I’m hanging out this week at Saastr 2017. Great conference, great speakers. Tons of insight. Very cool to hear Twillio’s story straight from Jeff Lawson, and hear CEOs reflect on what changes at $20M, 50M, and $100M ARR, straight from veterans like Tien Tzuo and Aaron Sconnard. I missed Doug Pepper's and Jon Miller's talk about lessons learned from their time founding, investing in, and scaling Marketo, but I hope to find that one online after the talk.
Seeing this lineup ahead of time inspired me to offer some insights that my team and I have gleaned by talking to a few thousand B2B technology buyers, most that were buying SaaS products. Borrowing from a title of one of Wednesday’s talk, I’m calling this “non-obvious lessons learned from a few thousand buyer interviews”.
What We’ve Learned from SaaS Customers
The game of scaling a SaaS company is incredibly intense, and has changed dramatically even in the past 5 years. SaaS companies invented the roles of BDR and SDR, and have found ways to scale even the human touch of B2B sales.
But as we’ve profiled buyers in this space, we find SaaS companies missing the mark in several key areas. Some of these are bread and butter for a sales organization, but it’s remarkable how often they still come up. For example:
Poor Buyer Qualification
Many of our SaaS clients struggle with high loss rates, too many stuck deals, or both. In many cases, we determined that sales was spending too much effort on accounts that were not ready to buy or simply unqualified, which not only put a strain on the sales team, but was a primary reason for the high number of lost or stuck deals. Better qualification not only improves win rates, but allows your sales organization to stop spinning its wheels trying to convert customers unlikely to buy.
It’s Not about You: Showing Every Feature of Your Superior Product
It’s common for companies to fall in love with their product and focus their sales presentation on product superiority. While sophisticated buyers may be influenced by product superiority, the vast majority of your buyers are less mature, and for them, product features are less critical than other factors. In fact, if you show all the features, you are likely to overwhelm them.
If you find as we often do that most of your market is made up of less mature buyers, you have to take a more consultative approach, and better yet, prescribe actions; tell your buyers how to get started, and how to proceed. They need to see how they can get their jobs done better and easier, and that usually beats products that focus on features, customization, and overall superiority.
If You Can’t Get to the Decision Maker, Turn your Champ into a Value Seller
It’s harder and harder to get to a decision maker, as companies have built moats around senior executives and buyers. The old Solution Selling techniques need a refresh!
For SaaS companies defining a new category or selling a highly technical product, it can be easy to gain traction with a champion, who is often the end user of the product, but still fail to close the deal because you don’t have access to the real decision maker.
The key action here is to have ready-made tools for your champion to sell internally. Your champion may not be a great sales person, and that’s important to understand. If your champion wants to get something done, you may need to teach them how to sell the solution internally, provide ROI tools, and show how your product can support the company’s big goals.
Ignoring the Competition
For SaaS companies who were once the talk of the town and experienced early success, it's easy to get complacent about your position in the market. But with the fast pace of innovation in the SaaS and technology markets, it's easy for your competition to leap-frog you and meet the needs that you hadn’t considered or taken seriously in the past. Loss and Churn analysis can expose competitors who were once only nipping at your heels but are now eating your lunch, and where you need to focus future development to keep pace.
Selling to Customers Destined to Fail
With executives and investors focused on top-line growth, and sales execs looking to make their numbers, not enough attention is placed on finding the ideal customer. But selling to customers who are destined to fail and fail early is not only a money-losing proposition, it puts undue strain on your support and customer success organization. Sales needs to be prepared to say no to a sale if they determine, based on the buyer’s long-term needs, internal resources, and technical competence, that they are unlikely to become a successful, long-term customer.
"We Already Know That"
This is not exhaustive, for sure, and if you’ve been to any kind of sales training, you’ve heard some of these before.
The trick is knowing which one of these (or others we haven’t discussed here) are causing friction for you as you try to scale. To what degree is it affecting your success? And what can you do about it?
Thankfully, and somewhat surprisingly, your buyers will tell you… if you ask them the right way. By doing a deep-dive on your wins, losses, stuck deals, and churned accounts, you’ll learn more about your product’s strengths, your sales approach, and value proposition. And you’ll either get confirmation on your own hypotheses of what needs work, or discover barriers you never knew existed. More importantly, your buyers will provide you with actionable insights on what you can do to improve.
Want to learn more? Reach out to me. I’m at SaaStr from Feb 7 – 9. Can’t make it? Contact us for a one-on-one discussion about how you can develop a balanced win/loss analysis program that will not only help you nail your value proposition, sales approach, product roadmap, and customer success function, but help you model your successes to scale your business.