How can you efficiently screen potential clients? What companies should you target and who are most likely to convert?
Our perspective here at LiteBreeze might differ from yours – we sell software development services – but the overall these principles can be applied to a broad range of professional services.
This article contains our internal guidelines for training senior project leaders, business development and sales representatives.
We work with passive sales: the leads come to our website via search engines and our sales work typically starts once the lead contact us via the quote form on our website.
When we quality a professional services lead, we assign a value to it in our LMS/CRM: low, medium or high. Based on this value we decide how much effort to put into it. But how can we qualify a lead?
The following factors impact lead value: conversion rate, ability to charge the right hourly rate, credit risk etc. They are generalizations and there are always exceptions. Starting with the most important factors first:
Assess the financial strength of the potential client through public company registers.
Private individuals and start-ups tend to be a whole lot more budget-sensitive, though we’ve had some success with private start-up projects from financially strong individuals. Such projects have a higher risk of not being successful though, which increases the credit risk.
What countries and regions should be targeted? Companies in financially strong regions have more money to spend and are used to higher prices. Nominal GDP per capita is one measure of financial strength (though far from perfect*) that can help us figure out how much advertising money to spend in a specific region.
This is a generalization and of course there are high-value clients even in lower-GDP-per-capita regions, but on average a lead from such region is just less likely to be high-value.
Another aspect is that the GDP per capita in the biggest cities of a country is typically much higher than the country average. For example, Poland ranks 56th in the world whereas its capital Warsaw has a nominal GDP per capita of around $39000 which would rank Warsaw at the same place as the UK (around 23rd) if it was a country.
Our marketing campaigns are set up with adjustments by country (and sometimes region) to account for this and other factors.
*Some “tax havens” have inflated nominal GDP per capita due to corporate profits being hoarded in such jurisdictions. It doesn’t necessarily mean that a company with a physical presence in such jurisdiction is likely to have more money to spend. Such regions might include Switzerland, Luxembourg, Malta, Ireland, UAE, Singapore, Hong Kong.
The more likely a client is to buy services long-term and with a constant demand, the more valuable it is.
A start-up is more likely to be a project that needs many developers for a limited number of months. The owners might abandon their idea on short notice for external factors. They might for example not be able to market and launch their product as easily as they had planned for.
An established business with existing customers and existing software products is more likely to be stable and long-term .
Development agencies that wish to subcontract projects to us could be stable and long-term, however some risks are added: price-sensitivity, fickleness, tricky rapport-building with actual end-client, more complexity and risk of misunderstandings due to middlemen.
It’d be easier for us to convince a client looking for Laravel developers than someone looking for mobile developers, as we’ve got more experience of Laravel. We can show more relevant developer profiles and case studies. Competition will be lower.
An American client is less likely to work with us than a British, due to the limited overlapping working hours.
Being based in India, we do all project communication in English. This is naturally a smaller cultural barrier to a native English-speaker, but for someone who has English as a second language it can be a deal-breaker. The higher a country scores on the English proficiency index, the more likely we are to be successful with leads from that country.
Our Swedish connection increases our trustworthiness among Swedish leads, but also culturally and linguistically close countries: Norway, Denmark, Finland and to a certain extent the rest of North-Western Europe.
Risk is reduced when we work for clients who have got a technical point of contact in their own offices, such as a lead developer or project manager. Such professionals already understand the agile development concept and that fixed price estimates can’t be given.
If they raise concerns, they can also understand their team better and give their team specific feedback. This reduces the need for our senior staff to get involved in detail. They can even help with coaching, at least when it comes to the code and functionality concepts. When the client is an expert within their field, this will be a job benefit for our developers and a selling point when recruiting talent.
A 40 year old businessman is more likely to have a large project budget, commitment, a well-considered project / marketing plan, and the contacts to succeed, than would a 20-year old student.