From Salesa’s founder, Adi Eranki:
(Featuring founders from: Atrium, Segment, Close.io, LaunchDarkly, ConvertKit, and LatelyAI.)
#1: Founder-led Selling: Stages, Goals, Exit Criteria — Atrium’s founder and Founding Sales author, Peter Kazanjy, details the organic progression of the startup sales org. (Source)
#2: MEDDPICC — Segment’s co-founder, Calvin French-Owen, describes a “rigorous tool you can use to evaluate a deal and see where you might have blind spots.” (Source)
No deal is fully complete without a set of qualification criteria.
Plain and simple, this criteria ensures that you’ve covered your bases. It’s a rigorous tool you can use to evaluate a deal and see where you might have blind spots.
Think of criteria in the same way that you’d think of the checklists that NASA or SpaceX use to launch rockets. If any field isn’t checked, you might be missing a key piece of the picture.
The one we use is called MEDDPICC. I’ve detailed it out below.
Metrics are one of the most important parts of a sale. You and the buyer should both be agreed on which metrics the product will impact for the business. That’s how you’ll measure the success of the product (and ideally the ROI).
The economic buyer is the person who actually buys a product—the catch is that they may or may not be the person who wants to use it. In every case, you want to know who can actually make the purchasing decisions.
The decision criteria are more or less the “required capabilities” I talked about earlier on in the post. They determine how the customer will evaluate the product you’re selling.
In every case, a viable option for the customer will be to “do nothing”. They don’t have to buy your product, or any product for that matter.
The best way to prove the case for your product is with your metrics. Doing nothing should be a very expensive option.
Of course, the criteria are only a piece of the puzzle. The decision process governs how customers will actually purchase a piece of software.
This can vary wildly from company to company—so you should take care to understand how your customer actually buys software. Ask questions to confirm:
Who you should talk to in order to make a decision?
What does the timeline look like to get there?
The paper process refers to all the forms, paperwork, and contracts as part of a deal. While it sounds similar to the decision process, DO NOT IGNORE THIS STEP. We’ve had a number of deals fail to close over the years just because we weren’t sure of how the paperwork actually got signed.
Though it’s far down in the acronym, the identified pain is really where you should start with the customer. You should be able to answer in great detail why their life is currently painful, and how they handle the problems you solve today.
Your champion is the customer who is rooting for you and wants to buy your product. In the early stage, it’s likely that your champion and buyer are the same person. But as you grow and expand your deal size, the champion might need to get permission to buy your product.
When this happens, you need to be giving your champion firepower! Help them provide collateral to the rest of their organization to teach them why your product is the best!
Lastly, you should know your competition. It could be internal efforts, it could be competitors, or it could be doing nothing at all. In each case, make sure you know why the customer is considering your competition.
#3: “It’s not enough to just know your customer. You need to understand the ecosystem within their company.” — Close.io’s founder, Steli Efti, shares how to pay microscopic attention to the ‘who’ behind any B2B purchase. (Source)
It’s not enough to just know your customer. You need to understand the ecosystem within their company. Only then can you need to differentiate, segment, and prioritize the right stakeholders and make sure you’re putting effort in the right place.
Differentiate: Who are the different stakeholders you’re going to deal with in SMB SaaS?
If you think about stakeholders in SaaS, there are a few basic categories you need to be aware of:
End User: Who uses your product for most of their day? In our case, these are sales reps.
Admin: Who buys your product or has the most decision-making power over the purchase? In our case, this is the sales manager or team lead.
Leadership: Who interacts with your product on a high level? People like the CEO or founders who won’t use the product every day, but have a lot of influence over whether or not they purchase.
Other departments: Who occasionally uses your product? For Close, that means support or success teams who use Close occasionally to research customers.
Segment: Who is the most important stakeholder and who can you empower the most?
Once you understand that most SMB SaaS customers have these five different stakeholders, you’ll probably realize that they don’t all want the same thing. They have different needs. Different levels of influence. Different problems and priorities.
So you need to ask a few questions and segment them into different groups:
Who uses your system the most?
Who uses it occasionally?
Who buys your system or has the most influence in the decision?
Who can block the purchase of the system or lock it in?
Prioritize: Understanding who your most important stakeholder is
At the end of the day, you want to try to serve as many stakeholders as possible. But not equally.
You need to prioritize for your most important stakeholder. They’re your North Star, and the voice you want to amplify the strongest.
Once you have some level of success (you’ve made initial sales, generated some revenue), the question you’ll ask yourself is: “How do I grow this? How can I take this to the next level?”
This is challenging, because you still need to focus on developing your product further as well. Balancing these two responsibilities isn’t easy.
Now is the time to begin your sales hiring process and bring on your first sales reps. Right now, your focus should be on bringing others on board and having them replicate the results you achieved in stage #1.
Don’t hire expensive sales veterans here. You want them young and hungry in this phase of your sales hiring journey. Hire two or three salespeople at the same time. It’s all about adding firepower to your sales efforts.
Why hire two sales reps at a time? Four simple reasons:
- Friendly competition
- Less dependence on individual performance
- More data for future sales recruiting
- More firepower
If you take a slower approach to sales hiring and have only one sales rep, you don’t really have anything to measure against. Two or three sales reps are still far from perfect for validating data, but it’s a lot better than just one.
At this stage in your sales hiring, you still need to be deeply involved. You’re managing, leading and motivating this team. You’re still pitching, doing outbound and inbound, working with your sales reps, listening to feedback.
You can’t outsource this. There are still too many critical decisions to be made. You need all these one-on-one experiences with customers, different sales channels, and lead generation methods. It’s not enough to monitor numbers. You need to be living them.
Goals you should accomplish before transitioning into the next stage of sales hiring:
- Try and test cold-email templates
- Use an effective sales lead management system
- Be experienced at negotiating deals and know how to [handle discount inquiries
- Use drip marketing emails to convert leads better
- Have the ability to see early levels of predictability in your sales funnel
Don’t worry about setting up commission structures at this stage in your sales hiring yet. It’s too early. Hire these first 2–3 salespeople and work with them to get the sales process predictability.
Once you’re there, then you can develop a commission structure /with/ your sales team—one that’s a good match for the size and frequency of each new deal your team closes.
#5: The misunderstood appeal (and opportunity) of build vs. buy discussions — LaunchDarkly’s co-founder, Edith Harbaugh, pens a brief, essential sales reframing. (Source)
Combatting buy vs build – I actually love buy vs build because it means that the customer believes in what you’re doing. If they say “we don’t believe that we ever need that”, there’s no conversation, and no sale.
For LaunchDarkly, our customers have to believe that feature toggling is a best practice they want to use. If they’re not on board with feature toggling, they’ll never build in house (or buy our solution). For buy vs build, I try to understand WHY the customer wants to build:
Pride – “We can do it better”
Cost – “Why would I spend $299/month on that?”
Core - “This is too important to trust to a vendor”
Customization - “No off the shelf solution can meet our needs”
We actually love it when our customers try to build in house - after they’ve tried building it in house, they realize how much time/energy goes into maintaining a system like ours.
#6: On the criticality of following up and other essential direct sales lessons — ConvertKit’s founder, Nathan Barry, recounts what helped as he approached the often-brushed-aside path of direct selling. (Source)
Before we dive into the details of sales I should point out the biggest mistake—one that I made repeatedly and didn’t see success until I fixed it.
You must follow-up.
I’m not a details person. I would reach out about ConvertKit—either for a sale or an affiliate webinar—get interest, and then never follow-up. No deal happens in one email or call. It’s never the right time to switch after cold outreach. So I’d get excited about a potential new account, talk to them for a bit, then let the trail go cold.
Do not do this.
If you’ve ever responded to a 6 month old email thread, then you have the same problem.
Create an echo chamber.
Use a CRM or something similar to track your conversations. You don’t need to buy SalesForce. In the very beginning I tracked everything in a Trello board. Moving leads across columns based on how they responded to my emails. How you track conversations doesn’t matter, it only matter that you never miss following up again.
By getting this specific we’re trying to create an echo chamber. The smaller the circle you target the more likely your prospects know each other. That means if you get one, you can typically get more. This works especially well when you don’t have a big name to mention as a customer, but you might be able to mention a blog in their exact niche. Now you’re relevant.
We’ve done this with fitness blogs, men’s fashion blogs, etc. Typically I start by looking for a niche where we already have 1-3 customers, then make a list of everyone like them (who they follow on Twitter can be a great start).
Get all the top customers in a tiny niche and all of a sudden you’re a big player—at least to them. Then rinse and repeat in other niches as you go.
Remember: the goal is to get so specific that through Google searches and following links you can list out all the major customers.
Now let’s get to the email itself. For this I like to keep it really simple. Don’t pitch, just ask. Ask what frustrations they have with the product they are using. Here’s an email I’ve sent over a thousand times:
Is anything frustrating you with MailChimp?
The reason I ask is I run X, which is an email marketing platform for professional bloggers. We’ve got a lot of great bloggers using us like Katie and Seth from Wellness Mama, Pat Flynn from Smart Passive Income, and Chris Guillebeau. ConvertKit
I’d love to hear more about how we can build it to better serve bloggers like you.
That’s it. The point is to start a conversation, not to make a sale. By asking about frustrations they can start easily and you can easily ask clarifying questions about how they’d like them to be solved.
I try to get to get on a call with anyone who responds. From there I can talk more and ultimately demo ConvertKit.
#7: On treating pitching as a form of marketing — LatelyAI’s co-founder, Kate Bradley Chernis, shares her (rock & roll) radio inspired, profoundly unique process to reclaim (and hone) the lost art of pitching. (Source)
I definitely think of pitching as a form of marketing. Naturally, there’s even different messaging because it’s a different audience, investors versus customers. One of the key things, though again, is to put that human touch, that accessibility, front and center. Naturally, I fall back to radio for lessons learned…
For example, the weather comes over the wire and it’s all scientific, talking about cumulus clouds and a 37.4% chance of rain — you would never read that. The human way is: “Grab an umbrella on your way out the door just in case, there’s a small chance of rain.” By the way, this is a trick I’ve also taught my sales team, how important it is to mold their scripts to their own voices, to their own vernacular.
Which is exactly how I write my pitches — including all of my slang words, speaking the way I normally speak. And then I learn it… I don’t memoize it.
I put 20 pennies in a jar and have another, empty jar next to me and I do the pitch 20 times a day, moving the pennies from one jar to another, so that before the actual pitch, I’ve literally done it a couple of hundred times. I make sure to power through all the mistakes so I also learn how to get out of each one of them. This way, it all becomes instinctive.
The other thing that works for me, because of radio, is that I learn aurally — meaning that I hear the frequency and the cadence of the words, like a song. So when I practice, I say the same phrases the same way, with the same rhythm, in the same tone, in the same pitch, each time. Because when I write, I’m always hearing the writing in my mind. Sound and writing go hand-in-hand to me. And I think that’s essential to communicating, naturally, to zero in on that human element.
I also choreograph the pitch, slightly, so that I always stand on the same side of the screen — even if that means not using the lectern provided. That also means extending my hand out in certain places or pointing at certain components of the slides the same way, every time.
Consistency comes into play as well. Because by the time I’m done with a series of pitch events, my entire team pretty much knows the pitch by heart as well. As a company, we can be one voice.
What are some of the nuances that you have discovered while implementing a sales process at your startup? Tell us all about them!
- Do you have your first 10 (or 5) customers?
- If yes, do you have case studies and testimonials on review sites?
- If no, don’t think of a process just yet. Think of ways to overcome the trust deficit that you face as an early startup. What people want to know is “will you be around in 1 year” and “will this product actually work”. But the way they will answer this question when you have less than 10 customers is by deciding ‘can I trust this person’?
- If you have 10 customers and case studies then try to expand the influence and trust sphere using those.