According to a 2013 article in Nearshore Americas, Deborah Kops of Sourcing Change said nearshore outsourcers are not very good at marketing, leaving the heavy lifting to government and industry organizations to market their individual countries a whole.
Kops said nearshore outsourcers, “…spend very little money on sales, marketing and branding.” Kops continues, “Marketing is the front door of any business, but outsourcers aren’t very strategic about the sale.”
So what are nearshore providers doing to market their companies and generate business? In a recent series of interviews I conducted with nearshore outsourcers, I identified the following common sales and marketing tactics:
1. Trade Shows and Events
Nearshore outsourcers attend lots of trade shows, conferences, and other events in order to meet possible buyers. There are many conferences and trade shows around the U.S., including several that focus specifically on the nearshore market.
Events and trade shows can be incredible sources of information, networking and business. However, most nearshore outsourcers I have spoken to have overly ambitious expectations from events.
The main attraction for an event is that there will be “buyers” present. Marketing materials for events stress that the standard entry fees are waived for qualified buyers so as to attract the kind of high-level decision-makers nearshore providers want to meet.
However, expectations inevitably are dashed when these events don’t produce the results that are expected. There are typically not enough buyers in the attendance, and there are too many nearshore outsourcers competing for the attention of the limited number of buyers present.
Finally, most outsourcers don’t feel they get the type of ROI they were hoping for rom these events. Few BPO or technology providers from Latin America can track many contracts or sales from events and they eventually stop sponsoring or attending.
2. Hiring Sales People “With a Rolodex”
Another tactic employed by nearshore outsourcers is to hire sales people with industry contacts. They want to hire a super sales person, those rare breeds who can single-handedly generate leads, has the patience to nurture those leads, and can then close large deals with those same leads.
Here again there’s a problem with unrealistic expectations. In many cases these super sales people are expected to start generating revenues in their first 3-6 months of employment. In other words, not only are they expected to find opportunities really quickly, but they are expected to close these opportunities very quickly as well. And they are even expected to close the large 5 and 6 figure deals a nearshore services firm usually covets.
However, this expectation ignores some very important elements. First, the sales cycle. Generating leads through cold-calling or working your network requires dogged persistence and thick skin. It’s a relentless slog to find prospects who are even luke-warm, and rejection is the rule rather than the exception.
This requires a particular type of skill-set that many sales people don’t possess, and it’s why some sales people specialize in prospecting.
Then when a prospect enters into your sales cycle, the sales person must employ a different set of skills. He or she has to build rapport, provide value up front, be a great listener and must be very skilled at asking probing questions while making the prospect feel like he or she is their best friend.
When the prospect enters buying mode, the sales person must be skilled at presenting, continuing to build rapport, and reading the subtle psychological signals that tells him what to say next, when to apply pressure, and when to lay off.
Finally, there’s the close and negotiation, which is another set of skills.
For the large project values that are typical of IT projects or BPO engagements with mid-to-large companies, this process can take anywhere from 6 to 18 months.
Do you have the patience to give the sales person this time? Do you have the budget to maintain a salary that will keep the sales person motivated through the complete process?
Additionally, how easy is it to find a sales person with the exact combination of skills required to take a deal from cold all the way to closure?
Typically most enterprise sales departments divide duties between an inside sales team, a team of hunters who take deals from qualified to close, and a sales engineering team that handles the technical sale. It’s near impossible to find this combination of disparate skill-sets wrapped up into one super sales person.
Many nearshore providers I’ve worked with have built their companies to a certain level of success purely through referrals.
This process typically starts with a large or well-known “anchor” client in the U.S. market that turns into a high profile engagement. These high profile projects are successful because they combine three elements: 1.) A well-known U.S. client, 2.) great project execution, and 3.) prolonged project duration.
Nearshore providers are able to use this “anchor” client as a jumping off point to close more business in the U.S.
First, their contact within the company often refers them to other departments within the same company, especially if the company is a large enterprise with many divisions or departments.
They can also leverage this client for referrals to other companies.
Finally, if there has been some press generated as a result of this initial engagement, such as mention in some industry publication or a local news outlet, this can also generate a type of media-related referral.
However there are limitations to growth of a company from referrals. In a study on referral marketing for professional services firms, Hinge Marketing found that 51.9% of respondents rejected firms that were referred to them before even talking to them.
What were the reasons? There were several actually, but the number one reason was that a full 43.6 % of respondents said they couldn’t understand how the referral could help their firm.
According to the report:
“This is unsurprising – our past research has shown that over 80% of buyers look at a firm’s website to check them out.”
If your marketing materials, the most important of which is your website, are unclear or too focused on your own services instead of delivering value to your prospective clients, you stand the chance of losing a referral from the very beginning.
Nearshore providers have a long way to go when it comes to marketing their companies. So far, with a few exceptions, they have been relying on a series of old school business development tactics in order to expand their presence in the U.S. market. They have relied on trade shows or events, sales people, and referrals.
However, there is an alternative. Nearshore providers can start to market their services to U.S. buyers using the strategies that their target audience use to consumer information: online marketing. They can employ methods such as social media, content marketing and inbound marketing to gain an advantage over other nearshore providers – as well as over outsourcing providers from Asia and Eastern Europe.
In our next post we’ll tackle some of the ways nearshore providers can implement an online marketing approach to the U.S. market.