The term "travel budget" has never meant much to Eric Elfman, CEO of Houston software company DataCert. In 2003, when potential client General Electric (NYSE:GE) requested due diligence information on Elfman's company, he hand-delivered the documents to GE's headquarters in Fairfield, Connecticut, along with three other DataCert staffers, including chief technology officer Eric Smith. The trip cost roughly $20,000, but the extra effort paid off: The next day, DataCert landed the deal.
It was no fluke. DataCert plows hundreds of thousands of dollars into plane tickets and hotel rooms each year, requiring employees in a variety of departments--from account representatives to software developers--to meet with prospective clients in person during crucial points in the sales process, often at a moment's notice. "I've rarely gone on a sales call alone," says Paul Zengilowski, the company's director of product marketing. "Our people really know the technical and business problems, and when I show up with them, it demonstrates the depth of the company."
This kind of aggressiveness may seem excessive. But many companies, particularly those selling sophisticated products to other businesses, would be smart to adopt a similar approach to wooing customers, according to Das Narayandas, a Harvard Business School professor who specializes in sales-force management and business-to-business marketing. Companies selling complex products can no longer afford to send a lone salesperson, or even a team of salespeople, to meet with potential clients, he says. Instead, businesses must involve a variety of employees in the sales process, leveraging different parts of the company to create a more consulting-based style. "Flooding the field is a great way to reach a tipping point where the customer finally gets it," Narayandas says. The strategy is potentially even more powerful now that many companies eschew in-person meetings for Web demos and video conferences.
DataCert's team strategy was born out of necessity when Elfman and Smith founded the company in 1998. "When we made our first sale, there were only four or five people in the company," Elfman says. "DataCert was a speck compared to other businesses." Rather than rely on telephone sales and remote demos, the partners decided to meet with potential clients in person, bringing along as much of their team as possible. It was a huge investment for a start-up, Elfman says, but it worked: An in-person meeting with several DataCert staffers helped win over a wary UPS (NYSE:UPS) executive, and the shipping company became DataCert's first major contract. "It made a big difference in our decision to go with them," recalls Cyndie Cox, former technology manager of UPS's legal department.
Now that DataCert boasts an impressive roster of blue chip clients, including Microsoft and AT&T, it no longer has as much to prove. But the company's commando-style sales strategy remains the same. These days, about 40 of DataCert's 120 employees are dispatched on sales calls regularly, with teams of between four and six staffers meeting with each sales prospect about half a dozen times. The process has become increasingly tricky to manage as the company has grown. To maintain some semblance of structure, regional sales managers decide which employees should attend each meeting. "We encourage them to bring additional resources to each engagement as aggressively as possible," says Zengilowski. If a contact seems confused about technical aspects of a software program, for instance, the account manager might ask an engineer to give a demonstration.
In many instances, travel plans must be made on the fly, so staffers are permitted to handle their own arrangements. A companywide policy helps keep costs in check by providing guidelines on, say, how much hotel rooms should cost in different cities, and DataCert's senior vice president of sales and marketing, Jeff Bolke, keeps tabs on overall spending. Luxuries like first-class plane tickets are strictly forbidden. "Our co-founders fly coach, so that's the culture," says Zengilowski.
Despite the low-budget ethos, DataCert spends about $100,000 courting each prospective client, often plunking down $30,000 on travel expenses alone. "Our cost of customer acquisition is higher than our competitors', but in the end our deals yield more revenue because of our business model," Elfman says. A yearly subscription to DataCert's service costs $100,000 to $200,000, and fees paid by participating law firms can increase the value of a contract to $500,000 a year. "In essence they're leasing from us," Elfman says. "In year two through infinity, the margin is huge." DataCert's approach doesn't always work. For example, Elfman and five staffers recently made several pricey trips to London to meet with a potential client, only to lose out to another company. It wasn't easy to write off all that time and money, but Elfman has no regrets. "The only way we ever would have won the account is by staffing it the way we did," he insists. "Otherwise we never would have had a shot."
ResourcesFor more information on business travel trends, check out the website of Carlson Wagonlit Travel.