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Thanks for the comment. Very helpful. Our product is targeted at end consumers at a yearly subscription. This person wants to sell our service to companies on

Thanks for the comment. Very helpful. Our product is targeted at end consumers at a yearly subscription. This person wants to sell our service to companies on a monthly basis (contracted for a full year). The sale would be in batch for revenue of $100k+ per customer (who would have to be able to sell it to enough consumers on the other end). I think this falls in line with what you're saying would work. The idea of opening it up is very interesting. I knew from the start that the success would be tied to distribution. I didn't think of "sales" as one of the distribution channels but rather thought in terms of business development. At the end of the day it may be two terms for the same thing but I'm happy to have stumbled upon this.

bmelton 13y ago
Most of the folks doing business around here are kind of foreign to the concept of high-touch sales. We build our products and sell them for $9.99, $29, or $50 a pop. A 'high-touch' sales process is completely different. If you're selling something at that price point, you need sales people to actively reach out and find customers. On top of that, high-touch sales processes generally involve very long sales cycles. There might be months between the first customer meeting and the actual closing of the sale. For sales people, this means leveraging who they already know that might be interested, because there's often such a long time between targeting a new customer and knowing whether or not they're serious, so for every sale you make, you might have had 10 other sales fail, for any number of reasons. If you have somebody volunteering, that likely means that they know of qualified buyers that they could target to immediately. She might be able to sell to 10 buyers (and put you in a pretty good position) and then run out of contacts. Going from pre-existing, qualified contacts to going to actually having to cold-call, market, and perform lead-gen is a terribly involved process, which she may never do. It would not be insane of you to have a very high churn rate on sales people, swapping them out every time they exhaust their rolodex.
- throwawayques 13y ago
  True and probably why I was more skeptical than I ought to be. She did mention cold calling so that might be a fallback depending on how well her rolodex pans out. Thanks again.
  - bmelton 13y ago
    Any time. The main concerns you have are what the percentages are, and how much margin you can actually afford, as well as what kind of book-keeping is involved to make sure that commissions are paid out if they're paid on future work. Make sure that giving away x% of something is still profitable (obviously), but more importantly, make sure that you're still making enough to acquire new customers, grow the business, etc. You can always raise your prices for new customers, but if you raise your prices on old customers, that means you're paying a higher commission if the commission included future work. Things like that generally take a little bit of tweaking, and of course, you have to pay electric, server costs, hosting, etc. The sales rep doesn't. Years from now, it might be harder to remember which sales rep sold company_x, and what the terms of the arrangement were. We found that the bookkeeping process was quite a pain in the ass. Expect to have to write something custom for that.

bmelton 13y ago

Most of the folks doing business around here are kind of foreign to the concept of high-touch sales. We build our products and sell them for $9.99, $29, or $50 a pop. A 'high-touch' sales process is completely different. If you're selling something at that price point, you need sales people to actively reach out and find customers. On top of that, high-touch sales processes generally involve very long sales cycles. There might be months between the first customer meeting and the actual closing of the sale. For sales people, this means leveraging who they already know that might be interested, because there's often such a long time between targeting a new customer and knowing whether or not they're serious, so for every sale you make, you might have had 10 other sales fail, for any number of reasons. If you have somebody volunteering, that likely means that they know of qualified buyers that they could target to immediately. She might be able to sell to 10 buyers (and put you in a pretty good position) and then run out of contacts. Going from pre-existing, qualified contacts to going to actually having to cold-call, market, and perform lead-gen is a terribly involved process, which she may never do. It would not be insane of you to have a very high churn rate on sales people, swapping them out every time they exhaust their rolodex.

throwawayques 13y ago
True and probably why I was more skeptical than I ought to be. She did mention cold calling so that might be a fallback depending on how well her rolodex pans out. Thanks again.
- bmelton 13y ago
  Any time. The main concerns you have are what the percentages are, and how much margin you can actually afford, as well as what kind of book-keeping is involved to make sure that commissions are paid out if they're paid on future work. Make sure that giving away x% of something is still profitable (obviously), but more importantly, make sure that you're still making enough to acquire new customers, grow the business, etc. You can always raise your prices for new customers, but if you raise your prices on old customers, that means you're paying a higher commission if the commission included future work. Things like that generally take a little bit of tweaking, and of course, you have to pay electric, server costs, hosting, etc. The sales rep doesn't. Years from now, it might be harder to remember which sales rep sold company_x, and what the terms of the arrangement were. We found that the bookkeeping process was quite a pain in the ass. Expect to have to write something custom for that.