Replies to This Discussion

Permalink Reply by John G. Self on January 19, 2009 at 6:04pm

Depends on the type and structure of your firm.

It generally takes retained search firms longer, unless the partners have a well established book of business. They have higher overhead in terms of front-end sales costs. So much of what we do is relationship development -- which is why they call selling "rainmaking."

Contingent firms generally can be profitable the first year if they manage the overhead component and are able to start closing a deal or two every month afgter the third or fourth month. But the more you pay yourself, the more the overhead!

When I started, we ran out of the old master bedroom of my partners sprawling home in Tyler. We kept our overhead low and we did OK. But I never liked contingent work because I am not a strong telephone closer for the sales side. We transitioned to retained, hired people and expanded (read: grew) the overhead and there was a period of time -- longer than I would like to admit -- before our revenue caught up with our expenses.

Start small. Have a realistic vision and stay on plan.

Permalink Reply by Alon Kim Dacquel on January 23, 2009 at 12:32am

Of course, the time it takes to turn a profit varies depending on your overhead cost and your fee. I don't think there are any solid statistics on how many cold calls produce a client. I usually try to focus on how many job orders turn into deals. I've been fortunate enough to have a 2:3 ratio (I usually close 2 deals out of every 3 job orders). Focus on your closing ratios because I hear its pretty bad feeling to have 6 job orders and no money coming from them.

Permalink Reply by Michael Saulnier on January 26, 2009 at 1:06am

I always wonder when I see someone build their business plan for their staffing business around cold calling.

My first question... how's that working out for you?

Let me paint a picture.

In EVERY large (and small) staffing agency around the country...

The CEO is looking at the numbers. And they are NOT good.
So they turn to the VP's and say: "Get those numbers up or else."
And the VP's turn to the District Managers and say: "Get those numbers up or else."
And the District Managers turn to the Branch Managers and say: "Get those numbers up or else."
And the Branch Managers turn to the Business Development people and say: "Get those numbers up or else." And we all know what the "or else" means.

And the Business Development people turn to... oh wait. That's right. They don't have anyone else to turn to.

And the Branch Managers say: "Whatever you USED to do... do a LOT more of it."
Of course the activity of the business development people is constantly monitored so they blast out 50, 75, 100 dials a day... but strangely... they're not making a lot of contacts or bringing in a lot of new business... WHY?

Because the hiring managers who are the target of these calls have seen their phone ring off the hook from staffing agency biz dev's... all pitching the same old things... "We know where the great people are... we want to be your "partner"... I've got a great candidates you've just GOT to see."

If YOU were the target of dozens, maybe as many as 50 calls like that EVERY DAY...

Would you be listening to ANY of them?

Nope. The minute you realized that you were on a sales call... you're off of it. And returning voicemails to biz dev's who "REALLY WANT YOUR BUSINESS"... well, they're not going to get many call backs are they.

At staffUP, we've developed a complete "warm call" strategy for business development that relies on relationship building, not "asking for the order". We DISCOURAGE our partners from ever making cold calls. Why waste your time and energy leaving messages that will never be returned when you could be building relationships that could last for years.

This is not a new idea in sales... but somehow, many in our industry don't seem to get it.

Michael Saulnier
staffUP
877-482-8777

Permalink Reply by Alon Kim Dacquel on January 26, 2009 at 6:04am

Warm Call? Could you elaborate a bit on what Staffup does instead of cold calling?


Michael Saulnier said:

I always wonder when I see someone build their business plan for their staffing business around cold calling.

My first question... how's that working out for you?

Let me paint a picture.

In EVERY large (and small) staffing agency around the country...

The CEO is looking at the numbers. And they are NOT good.
So they turn to the VP's and say: "Get those numbers up or else."
And the VP's turn to the District Managers and say: "Get those numbers up or else."
And the District Managers turn to the Branch Managers and say: "Get those numbers up or else."
And the Branch Managers turn to the Business Development people and say: "Get those numbers up or else." And we all know what the "or else" means.

And the Business Development people turn to... oh wait. That's right. They don't have anyone else to turn to.

And the Branch Managers say: "Whatever you USED to do... do a LOT more of it."
Of course the activity of the business development people is constantly monitored so they blast out 50, 75, 100 dials a day... but strangely... they're not making a lot of contacts or bringing in a lot of new business... WHY?

Because the hiring managers who are the target of these calls have seen their phone ring off the hook from staffing agency biz dev's... all pitching the same old things... "We know where the great people are... we want to be your "partner"... I've got a great candidates you've just GOT to see."

If YOU were the target of dozens, maybe as many as 50 calls like that EVERY DAY...

Would you be listening to ANY of them?

Nope. The minute you realized that you were on a sales call... you're off of it. And returning voicemails to biz dev's who "REALLY WANT YOUR BUSINESS"... well, they're not going to get many call backs are they.

At staffUP, we've developed a complete "warm call" strategy for business development that relies on relationship building, not "asking for the order". We DISCOURAGE our partners from ever making cold calls. Why waste your time and energy leaving messages that will never be returned when you could be building relationships that could last for years.

This is not a new idea in sales... but somehow, many in our industry don't seem to get it.

Michael Saulnier
staffUP
877-482-8777

Permalink Reply by KJ on January 30, 2009 at 12:55am

Alon,

Google "warm calling". It's not just putting on a "friendly, warm" voice...it's about legitimately building and leveraging a mutually beneficial relationship. How do you know if warm calling is right/working for you? Count how many times your clients called you to request your services or assistance. If the ratio to your calls out to their calls in is 100:1, then you may not have mastered the warm call. Think about how you felt the last time a client called to specifically ask for your help and you were able to help them...they want to feel that way too when you (or other recruiters call). That's my take on being successful at warm calling in business.



Sig: my contact info left intentionally vague.

Permalink Reply by pam claughton on January 31, 2009 at 11:13am

Honestly, there are no existing matixes because the playing field is not level. Everyone has a different background and skills that will affect these numbers. If you are brand new with few contacts, in this market it will be a longer curve for everything. It's really not about the number of cold calls you make to get clients, it's more about the quality of the call, being smart about who you are targeting, and what you offer when you call. You need to give them a real reason to use you, and I've found that more specific you can get in presenting yourself as a specialist, the more apt they are to use you. Whether it's a specialist in their space, or type of role, you sell your track record of success so they can see you filling the job for them. If you go into your fluffy stuff of how great you company is, you'll lose them, because all staffing firms say a similar thing about superior service, blah, blah blah. It's white noise they don't care about. They just want to know if you'll be able to help them fill the job quickly with a great person.

Then the key isn't how many job orders and new clients you get, it's how many you fill. If you knock yourself out to deliver for a new client, that's how you'll build your business.

Leverage any relationships you already have to try and turn your cold calls into warm calls. See if you know anyone at the companies you're targeting and if so, ask them to introduce you to hiring managers. That is very effective.

Shoot for a placement a month at a minimum. To get to that you'll need to focus on generating as much real activity as possible, and pay attention to your interview to sendout to placement ratios. As my former boss used to say, the numbers don't lie. And if you see that your ratio is say for every 4 sendouts (candidate going to a client) you make one placement, you can then adjust your level of activity accordingly to make sure you get there or better. Interview more candidates, and the rest can fall into place.

Good luck!
Pam