I get approached by a lot on online business looking to outsource their ad sales.

Well, I say outsource their ad sales but, basically, they don't have any to outsource.

What they all really mean is... "I want you to sell advertising for my unproven Web 2.0 business but I haven't any cash to pay you".

There's a great article in today's Sunday Times The new dotcom boom which gives some insight into this.

Whilst drawing some parallels with the last dot-bomb bubble, most notably the growth of start-up networking events, it's recognised that there are a some differences this time round.

Today, it's typcial of Web 2.0 start-ups see their exit through a strategic buyer rather than an IPO. VC activity is up but no-where near the feeding frenzy heights of last time around. One reason could be that it's so much cheaper to actually start up a Web 2.0 business today.

"Lastminute used to cost millions of pounds every year in technology," says Hoberman [Brent Hoberman of Lastminute.com and wayn.com]. "Now it is far cheaper." How come? "Moore's Law. Everything becomes cheaper and faster." Can you set up for 20,000? "Absolutely," says Clegg [Judith Clegg of the Glasshouse, the company that runs Second Chance Tuesday]. "Less, perhaps."

Add this to the fact that most Web 2.0 start-ups' business model is based solely on advertising revenues and you start to see why we get approached by so many people to sell advertising on commission.

The problem is that none of these start-ups have anywhere near enough traction to make a CPM model pay. So, to fill the void, there's this vague idea that someone can just make a few phone calls and drum up a quick ad deal for their "next big thing".

Sure, ad spend is moving rapidly online. However, as the article points out "with lots of social networking sites all seeking advertising money, some kind of shake-out is due."

Web 2.0 businesses typically work on some low value/high volume model (which could be be that a directly listing fee, monthly or annually subscription or CPM ad revenues). The trouble for us is that these models just don't work well with telesales (which needs at the very least a medium value proposition) unless you're prepared to buy business in a land-grab.

If you're looking to self-fund and grow covering your sales costs (outsources or in-house) from revenue then you either need a higher value offering or a small number of partnership deals which will bring the long term revenue scale you need.

So, now you know, please... stop calling me ;-)

Labels: new business development, sales outsourcing, start-ups, telemarketing, telesales, venture capital

With the spread of broadband, low-cost telephony and VoIP, there have been a growing number of experienced telemarketing & sales people striking out on their own as free agents.

Many are disillusioned with the large call-centres, or perhaps their job was outsourced overseas. Some have decided to take a career break, perhaps to raise a family, and want a new, home-based, flexible working arrangement. Whatever the circumstances, there is a growing pool of talented home-workers that you can leverage to expand your business.

Some key advantages of using freelance telesales & telemarketing people are:

Freelancers come pre-loaded with experience - on average most freelance sales & marketing people have at least 5 years experience. Using a freelancer gives you access to highly skilled knowledge workers on an "as needed" basis, which means they can hit the ground running and start delivering results for you.

In contrast, call-centres have large overheads. If you're paying 250 GBP a day per agent, they need to pay their agent less than 80 GBP per day to cover overheads, management, down-time, etc. This means they usually employ young and inexperienced people compared to a freelancer.

Freelancers are flexible - you don't have to use them full-time for large projects. In fact, they probably don't want to work full-time, that's why they're freelancing. Maybe you just want them to work a few days a month? If you're a small consultancy operating in a niche market, maybe you just want someone to target a short list of 50 companies.

A call-centre could never handle this type of work; they want volume. Call-centres, of 20+ seats, have overheads that dictate they need volume. All those people need to be fed regular work. If you're a corporate and need a campaign to hit 10,000 companies in 2 weeks, then you need a call-centre. Even a distributed freelance network like ours could not scale to handle that type of project.

Freelancers can operate as if they're part of your company - freelancers can send emails from your company domain, work with your marketing collateral, and operate as if they're part of your team. With collaborate online tools, such as Salesforce.com, or Microsoft's new Office Live, it's easy to share customer contact details, diaries, etc. Many freelancers operate like Virtual "Sales" PA's, setting up appointments for you and chasing quotes on your behalf. Because you engage a freelancer direct, you can build a relationship with them over time. They learn more about your business and develop as part of your team.

By comparison, whilst call centres can place outbound calls as if they're from your company, typically that's all they're set up for. They don't send information by email and call back, their model is all about crunching through high volume. Plus, they have terrible churn rates (employee turnover), which means building any long-term relationship with an individual is almost impossible.

Freelancers are doing this work because they want to - if you've ever been called by some 18 year old in a call-centre reading a canned script for the 100th time that day, you'll understand this point immediately. Freelancers do this work because they're good at it and they enjoy it. This point alone makes all the difference.

In summary, for directors of small businesses or companies operating in niche markets, hiring freelance telesales professionals can be an ideal fit. For most small businesses, as little as 30 hours a month can deliver real results. Their costs are comparable with most telemarketing agencies and call-centres, they're experienced, and can work on an appropriate scale for your needs.

If you need to feed a hungry team of 20 sales people with "leads" then, I'm afraid, you'll still have to work with the big boys.

Labels: freelance, telemarketing, telesales

There was a time when telephone selling, or telesales, was considered an lower level of of sales, compared to the smart-suited executive in his top-of-the-range car. Of course, this opinion varies from sector to sector; just look at recruitment to see highly paid executives who spend all their time selling by phone.

Nowadays, other sectors are beginning to realise that the telephone, when accompanied by online tools, can be a far more effective method of selling. We're seeing telesales now being utilised as a compliment to the sales cycle, particularly in areas such as software which were once considered "high-touch" and too complex to be sold using the phone.

I think that there are three key drivers behind this:

Online Presentation & Demonstration Tools - such as GotToMeeting, and WebEx, now make it simple to handle early parts of the sales cycle remotely. With decision makers and their teams often geographically dispersed, handling initial presentations online not only saves money in travelling costs, but can also dramatically shorten sales cycles. Plus, it enables the telesales agent to collaborate with pre-sales technical support (which could be located elsewhere) to provide all the answers that client needs.

Fee-Based and Disruptive Business Models - hosted applications, "software-as-service", and other low-cost charging models have made the on-the-road sales person no longer viable or cost-effective. Utilising remote selling, usually in conjunction with e-commerce platforms or live-agent tools, is the way forward. You still need highly-skilled people, but now they can service more customers in less time than is possible with face-to-face selling. Need an example? Look no further than salesforce.com

Changing Customer Attitudes - can you remember when they said no one would buy groceries online? when it comes to enterprise sales, people have been a little slower to catch up. Partly, I suspect, because sales people have a vested interest in keeping their cars. However, decision makers have become time-starved and scheduling a 20-minute online presentation can be much more preferable to blocking out an hour in the day (plus they can fit the online meeting in while they're working from home...or even while they're on the train!). Can you remember when most of your clients didn't have email? Nowadays, most middle-managers can only be contacted via their Blackberry (see Email vs Cold Calling) You get the point, people are far more open to new ways of doing business, especially if it saves them time.

Telephone Sales, Telesales, Remote BizDev, call it what you will...it's a growing part of sales today, and a great way to shorten otherwise long and costly sales cycles.

Labels: sales outsourcing, telemarketing, telesales