My dear sales channel, or how can business events help selling your services
Even though Kreston GCG is part of the international audit and consulting network Kreston International, we are independent to develop and implement sales strategies within Ukraine.
Kreston GCG has a sales model that is different from conventional models used in the consulting market. Our organizational structure comprises an independent Development Department that employs over 10% of the entire company staff and has 8-grade levels for those employees engaged in direct sales. This ensures us a steady accretion in both revenue and new clients. In 2018, the share of new clients in sales of Kreston GCG hit over 45%. We will elaborate on this more in one of our next articles.
We outline 13 sales channels and divide them on both outgoing and incoming. However, each of them is subject to a detailed refinement and creation of marketing influence factors by reference to specific services (products).
Different channels show different feedback, and different MROI may eventually vary in efficiency. Let us take a look at the most expensive and inefficient, yet quite popular among other consulting companies, sales channel – business events.
There are 4 approaches to business events:
- Event arrangement.
- Event sponsorship.
- Participation as a speaker.
- Participation as a delegate.
The key problem is that most of our colleagues consider all 4 approaches to business events as a PR promotion and networking and make no plans or projections as to the ultimate goal – execute a sale to certain companies through specific people.
How do we approach business events? How do we make the most of them?
First of all, it is essential to take your own service portfolio into account, assess its value for a client and understand the target audience. Let me remind you that sales channels are just a way to convey your message to decision-makers. If the market has low demand for such a service, and you cannot create a new demand, no article can help you with sales.
1. Just as any sales channel, a business event should have a sales funnel
- Target audience identification. 2. Search and formation of contacts. 3. Initial communication. 4. Meeting arrangement. 5. Company presentation. 6. Demand diagnostics. 7. Preparation of commercial proposal. 8. Conclusion of agreement. 9. Advance receipt.
- Each stage of the funnel needs to be measured in plan and in fact
Let us break down approach 4 – participation as a delegate.
Conference websites are often to post lists of participants. Or suppose you have already met the hosts and have an invitation list: you evaluate if you can come over to talk, spark the interest and make appointments with 15 decision-makers at the event.
In reality, some of them will not come or you will not get the chance to talk to those who came. Most likely, you will communicate with 10 representatives of potential clients – prospects. Depending on the level of a salesman, there may be different indicators at stage 4 “Event Arrangement”. Think, for instance, of 50%. You have managed to agree on 5 meetings and hold 5 presentations.
In a properly managed meeting, one can have 5 diagnostics of the prospect’s demands, translate them into leads and prepare 5 commercial proposals. Naturally, results are below expectations. In our company, 5 meetings with prospects translate into 2-3 commercial proposals.
This year, Kreston GCG translated 33% of commercial proposals into contracts. That is, with 15 decision-makers identified from our target audience, we converted one conference into one sale with one salesman.
3. It is essential to identify financial KPIs for events
The costs for each stage in the sales funnel should be calculated and compared with the costs of other channels and actual income.
If you calculate the previous case with a conference participation, you will get the following results:
- Cost of conference participation: UAH 10,000.
- A portion of an S1 salesman has (preparation before conference, participation and holding of meetings): UAH 2,500.
- The cost of 1 communication with a decision-maker: UAH 1,250 (12,500/10).
- The cost to arrange one meeting and presentation: UAH 2,500 (12,500/5).
- Direct distribution expenses at a contractual cost of, say, UAH 300,000: 4.2%.
How much more or less?
If we compare with standard indicators from the channel “Outgoing calls/messages”, then with 30 performing calls to decision-makers plus the corresponding portion of salesman’s salaries in the amount of UAH 10,000, the cost per communication with a decision-maker will account for UAH 333 instead of UAH 1,250. For the next 14 meetings arranged, one meeting costs UAH 714 instead of UAH 2,500. As a result, we have 7 commercial proposals and 2 agreements of UAH 300,000 each. In total, direct distribution expenses will account for 1.7%.
We included the cost to participate in a conference and a portion of the salesman’s salary (net of a motivational variable) into direct distribution expenses to compare sales channels. The difference is 2.5 times.
For comparison, we took standard indicators from the sales system used in Kreston GCG, which (between you and us) are performed by and large.
4. Each event has a separate sales map and KPIs for the sales
It is essential to have an officer responsible for events and sales channels. A sales channel should have internal instructions containing rules and business processes, an annual program with projected revenue and expenses, etc. It is important to arrange the work with salesmen in a form of applications, formation of sales maps, plan verification and assessment, KPI control for each event.
It is quite an expensive channel that works well long-term. However, it requires to shift emphasis from marketing and PR to direct sales. In this case, your sales will be more predictable, and the growth of your business will meet your expectations.
This post is also available in: Russian
Serhii AtamasManaging Partner