I have decided to share some of my experiences over the past year.
Having spent over 30 years selling a variety of products into the UK, European and US Financial industry - including, but not exclusively, Software, Information Systems, Broking, Electronic Trading and Prime Brokerage I feel I am at last slightly qualified to share some of my observations since I entered into this new exciting world of Fintech.
Firstly, it is exciting. A plethora of companies some with great ideas, some with good ideas and some simply copying existing businesses but trying to do it better – and to be honest some with just plain bad ideas.
However, let us assume that a company is somewhere down the road of their journey. They work from some type of shared office space, the “idea” has been developed and is under development, initial funds have been raised and focus moves to getting the product to market.
Now here is the thing….
It is time to get revenues – paying customers
The founders now have a choice.
1. They go and find the customers themselves. On the face of it this the cheapest option. No money spent on expensive sales people or outsourced companies. But what actually happens? In many cases they have never had any previous experience of selling. They have no relevant sales collateral, marketing material that clearly shows the benefits of their product. I have looked at numerous websites that just do not say what the company/product actually does. It talks in a language of a developer – not a buyer. It does not give the benefits to be achieved by the customer. This explains to me of a statistic I saw that the average time spent on a website it 6.2 seconds.
It is a costly mistake and a lost opportunity.
They have no clearly defined strategy but go head strong into, what they see as their target market – usually the top 10 global banks – unaware that the procurement cycle can be measured in years rather than weeks or months. This turns out to be hard work. Bear in mind they are also trying to manage the business and raise further funds. Focus is hard.
I have had conversations like
Founder : - we are nearly there with xxxx Bank – we had a very positive meeting and we are awaiting the call to move forward.
My response : - and when was this meeting?
Founder : - six months ago….actually longer
In another case
My question : - How do you communicate with you prospective clients?
Founder : - Well, I send out emails, I don’t want to call because I don’t want to upset them
My questions : - and does this work? Do you get any business from this approach? What do you do if they do not respond?
Founder : - No business yet, in fact I really have not had any useful responses. I assume that if they do not respond that my product is not for them.
I have many more examples but you get the idea. In most cases the founder has had no experience of selling. They have had no training and have done no research into what approach the most successful companies have taken. They are taking on the role of Sales Director, Sales Manager, New Business and Sales Executive. In the real world of financial markets these all have a (not insignificant) cost – and there is a reason – they drive sales.
2. The founder has his “sales moment” and makes the decision to invest in a Sales person. This is good. They realise they cannot do everything themselves and they must focus on what they are good at. So by hiring a salesperson the problem is solved.
But here is the thing.
They want the best Salesperson. This person must absolutely understand the business of the prospective clients. They must have a large contact base. They must have a CV that shows continuous success. The Salesperson must take on and be excellent at devising a sales strategy, generating leads, building the pipeline, manage and close the sales cycle.
However, there is a reason why successful companies have differing sales roles. That reason is that a Sales Director is good at that role – they are not necessarily good at new business. A good Sales Executive does not necessarily a good Sales Manager (a common mistake made by companies) and so it goes on.
A proven Sales person cost money – a lot of money – and quite rightly if they perform. But that is the risk. The Founder often has not recruited a salesperson before and is therefore hopeful that this is the right person. If they are not, it is a costly and risk filled mistake. But an easy mistake to make. What is their experience of hiring sale people? Do they know the right questions to ask in interview…? or will they be seduced by the CV – the common mistake being that if someone has worked for a renowned name they must be good otherwise they would not have recruited them – but even large companies make mistakes – it is just that they can afford to correct the mistake. Most significantly can they, or do they, ‘check-out’ their potential new hire in the relatively small world of financial markets.
So, what am I saying? I guess that I have seen many low quality sales people getting jobs over the years based on selling themselves in interview. Whilst I have no problem with this – my view is that the first test is whether a sales person can sell themselves – if they cannot what hope of selling a product. The problem is that the growing Fintech cannot afford to make an expensive mistake. They must be sure the person is fit for purpose. Nor am I saying that the market is filled with bad salespeople but the right person must be fit for purpose on day one. They must understand fully the potential clients’ business and where the product fulfills the need or solves a problem. In fact, they must understand the market to such an extent that they can create the need and operate without the backing, support and reputation of the large vendor that they used to work for.
Finally the founder often decides to de-risk by offering a commission only package - no financial commitment but pay on results. We at Finceler8 get offered about two of these a week. I have a problem with this in financial markets. There are plenty of highly paid sales jobs available with a decent basic plus commission so why should the salesperson take on all the risk - it should work both ways. A good salesperson, if they wished to work on a commission only basis would simply do their homework, seek out the best product paying the highest commission.
One interesting thing I have observed in both of the options above is the amount of ‘Proof of Concepts’ (or POCs) that people are happy to engage in. I get the reasons and have no issue with this – they used to be called trials. But I have encountered both Founders and Salespeople measuring their success by how many of these they have. To me it is not a sale until it is contracted and invoiced.
Here is a typical conversation I have had on a few occasions:
Me : How long has the client been running the POC?
Founder : A few months and we have passed all criteria
Me : How long was the POC supposed to last
Founder : Three months
Me : Are they actually using the product?
Founder : Yes
Me : So they have actually concluded the POC and benefitting from your product but have not made a commitment?
Founder : I guess so
Me : So why don’t you go and get that commitment and book the Sale?
Founder : Well, I don’t want to force or upset them - otherwise they could remove the product.
3. Use an Outsourced Sales Accellerator company The third choice to me is the obvious - but then I would say that because my company, Finceler8 (finceler8.com) has been created to solve the problems mentioned above. However, in fairness to Finceler8 no one has said it is a bad model. Essentially the founder is able to outsource part or all of the sales process to an independent company. Four key benefits are :
- Finding new potential clients that the Founder has not even previously considered.
- Having access to a team of seasoned professionals with a wide network within the target market with many years of proven sales experience. Collectively they fulfill the various sales skills required to actually start, qualify, accelerate and close a sales cycle.
- The reduction of the risk of recruitment until revenue generation starts.
- The cost is far reduced compared to employing an individual or team. Success fees are built into the model so the incentive is there to actually get contracts signed.
Working in partnership in this way means that an experienced team are available and obliged to offer advice based on real experience. Meanwhile, partnerships with ancillary services offer a shortcut to getting results.
What amazed me when we set up Finceler8 was that others have not already done this. Why not? Well, it seems that there are many ‘sales consultants’ available but who only seem keen to offer advice, strategy and marketing advice – for a very high daily rate. Very few seem willing to put their heads on the block and actually say ‘we understand the product, the market and have a far reaching network – if we see and understand the product benefits we will sell it’.
To me, now as a business owner, the lower risk, lower cost, higher return model works. Our conversations with investors tell us that they want their portfolio companies engaged with potential and real and potential clients – revenue and margin is king. Meanwhile financial institutions tell us that they want some sense and organisation in their engagement with Fintechs. They do not want to receive an email mailshot – incidentally it seems that when a mail is received by a corporate with a mass Bcc list they are most likely to end up in the spam folder – nor do they want to receive cold calls from those that cannot answer a question that takes them off script. What they want is product to be brought to them in line with real requirements and needs, by those who understand their business. They want both the product and the vendor to be pre-vetted, and to bring real benefits.
If any of this resonates then feel free to contact myself or colleagues at Finceler8.
So when is a Salesperson not a Salesperson? Well it is easy to give yourself the title but ultimately it all depends on achieving real sales.