Not every sales model will work for every industry, but here’s one framework that could work for you. BRENDAN LEWIS
By Brendan Lewis
I used to sell people. And although I had the occasional slave trader vision, usually accompanied by lots of whipping, the reality was much more mundane.
Selling people in the IT services industry meant we normally either offered people at an hourly rate, a weekly rate or occasionally offered customers the chance to pre-purchase hours or “block time” at a discount.
Pretty much our offering was the same as the rest of the industry, and a differentiator was the availability and skill of the people on offer.
I wasn’t really thrilled about this arrangement though, and spent a lot of time in front of a white board trying to understand what was making me unhappy. The conclusion I came to was that there were three things going on that interacted:
- My product.
- My sales model.
- My market.
My product and market was reasonably obvious. I had system administrators and network engineers that could help organisations that had IT problems.
However the sales model was where I spent the majority of my thinking. I was selling people by the hour, and would offer a discount for bulk purchases. The question haunting me though (haunting is probably too strong a word) was “is there a better way to sell people?” After much staring, I came to the conclusion that there were three things I wanted from my sales model:
- It made it easy to sell the product.
- It maximised the profitability of the sale.
- It gave me repeat business.
These I realised were probably principals of good sales model design.
Having this framework, I then looked at other industries to see how successful businesses were applying these principals. In fact I realised that the further I looked the more innovative solutions I found.
Eventually I came up with a solution that I now see regularly in the market place (and of course like to think it was copied from me). I called it contract support. Basically our clients are committed to a certain number of hours per month of IT services that they would buy off us. They got this at a low-low rate.
Then any additional hours they purchased were at a higher rate, but still below the market rate.
The result was a product that was easy to sell, more profitable (due to a higher utilisation) and gave us forecastable repeat business. Sweet. Sizzle.
Brendan Lewis is a serial technology entrepreneur having founded : Ideas Lighting, Carradale Media, Edion, Verve IT, The Churchill Club, Flinders Pacific and L2i Technology Advisory. He has set up businesses for others in Romania, Indonesia and Vietnam. Qualified in IT and Accounting, he has also spent time running an Advertising agency and as a Cavalry Officer with the Australian Army Reserve.
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