Growth Hacking Enterprise SaaS Sales

I also published this article on Venture Beat in 2 parts.

Growth Hacking Enterprise SaaS Sales

What’s new in Sales?

You have heard many examples of successful growth hacking techniques mainly used in BtoC websites, social networks and market places. Facebook, Twitter or Airbnb have great stories about how they hacked their growth. But how about growth hacking sales in SaaS? We are talking about higher value per customer and smaller volumes, but is it a reason not to be able to drastically increase growth?

Before getting there, let’s see how things have changed. If you have a long experience in Enterprise Sales, you have seen the fast evolution of the Sales Process at SaaS companies who sell Enterprise or other Business application technologies.

1. Direct Sales is predominant

The Internet has removed intermediaries in many segments and Enterprise Sales is no exception. We are seeing VARs and other channels playing a much less important role in most cases. Even though integrators still play a key role in deploying the solutions, their role as sellers or even advisers to recommend solutions has drastically reduced thanks to higher level of customers’ awareness and their direct connections to the vendors.

According to Matrix Partner’s recent study, Channels represent in average only 5% of SaaS companies’ sales. They used to represent in average 30% to 50% in the last decade.

Sales Channels, Before Sales Channels, Now

Sales Channels old

New Sales Channels

 

 

2. The Sales Cycle has become INFINITE!

In the old days, often more than 50% of customers’ lifetime revenue was taken at the time of the initial sales (and much more if you exclude the maintenance revenue). The sales cycle was defined as the period of time from the initial contact to the PO. That model is gone. Sales cycles make less sense today. Now the revenue collected from a customer is spread out over time. As you can see in my graphic below, after the initial sale, the cumulated collected revenue from the customer grows significantly thanks to the renewals, upsells and expansions. I am replacing the traditional sales funnel by the symbol of infinity; amazingly, the 2 funnels side by side do look indeed like the symbol of infinity in mathematics! We like symbols and metaphors in sales, I hope you enjoy this one.

In the past, vendors could unfortunately make it through without necessarily providing a great customer support. Anecdotally, vendors used to even “control” the users group by organizing and financing the events to make sure all communication is smooth. Today customers’ satisfaction rates are much higher. They share their experience publicly on social media. Organizing these communications through social media groups is still both desired and feasible, but customers have much more freedom. The great consequence is that SaaS companies must provide excellent customer service. Besides, the very nature of the SaaS business model, where each year (and sometimes each month) the vendor needs to be the best in class in order to avoid cancellation, pushes vendors to maintain quality and novelty.

 

Sales Funnel, Before Infinite Sales, Now

Sales Funnel, Before

Infinite Sales Cycle, Now

 

The socialization of customer support creates a new channel for upsells and expansion. Frontier between Inside Sales and Customer Success Teams or Community Managers is now a bit blurry. This leads to my next observation: Sales are needed everywhere now!

 

3. Sales Organizations have become more sophisticated: more roles, more tools and more automation

As customers got connected to the web, some power started to shift from the sales rep to the customer. In the old days, a good Account Executive had full control on the sales process. He/she was the one to deliver the sales presentation, educate the prospect and make a proposal. He/she was the main if not the only source of information for the prospect. Today the prospect already knows a lot about the product (webinar replays, articles,…) and the price (if not public for the Enterprise market, usually there are lower packages sold online giving good ideas of prices). As a consequence, sales organizations adapted themselves to more sophisticated customers by working smarter and became themselves more sophisticated so that they keep the control. Sales are going to be omnipresent wherever there is interaction with customers in order to seize sales opportunities. Some organizations will provide sales trainings to all customer facing employees, while others include sales persons in each department.

Organizations, Before Organizations, Now

Old Sales Process

New Sales Process

 

4. Social Selling

I could not write about the trends in sales without mentioning Social Selling. There is a lot of hype about Social Selling. It’s an absolute must that every salesperson needs to understand and practice. LinkedIn has even created a social selling index page which shows your SSI (Social Selling Index). Check yours! If you are in sales and you are not in the top 1% of your Industry Rank, then you need to fix it fast (since you have naturally a lot of non sales connections, you should be in the top 1 or 2%, unless you are selling a product or service to sales people).

social selling

However, Social Selling IS NOT selling! It’s sales people’s social existence. It’s about connecting to people (including your partners and clients obviously), building relationships, engaging and educating. You need to exist! Imagine an after work company event in the old days where your company has invited customers, partners, suppliers, employees, shareholders, everyone. Imagine you are sitting in a corner, not talking to anyone. That’s who you are if you are not into social selling. You don’t exist. So you can’t sell if you don’t exist. But existing is not enough to sell. It’s necessary but not sufficient. You need the good old fundamentals of sales to be successfully selling. So make sure you are “social-selling” and don’t forget that it’s not selling. To re-use the analogy to that event, you need to get back to your prospects after the event and apply your winning sales process and effectively SELL.

 

5. Fundamentals of the SALES PROCESS have not changed though

Even though many phone calls got replaced by emails and instant messages, and that some simple sales processes got automated thanks to some brilliant marketing automation techniques, at the end of the day, sales people need to convince customers that their product or service is the best solution to the customer’s needs. The bigger the opportunities, the more you need rain makers. The fundamentals of sales have not changed. And sales methodologies like MEDDIC or building your own winning sales process become mandatory to help sales teams rationalize what they do and allow successful sales teams to drive the sales process.

MEDDIC Sales Process

Typical Process in Enterprise SaaS Sales

Growth Hack Your Enterprise SaaS Startup

Now let’s see some of the Growth Hacking Techniques for Enterprise SaaS companies. A few of the examples below are based on my real experience with Business Hangouts that we growth hacked from zero to over 1 million business users in just 12 months. Obviously not all our hacks are listed here. It’s all about your own creative ways of finding the “hacks”. Many of the hacks are updated forms of older marketing tactics such as retargeting, email marketing, adding share buttons in your content, adding “powered by” links, customization and personalization of the content, Slideshare presentations, Quora answers, etc. The comprehensive list is very long, as you can see, however I am particularly excited to talk about the four techniques outlined below.

1. Little Apps on big market places

In the early days, all startups dreamed of partnering with big names. They hired senior execs called “VP Alliances” whose job was to sign a piece of paper called a “Marketing Partnership Program” with a big name company (very often the place he/she had worked previously) so that the startup could include the logo of that name in their Partners slide to raise funds or to sell. The practice was hugely expensive and didn’t really deliver results in terms of sales.

Today all the big names in tech have market places for desktop applications, not to mention the App Store and Google Play for mobile. For instance Google Chrome web store is quite easily accessible to developers for any application running in a chrome browser. Google Apps Market place is a great place if you have some sort of integration with any of the Google Apps products. If you don’t, create one to get there. Mobile is even better. You will be surprised to see how fast you can attract users from Google Play or App store. Be creative; build an easy fast basic app with an excellent design but limited features to capture leads from the early adopters in the Mobile Enterprise market.

2. Freemium model

The popular and effective freemium model can also be applied to enterprise SaaS. It is always possible to find the right scope of features so that the client can get a job done in limited cases or for a limited number of times, without leaving money on the table. You can monitor the use of your platform by free users and fine-tune the scope if you feel there are too many of them and you would like them to start paying. When it comes to attracting new clients, freemium is definitely better than time-limited trials; the client tends to develop a more permanent relationship with your company, and there is a good chance that sometime later they may upgrade to premium.

3. Marketing Automation Techniques implemented early

Once you have generated traffic with free accounts, the next step is to scale them up to paying accounts. You don’t need to wait until you are generating $1 million of ARR before implementing marketing automation with Marketo or Hubspot. You can use some basic, but important, auto-responders to automatically welcome, train, and coach your new free subscribers by sending them educational videos, white papers, case studies, or other educational materials as they sign up. The emails can be sent out  on time-based and event-based sequences several times a week.

4. Concierge onboarding

Automation is good but limited, and does not replace the good old human voice. It certainly can’t compete with concierge onboarding: making a phone call (or even better, a video call) to a brand-new customer. For high-end products with a number of free sign-ups, this service can be offered for free clients. But even when you have thousands of free daily sign-ups and a more limited number of paying clients, you can still onboard the paying clients to maintain them, reduce churn and increase upsells. That’s the role of a dedicated person or team, an inside salesperson with a technical background, or even a customer success who had been trained for sales. You can read more about concierge onboarding here.

Early Stage Startup

Now, how do the above techniques apply to very early startups when we are designing and developing the product? In many early stage startups, there are not that many sales persons if any. This conversation is for late stage startups and larger companies, right?

Wrong! If you think reflections about sales should be considered only after you have an ARR of $1 million, you are missing crucial opportunities. Remember, nothing happens until you sell something to someone. Of course, you are not going to hire huge sales teams until you have validated your winning sales process. However it is important to integrate some of the best practices of growth hacking as early as possible so that your early experimentation provides realistic and conclusive results. If you want to understand and master your full sales process, you need to test that process in parallel with product features and the whole package as early as possible.

The process of selling enterprise SaaS starts at the inception of the product and can be expanded as follows:

  1. MVP demo (lean Startup model), some call it MSP (Minimum Sellable Product)
  2. Customer’s feedback
  3. Improved MVP & First Dollars billed ( could be a POC)
  4. Repeat 1, 2, 3 with other clients
  5. Automate the initial sales and learning process using Marketing Automation tools
  6. Build free Apps (and connectors) to leverage large platforms market places in bound traffic (alliance strategy)
  7. Inside Sales teams to close small deals/clients and for a smooth on boarding of new clients
  8. Enlarge business in each client: Account Executives take over
  9. Scale up the sales team
Lean Startup Sales

Lean Startup Sales Model

Posted on November 5, 2015 in Executive, Growth Hacking, Sales

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About the Author

Darius Lahoutifard, founder of 01consulting is a Serial Entrepreneur and a former Executive at PTC and Oracle among other software companies. His latest company was Business Hangouts, a Google G Suite live broadcasting app, with millions of users, acquired within 3 years. He is interested and writes about entrepreneurship, startups, technology, enterprise software, SaaS, Sales Leadership, Management, Sales & Leadership Education including specifically the MEDDIC methodology, Marketing, Market Research and more.

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