I saw an interview recently with the CEO and Sales VP of a rapidly growing SaaS company. They were quickly adding both Sales Development Reps and Account Executives in order to acquire more customers and become the dominant player in a new market.
I can’t imagine how the CEO and VP Sales are managing through this phase of rapid growth in the company. Think of all the things that have to work together: They must fund the cost to recruit, hire, and train new people. As they hire people, this new company also is developing a sales method to acquire customers at a rapid rate. And finally, they have to make sure new customers are successful.
As I was listening to the interview I began to speculate on how a growing startup might begin to implement sales process excellence.
First let’s look at the goals of the company. These goals include:
- Acquire customers
- Retain those customers
- Acquire them at a low cost
The metrics are monthly recurring revenue (MRR), churn rates, and customer acquisition cost (CAC).
What does their sales process look like? The sequence is simple since they only have one distribution channel. They use outbound calling for lead generation and inside sales for selling.
What undesirable results might this company be experiencing in marketing and sales? Here are some possibilities:
- Not enough leads. Marketing generates some leads, but the sales development reps must find many leads on their own.
- Staff turnover. In this intense environment people burn out, they are fired for lack of performance, or they become dissatisfied with growth opportunities. But it’s expensive to recruit and train new people.
- Lack of follow-up with leads that do not turn into customers. Just because a lead is not ready to become a customer today doesn’t mean they will never become a customer.
- Inconsistent qualifying and selling methods. The company has hired a lot of people, given them goals, and told them to go to work. Each sales development rep and account executive is using their own methods. Some are better than others. The company only has informal mechanisms for people to learn best practices from each other.
Given these undesirable results, what are some basic actions that the company could take to improve the sales process, to retain their staff, and to strengthen their financial results? Here are a few ideas taken from Michael Webb’s Sales Process Excellence.
- Establish clear definitions of a marketing qualified lead and a sales qualified lead. What are the criteria that an MQL must meet in order to justify an SDR phone call? And similarly, what criteria must a prospect meet in order for the SDR to pass the lead to an AE?
- Identify and disseminate best practices. What questions work best when an SDR makes a call that quickly add value to the prospect and also qualify the prospect for further conversation? When the AE demonstrates the software to a prospect, what are the most beneficial features to demonstrate? Do they differ by industry or company size?
- Meet regularly to assess the pipeline flow. Establish and track conversion ratios. Evaluate the quantity and quality of new potential opportunities. Review the number of orders, installs, satisfied customers and referrals.