How to win new customers in 2018 by saying ‘yes’
How a Dev Agency can increase their profit margin – from the horse’s mouth
“Since we empowered our sales team to say ‘yes’ more often to prospective customers, we have seen a 6% increase in new business.” – Luke, BDM, North Sydney
This is just one of the gems we heard when interviewing some of Australia’s finest software salespeople about their sales strategies. 6% may not seem huge but anyone who runs a development agency knows just how difficult it can be to attract new customers.
First of all, it goes without saying that bad customers do exist, and sometimes the best thing you can do for your business and the customer is to politely decline a project.
However, there are good customers who we traditionally have just had to say ‘no’ to. For a long time, this churn has simply been accepted. Now though more than ever, agencies around Australia are fighting to become leaner and more competitive. Sales teams are increasingly being armed with new tools and better strategies to minimise customer loss.
We recently interviewed BDMs and salespeople from various Australian agencies. Our goal was to ask two simple questions: ‘why do you say no to clients, and how have you started to say yes?’
Here are the three key takeaways consistently raised by the sales teams and the workarounds that have led to increased business and commission.
1. “It’s Not Our Specialty”
Finding that sweet spot with your staff numbers is difficult. Too few and you have to refuse projects. Too many and you might be stuck with a talented team of developers twiddling their thumbs.
George – BDM, Sydney
“The agency I work in is relatively small. We have a great reputation locally especially in the education sector so we get a huge amount of our leads through word of mouth. The problem is we are mostly PHP specialists and customers often don’t understand the difference between technologies.
They call and ask us to fix their platform – potentially big contracts – but we discover that it is in Java or Python or something outside our area of expertise. We simply had to turn them away. For a salesperson, it was almost physically painful to do!”
The solution – Cash Karma
There is no quick and easy formula to get the perfect balance but until you do, it makes financial sense to think symbiotically.
“Obviously, I have my KPIs and targets to hit but now if a customer calls with a request outside our scope, I direct them to a quality agency I trust who specialises in that language. The agencies I helped nearly always send referrals back to us. It takes maybe 5 minutes extra per call but it nearly always comes back to you. We call it cash karma.”
2. Unrealistic expectations
This is probably the most common problem that sales teams in software have to deal with. Customers need tech solutions built but this doesn’t mean they understand technology. It traditionally takes time and budget to build something to be proud of.
Leo – BDM, Surry Hills
“As a salesperson, I will always stretch my imagination to its furthest point in the hope of reaching an agreement. We did run a trial for 6 months where we had an offshore team of 30 devs who technically could deliver projects quicker and faster. To start with, it was great. We won more contracts, we said ‘yes’ a lot. But then reality hit. The Project Managers were overrun trying to keep everything to schedule and the code that was coming back wasn’t great. It always needed cleaning up. Put short, it wasn’t worth it.”
The Solution – No need to reinvest the wheel
Starting a software project is like building a new house. You need architects, engineers, builders, etc. AlreadyBuilt was created to provide an existing house in a nice area for cheaper! All you need to do is design the house to your liking.
“Obviously, I knew of AlreadyBuilt – thus why I am here! Our owner asked me to make it part of my sales process to have a quick look through the solution listings on the marketplace when I get the usual phone calls with unrealistic requests. It’s not always the right fit but if one in ten is a fit, then that’s 10% more contracts on the board.”
3. Saying no to small job requests
Again, sometimes saying ‘no’ is the right thing to do. A business is just like a human. Overload with too many conflicting tasks and they will burn out and fail. However, some of the agencies we spoke to have found a way to filter profitably.
Sean, Director of Sales, North Sydney
“Years ago before I worked in software, I used to work selling courses for an online university. It was pretty straight forward, if a bit dull. A customer wants to study a certain course, we sold said course. Match the student, sell the course.
I had no idea how different selling software services would be. The biggest difference was the internal relationship management you needed to do to get a sale over the line, especially for the smaller, simpler job requests.”
In our team of 40, each developer and team lead has a priority that they can’t be distracted from. As much as our sales team want to say yes to a $20k basic project, it is never as easy as that. $20k revenue may only turn in to $3k profit. The developers don’t generally like to switch tasks frequently. They get distracted from the regular big projects which pay the bills and they can also burnout.”
When I spoke to my CEO and explained the problem, he wasn’t too surprised. However, when we did the maths of how many sales we turned away in the first half of 2017 alone, we were both shocked.”
The solution – Intelligent outsourcing
The word ‘outsource’ typically brings with it negative connotations. Almost everyone has been burned by poor offshore development work before. However, when done right, outsourcing enables you to expand your client base. It just has to be done right.
“We tackled this problem in two ways. One traditional and one a little different.
- We made contact with an offshore agency who do regular work for Australian clients. At this stage, we only give them the very basic work like easy landing page fixes, that kind of thing. The margins are better and we are able to take on a lot more work.
- Secondly, we got a cold email from a small development agency with the subject heading: ‘We do the small jobs you hate’. It was perfect timing. They have literally made our business problem their niche. They are based in Coffs Harbour and they take a lot of our smaller jobs. We split the revenue depending on the job and everyone is a winner.
It’s early days yet but these minor changes have allowed us to take on more work. Once we acquire a customer, we rarely lose them so if we can maintain this growth, we are on track for a record year.”
Business is good, why should I change?
Outside of Australia, the quality of development is increasing while the hourly cost of a developer remains relatively low. In this increasingly global economy, Australian agencies need to listen to their customers and salespeople to stay lean and competitive.
If your sales team are saying ‘no’ on the phone more than you wish, take the time to consider whether that percentage is acceptable. All of the above strategies aren’t going to work for you but one might. In a world of tight profit margins, 6% could be the magic number that propels you to the next level.