet Store24 will identify the pattern, adjust prices accordingly on those days and perhaps promote salsa to pull an extra two dollars out of each customer’s pocket.”
In this economy, every extra dollar counts.
Before you bulk up your sales staff, consider an outsourcing strategy.When it comes to outsourcing, most people think of IBM Global Services and other massive strategic business partners. But outsourcing isn’t only for large companies. Indeed, the Internet has paved the way for outsourcing specialists within all of the major vertical markets. Below is a sampling of some of the better-known outsourcing firms and the small-business services that they provide. Corporate Rain
(www.corporaterain.com): Generates business-development plans for sales organizations, publishing companies, media organizations and other vertical-market businesses. Claim to fame: Helped McManus Publishing Inc. to meet 30 percent of its senior-level business prospects (the year before, the company met only 4 percent). Pharmagistics
(www.pharmagistics.com): Somerset, N.J.–based firm offers sales, marketing and logistical services to the life-sciences industry. Claim to fame: Recently inked multiyear agreement to provide Altana Pharma with sales support services across the United States. Technology Sales Leads
(www.tsleads.com): U.S. and Europe-based firm provides telemarketing services to high-tech companies. Founded in 1999 by IBM veteran. Claim to fame: In mid-2002, won a contract to generate monthly sales leads for Empirix of Waltham, Mass. Practically on cue, Empirix customer orders increased 22 percent from Q3 to Q4 2002. Salesforce.com
(www.salesforce.com): Leading provider of customer relationship management (CRM) software. Users access the software over the Web. Claim to fame: Morgan Stanley named Salesforce.com the fastest-growing company in the CRM category for 2002.