Presale in IT companies: what is it and what is it for?

Presale is a funnel stage that IT companies actively use to increase the win rate. It is a presale preparation to clarify customer requests and finalize the product.

The presale department or a specialist thoroughly analyzes consumer requests, identifying the most significant and key points. Based on the results, documents are prepared, and the final proposal is developed.

Why you need a presale in IT

The average conversion rate that IT companies receive is about 15%. Thus, even when using popular marketing tools and conducting a competent advertising campaign, enterprises receive an average of one or two orders in response to 10 offers. These figures could be higher.

In addition, restrictions on using traditional marketing tools are constantly appearing on the market. To increase the conversion rate, innovative strategies are constantly being developed.

One of the most productive, but at the same time most expensive, tools is to separate the presale stage into a separate direction. To do this, hiring qualified employees and constantly training them to use their knowledge to increase the conversion rate will be necessary.

Presale (presale)—what is it? In simple terms, the term can be explained as follows: the presale preparation stage, during which the attractiveness of the offer for the client and the profitability of the planned strategy for the company are evaluated. The purpose of using this tool is to increase the likelihood of a contract between the enterprise and the consumer. The presale stage is implemented before the start of work.

Using this tool provides the following benefits:

• It makes it possible to assess the risks of implementing an idea.
• It allows, even before the implementation of the project, to identify the upcoming costs of labor resources, designate an approximate scheme of work and estimate the time frame within which the goals can be achieved.
• It provides an opportunity to identify the best solution to attract a client and allow the company to close the deal.

Presale exists in any company engaged in trade and offers consumers the chance to purchase a product or service. Some enterprises need a specialized presales department or specific employees who deal with it.

However, this stage itself always precedes the sale. A properly built presale allows the company to prepare for the next project. An important point in implementing this stage is the organization of work processes. If you make a mistake in their construction, then mistakes can adversely affect the plan’s implementation.

The presale consists of the following main elements:

• Analysis of customer needs.
• Assessment of the company’s capabilities to implement consumer requests.
• Preparation of a commercial offer.
• Conclusion of an agreement with the buyer.

The main task of presales preparation is to find out the client’s needs. This allows the company to offer the consumer exactly the product or service that he needs.

It is necessary to select qualified presale specialists because the results of their work will directly affect sales volumes. As mentioned above, the average percentage of conversions for IT companies is 10-15%. If the company employs a team of presale analysts, then this figure can rise to 50%.

A medium-sized IT company spends $30,000 to $150,000 annually on lead generation and customer retention. Considering that even one underqualified lead can cost up to $3,000, it becomes clear that building a team of presale specialists makes sense.

Suppose an enterprise has almost no competitors in its niche or has entered into a profitable long-term contract with a customer that provides most of the turnover. In that case, introducing the presales stage may not be profitable. But the company’s management must understand that a contract with one client imposes certain obligations. Such a customer can put forward his own conditions, which will have to be agreed upon. In any case, dissatisfaction with the terms of the contract will lead to the search for new sales opportunities.

You can hire employees to work at the presale stage both on an ongoing basis and in accordance with current needs. If the company offers a stable range of services or products, then hiring qualified employees on its staff is better. This approach will allow you to constantly train staff and use their knowledge to benefit the enterprise.

Presale stages

Of course, the best option is when a special department or a specific qualified employee performs the tasks of the technical presale. But, these functions are usually taken over by an implementation specialist or a project manager. In this case, the main goals of presale preparation are to identify the proposed project’s cost and implementation timing. The manager carries out this work as part of the presale process, which includes several stages:

• The sales specialist sends a request for project processing to the presales department. If the company does not provide a separate group of employees to perform this task, then this function is usually performed by a project manager.
• The worker is responsible for the implementation of the presale and conducts an assessment of the future project. This process reveals what resources are needed to implement the task and whether the enterprise has them. Also at this stage, the risks of the future project are assessed. Sometimes it turns out that it is better to abandon the plan.
• The duties of the presale manager include communicating with consumers to identify their preferences and analyzing the project documentation. After implementing these points, it is necessary to organize a discussion of the obtained data with specialists to assess the needs of customers and the cost-effectiveness of meeting them.
• Proposal preparation At this stage, the presale manager draws up a project plan and approves its cost and terms.

In the future, the results of the presale activity are transferred to the sales manager, who continues to work with the client. If a separate employee was involved in developing presales preparation, he could also participate in the negotiations. If the work on the presale was carried out correctly, in most cases, the project proposal to the consumer leads to the conclusion of a contract.

Types of client requests at the presale stage

Identifying the client’s needs is the most important task for project development. The future conclusion of the cooperation agreement depends on this.

RFx (Request for X) is a request for something. There are four main types of requests in IT:

• RFI stands for request for information. This is the most common data type required when selling goods or services. Its essence is to satisfy the client’s need to find up-to-date information about the company, its products, the benefits of cooperation, and the effectiveness of your offer as evaluated by other users. Based on preliminary data, the consumer wants to conclude how interesting it is for him to cooperate with you. Pay attention to creating a corporate identity for the company, attractive product design, denoting values and mission, geolocation, and other aspects of activity that can increase your organization’s credibility.
• RFP stands for Request for Proposal. The previous one is the most popular type. Its essence lies in the fact that the client wants to know the company’s offer to solve a specific need. Most often, such requests are made about companies selling products. They allow the buyer to get information about how profitable it is to use your offer compared to competitors.
• RFQ stands for request for quotation. It is a shortened version of the previous version. The request for a quotation contains data on the project’s total cost with details of the stages. To answer the user, it is better to use a clear list and order of work and offer additional services that can make cooperation more productive. Such a request is most often used about service companies; that is when the client understands what result awaits him as a result of the work but does not know the details of the project.
• RFB: Request for Bid/Tender This is the rarest type and is usually used when choosing suppliers through a platform or auction. In this case, it is necessary to indicate the cost of the work the client needs.

In today’s world, only a few companies can work with different types of requests. Typically, businesses offer a common solution to customers. Even in IT companies, request processing needs to be implemented properly. However, presales procedures are of great importance to increase operational efficiency. It is worth thinking about the organization of internal processes and optimizing them.

How to understand that it’s time to assemble a presales team in a company

Usually, enterprises do not develop in a straight line but simultaneously in different directions. To conclude whether the time has come to form a presale unit, it is necessary to study some areas of the company’s activities (according to the main indicators):

• Win rate. A satisfactory indicator for this direction is a value of 20%. This is considered a good result if the win rate is 25% or more. When the figure is below 15%, it is worth addressing the issue of presale preparation.
• Conversion (MQL > SQL) (SQL > WIN) If a small number of users reach the stage of deciding on concluding cooperation, then, accordingly, offers to conclude a contract are received by a smaller number of consumers.
• Several interactions with a customer The less contact that occurs with the consumer to clarify his needs, the less likely it is to guess his requests.
• Customer satisfaction This direction shows how the service or product meets the buyer’s needs.

The absence of a presale specialist or department in the company leads to decreased sales and the number of contracts concluded. To understand how many employees are required to conduct presales training, it is necessary to analyze what key functions the staff should perform. First of all, determine whether the presale functions are permanent or temporary. Based on the needs of the niche you work in, Answer the questions:

• Does the company have the resources to pay stable salaries to the staff in the department?
• Does the enterprise’s infrastructure allow you to enter presale without transforming it?
• What deals need to be worked on: Are you interested in long-term prospects or the quick conclusion of current contracts?
• Do the company’s resources allow you to create a presales department from scratch, or do you need to look for a ready-made team?
• Will the presale direction scale by the pace of enterprise development?
• What will the presale specialist or department do? Does he need to test the prospects of a new direction, or will his goal be to achieve specific indicators?

A topical issue is a scheme for calculating the salary of presale staff. It is believed that its formation is optimal according to the formula “salary plus interest.” According to a similar scheme, the sales manager also receives a salary.

If you have concluded that more than one presales analyst is required for you to work effectively and you need to form a department, then it is important to understand which staff areas will be required.

Command structure

For the full operation of presales, the following roles must be performed:

• Business analyst. This is a specialist who will be able to get an idea of the client’s business or production, identify his needs, and form a company proposal to solve the buyer’s problems.
• Techlead. This person will be able to formulate the specifics of the technical implementation of the proposal and determine what personnel and tools will be needed for this.
• Project manager. An employee who coordinates the work of the entire team and conducts a dialogue with the client
• Sales specialist. When forming a team, the question arises, Who is the presale engineer, and what does he do? This is the employee in direct contact with the buyer and presents the company’s offer favorably. At the same time, the client perceives such an employee as a representative of the enterprise. The engineer simultaneously identifies the customer’s requirements for the project and communicates them to production. The company’s offer is favorably presented to the client thanks to such an employee.

Presale tools

All presales tools can be divided into four categories:

• Account mapping tools — presales Aimed at resolving the issue of communication with client representatives. It is unlikely that the director himself will come to the meeting after the contract. The sponsor, the decision-maker, and the stakeholder will participate in this process. Account mapping allows you to analyze the customer’s enterprise’s internal processes and determine how decisions are made. Marketers and lead generators do primary account mapping, and the sales specialist should finally discover everything.

The use of such a tool is relevant for large companies. An analysis of the internal processes of the customer’s enterprise allows you to find out with which of his employees to discuss the implementation of technical issues, who is responsible for financing the project, etc. For small and medium-sized businesses, such activity only makes sense because, in most cases, the consumer decides about the purchase.

• Client identification tools, or, in other words, ABC analysis and prequalification tools. Sales can be concentrated on different categories or specific one.
• Templates and tools for compiling a project scope statement The main task of the entire presale team is to identify the volume of products sold, the timing of deliveries, and the project’s boundaries. This information is very important for making an offer.
• Data visualization tools This includes both the development of a presentation and the compilation of structural diagrams based on the analysis results. Data visualization increases the client’s confidence, as it visually represents what he can get when concluding a contract.

Why you need a business analyst at the presale stage

Customers of an IT outsourcing company can operate in different business areas. For example, a client may be involved in medicine, the provision of cosmetic services, restaurant services, logistics, etc.

Even if customers want to receive the same service, such as website development, everyone needs a personalized solution that considers the specifics of the business. It is precisely to correctly determine the client’s needs that a business analyst is needed during the presale.

Usually, presales preparation is associated with several time and resource constraints. Access to information about the client’s company is also limited. In this case, there is a risk of incorrectly establishing the customer’s needs, which will lead to problems during the implementation of the contract. The task of a business analyst is to prevent such misunderstandings and identify the right strategy at the stage of project development.

During the presale, the business analyst becomes the key point of contact between the client, the sales manager, and the technical team. The specialist communicates with each party, processes the data and comments on it, and draws up documentation. Together with the presale team, the analyst checks to what extent the client’s needs correspond to the enterprise’s capabilities, combining the client’s goals and favorable conditions for the company into a single project.

The main purpose of presales preparation is to conclude a contract and turn an interested client into a customer. For this to happen, you need to develop an effective and useful plan for both sides of the project. This is exactly what a business analyst does: he finds the optimal solution that will satisfy the customer’s needs and benefit the company. The scope of work of this professional mainly depends on the size of the client’s firm.

In any case, the specialist will have to solve the following tasks:

• Familiarize yourself with all available information about the activities of the customer.
• Analyze competitors’ businesses, consider offers on the market, and consider similar projects.
• Communicate with the customer to identify their needs.
• Formulate the boundaries of the project and describe the solution to the problem.
• Estimate the labor costs of a business analyst.
• Take part in the formation of the CP.

After that, you can search for up-to-date information on the Internet. When studying customer problems, moving from general information to private information is better. First, it is worth identifying the main problems and trends in his business creating customer problems; moving from general information to private information is better. First, it is worth identifying his business area’s main problems and trends. You can read reports from other agencies, analyze competitors, and formulate solutions to their needs.

When all the members of the presale team have read the request, it is worth organizing a brainstorming session to discuss the details and develop a suitable solution. During such a meeting, the analyst asks other participants about solving the customer’s needs.

After the meeting, it will be easier to formulate requests for the client and determine priorities for the project’s development. Usually, 10–15 clarifying questions are enough to reveal the outstanding details. This amount allows the team to get the needed data without being too intrusive.

The best option is when the dialogue with the client is conducted with a business analyst, a sales manager, and a technical team representative. With this format, each of the employees will be able to answer questions in their field and find out the data necessary for the formation of the project.

What documents does a business analyst prepare at the presale stage?

The first document that the business analyst prepares is the Vision and Scope. It structures the available data about the client’s company and the estimated scope of the project. Each enterprise has its solution concept template. The vision and scope should be clear and concise. This document makes it easy to understand the relationship between the customer’s goals and what solution will be most effective to achieve them. A great option is a concise presentation using diagrams and illustrations.

At the next stage, the analyst compiles a description of the functionality (a feature list). This document allows you to estimate the upcoming costs of the project. In order to make the decision more understandable, you can make a mind map.

The list of documents compiled by a business analyst at the presale stage depends on time, financial constraints, and the specifics of the company’s activities. In addition to the main artifacts mentioned above, you can prepare the following:

• Wireframes and user flow Allow for visualizing the project.
• Various canvases. Help to understand the specifics of the client’s business.
• Matrixes, comparison tables, charts, etc. From simple (sitemap, role matrix, BPMN of the main business process, etc.) to complex (GAP-, SWOT-, etc.).
• A demo of a boxed solution Allows you to create a client’s vision of the benefits of cooperation with your company.
• Description of persons and user scenarios
• Other documents that will be relevant when conducting presales

The final stage of the presale is forming an offer for the customer. As a rule, this document includes a marketing, commercial, and technical section. The analyst participates in the work on the proposal and acquaints the team with the estimated time costs at different stages of activity. Remember that when compiling this document, the main factor is to find the intersection of the customer’s needs and your company’s capabilities.

At the presale stage, the client often does not know the optimal solution. He is waiting for an expert assessment of the situation and an initiative proposal from an IT company. The company needs to show its features on the favorable side and get the client. In such a situation, the functions of an IT consultant are often performed by a business analyst. If he can offer an effective solution to the customer’s problems, then his credibility increases.

What causes difficulties in the work of the presale manager?

In their work, presale managers face various difficulties, including:

• Customer expectations There are situations when a customer comes to a company with a large-scale task that must be completed as soon as possible and at a minimal cost. Any person is looking for the maximum benefit for himself. But if the stated requirements cannot be met, it is necessary to properly build communication with the client. It is important to explain to the customer why the company cannot meet his needs and how things are. Tell us what you are ready to do to solve his problem as quickly and on budget as possible. Competently building a dialogue with the client will lead to the conclusion of a contract.
• Interaction with sales managers Such employees need constant training to get acquainted with the company’s innovations and priorities. This will save you from inefficient decisions.
• Hot date Presales often need to be carried out quickly so the client can keep his mind on the stated requirements and even go to a competitor.
• Working with objections The client may refuse the transaction for various reasons. Perhaps he considers the project too expensive or difficult. Some customers want to avoid signing a contract because they do not see a guarantee of success. A presale manager must have reasoned answers to the most popular objections and correctly lead the client to the transaction.
• Personnel shortage The development of complex projects requires the involvement of a large number of different specialists. Presale deadlines are usually last-minute, and finding competent employees takes more work.

If the presale manager is qualified and has the necessary professional skills, he can cope with the above difficulties. Constructively building a dialogue will help when working with customers and sales staff. The ability to correctly allocate time will come in handy with a burning deadline.

Presale performance analysis

In addition to the obvious KPI of win rate, it is advisable to track the following indicators:

• The number of RFX received
• RFx processing speed
• The frequency of contact with a potential client
• The degree of completeness of the client card (who is the decision-maker, the main problems of the client, etc.)
• The degree of retention of current consumers (contacts, offers)
• number of sales to regular customers.
• Deal cycle time.

Systematic tracking of these indicators will allow you to understand how effective the solutions offered to customers are.

Some IT companies consider presales to be too costly an approach that does not pay for itself. This usually happens for the following reasons:

• Lack of vision for the target audience.
• Low efficiency in the event that the customer communicates with only one representative of the company. The client needs to see that real specialists are behind the development of his project.
• Incorrect definition of an employee by the client with whom it is worth negotiating. It is the identification of such a specialist that is one of the most important tasks of presales.
• Sales funnel problems It is important to understand that communication with the client continues after the work of the presale team. To conclude a contract, you need the competent work of all the specialists of the company.

It is optimal to divide the sales funnel into three stages: preparation of an offer to the client, his presentation, and collecting feedback and clarifications in the proposal. To control each of them, you need to select competent employees who can monitor the performance of the stage and make improvements if necessary.

Presale preparation is just as important as the actions taken during the conclusion of the transaction. The client, in search of the optimal solution, sends his request to several companies, and the faster and more competently you respond to his needs, the higher the chance of making a purchase. Track important metrics and work on making your projects more attractive. The success and an increase in conversions will be close behind.