When it comes to selling a consultancy firm, a sales and marketing deficit can expose the firm to three equity value risks:
- Any business that does not invest in sales is less likely to scale to a sellable size with enough equity value for owners
- Without a demonstrable process, data or evidence to show revenue growth is within your control, buyers are less likely to have confidence in your long-term forecast or place any value on it
- The most damaging ‘deal breaker’ event in a sales process is revenue results dropping off during due diligence, and that is the risk you run without a sales engine.
A sales engine keeps your pipeline brimming with new opportunities and booked work. It gives your consultancy the luxury of controlling how fast the business can scale. Then when you sell, it will add significantly to the value a buyer places on your firm.
Here are ten essential components in a sales engine any consulting firm should adhere to:
1. Invest – This is an investment, not a cost, so allocate resources to your sales engine; about 4-8% of revenues as a rule of thumb
2. Automate – You will not be able to operate your sales engine as you scale without automation, or you will soon lose business by being out of control with your contact base. Therefore invest in integrated website, CRM and email systems that talk to each other
3. Messages – Spend some time understanding your audience needs and wants, then tailor your messaging to what they want to hear, making sure it’s something they can relate to
4. Content – Content is King. Developing relevant, engaging content is a non-negotiable element of the sales and marketing process
5. Database – it is important to continue to grow your database either by acquiring them organically or from a third party. You should aim to establish and maintain complete coverage of your target market
6. Campaigns – Now that you have content to share and a robust database, run an intelligent selection of campaigns to reach your target market
7. Measure – If you can’t measure it, don’t do it. Measure the results of all your campaigns to improve efficiency and effectiveness of the sales engine
8. Leads – It is important to manage any lead you develop. Make sure to follow-up all leads even after the initial interaction
9. Pipeline – Once a lead becomes a prospect, manage and build the relationship by maintaining frequent interaction with your key contact
10. Clients – Leverage the relationships you have with clients. To further your sales pipeline, remember to measure client satisfaction and ask for referrals
Once a consultancy firm has executed all of the above and can maintain the sales engine when the time comes to sell, it will be in a stronger position to:
- Demonstrate a historic track record of revenue growth – assuming you have also been managing gross and net margins as well
- Buyers might initially be sceptical about your forecast, but with historical data you’ll be able to reassure them of the reliability of your future sales pipeline
All of these combined will give a buyer confidence in the future potential of the business, thereby allowing you to command a premium price for your consultancy on favourable terms.
If you’d like to read more about building a sales engine, please read the full article here.
You might also be interested in watching our webinar on using the sales and marketing process effectively.
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