Sales methodology for B2B SaaS companies

April 2015

Most sales leaders will tell you: without a clear and well-defined sales methodology, you’re going nowhere. The goal of this presentation is to gather ideas and advice on how to do sales from leading thinkers in the field and present them in a short and actionable way.

Read on to discover why you need to setup a sales team, find out more about the PUCCKA sales methodology advocated by Mark Suster and see how it you could apply it to your own sales efforts.

Note: I strongly encourage you to go and read the original articles I’m referring to in full, they’re definitely worth it!

Introduction

Why do I need sales at all?

The first question you’re likely to ask yourself is, do I even need a sales team to begin with? Shouldn’t my product do the talking? While seductive, the idea that you don’t need to go out there by yourself and get hands-on with customers can be very dangerous to your business’ ultimate success.

You may grow without putting a formal sales process in place - but you won’t grow as fast as you could, nor as fast as your competitors do. Sales are the living, breathing heart of your business and they should be treated as such.

Sales are the key to your growth

Dries Buytaert:Other than the standard things (an idea, passion and the willingness to act), the most important thing that aspiring entrepreneurs need is the understanding that 80% of entrepreneurship is sales and marketing. If as a founder, you're not obsessed with sales and marketing, you're a liability rather than an asset. [...]

So if there is one thing you should learn before starting a company, it is "sales and marketing" (in the broad sense) — and you better be passionate about it, because you'll invest years of your life to selling and evangelizing to make your company a success. Without customers or a team, you won't need any other skills, because you'll be out of business.

Building a business = doing sales

Mark Cranney:One of the myths of SaaS is that the products are so good, so easy to use, so quick to deploy… that the product sells itself. Given the popularity of try-before-you-buy and freemium-to-premium models for software as a service, it’s easy to see where that myth comes from.

But as many startups discover to their horror — after they “land” users and try to “expand” to more departments in a large company or government agency — this is far from the truth. Even with early viral growth, SaaS products don’t sell themselves. Strong enterprise sales is critical to capturing market share.

Products don’t sell themselves

Jason M. Lemkin:A more fundamental question we’ve touched on but mostly bypassed is this: do I even need salespeople at all? I mean, Atlassian doesn’t have any. Can’t I just do a Basecamp model? Can’t I just have Customer Happiness Officers? Well maybe you can. More power to you. As long as there is enough momentum in your business to hit your revenue goals without a true sales team, then by definition you don’t need one.

The sales rep’s job isn’t to lie, cheat or steal, or convince you that that’s just “surface rust” on the ’05 Impala. Rather, it’s to be a trusted guide, a consultant, helping them through the product evaluation and purchasing process around a great product with very high ROI. It’s about learning, bonding, adding true and real value. And then... asking for the fullest, largest possible check ;-)

The need for salespeople

But I don’t know anything about sales - how should I do them?

There are a lot (really, a LOT) of sales methodologies out there. While reviewing all of them extensively would be teh work of a lifetime, I’ve researched a fair share of them, such as the Sandler sales system. While a general-purpose sales system should work reasonably well for any B2B company, SaaS sales present some unique challenges.

Based on personal experience, I decided to focus on the methodology presented and implemented by Mark Suster at his two companies. It’s both short, full of specific and actionable exemples and overall a very good fit for B2B SaaS companies.

Selecting an approach

Mark Suster:In my journey to better understand the sales process, my management team and I developed a sales methodology. It was really a common language we could all use with each other that became really important as we added new sales people and new geographic territories.It helped make sure that we all thought about our sales campaigns in a uniform way and that we had a common language that would help us decide where to spend our limited resources.We called our methodology “PUCCKA”: Pain. Unique Selling Proposition. Compelling Event. Champion. Key Players. Aligned Purchasing Process.

PUCCKA: a sales methodology

Mark Suster:Pain. It’s a reminder that unless your prospect has a need to solve a problem, they are not going to buy a product. Customers sometimes buy things spontaneously without thinking through what their actual need is. But often there is an underlying reason for a purchase even if the buyer doesn’t bring it to the surface.Throughout the meeting, your job is to tease out as many discrete pain points that are near enough to your solution set to begin talking about what it is that you do. Write down the customer pains so you’ll have them for later. Ask questions the whole time. The best form of sales is “active listening” where you’re engaged in what the customer is telling you.

Pain

Mark Suster:This post is about the “U” or Unique Selling Proposition, which in industry terms is often called a USP. It’s the second rule of sales: “Why buy me?”.I often work with teams to get them to codify the key things they do well that the competition does not. Teams usually start with terminology that is very insular and less relevant to customers. That’s OK for the first pass but you need to then move on to defining your USPs in simpler terminology that can be understood (and importantly remembered!) by your customers.After a short demo it is worth pointing out some of important things your prospect is going to want to consider when making a purchasing decision in this product area. This is when your key USPs need to come out strongest.

Unique Selling Proposition

Mark Suster:The number one reason sales stall when customers see the value in what you do is because they often don’t have a reason to buy NOW. That is where a “compelling event” comes into play. If you’ve done a good job in the sales process you’ve already written out a needs document in which your wrote out what you believe the customer problems are with specific examples.The next logical piece of work is to help your prospect quantify the problem so they can attribute economic value to your solution and help you complete your sale. [...] If you’ve documented their pain in economic terms, if your product uniquely solves this pain and if you build a compelling business case as to why implementing your product will make money, lower costs or reduce risks – you’re well on your way toward a new customer.

Compelling Event

Mark Suster:No product sells itself no matter what startup companies like to think. In order for an organization to buy product it takes an individual who has a budget and is willing to spend it on you or they have access to a group budget and are willing to fight for the resources to implement your solution. This is especially true for products that involve more than an individual user.In order for somebody to be a champion, they need to have both influence (in order to persuade others to take action) and “authority” to either make the decision or to get somebody who holds budget to make the decision.I shorthand these two things – Influence and Authority – as IA. [...] In order for somebody with IA to be your champion, he has to be actively helping you through the sales process.

Champion

Mark Suster:Mostly you need Champions who are “egg breakers.” But many people get secure in their sales process with just meeting / talking to the people who are the nicest to you. This is one of the most common mistakes untrained people make in a sales process because the nice guy you’re talking to tells you not to worry about the others, that he has you covered.This is a mistake because if you don’t meet a wide variety of people who may have a role in the decision you could be totally blind-sided by a parallel process happening in the buying organization of which you aren’t aware.So there you have it – the key players involved in a sales process. It’s your job to track who these people are and make sure you know how each will be involved in your decision.

Key Players

Mark Suster:What does it mean for the purchasing process to be aligned?Well think of it this way – you have your sales process. You know exactly when you want to sell to this customer and presumably it’s this quarter! But the buying company many not be able to buy in your time frame. [...] How do you know whether or not your prospect is ready to buy this quarter?The simplest rule in sales is... ask! I know it sounds trite, but believe me when I tell you most people are afraid to ask direct questions like, “who holds the budget to invest in a solution like ours?” or “what is your financial approval authority?” [...] When asking, you will quickly learn if this project is likely to slate for this quarter or in the future.

Aligned Purchasing Process

What should I do next?

David Cummings:After a startup achieves product/market fit one of the most important next steps is to develop a sales and marketing machine. The sales team should be working towards a reproducible, and profitable, sales process.

As part of that iteration, a sales playbook should be at the top of the sales manager or entrepreneurs list of items. A sales playbook is the how-to manual for a sales rep. The goal is to document and categorize as much sales related information as possible in a digestible format.

Develop a sales Playbook

Jason M. Lemkin:The time is probably going to come when you have to build a sales team in SaaS. It may be Day 1 if you have plenty of capital and are selling to large enterprises. It may be X months down the road, once you close a few deals of large enough size ($x,000 ACV) to justify hiring a sales rep. It might be 5 years down the road, like Dropbox and Evernote, when you decide to add a corporate/enterprise edition to your freemium app.

Most likely, you won’t have the resources to hire a whole sales team upfront. You’ll want to start with one experienced rep. And there’s only one problem with that: no matter how well that rep does, you won’t learn anything. You need at least 2 to learn.

Hire 2 sales reps

David Cummings:When interviewing sales reps, one of the most common questions we receive as an interviewer is “what would the first 30 days look like if I earned the job?” While the first 30 days will vary from company to company, there’s still plenty of commonality.

The first 30 days for a new sales rep is all about shadowing existing team members as well as training with the sales manager. Then, by the end of the month, it’s time for live calling and prospecting. Training is a critical part of the sales rep on-boarding process.

And get your reps’ first 30 days right

Conclusion

A startup story is a sales storyMaking sure you get sales right is the best way to give your company the freedom to achieve its objectives. In order to this, implementing a well-defined methodology, along with proper tooling, is key. Your CRM and your internal sales knowledge management systems should be the embodiment of your methodology.

Be careful not to see you methodology as an end point: it should always be a living and adaptative process that you use to streamline communication between all the people involved with sales. The results should quickly be worth your efforts setting things up!

Special thanks

Mark Suster (Upfront Ventures)➔ Website➔ Twitter

Jason M. Lemkin (Storm Ventures)➔ Website➔ Twitter

Dries Buytert (Acquia)➔ Website➔ Twitter

Mark Cranney (a16z)➔ Twitter

David Cummings (Pardot)➔ Website➔ Twitter

Looking for help?

I am available for short consulting missions: strategy advice, questions about the enterprise sales cycle, positioning review…

Get in touch:consulting@guillaumelerouge.com

Guillaume Lerougeme@guillaumelerouge.com

Director of Sales & MarketingXWiki SAS