Covering all things Sales, Marketing, Product management and Going global. Content taken directly from our jams and delivered in bite sized learning chunks.
It doesn’t take much scrolling through a LinkedIn newsfeed before you will stumble across an image proclaiming something along the lines of “skills can be learnt, but character is built over time.” While it is an absolute cliche, it’s also rooted in reality. Kiwi Landing Pad is all about growing the potential of New Zealand businesses as they look to expand into the American market. A big part of that is about finding the right people - especially when you are in the early stages of a startup when money is tight and the team is small. At that point it’s essential that you’re hiring people with a good character and an intrinsic motivation to learn, work and improve their skills. In the words of Mark Suster “team is the only thing that matters.”
Let’s take a few (unfortunately not too hypothetical) examples of where this can go wrong. Imagine you’ve just hired a top developer to build out your product; they have the skills you need and the qualifications to boot, but six months down the track they’re out the door because they’ve just taken a better salary (here’s an extreme example). Or one of your first sales hires has a chronic problem with excuses and is slowing down your sales team. This can be fixed by hiring two sales reps rather than one when you start selling - this is something we’ve covered multiple times in our Sales and Marketing Jams. Now you’re 6-12 months down the track, running low on funding and the product isn’t working or you have 3 customers (or maybe even both). These aren’t good problems to have.
One of the ways that we’ve seen companies get around this problem is by taking a ‘hiring for character’ recruitment strategy. This means looking for people who are responsible, have empathy as well as an inner drive to do their very best at their job. Sure they want to shine, but they are interested in doing it in the ‘right way.’ They take a longer term view of things, continually learning and work with a wider sense of purpose because they can align your vision of the future with their values. One of the interesting side notes to living to San Francisco is the dismissive attitude towards the “perks” that technology companies offer - there are a lot of people who don’t really care about the food that comes with working at Google, especially after you factor in the hour long commute either way.
Hiring for character often involves a few deliberate choices that ensure you bring on “missionaries” who share your vision and see work in a startup as a way to fast-track their careers, rather than “mercenaries” who are focused on making money and grabbing as many stock options as possible. Borrowing from Mark Suster - one of the best ways you can avoid mercenaries (and a whole lot of other issues) is by hiring people who are a weight class lower than they want to be. These are people who are good at what they do, but want to take the next step and basically don’t have the required years of experience needed to match their title. While startups are seen as the hot thing to be in right now, they are a hell of a lot of hard work. There is also a cultural difference between startups and established companies - a senior salesperson from a name brand company who is fed qualified leads is going to have vastly different set of expectations (and is probably less likely to work out) than a more junior salesperson who’s used to hunting their own deals and doesn’t stand behind an instantly recognisable logo. Someone who hasn’t done it all before (and therefore has an opinion on everything) is also much more likely to learning from their mistakes rather than blaming it on the executive leadership or other external factors.
While one cost effective way of upskilling staff members can be through online training, one of the major advantages of working in a startup is the freedom to be a jack or jill of all trades, working on a diverse projects that may or may not be part of your job description. Having a relatively flat management structure, being agile and constantly having to figure your way around problems without much money are all part and parcel of working in a startup. We advise against taking a straight jacket approach to hiring for skills - a positive attitude and an appetite for learning is a lot more helpful than a straight A+ academic transcript when you need someone who is going to have to figure things out for themselves. The other downside to a straight jacket approach is that you essentially mimic a big corporation, minus the certainty, prestige and defined advancement opportunities.
Hiring for character starts at the interview process - it means you need to be talking about what values your company holds as well as what your mission and vision is. Looking past the skills they’ve put down on their resume you want to find out why candidates want to work with you. Get to know them as people - after all, if they’re any good you’ll be spending an enormous amount of time with them.
Recently, we hosted Daniel Barber, VP of Revenue @ Node.io, and a very experienced VP of Sales on our monthly webinar series to deep dive into Sales Strategy. Catch the recap here:
Sales Process & Sales Strategy are like chalk and cheese. They’re both different. Yet, most people end up confusing the two, which can be detrimental to a company’s progress. This post is dedicated to understanding the fundamentals of sales strategy, based on an interview with Daniel Barber, VP at Node.io, who shares some invaluable insights on this topic. So let’s get right into it!
What exactly is a go to market sales strategy?
A sales strategy sees to find the best possible way to distribute a product or service to the market. On the other hand, a sales process is about setting up systems & processes and hiring the people you need to execute on your sales strategy.
With a go to market strategy, the 3 key questions to ask are:
1. Are you selling your product/service directly to a business?
2. Are you selling your product/service directly to a consumer?
3. Are you selling your product/service through an indirect channel?
Once you know exactly who your target audience is, your go to market strategy entirely depends on your business model. The 4 types of business models in a tech business are:
a. Charge Per User: Your revenue depends on the number of users using your product. The benefit of using this approach is that it’s simple and logical. The more people that use your product, the higher your revenue. But this model may not be good from a customer advocacy perspective. In the early stages of your company, you want as many people as possible to talk positively about your product and spread awareness about how awesome your product really is. A charge per user may limit your ‘word of mouth’ marketing.
b. Usage: Your revenue depends on the extent of usage of your product/service. This approach can be great due to it’s simplicity, but again, may limit user adoption on a large scale.
c. Revenue Share Model: This is when you charge your customers a percentage of the revenue your product/service generates for them. With this approach, it’s possible to make a lot of money, if your product generates a large profit for your customers. The only disadvantage of using this approach is that it’s hard to track how much revenue is directly attributable to your product or service. So you’ll need to make sure you have experienced analytics and data experts on board who’re helping you track the exact amounts of revenue generated and your resulting earnings.
d. Flat Price Model: This is when you charge a flat price for your product. It’s simple and straightforward, but you need to be confident that your customers would be willing to pay the price you’re charging.
Once you know which one of the above business models you’re adopting, it’s a lot easier to identify the right sales strategy (and process). By evaluating the costs and revenues associated with each sales approach, you can work out your cost of customer acquisition, decide which route to take and create a sales process around it!
What should you include in a go to market sales pitch deck?
Daniel recommends a book called “Get Backed” which has pitch decks of over 25 different companies that have raised capital to fund their ventures. He also recommends having a look at Reid Hoffman’s pitch deck for raising series B funding from Greylock partners for scaling his venture, LinkedIn. These pitch decks contain all the important details you need to include when pitching!
What exactly is a sales process?
A sales process consists of 3 main aspects. Inbound Sales, Outbound Sales & Closing Sales. It seeks to address questions around these 3 aspects, such as:
a. How many direct sales reps are needed?
b. What should the frequency of sales calls be?
c. What is the process of closing sales?
In the early stages of a company, it’s important for founders to be able to sell their product and close the first few deals, as they’re usually the ones who can communicate their product’s value in the best possible way. Moving on to later stages of a company’s development, Daniel recommends that the first people you hire should always be ‘sales closers’. They’re the ones who make calls, set up appointments and close deals (in an enterprise software or SaaS business).
An inbound marketing rep is responsible for generating and qualifying leads with inbound marketing. It’s easy to submit to inertia if there are many inbound leads being generated, so it’s best not to wait to do outbound sales, or rely too much on inbound. An inbound marketing rep shouldn’t be the first person you hire from a go to market standpoint.
Treat hiring sales professionals the same way you’d treat qualifying customer leads. You need to go through a few profiles, have a couple of interviews before you narrow down on the best person for your business. You’ve got to have a rigorous hiring process to attract the best talent!
How can you identify a good Sales Closer as your first hire?
You need to be able to have an ‘ideal candidate profile’ to know exactly the type of person you’re looking for! Without this, you’ll be lost.
Look for people who have experience in selling the products your company sells. If you’re in the enterprise software business, hiring a sales professional who’s sold widgets in the past would be terrible hiring decision. High end enterprise software sales requires a highly sophisticated sales professional who’s adept at managing relationships and comfortable with multiple rounds of negotiation. So make sure you know what qualities you’re looking for in your first few hires.
What would you do in a scenario where you’re in a sales meeting with a prospect who has recently bought another similar product?
In the enterprise sales domain, you can only lead with differentiation, not cost. It’s about creating the maximum value for the customer. In such a scenario, it would good to demonstrate how your product can be more valuable to your prospect. Rather than doing all the explaining yourself, it’s best to let customer testimonials do the talking, and show your customer how your product has added value to companies that are similar to theirs.
An experienced sales professional would find out who the decision makers are in the prospect’s company, and try and get them involved in the product demonstration process. Understand where their pains are, so you can truly demonstrate value to them.
How do you maintain engagement with customers, when the customer contacts leave the company? Do you have to resell the product to the new people who replace them?
If you’ve got a great relationship with a contact at your customer’s company, it can be tricky when they leave. It’s important to track where they’re going, so you can continue the relationship, and hopefully sell your product to them at their new company.
To re-engage with the people who replace customer champions at your client’s company, identifying ‘Value Moments’ can be the key to success. These ‘value moments’ are when your product demonstrates immense value for your customers, so it’s important to communicate them regularly with your existing and new customer contacts. People love receiving good news, and will begin to associate you with value!
How should a SaaS sales team work with the customer success team at a company? Who should be responsible for customer upsells/renewals?
A lot of companies have account executives win new customer deals, and customer success reps manage the relationship with customers as well as renew their contracts. The ‘customer success model’ is now evolving.
Daniel recommends bringing in a customer success rep long before the deal actually closes, and working in conjunction with the account executive to understand the prospect’s needs in detail, to set the foundation for the contextual value the product would generate if the prospect was to buy. This goes a long way in being able to track the right metrics, when a prospect actually becomes a customer.
With renewals, it’s best to think about who’s actually good at sales? Is it the account executive or the customer success rep? Having the customer success rep do renewals may be a conflict of interest, as it adulterates the genuineness of service a customer success rep is meant to provide! Therefore, the ideal approach is to have account execs own the customer relationship and do the selling, while having the customer success rep being purely responsible for the customer’s success.
What’s the right hiring strategy for sales reps? Is it good to hire in pairs or batches?
Don’t hire in pairs. It’s best to hire sequentially, when you have one sales prep start on one day, and the others start on a future date. The reason is because the ones who start first would be in a position to help the ones who start later, thereby reinforcing their knowledge through teaching and collaborating with newer sales reps. This has proven to be a very successful hiring and training approach, based on how people learn!
It’s also recommended that you set up office in a location that’s close to the talent pool you’d like to hire. For instance, if you’re looking to hire talented engineers, it’s best you’re located close to top tier engineering colleges where you can easily source great talent!
Wrapping it Up
Base your sales strategy, depending on your business model. Create a sales process once you’ve determined the right business model and sales strategy, to set the foundation for sales success. Evaluate what stage your company is at, in order to make the best sales strategy decisions.
For more videos on sales and marketing from the Kiwi Landing Pad subscribe to our youtube channel.
Editor’s Note: Guest post by contributor Ash Alhashim, founder of the Brown Flag Group, and previously Global Inside Sales Director @ Optimizely. Ash is a regular Kiwi Landing Pad speaker community contributor.
You’re walking down the street, texting on your new Blackberry Electron. You jokingly text your friend back, “You shut your mouth when you’re talking to me!” one of the many lines you shamelessly recycle from Wedding Crashers. What a great film. That Owen Wilson guy’s on fire. It can only get better for him from here.
As you reminisce about more great 2005 movie quotes, you realize you’re across the street from an Apple Store. Maybe you should go inside and check out one of those new iPods your friend keeps yammering on about? You decide it’s worth a shot, and you walk in the door–blinded by the array of shiny Apple products.
Okay, we’re back in 2015 now. [Thank goodness; I wasn’t sure how much more Kelly Clarkson I could take]. What happens next in our collective hypothetical memory is the subject I’d like to dive into in the following article. The question I’m posing is:
“What is the best way for an Apple Sales Rep to facilitate the sale of an iPod to our curious, but apathetic, prospect?”
BANT is Dead
When you think about BANT [qualifying sales prospects by inquiring about Budget, Authority, Need, Timeframe] as it relates to this B2C sales scenario, you realize pretty quickly how ineffective it is in galvanizing a prospect like this one into action.
Apple Rep: Hi sir, how can I help you?
You: I wanted to learn more about this iPod thing I keep hearing about.
Apple Rep: Sure thing! The iPod is our best-selling item right now, happy to tell you more. But before I do that, do you mind if I ask you a few questions?
You: Uhh, sure.
Apple Rep: Do you have budget?
Apple Rep: Do you have $300-$400 set aside for an MP3 player?
You: I mean, I do have money, but I didn’t think--
Apple Rep: Well do you have buying power?
You: blank stare
Apple Rep: What is your need for an MP3 player?
You: Well, I don’t need one, I just thought--
Apple Rep: Do you have a pain caused by listening to music on a portable CD player? What is it about listening to CDs that keeps you up at night?
You: Dude. You must’ve sipped too much sizzurp. I’m outtie.
The point of that hyperbolic conversation was to show how ineffective BANT is when it comes to selling products in nascent markets. The iPod was a new technology. It changed the way we consume media. Therefore, Apple was “selling into uncharted territory.” Because of this, the Law of Diffusion of Innovation applied to iPod sales. This theory, presented by Everett Rogers in the early 1960s, suggests that the rate at which new technologies are adopted is a standard distribution.
Law of Diffusion of Innovation, visualized [Source:Wikipedia]
Rogers broke up the curve into five distinct audience segments, that anyone who has read Geoffrey Moore’s Crossing the Chasm should recognize: innovators, early adopters, early majority, late majority, and laggards. The early + late majority segments make up almost 70% of the market (moving forward I’ll refer to these two segments simply as the “market majority”).
It’s safe to say that if a new technology or idea doesn’t “cross the chasm” and gain majority market share, companies selling products in that space won’t last. Note that I am talking about category adoption, not product adoption. In other words, I’m not saying that if Salesforce’s CRM product doesn’t capture the market majority, Salesforce will fail. I am saying that if CRMs don’t gain widespread adoption, the idea of CRM will fail.
BANT works when you’re selling to nerdy innovators and early adopters who can’t wait to be the first person in their social groups to adopt this tech. These folks might even buy in spite of BANT. I was an early adopter of the iPod and iPhone, and I would have let the sales reps flip through my high school yearbook and ridicule my hemp necklaces and JNCO jeans just so that I could get my hands on those devices first.
But an interesting thing happens when you start selling to early majority folk: the customer’s desire to change their own behavior dissipates. People, on average, become more cautious and pragmatic. The attitude of the buyer goes from “man, I can’t wait to trash that stupid Discman,” to considering how to get the most from that stupid Discman. In other words, people in the early majority are still annoyed with the limitations of the incumbent technology, but they believe that incremental improvements to that technology will suffice. Henry Ford once said, “If I had asked people what they wanted, they would have said faster horses.”
The biggest problem with BANT, though, is that it assumes that the customer not only has budget, a need, and a timeline for evaluating and purchasing software in place: as a prerequisite, it assumes that the customer is aware of the fact that they should be buying a product like yours in the first place.
I wouldn’t be doing you much good, though, if I just wrote this to let you know that BANT sucks. The purpose of this article is to offer saleshumans selling disruptive, game-changing products a new sales discovery framework that is better suited for the type of conversation you will be having with prospects who are in the “unconscious incompetence” stage of learning [in other words, individuals who not only don’t know about what you do, but do not recognize the learning deficit].
The model I’m referring to is GROW-ROI.
GROW-ROI stands for:
GROW-ROI puts discovery at the top of the sales funnel, instead of qualifying and disqualifying. It is an attitude change: instead of looking for reasons to disqualify a prospect for not having budget, need, or timeline established, you’re trying to find common ground so that you can push the opportunity through. [I’d argue that authority is always relevant, because you always want to be talking to the right person].
GROW-ROI makes the middle of your funnel, the shaky ground where the SDR hands off the buyer to the Account Executive, much fatter than it was with BANT.
But enough with the GROW-ROI ad. Let’s explore it in detail.
In order to have intelligent and meaningful conversations with prospects, you need to understand what they are trying to accomplish. Now, this doesn’t mean interrogating them for 45 minutes so that you can hand off a “qualified lead” over to an AE. It means building rapport.
Consider what your product helps companies do. Now ask yourself “why does that matter?” When you have an answer, ask yourself why that answer matters. Keep doing this until you hit a wall. You’re [hopefully] landed at “helps companies make more money” or “helps companies save money” or some combination of the two. “Goals” questions should be focused on the big picture, and how muchmoney or savings they want to see within a set timeframe.
Note, that goals should be quantifiable, measurable gains. If you get fuzzy answers here, dig in deeper. How much additional revenue do you need to make this year? How many more marketing qualified leads do you need in order to meet your goals? The best way to do this is to start off by learning what’s going on today. Hint: this part of the conversation has nothing to do with your product, and often has little to do with what your product directly solves.
Roadmap questions are ones that help you understand how your prospect plans on accomplishing their goals. What is your plan of attack for making more money from your website? Do you plan on spending more on AdWords to drive more traffic to your site? Retargeting? Do you plan on doing more with your social media presence? There are so many ways to make more money online.
A majority of the time, especially when you’re selling to a prospect that is squarely in the market majority, their answer as to how they’re going to accomplish their goal will have little to do with the solution you’re selling. This is okay!
At Optimizely, we sell a product that helps companies improve the digital experiences they deliver to their customers—and increase online revenue as a result—through A/B testing and personalization. But, when we ask prospects how they plan on making more money from their websites, one answer we don’t often get from early majority prospects is “through optimization.”
That’s because most companies aren’t doing it today, and going back to the unconscious incompetence point from earlier, don’t even know that they should be testing. They want to do more of the “tried and true” stuff that has typically worked in the past. The problem is, what worked yesterday won’t necessarily work today. This is where “teaching, tailoring, and taking control” lessons of The Challenger Sale really become important. You’re in the process of learning about your prospect’s business. Soon, the time will come to teach and take control.
What challenges does your prospect anticipate she might face in trying to accomplish her goals? What could prevent her from getting to the finish line? Chances are she’s tried to accomplish similar goals in the past. What went wrong then, and how is she ensuring that history doesn’t repeat itself?
In Matt Dixon’s The Challenger Sale, this is referred to as “reframing.” What you are essentially doing here is helping the prospect realize that the goals and challenges she is speaking about is not the entire picture. There is more to it.
Marketers will often tell us at Optimizely,, with the very best of intentions, that their goals are to run A/B tests in order to increase conversion rates.
Why does that matter? And, is that the whole picture?
The reason websites care about increasing conversion rates is that, all other variables held constant, higher conversion rates equal more revenue. So it’s not about increasing conversion rates; it’s about making more money.
On top of that, many of our prospects don’t realize what Optimizely can do around personalization, particularly if they have a lot of first or third party data about their website visitors. We do a lot more than just A/B testing. This is where we help the buyer realize that.
Now is the time to teach through storytelling. The time to juxtapose the buyer’s limited understanding of how your product might be able to help with a clear, mind-blowing example of the effect your product was able to have on one of your existing customers.
When you give a reference, go big. Don’t match the buyer up with a case study of a company that did the thing they think they can do with your product. Show them what’s possible if they start doing the thing your product gets them doing.
Try to be as specific and relatable as possible (by vertical, by buyer persona, or by use-case] as that will help make your story resonate. But, most importantly, offer a great narrative!
What did your product do for the customer you just referenced? There are two directions you can generally go here:
Person: What were the benefits that person reaped? Did she get promoted? A raise? A big ol’ bonus? This is a great way to generate excitement with your buyer.
Organization: What were the positive implications for the business line? What did that mean for the business as a whole?
This is the part where you wake them up. That daydream with the big wins was nice, but now is the time to bring them back to reality. Here, you will introduce them to the account executive who will manage their evaluation cycle.
Introduction also means stands for introducing the buyer to the evaluation and purchasing plan. It’s important to remember, after all, that you are a saleshuman: you specialize in selling software for a living. Your buyer is likely not a professional procurer of technology. Be professional but firm, and set expectations for what your sales process looks like. Let them also know what all all involved parties–this includes them–will have to do along the path towards wild success.
I hope this was helpful. It has been for us at Optimizely. Crossing the chasm is never easy, and we struggled to figure out how to get out of our sales funk as we grew past the early adopters stage [MISS U GUYZZZZ!].
The Tao Te Ching teaches us:
“When they think that they know the answers,
people are difficult to guide.
When they know that they don’t know,
people can find their own way.”
Lao Tzu couldn’t have been more correct.
When it comes to selling products in the early majority of emerging markets, there is an order of operations. First, you must make the buyer aware of his learning deficit. Do this by reframing the conversation, and then persuade him through storytelling. Once you you’ve done these things, set expectations as to what he’ll need to do in order to be able to actually use the product. From there, the selling process gets much easier.
Just don’t screw up the demo
Editor’s Note: post originally appeared on the SalesHacker blog visit here for details of there up and coming sales conference in New York > #salesmachine. http://www.salesmachinesummit.com/
An event series and online resource dedicated to supporting the New Zealand ecosystems development in Sales, Marketing and Product Management.