Want to grow sales without having to hire? Fractional sales is an excellent solution.
WHAT is FRACTIONAL SALES?
Fractional sales is a new term for hiring a part-time sales and business development contractor, instead of a permanent full-time person.
The word ‘fractional’ has been increasing in awareness over the last five years or so in New Zealand. Of course, part-time contractors have been around for many years now – we’ve just acquired new language to describe it.
Your fractional sales hire is a part-time contractor, who comes in to help you solve a sales revenue problem, and then leaves when it is solved. Fractional sales can be project-based, for a specific reason and length of time in your business. Or you can bring that part-time sales contractor into your business on retainer, on an ongoing basis.
A BRIEF HISTORY OF FRACTIONAL SALES
Ten years ago, there were only two options to grow your sales:
1. Hiring a full-time salesperson
Hiring full-time is often too expensive for small and medium-sized businesses. So, they delay getting sales capability onboard, and often get stuck at a revenue ceiling, with no way of getting the sales growth expertise they need.
Want to hire a full-time sales rep or BDM? You’ll need to budget $100K -$150K.
Some of the costs for your full-time sales hire include:
- Salary costs
- Holiday pay
- Sick pay
- KiwiSaver
- Special leave
- Training and development
- Health insurance and benefits
- Office space and equipment costs
- HR and payroll costs
Add in ramp-up time and onboarding. Hiring that full-time salesperson is a big risk, especially for a small business making your first sales hire. Nobody wants to have to manage out a bad hire, or deal with the fallout when your sales pipeline fails to progress.
2. Hiring a telemarketing firm
Hiring a telemarketing firm to do cold calls is the second option but comes with its own risks. There’s the risk of data being recycled for your competitors’ sales campaigns, and the challenges of unfamiliar accents that often fail to connect with Kiwi clients.
How fractional sales got started in New Zealand
Enter outsourced or fractional sales – the midpoint between these two options.
- You get the sales capability you need
- Across the whole sales and business development spectrum
Without having to hire full-time.
Fractional or outsourced sales started about ten years ago in New Zealand, in response to SMEs who wanted access to sales expertise without the full-time price tag.
Going fractional takes the risk out of hiring full-time, giving SMEs access to part-time sales experts they wouldn’t normally be able to afford.
WHAT DOES A FRACTIONAL SALESPERSON DO?
Your fractional salesperson does everything that a full-time business development manager would do.
Magnify specialises in fractional, outsourced sales and business development.
Fractional sales projects are based around all or part of your sales process:
- Sales and go-to-market strategy
- Sales set up and CRM – systems to streamline your sales process
- Go-to-market services – reach new customers
- Sales development – book meeting opportunities with your new ideal clients
- Business development – manage your full sales cycle right through to closing sales
- Advisory and sales training – grow your internal sales capability
Your fractional or contract sales resource should bring in revenue, and get you set up for sales success. This includes getting you ready to hire your first salesperson.
Expect them to slot in alongside your team to scale, representing your business to new clients – complete with your business e-mail address and login for your CRM.
Agreements are structured much like a full-time BDM – your very own Business Development Manager. You both agree on sales goals to be achieved. Remuneration is via a flat fee, or can include commission and/or bonus options to celebrate achieving your sales goals.
WHAT RESULTS DOES FRACTIONAL SALES DELIVER?
Fractional sales is an excellent option, especially for SMEs.
1. Targeted sales expertise
Targeted, fractional sales expertise is focused on a specific outcome to deliver results. As an outsourced, fractional salesperson, when you have two days of resource each week to deliver maximum return on investment; this really focuses your efforts, forcing you to prioritise the best sales activities.
Any sales action needs to pass this filter – ‘What action has the greatest likelihood of putting money into the business bank account?’ Unnecessary administration and ‘nice-to-haves’ quickly fade as you choose the most direct actions to reach your revenue growth goals.
An experienced BDM knows exactly where to tap to unblock your sales pipeline. This means a faster ramp up time, and faster sales results.
2. Full-time salespeople are not selling 100 per cent of the time
This is a huge factor in the success of fractional sales and business development. From a quick Internet search, statistics commonly agree that full-time salespeople are only selling for 28 to 36 per cent of their available time. The balance of their time – a whopping 64 to 72 per cent – is spent on non-revenue generating activities.
These non-revenue generating activities include:
- Admin
- CRM updates
- Data entry
- Internal meetings
- Reporting
- Travel time
And of course, water-cooler time (social interactions).
While these activities have their place, they do not directly result in sales. AI removes friction across the sales process, but does not completely remove all non-revenue generating activities.
Removing these non-revenue generating activities leaves just 28 to 36 per cent of a full-time sales resource.
Fractional or outsourced sales strips away non-revenue generating activities; and has a total focus on moving the needle on your sales results.
This means your fractional salesperson only needs one or two days per week (20 to 40 per cent of a full-time sales resource) to deliver sales results equivalent to, or just slightly below, your full-time sales hire.
Yes, your fractional BDM is effectively selling for the same amount of time as a full-time employee.
IS FRACTIONAL SALES RIGHT FOR YOUR BUSINESS?
Fractional sales is a good option for SMEs, and for specific use cases in larger businesses.
Part Two of this series on fractional sales will discuss:
- Fractional business development as part of a go-to-market strategy for small and medium businesses – especially when moving from founder-led growth to scaling revenue.
- Where to use fractional sales for best results.
Ideas and insights from Mary Crampton, Magnify Consulting
