I recently wrote an article positing some basic ideas on Sales 2.0 here. In the aftermath of the article, I met some very interesting folks doing some very interesting things. I’d take it even further — I think we are on the forefront of seeing a sea-change in Sales 2.0 technologies and their implementations in the World 1.0. More on that later.
I had a chance to sit with Evan Sohn, founder and CEO of SalesConx, a leading Sales 2.0 platform that allows buyers and sellers of leads to connect and do business. It’s been called “Where LinkedIn meets Ebay”. The interview takes place below…
Tell me a bit about yourself, Evan.
Evan Sohn, CEO: I’m a New Yorker by birth and moved out to the burbs a couple of years ago. This is my 5th company. I started my first company after graduating business school at NYU and that firm was acquired by a division of D&B in 1998. That firm was focused on mobile computing. My most recent firm was called Omnipod and focused on the enterprise messaging space. It was bought by MessageLabs, based in the UK, in 2005. After the M&A, I ran marketing for the Americas for the combined entity.
How did your experience lead to the founding of SalesConx?
ES: At MessageLabs, I thought a lot about lead generation in my role. When I had my own firm, lead generation also preoccupied me. The difference was that from a small company perspective, I had like a $50k/month spend. At MessageLabs, it was like $500k/month after the acquisition.
I was looking at trying to create a different model from what existed for lead gen. Social networking was also starting to take off and we all know that the best way to meet a person is through an introduction. So, I started to think about ways to promote introductions.
Business need to spend on leads. I might as well open the window if I’m willing to spend as a business.
So, where did that take you?
ES: So, I started thinking “How doe we harness the power and the relationships of sales professionals?” We’re talking about a really large community here. I’m not just talking about the 2 million independent sales reps but also the 17 million sales professionals in the U.S. and that’s not counting small business owners who are by definition always selling.
We’ve created a marketplace of buyers and sellers of leads. Typically, companies list what they are looking for (could be a manufacturer of flip-flops looking for retail presence) and how much they are willing to pay for an introduction. Non competitive sales professionals can then make introductions to their network and make some many for the connection.
What industries are most pronounced in your marketplace?
ES: We’re clustered around business services and financial services — selling insurance, financing, commercial mortgages and credit card processing.
How much money typically changes hands?
ES: We see a wide range here: from $25 to $30,000. At the higher end of the spectrum, some of our buyers of connections are also willing to pay a success fee if a transaction occurs. It’s our job to bring targeted buyers to the sellers and we hold onto the payment as the process takes place and deduct our fee after the transaction. There is no fee to register and no fee to list.
Have you gotten feedback that SalesConx is like hanging your contacts out to make a buck?
ES: Listen, it’s not about me getting paid. It’s about what the PR firm would have paid to reach my client. Why not pay me part of that fee. You are not going to introduce someone you met on a bus to your best clients. It’s not going to happen. Territorial sales guys are our typical users looking to make some targest sales. The other person in the transaction had a client base and is looking to leverage his relationships.
Who is your closest competitor?
ES: Most of the activity in this space still takes place at local business networking events, the largest of which is BNI. People meet face to face, swap some business cards and what happens typically is that one guy feeds business to everyone else, doesn’t feel like it’s reciprocated and leaves. And who makes money? BNI does.
Are you nervous about people going around SalesConx?
ES: Listen, disintermediation is something every business has to be concerned with but the reality is that the overall feedback rating system creates more sales opportunities and potentially more money. So, there is definitely an incentive to work through the platform.
How do you structure your fees and how does this compare to LinkedIn’s lack of fees?
ES: Our fee is 20%. If you provide enough value to the buyer, this is not the last lead you’ll need. If you are looking for 3-4 leads per year, this is probably not the marketplace for you. If you are looking for more, then it’s important to use us. By the way, with LinkedIn, you are paying for leads. You’re just paying LinkedIn for the leads, not the person who makes the introduction.
We’ve witnessed an insatiable appetite that sellers have for more customers. I like to put it like this: How many contacts do you have on LinkedIn? 100? 200? How many have bought from you? Not too many.
What’s the next step for you and SalesConx?
ES:We’re continuing to build out the community, growing the marketplace and add more functionality to make it easier for buyers to source qualified sellers and lastly, we’re focused on getting more and better sellers.
How are you bringing in new people to the market?
ES: We have our sellers recruiting new sellers and paying them for it. That’s our model and we live it, too. We also have an association with the LinkedIn Alliance, which has like 50k users.
What keeps you up at night?
ES: Balancing the marketplace. We always have more buyers or sellers and the ratios go back and forth. There’s nothing worse than walking into the store willing to spend money and not finding anything to buy.
Currently, 80% of our users are buyers currently but there is a strong correlation of people who are buyers and sellers. People are doing their own lead generation via their own selling.
What is Sales 2.0 — how do you look at it?
ES: There has been so much written about what to do with the lead after it’s come in the door. Let’s track it, click to talk, lead process. So much has happened here. I went to the Sales 2.0 conference last December I think and it was all about maximizing ROI on a spend. One CIO said that Sales 2.0 is all about making the sales process algorithmic.
I thought and think sales is about relationships. We’re bringing relationships back to the process. Money is the best tell for this and as a metric for feedback, money makes the most sense.
I’ll give you an example. I have U.S. Open tickets. I go every year — year in and year out. I can’t make it this year but I don’t want to just sell the tickets to anybody. I want someone respectable to sit there. I can use Ebay to check a buyer’s credibility. When it comes to introductions to 3rd parties, I need to do that.
Is it hard for a new seller to break into the market?
ES: Like all marketplaces, it takes time to build credibility when you don’t start with any. New sellers can break in but may need to start by pricing aggressively.
What about my tolerance for multiple networks? Do users have time and brain space to participate in multiple networks?
ES: As a consultant, it makes sense for you to be on multiple networks — it only increases your visibility. We are witnessing the new networker. It used to be that people had 100, 200 contacts. A recruiter would have 1000. Now, we are seeing people with tens of thousands of contacts. Getting a person’s name is so much easier now. What’s harder is getting that person to pay attention. That’s where we come in.
Evan, thanks for your time.
