B2B sales teams in SaaS are rightly obsessed with lead generation. Where are my leads? How do I get more leads? What do I do if my leads start to trail off? But the answer is more complicated than leads – unlike the fictional characters and story in Glengarry Glen Ross – quality of leads does matter. Effective B2B sales strategies in SaaS have nothing to do with the quantity leads -ultimately quality and focus will determine success as funds are limited. This is especially important during the current economic climate. I’ve written a basic overview for those just learning about SaaS.
A lead is anyone who falls into the top of your marketing funnel before they convert into a sales opportunity; they’re a hypothetical person who looks good on paper, but isn’t yet guaranteed to give you any business. An opportunity is someone who your sales team has actually had a conversation with; they’ve agreed to at least explore whether your product is a good fit for their organization. This may sound like mere quibbling over terminology, but consider this:
- Company A generates 100 leads and converts them into 1 deal.
- Company B generates 20 leads and converts them into 1 deal.
Marketing departments may not consider this a significant difference, but for sales it’s the difference between having to pay for a team big enough to call 100 people to convert them into opportunities versus a team that only has to call 20. Brute force isn’t a scalable strategy.
So how do you make sure you get fewer but better leads?
Refine the role of marketing – focus on data
Let’s start at the top of the funnel. There are two questionable assumptions many entrepreneurs make:
- Marketing is sales. False. The role of your marketing department isn’t to make the sale. Marketing is there to start the conversation.
- Marketing can do everything. This is common in small teams but can happen at any stage when companies have expectations of marketing that are unreasonable – marketing like any other functional group does not have a magic wand. Trying to do everything can risk accomplishing nothing. In today’s age of data, relentless measurement of effectiveness enables a company to focus on what is working and avoid excessive spend in areas that are not.
Establish your market type – mature or new
What works for your company will depend on its stage of development and market focus. To attract people you should consider which of the two possible fundamental markets you are in: a mature market or a brand new one.
Working in a mature market
In a mature market, the problem you’re trying to solve has already been defined and you’ve got potential customers already searching for solutions and many are already using your competitors’ products. So you need to figure out how to seize the existing stream of customers currently going to your competitors and redirect them towards your product / service. Digital marketing strategies usually work well here like SEO, paid search, content marketing and even social media influencers because customers know their pain and are searching for a solution. These tactics boil down to informing your target audience that there’s a new player in the field with a better product which might include features, ease of use, value etc.
Establishing a new market – start a movement
This is when you’ve invented something brand new—something that nobody’s looking for because they don’t know the problem exists (at least in a consistent way), much less the solution it offers. For example, before Marketo (a company we were an early investor in years ago), the concept of marketing automation was nonexistent.
In these markets, digital strategies at the beginning can be more difficult because there is by definition no resonance with a non-existent market. In new markets, you need to really start with basics and the customers that made you see the problem, sell to them and put them in the spotlight. Other customers will more easily resonate with similar customer profiles.
Derek Sivers says in his TED talk: “The first follower is what transforms a lone nut into a leader.” As a vendor you’re not credible, so find your first customer and have them tell their story instead. If your product is a solution that CMOs should be using, find out where the CMOs are: conferences, industry publications, meetups, etc. Convince them the problem exists—which shouldn’t be hard, if you’ve done your homework—and see who likes your solution enough to not only pay for it, but tell others about it. That first customer testimonial is what turns you, the lone nut, into the beginnings of a leader.
Whether you put your customer on stage at an event, publish their words or put up a video testimonial, there’s one important detail to remember: their story shouldn’t mention you by name. It seems counterintuitive, but the instant your company’s name is uttered, the story becomes a pitch which sinks its credibility. Instead, make sure your customer’s story is about them: “Here’s a story about me and the problem I was having. Here’s how I solved it—how I was the pioneer who took a bet on a new solution that set me apart from my competitors and gained me new ground in the industry.” Put them front and center.
Expand your opportunities
While you’re working with your customer on their story, you should also seek look-alikes. If you’ve already got a customer (or customers), find more prospects who resemble them in the following ways:
- Fit. Are they similar demographic or size? Look at factors like title, org chart, company size, vertical, industry, etc. Especially at the beginning – it’s unlikely that the same 1.0 version of a product will span the needs of a SMB through a fortune 500
- Pain. Do they share the same pain as your current customer base? Buyers generally prioritize pain but buy with emotions: get them to say to themselves, “Oh! I have that problem!”
Rather than focusing on ROI, get your message to resonate among similar people who have similar problems. It helps get the conversation started, and that’s where opportunities are created.
Inbound vs Outbound
It’s important to note the two distinctive approaches of inbound and outbound marketing. Inbound marketing and sales involves prospects coming to you. Outbound marketing involves you going to them. Early on, everyone is focused on outbound marketing. You can’t rely on inbound marketing because you won’t have a clear idea of who you’re trying to target – let alone the content to draw prospects to you.
Get your people on the phone and start learning. Separate the messaging that works from the messaging that doesn’t. Ultimately, it’s not scalable, but that doesn’t matter: it’s the fastest way to learn and equally importantly, it’s the fastest way to start conversations.
Outbound yields quick learning, but comes with a high cost per opportunity. Inbound takes longer but has a lower cost per opportunity and over time if well focused delivers the best leverage for your business. Inbound also forces you to distill your problem statement and crystallize it, which is valuable for the whole company and can be incorporated into your outbound strategies. Eventually, the two approaches will work in concert.
To summarize, customers and their problems are essential in creating opportunities. Sales isn’t about pushing products: it’s about diagnosing a problem which you do by having conversations. Marketing is about finding a group of people with a problem you can solve. Once you’ve acquired your first customers, get them to tell their stories to everyone else, which will illuminate the problem for the rest of your target market. Delivering value to your customers makes them happy, and happy customers attract new ones.
Written by Ryan Floyd. Have you read?