The way you sell your product is as important as the product itself.
The success of your product is about your ability to get your product to market, make it stand out and convince others to sell it for you.
This has become more of a science than an art form, and as a startup can make or break your business. But the topic isn’t discussed enough.
At Xero, where I look at strategic partnerships and new channels, I’m in the fortunate position to witness a highly effective sales machine as well as meet so many other great SaaS sales leaders.
As a word of caution, you should know that digital sales are hard.
This is particularly true in a SaaS context where search engine marketing, ad display and remarketing costs can easily reach $100 per customer.
These tactics are a zero-sum game.
Data compiled by Compass CEO Bjoern Lasse Herrman suggests that fewer than 7% of all SaaS companies achieve more than 10,000 customers. At that level, and assuming a direct digital advertising play, you could be talking up to $1 million in acquisition cost. Think about whether you have the money to pursue this approach.
Here are my 10 key tips to setting out a sales strategy as a startup:
1. Even where your product has widespread utility, focus on one thing and target a niche to set your product apart from the rest. You can always expand later.
2. Acquire a clear understanding of the problem, its workings, magnitude, footprint, and its consequences and victims. Then build a profile around your expert status in each of these areas and start building a content presence.
3. Create circles of prospects – start with 50. Sit down with them one-on-one but don’t sell to them, learn from them. Now summarise everything you’ve heard and respond to them with what you think you’ve heard and the solution you have.
4. Pick a channel, ideally one which you can tap into and a place where your product most resonates. Remember Xero’s success with accounting firms? Who better to represent accounting software than accountants themselves?
5. Invest in sales enablement. Did you know that on average, a sales team member spends less than 30% of their time selling? How fast can you on-board your reps? How can you improve their product understanding? How can you provide a place for continued product education? How can you accelerate their customer touch points?
6. Get to “no”, and do it fast. I love this article from the Sequoia Blog: “Whenever you meet a prospect, get a business card and tell that person you’ll give her / him a call. If you say three weeks, call back in two days. If she / he doesn’t pick up, leave a message and follow up with an email. Then call back the next day. Keep at it. Once you’re on day three, start calling and emailing every few hours until you get through.” Sounds intimidating but at least you won’t get a maybe – maybe you’ll get a yes.
7. Adjust your pricing to appeal to more customers earlier on. It’s far easier to get 10,000 clients paying you $500 per year than it is getting a single client to pay you $5 million.
8. Go where the competition is. Is there a network of parties who have sold a similar product to yours and had success doing so? If there is go after them and build a compelling compensation model to better incentivise them.
9. Don’t invest in a zero-sum channel. Instead, invest in non-zero-sum channels like social media, long-tail SEO, brand-building, content, value-added resellers, or even cold-calling. In this case the limit of the channel is closer to the limit of the market itself, rather than the sliver of the market which might reach you via a single advertising channel like AdWords.
10. Play with your pricing and website design. Do this regularly. Watch the flow of your customers. What are your fall-out rates?
Selling as a startup is hard. Know your measures of success and keep them on hand. You’ll need to be able to influence these to make decisions on direction.
Blake Hutchison heads up Strategic Partnerships for cloud accounting software Xero.