What impacts the conversion of PreSales in IT projects? Survey results.
Hi, my name is Stanislau, I am an IT Business Analyst.
I’ve been highly involved in the PreSales phase when I was working in an IT outsourcing company.
I was not happy with our lead conversion rate, meaning the percentage of potential projects that we lost. So, I tried to figure out what influences the success of the presales and how to design the presales process to increase the conversion rate.
In order to somehow get closer to the truth, I made a survey and shared it in popular IT chats, for example, analyst.by and Lampovoe IT — the largest Telegram chats for product owners, business analysts, and other IT managers in Belarus and Ukraine. The questionnaire had 10 questions and I got 31 responses.
Disclaimer. I am not an expert in data analysis, representative samples, and statistically significant results. My “analytics” does not pretend to be some kind of truth. This research has many disadvantages: for example, almost no one indicated their company, so probably some form submissions come from employees of the same large company, which could ruin the result.
If you’re still curious, let’s get started. I will list the questions, answers, and my comments on them.
Question number 1. What types of document do you most present to a lead as a result of the PreSales phase?
- 58% WBS (word breakdown structure)
- 48% Vision & Scope
- 48% Feature List
- 29% Statement of Work (SoW)
Question # 2. How much time does the PreSales phase usually take in your company?
- 48% up to 5 days
- 28% up to 3 days
- 24% up to 2 weeks
Comment: If we sum up the first two options, we get: 76% of respondents most often perform a free presale for no longer than a week.
Question number 3. Who is in your PreSales team?
- 83% BA (Business Analyst)
- 80% Sales Manager
- 64% Developer
- 61% PM (Project Manager)
- 19% Account Manager
- 9% QA (Quality Assurance, aka Testing Engineer)
- 3% UX/UI (User experience and User Interface Designer)
- 3% Engagement Manager
- 3% Technical Lead / Solution Architect
Comment: It seems like we can say that a typical PreSales team consists of a Sales Manager, BA, PM and Developer.
Question number 4. What levels of specialists do you most often involve in the PreSales?
- 43% Lead / Senior
- 36% Whoever is available
- 20% Mid / Senior
Comment: I assume that they try to use the more experienced ones in order to impress the client, but sometimes these guys are not available due to their business on their projects.
Question number 5. How often do you offer a paid Discovery Phase to your potential client?
- 33% in half of the cases
- 26% almost always
- 33% rarely
- 6% never
Comment: It’s pretty often to offer a Paid Discovery phase to potential clients.
Question number 6. What factors, in your opinion, contribute to the success of the PreSales phase (i.e. converting a lead into a client)?
- 75% Previous experience on similar projects
- 65% Show concern for the client’s budget (MVP-oriented)
- 60% Show professionalism
- 35% Recommendations from other businesses
- 20% Discovery phase
- 10% Minimum cost
Comment: Despite the fact that the discovery phase is offered pretty often, this is not the key, according to the respondents. The key things are previous experience, professionalism, and care for the client’s budget. The interesting thing is that most of the survey participants claimed that they don’t try to minimize the project cost. Well, it makes sense, because in terms of cost it’s hard to compete with programmers from India, which are way cheaper.
Question number 7. What mistakes shouldn’t be made during the PreSales phase? (optional question)
Comment: The question was optional, so, unfortunately, I got only one answer to this question: “Use vague project boundaries, do not pay enough attention to synchronizing client expectations and what we can actually do within this budget and time frame”.
Question # 8. With what percentage of prospects (i.e. leads that came with a specific Request for Proposal or Request for Quote) do you manage to sign a contract for a paid Discovery Phase? (optional)
Comment: The question was optional, so only 5/31 answered this question. The answers are very different, like 20% and 90%. So it’s difficult to draw conclusions.
The answers to the most important question for me were also disappointing:
Question # 9. With what percentage of prospects do you manage to sign a contract for development? (optional)
Comments: And there are only 5 answers. Two answers 50%, two answers 10%, and one more answer 95%. This is pretty odd. It’s hard to make any conclusion of this data.
Fortunately, I also asked one more question:
Question №10. Do you think that you have an optimal approach to the PreSales phase in your company?
- 30% Yes
- 35% I find it difficult to answer
- 35% No
Comment: The question is subjective, but I think it should correlate with the effectiveness of the PreSales phase in general.
Let’s assume that the more people are happy with the approach, the more effective it is. And based on that, let’s make some cohorts, i.e. groups. And let’s check if some correlations could be found and if some conclusion can be made based on that.
Conclusions
Unfortunately, I did not achieve my naive goal to find a silver bullet. Most likely, it does not exist, and a combination of many factors affects success. After all, in order to objectively answer the question “which process works best for presale in IT projects?” you need to come to dozens of IT companies, study not only the results of their PreSales phases but also the way it was organized, come up with some hypotheses and do some A/B testing.
Nevertheless, I think I still managed to make some observations:
- It seems like only highly experienced employees should be involved into the PreSales phase.
- The PreSales phase must have a dedicated team consisting of at least a Sales Manager, BA, PM, and Developer.
- Most of the respondents believe that the success factors are:
- Taking care of the client’s budget (MVP-oriented);
- Previous experience on similar projects;
- Professionalism;
Since the last two points could be obtained only through many years of experience, in order to improve your PreSales phase now, it might make sense to demonstrate to a client that you do actually understand the client’s needs and care about the client’s budget by focusing on the most important functionality.
Thank you.