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Being a founder is a tough gig. You have to be an expert in everything. Every decision, every action falls to you. To grow your business, you have to put the foundations in place from day one. Fundamentally, this means building processes that can scale. But, that’s hugely a challenging task. In this article we’ll talk about the tried and tested ways of building your B2B sales process for SaaS and tech businesses.We’ll cover a range of items to consider that include:
- Tailoring Your Sales Process to Your Product and Identified Customers
- Following Up On Leads, Chasing Down Deals
- Understanding the Importance of Life Cycle Nurturing
- Qualify Leads Within Complex and Enterprise Sales Processes
- Building a team to support sales
- Making sure you understand your distribution model
So let’s jump straight in. Before getting to the sales process you’ll need marketing support to generate leads, but you need a sales process in place to turn those leads into customers. Depending on the nature of your SaaS product, your sales process might be entirely led by marketing — creating a self-directed funnel that uses freemium and content marketing to turn leads into customers.
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For other SaaS products, a much more robust sales process will be required. Either way, you need to identify how involved your sales team should be and create a repeatable and structured process for addressing and interacting with qualified leads. Like with everything, the first step to defining the sales process is literally mapping out the stages you’re going to take somebody through from the first conversation to making a sale and retaining that customer.
Tailoring your sales process to your product and identified customers
The creation of your sales process will be informed by the judgments you have made up to this point. Think about your buyer personas: what they want, what they need and how you will be communicating with them at every stage of your sales funnel.
You might want to subdivide your sales process across target personas. But, for every persona, you need to ask yourself: what information do you need to give to this person and what kind of things are you asking from them? This should give you an idea of the assets you need to arm salespeople with to have successful conversations, and the steps salespeople themselves need to go through to take someone through a sales process.
For a self-directed sales cycle, this might simply be about how your freemium product trial interacts with the user. How does it remind them that there are paid options, and will it periodically ask the user if they want to ‘upgrade’ for more features? Will you execute automated email campaigns, targeting free users with information about upgrades?
For more complex and expensive products, your sales cycle will increase in complexity and cost. The underlying theme, however, will be the same — show the prospect that they will benefit from engaging with your product. However, the introduction of direct interactions with sales representatives allows for many more steps and considerations.
Following up on leads, chasing down deals
There is always pressure on marketing to deliver leads. However, this pressure drops off when it comes to following up on those leads properly. Depending on your sales process, this might be warranted because the responsibility to pursue leads shifts to sales. However, what is critical is that there is a process in place to follow up leads and everyone involved knows what they are doing and does it.
Acting fast will give you first mover advantage when it comes to dealing with customers. If someone is on the hunt for a solution to a problem, then they’re going to be speaking to your competitors and looking to compare solutions. You want to be the first one to tell that person you can solve their problem and give them an idea of how much it’s going to cost. So engage with them immediately.
Often, when someone has filled in their details and are researching a problem, they have set time aside to do so. Take advantage of the moment when they have set time aside to focus on this issue, and have your product fresh in their mind. You’ve got a window of 48-hours but ideally, you should contact them within a day.
If someone new comes to your website, fills in their details and fit your target market and ICP, you need to follow up, and fast. What exactly you need to do will be different depending on your product. But the number one rule is that something needs to be done. If your process is poorly defined and responsibilities aren’t clearly delineated, potential customers will fall between the cracks.
Getting a system in place to help you do this is important. This could be a CRM or just a simple spreadsheet early on. However, it is essential that when someone has become a lead, it is known who is owning that person and what the next steps are. A pipeline management system can assist with this, but it’s really about ownership and responsibility — these are the key things to set in stone.
Understand the importance of life cycle nurturing
Up-selling, cross-selling and re-selling generate a large chunk of SaaS revenues. Up-selling alone accounts for 16% of new annual contract value (ACV) for the average SaaS business. However, for the largest SaaS sellers (those pulling in annual revenue in excess of £60 million), that number jumps to 28%, while the smallest SaaS companies only generate 11% of their ACV through upselling. Similar disparities are seen in all bands of annual revenue split between growth rates.
Customer acquisition costs are much lower for cross-selling and upselling — £0.28 per £1, rather than the average £1.18 spent to acquire £1 of new revenue. Re-selling is even cheaper — only £0.13 per £1. The larger your customer base, the more re-selling and upselling opportunities you have.
Keeping churn low is fundamentally critical to your success as a subscription-based business. If your churn rate outstrips the average customer break-even time, you will lose money and eventually fail. A net-revenue churn (NRC) above 2% a month indicates that you have a problem. The top quartile performers in SaaS have an NRC of 14%-23% lower than average performing companies.
When creeping into the enterprise market, it is important to start putting in some face time. However, for most SaaS companies, you want to find automated ways to stay in touch and push up-selling and re-selling. If you can add value to every interaction where you are also making a sales pitch, you can do so without annoying customers. For example, rather than directly telling customers about a product, write a blog that explains the productivity values of a new feature.
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Your customers already know you and they already like your product, so make sure that you are getting the most you can out of those relationships. SaaS founders need to put in place the foundations of up-selling campaigns from the beginning in order to scale their business.
Make sure to qualify leads within complex and expensive sales processes
When sales teams become directly involved in the sales process, qualification becomes central to most steps. Even where your ACV allows for the investment in a ‘hands-on’ sales team, sales reps are still expensive, and their time is valuable.
You need to make sure that Sales is pursuing the right customers. Some of this comes down to making sure that Marketing is generating the right kind of leads. But, it is also about creating way-points and processes that are designed to limit the poor allocation of resources. This is what is known as ‘qualifying’ leads.
What is a qualified lead?
Effectively, a ‘qualified lead’ is a lead that fits a ‘buyer persona’ — a lead that actually has a high chance of converting into a sale. Leads are normally identified by people who express interest in your product — download a free trial, subscribe to your blog or otherwise put their details in a ‘gate’.
You can then rank these leads based on their seniority within an organisation and ability to actually execute a purchase themselves. But, what is really important is that they express interest in your product and fit a persona within your target market audience.
How to qualify a lead
There are a number of methods commonly used to qualify leads. Most, simply involve asking yourself a number of questions about the prospect. The standard lead qualifying strategy is called ‘BANT’ — Budget, Authority, Need, Timing. Simply, BANT involves questioning how these four criteria lineup with your prospect. For example, ask yourself:
- Does this business have the budget to buy our product?
- Does this person have the authority to make that purchase or influence that purchase?
- Does their business genuinely need our product?
- Is the timing good for us and them to strike a deal?
There are dozens of these systems and acronyms, but most direct you to focus on a very similar set of criteria. If you are struggling to gain traction with your qualified leads, more in-depth research into this topic will help. But, BANT is not a bad place to start. We’ve created another article which looks to help you define your qualification process and deliver better qualified leads.
Keep different stages in mind
Do not jump the gun. Your sales funnel will have multiple stages and you do not need to rush someone from their first positive contact all of the way to a sale. For example, if in the first meeting you have agreed to undertake an audit of their processes and show them how your product will function, you will have needed to get them to agree to provide you data about their business. Your next job in the sales process is not to close the deal, but to get them to fulfil those commitments.
Construct multiple check-points at which you re-evaluate leads within a repeatable cycle. What this looks like will depend on the specifics of your product and market. It might include stages on limited contact, or periods of intense support using a free trial. Your first sales can teach you a lot about what you should expect moving forward — pay attention!
Part of keeping your sales teams on the right track is knowing when to pull the plug. Make sure to review leads that sit within your sales funnel for too long. If a prospect has been flaky, take them back a stage and go through the process again. If they’re still flaky, you might want to disqualify them all together. At the very least, stop expending expensive human resources on direct communication. Send them your newsletter. But, eventually, you will need to stop calling.
Evaluating if a prospect is going to buy as quickly as possible will save time and money. Every interaction you have with a prospect should tell you something. Don’t waste time selling to prospects that are never going to buy, or on-boarding customers that don’t fit your product and won’t stay for long. Minimising churn rate is another goal of qualifying leads.
Keep yourself involved
Although we have stressed throughout the importance of building scalable processes and removing yourself (as a founder) from the sales and marketing process, it is still important to maintain a hands-on approach, particularly at the beginning.
The reality is that you will remain the best salesperson in your team for a long time — maybe forever. It is hard to match the gravitas that a founder can bring to the sale cycle. If you have built a sales process that includes face-to-face contact, make sure that your face is in there, at least for your first dozen clients.
Founders are always the best salespeople for their product. They should be able to pitch, they understand the problem they are solving and they have the power to change the pitch when needed. They have an understanding of commercials and can make quick decisions.
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Fundamentally, founders almost always possess a dynamic magnetism and belief in what they are doing — backed up by a detailed understanding of how those things get done. Your knowledge of the product, problem and the market cannot truly be replicated in a sales team. For that reason, especially in the early stages of growth, founders should be selling their product.
Founders have a lot on their plate, so when growing your business, you need to make strategic hires to ease your workload. That means building a sales team, but it also means hiring account managers, marketers, product developers and administrative support — allowing you to dip in and add your expertise everywhere. Just remember that sales is a critical area that you cannot afford to neglect.
Hire your marketing team first
Hiring sales representatives is critical, particularly if your product is complex and reliant on face-to-face meetings to sell. However, your first hires should not be sales. Building a sales team before a marketing team can damage your SaaS business early on.
If you only have a sales team, they will be pressured to drive demand on their own. This is a critical error that can undermine all of the high-level work you have done to create a product market fit and a broad understanding of your ideal customer personas.
To be of value, sales teams need leads. That puts them further down the priority chain than marketing. Sales teams will also pull your business, and product, in the direction of their contacts. Their role is to meet those demands on a micro level. This is good, but only where it is counterbalanced by a higher-level understanding of what your product does and its place in the market.
If you make decisions today just to win deals, they have the potential to hinder your business in the future. This kind of misalignment occurring in such an early stage of growing your business can slow down your growth for a long period of time, and is hard to get out of once you have gained clients in those early days that don’t fit your target market.
To begin with, you as a founder can take on the customer-facing interactions with the first leads that come through the door, and build a sales team from there.
And finally, account for your distribution model
This comes back to understanding your product and building a sales process that fits. It may seem redundant to keep coming back to this point but the hard truth is that the number one reason SaaS businesses fail is a failure to understand their distribution model and the limitations/requirements that places on their go-to-market strategy. Sales is a major area where this falls apart.
Fundamentally, you need to make sure that your sales process matches your product, budget and average annual contract value (ACV). Failure to do this can undermine your entire business. If successful conversions and sales don’t actually make you any money because of how much you spent on customer acquisition, there is almost nowhere to go from that point other than fail.