XXXINDIA: A SALES MANAGEMENT STRATEGY DILEMMA

INTRODUCE THE CHARACTERS AND ECONOMIC SITUATION

.: CEO of XXXindia – he is the founder and makes all the strategic decisions for the company.
He leads a team of managers and developers who are responsible for executing the project. Till
date the responsibility of generation of leads and marketing of the company lies with CEO alone.

CEO is assisted by a presales team which consults the clients and estimate projects. They are
responsible for showcasing the company’s capability, responding to RFI/Q and converting the
leads. XXXIndia primarily has been working on projects in consumer Internet space and has
little experience in Business Solutions. The issues that the company faces is no visibility of work
on the available sales channel and most importantly, no branding and Positioning.

The opportunity: The Company has undertaken some medium scale opportunities and started
investing in uncommon technologies like flex, mobile app development that has opened new
channels of growth beyond the conventional website design and development jobs.

MOVE FROM DESIGN TO TECHNOLOGY

As the market grows more and more competitive with more professionals stepping into the field
of web design, new companies and freelancers are mushrooming at a very fast pace. A city like
Chandigarh alone has 285 companies which do the same work. Every year the number is
growing. With other companies trying to make a mark for themselves, offering lesser prices,
flexibility in the deliverables as well as availability, the only possible move was to move up and
offer more complex and involved services.

BRIEF BACK GROUND OF XXXINDIA

XXXIndia is a full service web design and development company with a team of 165 people.
The company has been in business since the year 2000 and have since then come a long way. The
company is at present based out of Rajiv Gandhi Chandigarh Technology Park. Average cost of
each project it does is around 12,000 USD with a margin of around 30%.

It has grown from 0 to 12 crores in revenue in past 9 years, it has built its own campus of a
seating capacity of around 500+ people in Chandigarh, and it has 165 employees based out of
Chandigarh

PROBLEM AND VISION

95% of the XXXIndia revenue is exports to US, UK and Australia. Most of the leads right now
are coming through referral, repeat business and whenever there is need Google Ads are used to
generate leads.

To grow and get larger projects, XXXIndia needs to have Business Development Managers in
the different Geographies from where it generates revenue. CEO needs to decide when it should
go for opening offices or which one single model or mix of model should be work on.

ALTERNATIVES

HIRE SALES MANAGERS IN LONDON AND US

1. Business Development Managers would be based in London and Silicon Valley and will
then scale to other major business centers of the world like Sydney, New York, etc

2. The Average salary of each Business Development Manager would be 50,000 GBP and
other expenses will add another 20,000 GBP making total costs as 70000 GBP +
commission which will be around 60 Lakhs or 5% of the revenue for each Sales Manager.

3. If XXXIndia hires at both locations US and UK, they will cost 10% of the topline and eat
up 30% of the OMBT.

4. With Economic downturn impacting the industry and layoff, the scenario has turned
hyper competitive. For break even point the total sales each sales rep has to generate
revenue of around 250K GBP, margin of projects is around 30%. With average size of
each project as 15K GBP and only 5% of the leads getting converted into projects, each
sales rep has to generate around 30 good leads a month. Generating so many leads will
require lot of Visibility, travel and advertisement increasing the cost further.

5. In addition a team of 6 Tech Sales Team would be required in India to respond to the
customer requests and submit proposed solutions.

6. But this is the only way to create branding and visibility in the market. In addition to this
larger the deal size, the more influence this factor has in closing the deal.

BUILD AN INSIDE SALES TEAM IN INDIA WITH REGULAR TRAVEL TO

CUSTOMERS LOCATIONS

1. XXXIndia can hire the 4 Inside sales rep who work in US and UK time zones. They will
cost around 9 lakhs each.

2. In addition to closer bigger accounts and deals the sales rep can travel to the actual
location or travel every month for a week and meet all the prospects. The additional cost
would be around, 1.5 lakhs per trip.
 3. The cost of this approach would be around 5-7% of the revenue. The cost of this option is
half of the first option.

4. The problems faced would be if the customer wants an early meeting then the visa,
tickets and cost will be an issue.

5. In addition generating leads would be difficult compared to option 1 and like Option 1 a
team of 6 Tech Sales Team would be required.

USE WEB 2.0

Use the second Generation Web 2.0 for Sales Management using the Tech sales Support team.

With availability of data and information available online, it can be leveraged to help customer in
buying decision. Case studies are downloadable. Customer references, forums and groups from
where the information about the vendor is easily available. With Social Networks people can get
opinions in minutes, with Google it will be in few macro seconds. XXXIndia can use Google
Ads to advertise and create awareness.

Sales Stage Web 2.0 tools

Lead Generation Google Ads

Blogs/SEO/SEM
Social Media/Network
Engage with customer Skype
Video/YouTube
Web Meeting
Close the Sales/Propose Solution Skype
Web Meeting

Out of the above only Google ads are being targeted right now. CEO spends approximately 1
lakh per month to generate leads through PPC

Other channels like blogs, SEO, social media and videos have not been targeted actively.

Here is a typical breakup of the costs of this exercise:

S. Requiremen Description Cost One time/ Converted

No. t recurring Leads by
all analysts
 1. Salary of Basics: It is recommended that the Rs. 50000 Recurrin
analyst salary has a pay + benefit structure g
2. Notebooks Basics: A notebook will be needed to Rs. 30000 One time
make sure that the analysts have
seamless connectivity
3. Internet Basics: Wireless broadband Rs. 1500 Recurrin
Connectivit connectivity g
y
4. Social Lead generation tool: Notable sites Rs. 1200 Recurrin 10
Media which can generate a lot of business g
are LinkedIn and FaceBook
Video/ Lead generation tool: Videos of case Free Free 5
YouTube studies could strengthen client’s
beliefs about the company and the
processes followed
5. Blogs Lead generation tool: One time blog Rs. 40,000 One time 10
setup – this will be approximately 40
hours worth of work
SEO/SEM Support tool: The blogs done will Rs. 9,600 Recurrin
need about 10 hours worth of work g
every month
Skype credit Conversion tool: Skype can be used Rs. 700 Recurrin
to make cheap calls to the client. g
6. Webmeeting Conversion tool: This will be used to Free None
convert potential leads by
showcasing demos of work already
done

Potential work generated by the above exercise per quarter will be:

Type of Lead Description Number of Value

projects

High Value These are very high value leads 1 $50,000

coming from end customers
which are looking to deploy a
new software or change an old
 one example:
- custom made accounting
systems
- custom made CRMs
- inventory management systems
- Ecommerce portals
Low value – repeat These type of customers are web 3 $10,000
business design companies, they will yield
low value projects to start with
but can give repeat business in
the long term
Low value one time These are small shops and 12 $1,000
business businesses which need site done.

To close the High value Deal one travel to customer location would be required which would
cost 1.5Lakhs.

With this option there is very little chance of getting projects of value more than $100,000 and in
addition getting leads would be difficult.

LOCAL ALLIANCES/PARTNERS IN EACH COUNTRY

This is a relatively new model that is being explored with one partner in Australia. The upside of
this is model are

1. No Additional cost

2. All leads are converted – there is no channel competition at our level and lead
qualification is done by the partner.

The down side of local alliances is:

1. Reduced Margin

o Local Partner takes 18% of the total revenue it generates.

o All the Projects are in overrun. The top management does not seem agree to push-
back on the extra work since the relationship is highly valued and its being
assumed that with passage of time the overruns will come under control. So there
are hidden costs of doing this business.
2. Cannot explore other customers/prospects in the same area, No Physical presence in the
Geographical harming the long term branding in the country

3. Local Partner takes credit of all the Good Brand Equity.

4. Another important factor to consider is the pressure exerted on presales. Since the client
tends to pass and push all leads (typically 5 leads a day) to XXXIndia and demands very
quick turnaround, which result in loss of quality in all quotes (clients and others).

Any option CEO chooses will have long time impact in terms of Growth and Margin.