When most people think about scaling a B2B company rapidly, they think about Sales closing a lot of business. It’s true that Sales are the closers. They are the finishers. You can do a lot of things right as a team, but ultimately someone has to score and put points on the board if you want to win. That is the role of Sales. Finishing off all the good work done by their teammates in Product and Marketing. If Sales can’t close, you can’t win deals. And if you are not winning deals, your company won’t grow very fast.
So what separates a Sales team that can close versus one that can’t?
Game plan and execution.
Sales teams that close in great quantity have a plan and execute it effectively over and over again. This post will cover how to organize your Sales, Sales Development and Customer Success teams to maximize revenue production, and set yourself up for the high renewal rates and large customer upsells that drive rapid growth.
This is the third and final post of a three part series describing a go-to-market framework that drove the growth of numerous high-growth technology companies. The first post of this series, Go Big or Go Home! How to Build an Awesome Go-To-Market Plan for Fast Growth, is an overview of that GTM framework and includes a more detailed description of the foundational components of any GTM plan: Product-Market Fit, Differentiated Product Strategy, and Message Platform and Value Proposition.
The second post of the series, How Marketing can Crush It, and Drive Meteoric Company Growth, describes the critical role that marketing plays in driving high growth, including Marketing Mix, Funnel Progression, and Sales and Marketing Integration.
This third and final post of this series will cover how Sales can leverage all the good work Product and Marketing teams have done to get the most from their pipeline of opportunities. Learn how Sales can close more deals, at higher contract values and blow out their numbers by nailing three key components of every GTM plan: Opportunity Development, Sales Strategy and Customer Success.
Sales Development typically has the job of qualifying and developing leads from Marketing, and turning them into opportunities for Sales. This is one of the most critical points in the GTM process since Sales Development is the link between Marketing and Sales. They have to have a good understanding of Marketing’s plans so they know where the leads are coming from and what to expect, as well as a good understanding of Sales’ needs, as that is the ultimate destination for their work.
Many companies direct their SDR teams to merely set up qualification calls with sales reps. In other words, just schedule meetings for the Sales team and let Sales do the selling. I think this sells the SDR team short by only letting them set up calls for the sales reps. The problem here is two-fold. First of all, SDRs can typically find lots of contacts that just want to schedule a call. This does not make them good prospects for your product, just curious ones. Secondly, this can generate a lot of calls for the Sales team that are just tire-kickers or seeking basic information, which is a waste of time for sales reps who should be selling later stage opportunities. SDRs can and should do more to qualify a prospect. It might take some training and practice, but SDRs should be able to understand a prospect’s needs, describe the company’s solution and determine if there is a fit and enough interest to move forward. Set up your SDR team to generate true SQLs, sales qualified leads that meet critical prospect criteria and are about to become sales opportunities. This frees up the Sales team to focus on closing, not qualifying.
Many SDRs also do outbound calling in addition to following up on the inbound leads. In my experience, these two tasks are very different and should probably be separate SDR teams because they require a different skill set. Cold-calling prospects is very different from following up on leads that have already engaged with the company. Some SDRs will be better at one versus the other. And it’s very difficult to do both at the same time, since they will need to constantly switch contexts and discovery techniques.
I get asked often if the SDR team should be managed by Sales or by Marketing and, in my opinion, either can work. But SDRs have more affinity to the Sales team and many will gravitate to a role as a sales rep in time. They have quotas, they are on the phone with prospects all the time, they are pitching the company’s value proposition and they work closely with sales reps to identify good opportunities. However, management of the SDR team is often an after-thought for the Sales leader in a Sales organization that is revenue driven. With Sales executives focused on closing deals, forecasting bookings, working with customers and partners or hiring a revenue generating sales team, the needs of the SDRs is often deemed a lower priority, despite its critical role. Marketing executives do tend to give SDRs more attention because all of their output goes through them.
Either way, organize your SDR team to be as productive as possible with the ability to qualify MQLs into SQLs, and by keeping them focused on either inbound or outbound prospects. And proactively support and manage them so they can generate a large amount of high quality opportunities for Sales.
So now you have SQLs from the target market flowing from the SDR team to the sales team. All you need to do now is close them! Easy right? Not exactly. Now the real fun begins as Sales directly engages prospects in presenting your value proposition and competitive advantage to address their business goals.
Simply put, the goal of your sales strategy is to close as much revenue from your opportunities as possible while building good long-term partnerships with your customers. This breaks down into two fundamental tasks: close as many of the opportunities as possible as quickly as possible, and maximize the long-term revenue or account value from each opportunity. The first task is efficiency-based because you want your sales team to focus their energy on the opportunities with the best chance to close easily. That frees up time to work new opportunities. The last thing you want to do is get stuck working a deal that never closes. It just wastes everyone’s precious time.
The second task means understanding what an account can produce not just this year, but in future years as well. This is about realizing the potential. The first task is about efficient use of resources. The second is about capturing the long-term potential. And remember that follow-on sales to existing customers typically take much less time than initial sales if your product-market fit is spot on and your product does what you said it should do. Sometimes it’s better to take the smaller deal quickly knowing there is more business in the account than holding out for the larger deal which can take longer and be harder to close.
To do this well, you have to have some fundamentals in place. Start with a very clear understanding of each prospect’s needs through detailed discovery. Before you start pitching anything, make sure you know what problems the prospect has and what goals they are looking to achieve. Only then can you assess how well your products may meet these needs. You might decide you can’t meet these needs and should move on or target a different group within the account. I am always amazed at how many sales calls I go on where the sales rep skips this discovery step and moves straight into their pitch. If you don’t understand the prospect’s goals and challenges, you can’t really pitch your product as a solution to them.
Inevitably every account is a little bit different, so be prepared to tailor your pitch to their needs, use cases and objectives. You are typically going to find a finite number of use cases for your product, so be versed in all of them and be ready to explain how your product is a perfect fit for this particular use case.
For each account, you should have a game plan for how you are going to close that account. Which people or departments you have to get on board, who are potential blockers, who will be advocates for your solution. And ultimately, who will be your champion. Nothing gets purchased without a champion who will carry the flag and gather the support and resources needed to buy and use your product. Ideally the champion is a very senior executive with the clout and budget to make the decision on their own without other executive approvals. But the bigger the deal is, and/or the more strategic the initiative, the more executives and departments will likely get involved. This may be frustrating as it will take longer to gather all the support, but ultimately it is a good thing since it’s an indication that this is a very important project and gives you the opportunity to build strong relations across many levels and many departments that you can leverage later on. Either way, small starter deal or big strategic deal, have a game plan for how you are going to get the deal closed. Map out the key players, possible champions, potential hurdles, sources of budget, and entrenched competitors and then build a plan to methodically attack and win over each one.
Pricing and packaging are critical to get any deal done. There are two key considerations when it comes to pricing and packaging your products. First, what pricing and packaging is the easiest for customers to understand and purchase. Many companies screw this up and make it extremely difficult for their customers to actually buy their products. Secondly, what kind of pricing and packaging will make the customer most successful long-term? So many times, pricing and packaging are set based on what a vendor wants to happen, not what will make a customer successful. For example, if they will likely need services to successfully implement the product, then include services in all the packages. If the analytics module is the best way to see the value the product delivers, then include the analytics module in all the packages. Giving customers too many options or allowing them to customize the solution to their liking may not be in their or your best interests.
Netflix is a good example of clean and effective pricing and packaging. Netflix has thousands of movies and TV shows in its catalog. Some are produced by Netflix, some not. Some will be viewed on laptops or phones, some on high definition (HD) TV’s. Most can be streamed, but some are only available on DVD’s. If Netflix gave their customers all these choices, it might be bewildering for them to decide what they were going to watch and how much they should pay. But Netflix makes it easy. With a monthly streaming subscription, you get every movie and series in their catalog automatically. Then they have 3 packages based on HD, and ultra HD, and number of simultaneous streams. If you want DVD’s, you have two choices for the number of DVDs you can have at once. Super simple and Netflix has ridden this easy subscription pricing and packaging model to $15B in revenues. Figure out what your customer needs to be successful, price it and package it to make it very easy to buy, and have a well thought-out account plan to guarantee closing more business faster.
When Taleo began to sell Performance Management in addition to Recruiting, it required a new sales approach, something we called the “Z strategy” because we had to sell across different departments and up and down several levels of management to close deals. We were zigzagging across the organization chart, but that is what it took to sell a broader multi-department solution.
Typically Sales should be able to generate some percentage (25%-60%) of their opportunities on their own with no help from Marketing or the SDR team. Every sales rep should be actively hunting for new business within their own territory and network. This has multiple benefits. First, it adds capacity to your pipeline generation capabilities since each sales rep is now adding to their own pipeline. It also helps to check the attitude of “where are my leads from Marketing,” since Sales is on the hook to generate some of their own as well. And it generates additional data points on what is working and where to target more comprehensive marketing campaigns. Untapped sources of revenue can often be discovered by one sales rep working a new market segment or use case. Ultimately, Sales creating some opportunities brings Sales and Marketing together in the same goal of generating pipeline and fosters a stronger team mentality.
And even though Sales is now working the opportunities, Marketing and Sales Development’s job is not over by any measure. They should go on a lot of sales calls to meet prospects directly and hear their priorities and needs in their own words. This is a great way to confirm product-market fit, hone messaging and value proposition, and identify competitive strengths and weaknesses.
Now that you have closed the deal, it’s time to celebrate the closing, cash your commission or bonus check and move on to a new account, right? Yes and no. Definitely celebrate the closing of a new account, but the truth is, your work has just begun. And you are entering a critical period of customer deployment that will set the stage for hopefully years of success and follow-on business. In a subscription business, most accounts churn because they fail to get started correctly in the first 30 to 60 days after buying the product. Typically, the users don’t get trained properly, or they are not able to realize the value of the solution, or the solution is not integrated into current operational systems. Somehow the account is either not using the solution or not realizing the value. And even though they may have signed up for a 12-month subscription, the account has essentially already churned. You just won’t find out about it for another 10 or 11 months.
An account that churns is a huge loss of the investment to win the account, the future revenue stream it won’t be producing, and the reputation damage that could tarnish your company’s image. Fortunately, most of the issues that cause churn are easily recognizable and usually highly preventable. Help the account get set up with your solution so they can be successful, even if you have to fund it. Have regular check-ins with key stakeholders and your internal champion to make sure things are going well. Do quarterly business reviews where you address issues, and tell them how much value you are adding to their business since they may not know or be able to discern it themselves. This will set you up well for renewals and potential upsells. Tending to accounts is like tending to any crop; if you ignore them and don’t water them or care for them, they will die.
Always be selling to your customers because other vendors are trying to unseat you, so you need to defend your turf and fight for renewals. And of course, each account represents future revenue potential in upsells to new groups, new use cases or new products. Ideally you can build a strong customer community around your company like Salesforce has and like we did at Taleo. As CMO at Taleo, I knew we had good potential for a customer community when I saw our customers setting up email groups and message boards with each other. We built an online community combined with additional customer events so they could connect and collaborate and the whole thing just took off. Ultimately this became another unique selling point for Taleo compared to our competition.
Upsells to your customer base should be much easier to close than initial deals if your product fits the market need. This is a huge advantage when it comes to ramping revenue. Typically the first deal is the smallest and the hardest to close. Think of the first deal essentially as a trial. It’s your chance to “prove-it” to the customer that you can deliver on the value proposition. There are no givens in a subscription business. You need to deliver every day, every week and every month.
Treat your new accounts like the trials they are, and you’ll have the right perspective on the amount of attention they need to succeed. If the trial or first deal is successful, then you’ll have an opportunity for a second deal typically within 6-12 months, which is usually a larger deployment of either users or products or both. The third deal within another 6-12 months is typically the whopper for a much larger deployment or site license. Have a plan to get through each stage and understand the account dynamics to make it happen. It will not happen on its own.
Now that you have happy customers that have deployed widely, it’s time to harness their feedback and start over again at Step 1 of the GTM framework: Product-Market Fit. Except now you are looking deep into the future of your current customers’ needs, as well as into those of your non-customer prospects, and developing future product roadmaps. Establish a Customer Advisory Board of some of your more thoughtful customers to help guide your product direction. They typically love interacting with senior executives of their vendors. You’ll need to balance the needs of your current customers with the needs of new prospects since they are not always aligned. It requires some tough choices but it is essential to maintaining product-market fit and revenue growth for the long-term.
These components of the GTM framework need to line up together like the chambers of a lock. If even one of them is out of sync, it can shut you out of a huge market opportunity. But when they are aligned and working together like a machine, they will unlock rocket-like growth that will propel your company forward.
We just sent you an email. Please click the link in the email to confirm your subscription!
OKSubscriptions powered by Strikingly