Sales Economics and Structure Job Boards

Sales Economics and Structure Job Boards

July 15th, 2014 // 12:11 pm @

Sales PeopleThe economics for Job Boards are unusual (See – Job Board Economics) and those of the sales operation are particularly unusual.

Several key facts drive this unusual sales dynamic. Firstly Job Boards are now often valued as a multiple of revenue rather than profit, therefore raising revenue has an unusually high impact on the value of the business.

Secondly there is no incremental cost to one more job advert. The cost of the web site is largely fixed so every extra sale is almost all positive contribution to profitability.

Therefore while in many traditional businesses’ keeping sales costs below for example 1% of sales is critical. In the job board business particularly as you attempting to grow it may be beneficial to have sales costs that are a major part of revenue, or even greater than revenue.

This is a difficult principle for managers to accept, but if your business is worth for example two times revenue, then spending $2 to get $1 of extra sales, actually adds $2 to your business value.

The problem with this strategy is it can easily drive profligate sales expenditure where you are not actually driving incremental sales. And that is the key; the spending $2 to get $1 of sales can only make sense if those sales are incremental.

The tactical way to approach this is to structure and then restructure the sales operation to ensure each part of the sale team is driving for incremental sales. The exact way to do this depends on the market focus of your business, and on a very clear understanding of how your market is structured.

However the principle is to make each sales person’s potential market increasingly smaller so they need to push for incremental sales to hit target. The speed and delivery of this requires a high quality of sales management skill to keep essentially making the sales persons role more difficult, while retaining and motivating the team.

An example is in general geographical job boards where sales territories can over time be made smaller as more sales people are added.

This strategy is universal to job boards but can be more difficult depending on the chosen market. It is relatively simple for geographical general job boards, as it is for industry driven job boards. However those job boards that focus on a type of job face a slightly different challenge.

If you are targeting the hotel industry and all jobs in hotels, then sales contact is relatively efficient as any hotel is going to have staff turnover and therefore need recruitment advertising. If however your target market is Financial Directors then timing sales contact when the hotel has a need for a Finance Director is much harder, and there is then a need to focus more on being know, so when the need arises the hotel will contact you, this is more difficult and expensive. For this reason job boards focused on particular types of jobs or even job disciplines such as finance in a more general sense have struggled.

This strategy has been critical to many job boards, some of which I have been involved in. Allowing rapid revenue growth, market leadership and successful company sale or flotation at a multiple of revenue.

 


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