B2B SaaS Sales in a Nutshell : a Startup-sized Framework to cut out and keep

A Startup founder asked me today “Can you help me put some structure around our sales process, but I’m also wondering – do we even need one? since we’re intending selling through channel partners”
Um.. the answer to each of those questions could fill a book. And for that matter does fill several hundred. How long have you got?

Anyway, I thought I’d write down how I really answered, in case it’s of use for anyone else. I basically sketched out for him the key elements of a lightweight framework for a scalable B2B sales model for any SaaS startup based in a location remote from its target markets.

Channels and Tunnels

But first, I addressed his second question – selling through channel partners.

“Someone else will do all the selling for us, and it won’t cost us anything!”

As appealing as this sounds in principle, in practice channel selling won’t work without strong existing demand for your product from end users. Channel partners don’t believe in your mission, won’t be able to articulate your value proposition as well as you, and certainly have no motivation to invest the time and cash it will take to find out whether there’s a market for it. If you choose this as your only path to market, you might find yourself down a long dark tunnel.

So first you want to create some demand from end-customers. Only once you have achieved that, evidenced by strong sales momentum, then look to channels to fulfill the growing demand. Think of channels as an efficient way of scaling out the taking of orders.

“But we will incentivize our partners with sales commission/referral fees!”

That doesn’t change the fundamental dynamics. Channel partners will always focus their time and energy on selling their own services, for which they get to keep 100% of the revenue. They will happily sell your product, and pocket a margin, if their customer has already decided to buy it.

You can try creating demand from enterprise end users the same way you drive online B2C sales. Whether that’s by investing in targeted advertising, content marketing, or by offering users a restricted version of your product on device marketplaces to try out for free.
But you may find that simply generates additional online sales to individual users.
You will create enterprise demand by putting yourself out there and selling directly to enterprises. No, that doesn’t mean you need to find the money to hire a sales team. As I’ve argued elsewhere, for the first year or so you and your co-founders will make all your sales anyway.

Where do I find Customers?

One option is to approach building a B2B sales funnel the same way you do for your online sales. Segment the market, cast your net wide – testing a range of advert and blog content for engagement, and wait for the leads to arrive.

But to highlight the uniqueness of B2B sales, it can be a useful exercise to start the process from the other end. Here you’re going to put your net away and try some spear-fishing. Normally called Target Account Selling.

First, define the characteristics of your ideal customer, and then list some organizations you already know that fit your criteria, or may already be a beta user. These leads are your first targets. Now approach them one by one.

This isn’t only an early-stage tactic. Even after you have a growing funnel of active prospects, it’s a good idea to always have a list of the next 5 or 10 customers you’d most love to have. Pin the list on your wall where you will see it and can regularly reflect on what you’ve done lately to turn them into active prospects.

Prospects, Customers, Buyers, and Users

Once you have your list of target leads, Your next challenge is: who to talk to there? And this highlights the first problem that truly separates B2B sales from consumer sales: the user of your product is seldom the buyer, and a buyer seldom makes purchase decisions alone.
We know this intuitively – we’ve all used Word in our office for decades – have you ever actually ordered a license for it? No, because somebody else at your employer with a company credit card or budget authority did. But In this scenario, you were the User, and the person who owned the budget and oversaw the process which resulted in that decision is the Buyer. What you can’t see is how the buyer was influenced in the choice by others in the orgnization and by written and unwritten rules, principles and policies.

A Buyer could be sitting in an administrative or finance department, or manage an operational department or a business unit. How do you find yours? When cold calling your target accounts, I’ve found a good rule of thumb is: go high and go low. Approach your potential users to get their buy-in first, because they can influence buyers, but also reach out to the CEO or another senior exec who will see the benefit of whatever your product can do for their business. Its quite common that your buyer will receive little direct benefit from your product, and your only path to motivate action is through the indirect influence of users and execs.

When contacting your target leads, experiment with various messaging content. When emailing leads, don’t bother searching for the magic email template that is going to get you a guaranteed response. You will get the best response rate if recipients perceive you are unique and genuine. So use your own “voice”. For CEOs and senior execs, I can tell you for sure – you will get the best response rate if you keep it to one simple question. And it will be some variation of: “Who should I talk to there about X?” where X is a clear benefit statement: a summary of the impact your product can make on their business.
“..about improving employee engagement”; “..about improving your conversion rates”; “..about eliminating material waste”, etc.
A senior exec who this issue resonates with will often cc the person responsible, asking them to pick it up with you. This is gold: now you have not only identified a buyer, but that buyer has been instructed to engage with you.
You can also ask staff there using the free version of your product to share their feedback – and use the responses as a form of trusted-party testimonial to get the attention of your buyer.

Also remember that one person is not an organization. The first person, or the first 9 people you speak to, may have no interest in your product or even an aversion to it. If you accept that as the view of the organization, you may miss out on a great discussion with the 10th person who has been battling for years the very problem your product solves.

Bootstrapping a Scaleable Sales Engine

Inside Sales and Field Sales for Startups

B2B Selling is always relationship selling. Relationship selling involves you, later your Sales Rep, interacting one-on-one over the period of the sales cycle with a buyer of the product or service. Responding to requests, answering questions, overcoming objections, guiding the buyer’s choice, building trust by demonstrating sincerity and integrity, and creating urgency.
Depending on the product and the market, a Sales Rep may only be able to achieve this effectively in face to face customer meetings – this is your Field Sales team. Or with a simpler value proposition, it may be possible to execute some or all sales entirely remotely by email and phone – your Inside Sales team will handle this.
In B2B Sales, RFPs and requirements lists need responding to and terms and conditions are often negotiated for the specific customer’s requirements. Growth involves painstakingly winning over customers one at a time.

Most enterprise software is sold this way. Enterprise software vendors without a B2C or SME play typically experience slow, steady linear growth in the early years, with a high CAC (Cost of Acquisition).

This may be an unpopular opinion, but if you’re building your business in NZ for an international market and you have a complex enterprise value proposition that relies on Field Sales to espouse and evangelize and negotiate face to face, then you’re probably building the wrong business. It’s not an accident that all the successful NZ companies are able to sell to their core market online or at least remotely using an Inside Sales Team. The tyranny of distance will kill you as you rack up the air miles through the lengthy enterprise sales cycle.

“But we’ll hire sales staff locally!”

A sales rep in San Francisco will still have to get on a plane and book a hotel every time they visit their customer in Seattle or St Louis. Just work out the true cost structure if you’re contemplating this, is what I’m saying.

Drive Inbound Leads using Content Marketing and Marketing Automation

Finally, once sales momentum is building under your new process, you’ll start getting a feeling for messaging that is effective at different stages of the customer’s buying cycle. The next step is to create a scalable sales model because you don’t want to just hire more salespeople and see sales grow linearly. So start to automate messaging to leads you’ve identified with a marketing automation system like Marketo, Hubspot or Intercom which enables you to implement an automated lead nurturing process.

The end goal of marketing automation is to support leads through the phases of their buying decision until they either buy online or contact your sales team wanting a quote. This is your inbound marketing process.

“Is it Time to get Channel Partners now?”

Yeah.. nah, still too early. Now is the time to build your own sales team. This requires spending, but having followed this framework you now have growing revenue that will contribute toward the hiring costs. You can use channel partners to scale out later.

Sales Team Role Specialization

An important step toward building your scalable, predictable Sales engine is to break your sales process into sub-processes and roles, and hire for each core specialization:

  • A Sales Development Rep (SDR) generates outbound Leads via email and cold calling
  • A Market Development Rep (MDR) qualifies inbound Leads from quote requests,
  • An Account Executive (AE) in your Inside Sales Team or Field Sales Team takes qualified Leads and converts them into Purchase Orders, by converting Prospects into Customers
  • Finally, the AE hands over to a Customer Success Manager (CSM), responsible for nurturing and retaining the new Customer.

You could start by hiring an SDR to get meetings for you while you’re still doing the selling. Then hire AEs to take over the selling from you, but continue to qualify leads yourself. Then hire CSRs when you need to embrace and retain your customers. Then add more SDRs to generate more leads for your first AEs. And so on. Eventually you will want to hire a head of sales to take your fledgling sales engine on to the next level. (Be wary of the temptation to skip to this step without laying the foundation – or prepare to repent at leisure).
Track aggregate and individual results by week and month. Use this data for decision-making. Benchmark the number of leads your business can expect from each SDR, and AE conversion rates and bookings volumes. From this, build a model for forecasting sales and for planning when and how many staff you will need for each role to support that forecast.

Finally, set up some experiments: A/B test your content, and your message sequence, channels, and timing. Discard what doesn’t work, and try variations on what does. Never stop experimenting. You can learn a lot from others’ experiences, but your business is unique.

And there you have it – a loose B2B sales framework you can hang any product for an enterprise market on.

To recap – here’s that 5-step plan

  1. Start by selling into some Target Accounts you already know. Lead this yourself.
  2. After you have some momentum from founder-led sales, hire SDRs and Inside Sales reps to maintain growth
  3. Build a scalable, predictable sales model: Automate messaging, and use data to optimize team size.
  4. Break your sales process down into specialist roles and hire for each to support your forecast.
  5. Once you have sales momentum, proving strong demand for your product, engage Channel Partners to help you meet the growing demand cost-effectively

There you go. Your Sales model may evolve to look completely different in 24 months time, but this framework will give you a platform to build upon.

Happy hunting!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s