Who’s your ideal client? If you plan on describing someone in the C-Suite of Fortune a 500 company, let me get out my calculator.
This is going to get expensive.
Almost every day I hear from owners that want to grow, work on big projects, and cut out the middleman. “We want to deal directly with the buyer – the Decision-Maker.”
What’s your beef with the middleman? “They take too big of a cut. That’s money I could be making. Plus, it adds another gatekeeper. We need to communicate directly with the economic buyer in order to meet their needs.”
Ah, now I understand. You don’t realize that middleman exists because your ideal buyer doesn’t want to pay you that “extra” money. They are buying insurance against – well, you. Now, you want to tell them that you are all the insurance they need, how wrong they are? Awkward.
And I suspect that the middleman is keeping you at arm’s length precisely because you covet their customer. Basically, you are not trustworthy. You are not respecting the sales channel.
But let’s look at this another way.
The middleman is providing a valuable service to you.
Agencies, Producers, General Contractors, Architects, Designers, and Technical Directors are not your nemesis unless you are one of them. They are specialists, part of the value chain. Sure, you can perform many of their tasks, but that doesn’t consider the value these services are providing to you, free of charge.
Let’s do some math. Let’s say your ideal targets are all on the Fortune 5000 list. On average, let’s assume there are ten ideal buyers per organization (there might be hundreds in some of the big ones!). 50,000 targets – 99% of whom you do not even know their names.
You could hire an enormous sales team, contract client acquisition specialists, and spend a ton on promotions, or…sell to the much smaller pool of companies that are already targeting the business you would like to do.
These middlemen are not taking your gross profit, they are saving you selling overhead.
Here are three priceless benefits of leveraging the supply chain instead of bypassing it:
Think of your middleman customer as someone that is out there finding business for you. They are selling a package that hopefully includes you specifically, but is at least potential business for you.
I was once hired by a company that was trying to bypass the creative producer channel they had traditionally served. Their theory was that they could have more control over the project and win the extra revenue. What they missed was that their cost of acquiring a new client was astronomical.
In order to compete they added Art Directors and Designers and Animators and Line Producers, and others…simply to qualify to bid on projects. That took their cost of client acquisition from a reasonable 10% of revenue to almost 30%. The added business did not begin to cover those costs and profits tanked.
The solution was to embrace the middleman, earn their trust, and become part of the team that worked directly with the end-client.
Imagine having twenty, fifty, or one hundred middlemen out there pounding the pavement for business. They are reaching regions, segments, and industries you didn’t even know existed.
This business development arm is not costing you a penny other than what you would already do to win their business. If you are partnered with them, then they are an extension of your sales team.
Even if you are aligned with these buyers, you will see more opportunities than you could reasonably acquire on your own. In the end, more of your industry will know who you are.
Variety of Project
One of my earlier clients was completely focused – or should I say, wrapped up – in one kind of project. That’s all they did. Guess what? It wasn’t recession-proof.
After some retooling and learning how to embrace different opportunities, they were able to recover and thrive again.
What made the difference was supporting Event Producers that needed my client’s expertise and experience. Those new clients brought in more diverse projects, new seasons to be busy, and ideas to innovate – things their old clients couldn’t deliver.
As a business you need to embrace your ideal customer more than you love the projects they have. They may be actors in the middle of the transaction, but they are sourcing work for you. You can bypass this channel if you want, but be prepared to retool your sales model and invest in business development.