All sorts of good things happen when a sale is made. And in business-to-business settings, sales result from connections. A lot has been written in recent years about the connection economy. Seth Godin often speaks of the trust that is engendered when proper connections are made, and the critical exchange of ideas that can result. Ted Rubin, who coined the phrase Return on Relationships (ROR), makes a strong argument that creating and maintaining relationships can positively influence financial returns (ROI).
Selling might actually be more about connecting than selling. So, how can we connect in more meaningful ways with more people?
Certainly, technology offers multiple methods of connection that didn’t exist just a couple of decades ago. Email, texting, Twitter, Facebook, YouTube and other venues facilitate the mass dissemination of messages that, ideally, will connect with the right people. Online marketplaces also provide connection points for buyers and sellers. But technology alone may not be enough to create Rubin’s ROR, or foster Godin’s critical trust factor.
Most companies use tech to enhance the sales process. They get prospects into a funnel and move them from step to step with the hope that they can build a relationship along the way, and eventually make a sale. One entrepreneur looks at it a little differently. “While others see sales as a process, we see it as a problem to be solved. And the best solution is a sales professional who already has the relationship,” says Ankur Srivastava, Co-Founder and CEO of Swarmsales.
Srivastava and team may be onto something. Their methodology is a combination of technology, human relationships and fast connection between buyer and seller. This new approach could be the prototype for the next generation of B2B sales practices. In an interview with Srivastava, I’ve isolated the working parts of his solution.
An alternative to the internal sales force
Most often, companies hire in-house sales teams to prospect and sell. This tried and true practice gives a measure of control over how the sales team operates. The message, collaterals, tools, pitch deck, CRM and other components are managed by the company. The sales team is then charged with the task of creating relationships that lead to sales. They do this by forming trusted connections with prospects.
The Swarmsales method is the reverse of the standard practice, because it begins with the trusted connection and relationship. Srivastava explains, “We created a straightforward marketplace that allows any company to identify another company they wish to penetrate. Sales professionals in our marketplace who have existing relationships with buyers in the target company can respond, offer their credentials and, if selected, begin the sales cycle almost immediately.”
Anyone who has tried to cold-call or get past gatekeepers can appreciate the benefits afforded by an existing, warm relationship. This method doesn’t create connections as much as it hits the ground running with them.
Pay compensation along the way
The vast majority of companies pay their sales professionals commissions after a sale closes. This is often in addition to a base salary. For the company, this creates both a fixed financial obligation (base pay), and variable compensation (commission). When building a sales team from scratch, it’s not unusual to pay the base salary for the entire team for many months before sales begin to come in. That can be a hefty fixed expense to float.
The Swarmsales method involves no fixed cost, but there is some compensation earned by the sales professional before the actual sale happens. “We’ve experimented with various compensation plans, and here’s what we found: Sales professionals are excited to receive partial payments upon the milestones of Introduction, Demo, Pilot and Close,” reports Srivastava. “At the same time, companies are happy to make partial payment for the value created at each step.”
The bulk of the total compensation is still paid when the deal closes, aligning the interests of both the company and the agent. There is no upward limit on compensation or number of deals per sales professional. And companies are free to choose those who have the most strategic relationships and can best represent them.
This approach is in some ways similar to paying a finders fee, but it is more comprehensive and formal. It is also comparable to selling through an existing channel, without having to commit to a potentially larger number of reps. It may offer a viable alternative to more common practices, especially if those practices are not yielding desired results, or are too costly to scale.
To date, this new way of connecting has raised $1.2M in funding, and attracted 124 companies and 1,700 sales professionals. We’ll watch to determine if it is an idea whose time has come.
