Author introduction-Wu Hao, SaaS strategy and marketing consultant, Tencent SaaS accelerator tutor, author of a series of articles; Angel investor and former CEO who enjoys selling customers. A series of books of the same name will be published in February 2020.
Many of my articles were chatted with SaaS founders or team leaders. Perhaps this is the vitality of these words.
Since it is still the planning season, this article still has to continue to talk about annual planning.
This article comes from talking with a sales person in charge one day about how to divide regions and allocate resources among various sales teams in the company. I’ll throw out the results of the discussion first, and then make a detailed breakdown.
A few days ago, when communicating with a well-known SaaS enterprise executive team, I was still saying that I like the telemarketing team best, not emotional love, but from the perspective of CEO+CFO.
The cost of reaching customers by telemarketing is low, and it is much easier to cultivate communication skills than direct selling (face-to-face communication). Telemarketing is where dozens of people sit together, and on-site management is much easier than field management of direct sales representatives.
The bigger advantage is that when we need to expand the market coverage, we just need to add seats in the office or rent the office next to it. There is no need to send general managers and executives to open branches in another city, and there is no need to take risks to let a new branch manager take on all business and management responsibilities in a newly opened city.
The total operating cost of telemarketing is also relatively low, there is no travel expenses, and the labor cost is generally lower than that of direct selling.
Therefore, from the perspective of CEO and CFO, telemarketing is the first choice for SaaS companies. Most American SaaS companies I know are like this.
The best partner of telemarketing is "market clue". If the company has a certain brand, can bring natural traffic, and the clues brought by SEM can cover most of the clue needs of the telemarketing team, then the combination of "market clues+telemarketing" will be invincible.
In the past two years, I have seen the average monthly output of some sales representatives of the telemarketing team reach 80,000, and some reach 120,000 (the customer unit price is not high, and there are many odd numbers). It can be calculated that the gross profit of their sales team is very good.
Even if there are insufficient market clues, it is faster to find clues through telemarketing than through ground forces.
Of course, electricity sales also have three limitations:
◆ The customer unit price cannot be high.
◆ Product configuration and operation should not be too complicated.
◆ Customers don’t need to change the business process when using this product (the implementation is not difficult).
In addition, in the output results, there are still problems of insufficient regional market coverage and insufficient penetration.
In a word, telemarketing is "fast replication, wide coverage, shallow penetration and high gross profit".
The direct selling team, like the telemarketing team, has the opportunity to become an iron army with high combat effectiveness.
Direct sales representatives need to go out to visit customers, which makes their sales skills, understanding of product value and understanding of customer business more demanding. The data I saw with my own eyes, even if it is the same product and the same level of clues, the price of direct sales will be much higher than that of electricity sales.
However, due to the characteristics of "on-site visit and departure management", the management difficulty of direct selling team is more than twice as high as that of telemarketing team. Even an excellent manager, the efficiency of departure management can not exceed that of the telemarketing team manager. The number of direct sales teams reaching target customers and obtaining effective business opportunities every day is weaker than that of telemarketing teams.
Therefore, it can be seen that if a direct sales team is established, it must be different in product prices to ensure that the direct sales team can sign a larger list.
The direct selling team is not slow to replicate locally. However, if you want to use the direct sales team to cover a larger area, you will face the problem of difficult management of business trips.
What if more branches are opened? It will also face the problem that branch managers are not easy to cultivate.
Although some excellent enterprise service companies can solve these problems well, it will take a long time: it will take at least one year to successfully complete the layout of branches in four first-tier cities, from talent reserve training to branch opening, recruitment, training and optimization.
The sales leads of direct selling may come from market leads, or from the self-development of sales representatives and the referral of their own customers. Because the direct selling team can meet customers and have deeper offline interaction with customers, it has more advantages in self-development than electric sales. Therefore, direct selling can make a regional market deeper.
From the practice of domestic SaaS companies, in the cost structure of direct selling teams, the marketing rate (the sum of sales and market expenses ÷ sales revenue) is mostly between 60% and 90%. Therefore, the cost is relatively high, and the gross profit of new customers in the first year is not very good.
To sum up briefly, the characteristics of the direct selling team are: "fast replication, less coverage, deep penetration and low gross profit".
Let’s make a simple division, and call the fast one-sided sales team with a unit price of 10,000 ~ 80,000 customers "direct sales team"; The "KA team" is the sales team whose customer unit price is more than 80,000 yuan and needs to provide solutions to customers.
Compared with direct selling, KA has higher requirements for sales representatives’ product ability, solution ability and ability to understand customers’ business.
As you can imagine, according to such requirements, the speed of KA team training talents is limited, and it also takes a long time to dig people from outside the company and integrate them into the company’s organization and culture. The management complexity of KA team is less than that of direct selling team. KA management is more driven by values and performance goals, and its process management complexity is not as high as that of direct selling teams. KA process management focuses more on business-side capabilities such as sorting orders.
Regarding the degree of dependence on market clues, the KA team has two extremes. What I see is usually that the KA team of universal tool SaaS relies heavily on market clues; However, the sales representatives of big customers in SaaS companies often gain the trust and business opportunities of big customers through their own mixed industry circles.
Getting a KA account often involves many roles such as pre-sales, service, product research and development, and the per capita annual output far exceeds that of the direct selling team, so the marketing rate of KA team is often not high, and the company’s Mao Lijiao is good.
Summarize the characteristics of KA team: "slow replication, large customers, deep penetration and high gross profit".
These characteristics will affect the salary performance design of telemarketing, direct selling and KA teams. How to design specifically, please see my related article: (67) Annual Salary and Incentive Design #SaaS Entrepreneurship Roadmap #
My agent here does not include a System Integrator who can do customized development and system integration for big customers, but only refers to a relatively pure sales agent.
Should SaaS companies build agency channels? I have an article devoted to it. Interested readers can read it: SaaS entrepreneurship roadmap (54) Discussion on channel value.
This article only discusses the way of channel agency, which is different from direct sales and electricity sales for SaaS companies.
Channel construction is a long process. If SaaS companies want to build a channel department, they must have a long-term investment plan.
It is not easy to convince a large number of agents at the beginning. It is necessary to invest heavily in supporting several high-quality agents and set the benchmark. The work of channel management is also relatively complicated, and the talents in the channel department are relatively hard to find.
From the perspective of sales leads, agents should have the ability of self-open source. If they mainly rely on the leads provided by manufacturers, the efficiency may not be as good as that of Saas company’s electricity sales or direct sales. The purpose of cooperating with agents in second-and third-tier cities is to dig deep into the regional market, so agents should have the ability to penetrate the local market.
In the design of channel system, service problems are often considered. The agent is a very suitable service subject in the local area. The customer success department of SaaS company should coordinate the national customer service and renewal rate targets, and agents can’t get something for nothing, and they can get corresponding returns by contributing to the service and renewal.
In the second, third and fourth tier cities, although labor is much cheaper than direct selling teams, its transaction efficiency is often not as good as direct selling. At present, the proportion of new single share and renewal share distributed by most SaaS companies to agents is not low (generally between 50% and 70%), and the gross profit margin of channel agency is relatively low when the cost of channel department itself is included.
Summarize the characteristics of the channel agent team: "Replication is slow first and then fast, with deep penetration and low gross profit".
After talking about the characteristics and limitations of each team, we can also talk about how these teams are matched for different products and markets.
Combination a, electricity sales+direct sales
This is a common combination. The telemarketing team is responsible for the national small orders (below 10,000 ~ 20,000), and the larger business opportunities are handed over to the local or nearby direct selling team for door-to-door transactions. Market leads are graded by SDR team.
Combination b, direct selling +KA
This is more suitable for customers with a large unit price span, ranging from 20,000 to 80,000 for direct selling teams to 100,000 to 200,000 for KA teams that need solutions. The division between them can be made by the directory system, and KA is responsible for the big customers in the directory; Other target customers are divided into local direct sales teams by region.
Combination C, Direct Selling+Channel
Direct selling is responsible for first-tier cities, and second, third and fourth-tier cities are handed over to channel agents. Both sides need to have clear geographical boundaries and reduce friction. Let the local direct sales and agency teams feel at ease to dig deep into the local market.
Combination d, channel+KA
The manufacturer (KA) is only a big customer, and the national flight contract is signed. Hand over all small and medium-sized customers to channel agents to complete signing and service. Different from the way that Group C strictly divides customer resources by region, Group D is divided according to customer size; There will be many intermediate areas in this division, and conflicts are inevitable.
Like Kingdee’s ERP products, it would certainly be better to use high, medium and low-level products (EAS/K3/KIS) to separate the boundary between KA and agents. However, SaaS companies’ products are organized in different ways and should not be so complicated.
In addition to the combination of the above two team types, there are also SaaS companies that choose to combine three teams. In this way, the complexity is higher, and it is necessary to design a more efficient division of rights, responsibilities and interests of regions, resources, new purchases/additional purchases/renewal fees.
This article is the last article in the planning series for 2019-2020 (if you write it later, you won’t need it after you finish planning). Let me summarize it. Welcome to read and exchange messages:
"Year-end planning series"
(66) Annual business plan of SaaS enterprises #SaaS entrepreneurship roadmap #
(67) Annual Salary and Incentive Design #SaaS Entrepreneurship Roadmap #
(68) Thinking Framework for Designing Company Organizational Structure #SaaS Entrepreneurship Roadmap #
# Business Sense Wu #(8) Planning should not be limited by the shortcomings of existing talents.
At the end of the year, I carefully created a course to help the business team develop: copying transactions-copying talents-copying teams. Tell the story of leading the team’s monthly performance to increase 60 times in 18 months and the management ideas behind it. Click to view related information.