There is no doubt that the innovation that is taking place among start ups and emerging companies today is quite impressive. Visit any incubator or developmental zone and you'll find a bevy of fascinating platforms, tools and technologies that are capable of solving business problems for clients; problems that many of us don't even know we have yet. That's the good news. The bad news is that many of these companies will never get the additional rounds of funding they'll need to become the next Drop Box, Tempo, Uber or Evernote if they don't fundamentally invest in sales and marketing.
VC's and other investment vehicles are becoming increasingly interested in seeing if emerging companies can prove their value in the open market; looking beyond just early adapters into the depth of viable, defendable pipelines that can illustrate that the product that is being pushed has an audience willing to spend money to buy it. In other words, showing beta clients isn't enough anymore, you have to show that there is true market value for your product.
But sales and marketing costs are expensive and risky. As a result, many founders take on the task of selling the early client base themselves. This is fine, but along with product development, fundraising, human resources, financial management and sleeping, sales often takes a backseat to the other more pressing issues. This is somewhat odd; as what can be more pressing then selling your product to a buyer?
I recently met with a prospective client who said, "I know I need to get out there and sell, but I can't even return the inbound sales calls we get; let alone prospect and develop a pipeline. I have investor meetings in the 3rd quarter and I'm worried about not having a pipeline." Additonally, another prospect told me this week, "I have 100 leads in my office, some want us to do RFP's for their business and I can't respond and I don't know how to handle some of these enterprise prospects anyway."
Fractional sales and marketing may be the answer. Mitigating investment into sales is one of the reasons many start ups avoid the cost center. They could hire a business development person with a rolodex at $90,000 a year plus 20% benefits and all the costs associated with having an employee and all the risk that comes with that such as:
- The true cost of onboarding a new employee; including training them in your product
- Limited resources that comes with one or two sales employees
- The promise of "tappping" into their networks for new business that has its limitations
- The high cost of founder involvement in sales deals anyway - the CEO is still sitting in on most sales calls and meetings; so where's the scalability?
Fracational sales is the idea of using a firm that has existing sales professionals on staff, a proven sales process for prospecting, deal management and closing deals along with understanding how to take an emerging brand to market. Often, fractional sales teams will be able to quickly jump start your sales process by partnering with your company to develop many of the elements needed to have a sales operation:
- Marketing collateral
- CRM database management and development
- Lead generation and addressable market identification
- Demo mapping and management
- Pricing matrix development
- Contract development and management
Fractional comes form the very real economic case that firms like Eta Consults can be had for a fraction of the cost of hiring a Business Development rep with the expansive benefits of a deep bench of experienced sales and marketing professionals. In addition; see math terms again, you get more people working on your behalf based on the budget you can afford. This frees founders up to continue to focus on the product and business development of their company's while the hired sales team is out building your pipeline.
Neglecting sales and marketing in a start up may prove to be the death blow for those businesses that are in the process to coming to market. At some point; investors are going to want to see progress against their portfolio companies and a fractional sales partner may just be the right way to jump start the process.
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