As we covered in my previous article, one of the first things to think about when considering sales are your routes to market – how many would you say you have? Last time we looked at the most obvious one – what I call “direct”. This week we will look at “indirect”.
Reciprocal is the first type of the indirect marketing route. This is where you identify people you like and trust, and who are ready, willing and able to refer qualified opportunities to you, in the expectation that you would be equally prepared to do the same for them. In this type of arrangement, which is informal, no money changes hands. You are much better off having a handful of these types of relationships that really deliver, rather than a vast number that deliver nothing and effectively waste your time.
The second type is fee-based, preferably on a mutual as opposed to one-way basis. This, in effect, means that the originator of the opportunity pays the other a fee for sourcing the work. This can be a significant source of business for you, but you need to bear a few things in mind:
- There has to be a platform of mutual trust to begin with, otherwise you have nothing to build on.
- The arrangement has to be documented.
- The fee split has to be sufficiently interesting to motivate people to spend time finding work for you (and vice versa of course!). I would suggest 10% of revenue if it is a straight referral, maybe up to 20% if the other party is actively involved in the sales process and actually helps you close the deal.
- The duration of the agreement should probably be finite – again I would suggest 12 months from when the works starts; in year two you are in all likelihood being retained on your own efforts.
- There needs to be transparency and honesty at all times between you and the other party in terms of work undertaken and fees earned.
So, in the case of this route to market, you are succeeding or failing based on your ability to build relationships with others who will channel meaningful and relevant opportunities to you.
In my next article, we will look at how you can take this one step further and identify people with whom you can collaborate to win business you could not win on your own.