Gentleman's set in the field of marketing and sales of the company-developer of custom software
In the first article we told about our first experience in marketing and sales. In this article, we’ll explain why you need to do marketing and sales yourself, even if you have been studying mathematics and programming all your life, and not relying on market gurus, and what minimal marketing and sales activities a custom software company should do in our time to be a profitable company and be able to develop steadily. In this article, the topic of promotion and sales of products, mobile applications, games and much more will not be affected, as the experience of Maxilect is mainly related to customized development, and only at the end of 2017 we started to do our R & D development and work with startups on the model Revenue Sharing.
The story of my partner Kirill Antonov , who wrote the first part of the article, stopped at about the end of 2016 - the beginning of 2017. At that time we had already broken a lot of firewood, came not on one rake, achieved first successes, and remained in a certain euphoria at the fact that at last it began to turn out, we grew, the profit increased, and it was time to think about the dynamic development right direction.
The idea of inviting an experienced seller to work with an understanding of the Russian B2B market looked very logical, which we did by finding a Muscovite (business there) and inviting him to the final communication in St. Petersburg. We were not ready to offer a salary of 200,000+ rubles (and a small% over this), so they offered about 100,000 rubles of salary and 30% of the profits from the sales that he would do to us. A lot, to be honest. But I was always interested in my share in absolute terms, and not in percentage. We talked well, went home and quickly built an action plan that included comprehensive work in a number of areas. But already in February 2017, it became clear to me and the partner that our new partner is not ready to work in the same rhythm as we. After a short conversation, it was decided to cease cooperation.
')
We lost several months in the dynamics of development, only supporting current projects and sales. A radical change did not occur. People tend to want a miracle to do everything for them. We fell into this trap almost immediately the second time. We shook hands with a former colleague of a partner, but this cooperation did not last long.
Subsequently, I analyzed these stories. The harsh and logical conclusion is:
1. There are no normal sellers of custom software development services on the labor market, because they earn enough on the current (from 200,000 r. Per month with bonuses that “per circle” can give 500,000 rubles or more), and they are difficult to withdraw from comfort. Why should they be removed from their homes, where there are already large sales and a good% of transactions? For a startup where there is not and will not be such volumes in the coming year to economically justify attracting such a seller (who will certainly ask to create a team for him, which will further increase costs). All these volumes must also be multiplied by the probability, which in its former place was close to 100% (this is how it seems most often to those who have never been fired).
2. Such sellers are not needed at the development stage, when you have only 20-40 technical specialists and there is no need for a stream of large (from 1 million dollars) orders.
3. Regardless of the tasks to be solved, it is easier to delegate what you yourself figured out. In this case, you understand what tasks you need to solve and you can build a portrait of a successful substitute.
4. You have to be a very risky person in order to entrust marketing or sales to a hired specialist from the market, because it essentially means the transfer of responsibility for the future of the company to someone in the company’s business who does not understand your level. Something it looks like a "Russian roulette", where they shoot a business.
For myself, I decided that there is no alternative to strengthening knowledge about the company with marketing and sales knowledge, where I already had a theoretical base from a business school (2010).
What will be listed below, was checked by me during 2016-2017, can quickly become outdated and bring little benefit (or even harm). Some points, I am sure, will be relevant in 5 years. I wrote about this because we once tried to work the same way as another company did and achieved success ... 5 years ago. The result was logical, we did not achieve it and 5% of what we expected.
I learned a lot of practical experience in recent years, and on this topic, if I had time, I could have organized at least a blog. In this article, I will limit myself to listing what seems to me the most important and useful for those who have already created their own company for custom software development or on the way to it.
Your vision will determine what the company will be. At the initial stage (or better before the start) determine for yourself what you are creating a company for, why do you need it. If the answer is just money, then there is a great risk that you will sooner or later throw it, finding something more profitable and interesting. Your vision should be built around your personality, your experience, principles and values. Do not be shy. In my case, it turned out like this: equal opportunities for IT-professionals, regardless of their place of residence. I am for not making a false choice - to work for low pay in the regions or to move to megalopolises or go abroad. There are alternatives, including freelancing and remote work. The second key factor was that I love freedom and I am ready to take responsibility for it. Remote work will be appreciated by those who value their time, are organized, want to be free and understand the responsibility for this. About why the company was created Maxilect, I will write separately in two languages (we will not publish it on Habré), since this has a positive effect on sales.
Marketing determines what your company will develop in 1 year, for whom and for what price. If you don’t want to be in a year where I don’t know myself, then today you’ll do an analysis of the markets, the definition of your niches and segments (we did this after “working on the areas”), describe the Ideal Customer Profile and create a Value Proposition for each of them. This will give you input quality leads (potential customers who have a need that you can address) with the proper construction of the sales process.
Model the entire sales process from lead generation to deal making. There should be no weak points. Otherwise, all costs in the initial stages will be useless if, for example, in negotiations with an English-speaking customer, your pronunciation recalls the well-known phrase of our sports official “Ai Speake From May Hart”. Forget about scaling until you have at least one transaction in your sales system - why scale errors and losses? I have limited myself to the stage of making a deal, since it is obvious that your expertise must be commensurate with the complexity of the project and there must be specialists to work on this project.
The sales system needs its own for each pair (a niche is a service). It makes sense to immediately describe it with large strokes, and as you receive feedback from the market, it is constantly improved. Only after you have made several sales on this system can it be used for scaling. This description takes 1-1.5 pages in Confluence.
InBound marketing is becoming increasingly important these days. This is when a client finds you himself, and before making an application, he will work out according to his fears and risks, reading your expert articles, review videos, tapes on social networks, customer reviews. OutBound also continues to work, and in the short term, it can give a sale faster, but here, to “warm up” the lead, you need the right content published in the right way in the right places. Briefly about both approaches can be found on this page . You need to define a balanced approach using both InBound and OutBound. Sooner or later you will come to the conclusion that you need at least a coordinator in the state, who will monitor the implementation of the marketing plan for the publication of reviews, articles, etc.
Two-tier sales system (Lead gen, Sales). After the process of scaling and delegating has gone, you need a lead generator - i.e. the one who will create a stream of calls for the seller. You can do this in different ways, there are many tools to automate the process. Lida start up in CRM (we managed Google Sheet for 2 years, now we use Hubspot), and then the seller works on them. If the deal is large, then at some stage the participation of the CEO will be required. I’ll say right away that it’s difficult to combine these roles of a lead generator and a seller in one person, because the tasks are very different. A good seller will not be interested in lead generation, and from a business point of view, this is wrong. Lead generation can be put on stream by creating a clear instruction (script) and use cheap resources on the part-time scheme for this.
Three-tier sales system (Lead gen, Sales, Account). It is suitable for a more mature company, where a regular stream of InBound calls is already coming and there are customers (Accounts) with which it is necessary to increase the volume of cooperation. It differs from the two-level in that there are 2 sellers. One works with leads, and his task is to make the first contract from a new client (which is unlikely to be large). The second seller is the Account Manager, and from it we must expect volumes and more profitable transactions. In cases of the appearance of serious leads, he can take them to work for the entire cycle.
Motivation systems for Lead gen, Sales and Account may be different. It is important to understand that the main KPI of Lead gen is relevant leads in the required volume for a certain period of time. They will not appear immediately, it may take a month. Sales may not have large contracts, its task is to expand the customer base. Therefore, here you can measure the conversion from leads to customers and the number of contracts for the period. Account makes volumes, and there must be a link to income or profits. We chose the latter.
Advertising on the Internet can give you quick traffic to the site. But traffic is not a synonym for sale. We know an example of 0 conversion into leads from an advertising budget of 200,000 rubles. I decided that even though this is a fast channel of attraction, for us to use it, it is necessary to increase the critical mass of publications to begin with. I heard that in the Western market advertising of B2B services works better on Facebook, and not on LinkedIn.
Use your advantage - read, compare and optimize. Many people do not like numbers, but only we, mathematicians. And this is our advantage, which should be used in sales. Identify important metrics for you, collect data and analyze. Here are a few of them: the cost of one lead, the cost of one sale, the client's share in profits (the higher, the higher the risk of dependence on him, do not do more than 40%, and ideally - no more than 25%).
Communicate with colleagues in the shop - other entrepreneurs from Russia, Ukraine, Belarus. This is the fastest and cheapest way to learn about something new. Share your experience if you already have a story to tell. Forget about being competitors. Even the Russian market is great, not to mention the western one. There is enough room for everyone, and such an exchange of experience will increase the chances of everyone to survive in the competition in the Western market. If you have your own company of a similar profile and you share my point of view, then let's get acquainted and communicate.
I did not write about the cold mass mailings of letters and calls, because we did not do this. Mailings can give a negative effect to the brand and close the opportunity to work with some customers forever (everyone is tired of spamming), and in a number of segments our market is limited to several hundred companies.
There is nothing in marketing and sales that a graduate of math or physical education who has worked as a developer or tester at the start of a career cannot understand. The only question is how long it will take to study and how many millions of rubles of lost profit it will cost. If there are at least 10 people among the readers who recently founded a similar business or simply matured for this decision, and their level of knowledge in marketing and sales is equivalent to the baggage that I had 3 years ago, then the value of my article in 2-3 years will be 20-50 million rubles.
I almost forgot to say the main thing. The business of custom software development is complex, and the statistics on survivors after 1-2 years is depressing. Many people quit because of fatigue, wasting their energy on knocking out accounts receivable, fighting cash gaps and losing faith. I have not created a single successful product service (although I tried, as can be read in our first article on Habré), but it seems to me that this occupation is more interesting and less nervous. Therefore, if you have a margin of safety (at least several million rubles) or you believe that your project will interest a business angel (I checked it in 2009, therefore I decided to create a financial and technological base myself), you have a strong team that covers not only technical issues, but also in marketing and sales, then try to create your product service. It turns out - you can share the experience with others. In any case, this will be one of the brightest and most intense periods of your life. Don't give it up, it's worth it.
Article author: Maxim Korotkov, CEO, Maxilect
PS We publish our articles on several runet sites. Subscribe to our pages on the VK , FB or Telegram channel to learn about all our publications and other news from Maxilect.
The story of my partner Kirill Antonov , who wrote the first part of the article, stopped at about the end of 2016 - the beginning of 2017. At that time we had already broken a lot of firewood, came not on one rake, achieved first successes, and remained in a certain euphoria at the fact that at last it began to turn out, we grew, the profit increased, and it was time to think about the dynamic development right direction.
No alternative solution to do marketing and sales by yourself.
The idea of inviting an experienced seller to work with an understanding of the Russian B2B market looked very logical, which we did by finding a Muscovite (business there) and inviting him to the final communication in St. Petersburg. We were not ready to offer a salary of 200,000+ rubles (and a small% over this), so they offered about 100,000 rubles of salary and 30% of the profits from the sales that he would do to us. A lot, to be honest. But I was always interested in my share in absolute terms, and not in percentage. We talked well, went home and quickly built an action plan that included comprehensive work in a number of areas. But already in February 2017, it became clear to me and the partner that our new partner is not ready to work in the same rhythm as we. After a short conversation, it was decided to cease cooperation.
')
We lost several months in the dynamics of development, only supporting current projects and sales. A radical change did not occur. People tend to want a miracle to do everything for them. We fell into this trap almost immediately the second time. We shook hands with a former colleague of a partner, but this cooperation did not last long.
Subsequently, I analyzed these stories. The harsh and logical conclusion is:
1. There are no normal sellers of custom software development services on the labor market, because they earn enough on the current (from 200,000 r. Per month with bonuses that “per circle” can give 500,000 rubles or more), and they are difficult to withdraw from comfort. Why should they be removed from their homes, where there are already large sales and a good% of transactions? For a startup where there is not and will not be such volumes in the coming year to economically justify attracting such a seller (who will certainly ask to create a team for him, which will further increase costs). All these volumes must also be multiplied by the probability, which in its former place was close to 100% (this is how it seems most often to those who have never been fired).
2. Such sellers are not needed at the development stage, when you have only 20-40 technical specialists and there is no need for a stream of large (from 1 million dollars) orders.
3. Regardless of the tasks to be solved, it is easier to delegate what you yourself figured out. In this case, you understand what tasks you need to solve and you can build a portrait of a successful substitute.
4. You have to be a very risky person in order to entrust marketing or sales to a hired specialist from the market, because it essentially means the transfer of responsibility for the future of the company to someone in the company’s business who does not understand your level. Something it looks like a "Russian roulette", where they shoot a business.
For myself, I decided that there is no alternative to strengthening knowledge about the company with marketing and sales knowledge, where I already had a theoretical base from a business school (2010).
Hygienic recruitment of a business owner for marketing and sales
What will be listed below, was checked by me during 2016-2017, can quickly become outdated and bring little benefit (or even harm). Some points, I am sure, will be relevant in 5 years. I wrote about this because we once tried to work the same way as another company did and achieved success ... 5 years ago. The result was logical, we did not achieve it and 5% of what we expected.
I learned a lot of practical experience in recent years, and on this topic, if I had time, I could have organized at least a blog. In this article, I will limit myself to listing what seems to me the most important and useful for those who have already created their own company for custom software development or on the way to it.
Your vision will determine what the company will be. At the initial stage (or better before the start) determine for yourself what you are creating a company for, why do you need it. If the answer is just money, then there is a great risk that you will sooner or later throw it, finding something more profitable and interesting. Your vision should be built around your personality, your experience, principles and values. Do not be shy. In my case, it turned out like this: equal opportunities for IT-professionals, regardless of their place of residence. I am for not making a false choice - to work for low pay in the regions or to move to megalopolises or go abroad. There are alternatives, including freelancing and remote work. The second key factor was that I love freedom and I am ready to take responsibility for it. Remote work will be appreciated by those who value their time, are organized, want to be free and understand the responsibility for this. About why the company was created Maxilect, I will write separately in two languages (we will not publish it on Habré), since this has a positive effect on sales.
Marketing determines what your company will develop in 1 year, for whom and for what price. If you don’t want to be in a year where I don’t know myself, then today you’ll do an analysis of the markets, the definition of your niches and segments (we did this after “working on the areas”), describe the Ideal Customer Profile and create a Value Proposition for each of them. This will give you input quality leads (potential customers who have a need that you can address) with the proper construction of the sales process.
Model the entire sales process from lead generation to deal making. There should be no weak points. Otherwise, all costs in the initial stages will be useless if, for example, in negotiations with an English-speaking customer, your pronunciation recalls the well-known phrase of our sports official “Ai Speake From May Hart”. Forget about scaling until you have at least one transaction in your sales system - why scale errors and losses? I have limited myself to the stage of making a deal, since it is obvious that your expertise must be commensurate with the complexity of the project and there must be specialists to work on this project.
The sales system needs its own for each pair (a niche is a service). It makes sense to immediately describe it with large strokes, and as you receive feedback from the market, it is constantly improved. Only after you have made several sales on this system can it be used for scaling. This description takes 1-1.5 pages in Confluence.
InBound marketing is becoming increasingly important these days. This is when a client finds you himself, and before making an application, he will work out according to his fears and risks, reading your expert articles, review videos, tapes on social networks, customer reviews. OutBound also continues to work, and in the short term, it can give a sale faster, but here, to “warm up” the lead, you need the right content published in the right way in the right places. Briefly about both approaches can be found on this page . You need to define a balanced approach using both InBound and OutBound. Sooner or later you will come to the conclusion that you need at least a coordinator in the state, who will monitor the implementation of the marketing plan for the publication of reviews, articles, etc.
Two-tier sales system (Lead gen, Sales). After the process of scaling and delegating has gone, you need a lead generator - i.e. the one who will create a stream of calls for the seller. You can do this in different ways, there are many tools to automate the process. Lida start up in CRM (we managed Google Sheet for 2 years, now we use Hubspot), and then the seller works on them. If the deal is large, then at some stage the participation of the CEO will be required. I’ll say right away that it’s difficult to combine these roles of a lead generator and a seller in one person, because the tasks are very different. A good seller will not be interested in lead generation, and from a business point of view, this is wrong. Lead generation can be put on stream by creating a clear instruction (script) and use cheap resources on the part-time scheme for this.
Three-tier sales system (Lead gen, Sales, Account). It is suitable for a more mature company, where a regular stream of InBound calls is already coming and there are customers (Accounts) with which it is necessary to increase the volume of cooperation. It differs from the two-level in that there are 2 sellers. One works with leads, and his task is to make the first contract from a new client (which is unlikely to be large). The second seller is the Account Manager, and from it we must expect volumes and more profitable transactions. In cases of the appearance of serious leads, he can take them to work for the entire cycle.
Motivation systems for Lead gen, Sales and Account may be different. It is important to understand that the main KPI of Lead gen is relevant leads in the required volume for a certain period of time. They will not appear immediately, it may take a month. Sales may not have large contracts, its task is to expand the customer base. Therefore, here you can measure the conversion from leads to customers and the number of contracts for the period. Account makes volumes, and there must be a link to income or profits. We chose the latter.
Advertising on the Internet can give you quick traffic to the site. But traffic is not a synonym for sale. We know an example of 0 conversion into leads from an advertising budget of 200,000 rubles. I decided that even though this is a fast channel of attraction, for us to use it, it is necessary to increase the critical mass of publications to begin with. I heard that in the Western market advertising of B2B services works better on Facebook, and not on LinkedIn.
Use your advantage - read, compare and optimize. Many people do not like numbers, but only we, mathematicians. And this is our advantage, which should be used in sales. Identify important metrics for you, collect data and analyze. Here are a few of them: the cost of one lead, the cost of one sale, the client's share in profits (the higher, the higher the risk of dependence on him, do not do more than 40%, and ideally - no more than 25%).
Communicate with colleagues in the shop - other entrepreneurs from Russia, Ukraine, Belarus. This is the fastest and cheapest way to learn about something new. Share your experience if you already have a story to tell. Forget about being competitors. Even the Russian market is great, not to mention the western one. There is enough room for everyone, and such an exchange of experience will increase the chances of everyone to survive in the competition in the Western market. If you have your own company of a similar profile and you share my point of view, then let's get acquainted and communicate.
I did not write about the cold mass mailings of letters and calls, because we did not do this. Mailings can give a negative effect to the brand and close the opportunity to work with some customers forever (everyone is tired of spamming), and in a number of segments our market is limited to several hundred companies.
Short summary
There is nothing in marketing and sales that a graduate of math or physical education who has worked as a developer or tester at the start of a career cannot understand. The only question is how long it will take to study and how many millions of rubles of lost profit it will cost. If there are at least 10 people among the readers who recently founded a similar business or simply matured for this decision, and their level of knowledge in marketing and sales is equivalent to the baggage that I had 3 years ago, then the value of my article in 2-3 years will be 20-50 million rubles.
I almost forgot to say the main thing. The business of custom software development is complex, and the statistics on survivors after 1-2 years is depressing. Many people quit because of fatigue, wasting their energy on knocking out accounts receivable, fighting cash gaps and losing faith. I have not created a single successful product service (although I tried, as can be read in our first article on Habré), but it seems to me that this occupation is more interesting and less nervous. Therefore, if you have a margin of safety (at least several million rubles) or you believe that your project will interest a business angel (I checked it in 2009, therefore I decided to create a financial and technological base myself), you have a strong team that covers not only technical issues, but also in marketing and sales, then try to create your product service. It turns out - you can share the experience with others. In any case, this will be one of the brightest and most intense periods of your life. Don't give it up, it's worth it.
Article author: Maxim Korotkov, CEO, Maxilect
PS We publish our articles on several runet sites. Subscribe to our pages on the VK , FB or Telegram channel to learn about all our publications and other news from Maxilect.
Source: https://habr.com/ru/post/350322/
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