Extensive Notes from SalesConf
As an engineer with no direct sales experience, I've always wanted to learn more about how to turn code into cash, but wasn't sure where to start. A few months ago, I got an invite to SalesConf, an affordable sales conference with a great speaker lineup. I bit the bullet and signed up, and I'm happy to say that I learned a ton. While the conference was targeted at SaaS startups, many of the lessons are broadly applicable.
This post is a collection of my notes from the conference, which was held last Friday.
There are a lot of notes here -- about 6,000 words in all -- and not everyone has the time to read that much. While I think there's a lot of value to reading the entire post, here is a summary of high-level points that came up in multiple talks:
- You need a sales process -- don't just wing it, or expect your initial sales employees to just figure things out on their own.
- Your pitch should be simple and clear, and tailored to the prospective customer you're talking to.
- Know what you're looking for in an ideal customer and an ideal salesperson.
- Measure everything. Analyze the data for your best customers and look for patterns. Go out and find more customers who fit those patterns.
- Specialize and do 1-2 things very well instead of doing a lot of things poorly. This advice applies both to team efforts and to individual efforts.
- There are many great software tools for salespeople and marketers (links throughout the notes). Use them.
- When your company is small, you don't have the bandwidth to handle a lot of potential customers, so identify your ideal customer profile and focus on companies that fit that profile.
- Ask customers to pay for up-front development (for new products) and custom development (for enterprise PoCs).
- Your first sales hire needs to be a great salesperson and to be able to build out a team. Don't settle for just one of those two skills.
- Understand the milestones that lead to sales and customer success, then work hard to lead customers to those milestones.
Ok, on to the notes! If something doesn't make sense, it's my fault and not the speakers'.
Table of Contents
- How to Crush Your Sales Goals by Aaron Ross
- Uncovering a Treasure Trove of Sales Opportunities With Customer Data by Lincoln Murphy
- How To Fast Track Sales Reps To Peak Performance by Bridget Gleason
- Step-By-Step: $290K MRR In 14 Months by Tim Sae Koo
- Build A Massive Personal Brand-Powered Referral Network by Carolyn Betts
- Build a Hyper Targeted Lead List in 12 Minutes by Ilya Lichtenstein
- How to Sell a Product Before You Create It by Josh Isaak
- Growing B2B and SaaS Sales Teams by Armando Mann
- How to Write a 3m Page View Article by Nick O'Neill
- How Mattermark Sold Their First Million by Danielle Morrill
- Sales Hot Seats with Hiten Shah, Lincoln Murphy, and Steli Efti
How to Crush Your Sales Goals by Aaron Ross
Speaker background: Aaron spent 2002-2006 at Salesforce, where he built out the outbound prospecting team. He is also the author of Predictable Revenue.
Aaron talked about common sales mistakes and how to fix them.
Fatal mistake #1: not having a sales system
Indicators of this mistake include high (>10% per year) churn on the sales team and/or missing your goals. You need to have a process in place, be able to describe your ideal customer, etc.
Corollary: at large companies, missing quotas is often blamed on salespeople, who are then fired and replaced. But if recruiting, training, and other processes remain the same and quota continue to be missed, the problem is with the processes, not the salespeople.
Fatal mistake #2: confusing your prospects
When people are confused by your pitch, they default to saying "no." Don't pitch your product as a kitchen sink or ask your prospective customers what features they want. Instead, try to understand each customer's problems, then give a very focused, targeted pitch which makes it easy for them to make a yes/no decision. Confusion always defaults to a 'no' reply.
Make the pitch about what customers want. They don't care about what you do, they care about what you can do for them. For example, don't talk about your "scalable platform," because a prospect won't care; they only care that you can solve their specific problems.
Tips for improving messaging:
- Instead of telling someone what you do from your point of view, pretend they asked you: "How do you help customers?"
- Review your own pitch. For each bullet point, ask yourself, "so what?" or "what's so great about that?" Your answers are what you should be pitching to prospects.
- Selling ideas is better than selling benefits, which is much better than selling features. Aaron used a great analogy:
- Selling a feature: "This is a drill."
- Selling a benefit: "You need to put a hole in the wall, and this drill makes that possible."
- Selling an idea: "You'll be happier if you can cover your walls with family photos, and this drill makes that possible."
Fatal mistake #3: driving growth by growing the sales team
It's less common today, but the way people used to think about growing sales was "I have 10 salespeople, and I need to double sales, so I'll double the number of salespeople." The real lever is lead gen. If you have great sales but terrible lead gen, you'll struggle; if you have great lead gen, you can mess up the sales process and still succeed.
3 types of leads: seeds (word of mouth), nets (marketing), and spears (outbound sales).
Tips for word of mouth:
- Improve referral rates by hiring customer success reps. Happy customers will recommend you to others.
- You should hire a customer success manager (CSM) by the time you have 5-15 people, and should have one CSM for every $1m-$2m in annual revenue.
- Two baseline metrics: customer churn should be <15%, revenue churn should not be negative (if you lose customers, you win more revenue from upselling to existing customers and growing your customer base)
- Triggers for having a CSM engage a customer: support/help desk interactions, billing/payment history (i.e. someone is paying on time), survey feedback, engagement with marketing materials, levels of usage of the product and specific features.
- GainSight offers great dashboards for customer success management.
Tips for marketing:
- Just like the VP of Sales has a sales quota, the VP of Marketing should have a lead quota (with some balance of quantity vs. quality).
- Most important metric to track: lead velocity rate. This is a measure of how much qualified pipeline is being created each month and helps you estimate growth/company health. Ideally, the velocity is high and growing every month.
- Make your marketing emails personal. Messaging that sounds more human gets much better results. For example, use text emails instead of HTML with a lot images, and include a one-sentence story about yourself (even if it's something trivial like "I just finished my coffee and wanted to send this to you.") This advice is probably simplest thing you can do to make your marketing better.
Tips of outbound prospecting (Aaron's specialty):
- Your funnel should be to identify target customers, prospect with cold emails/calls/appointments, then start the sales cycle on qualified leads. For example, 1000 emails => 100 calls => 20 appointments => 15 sales qualified leads, each worth $50k/year.
- Common sales email fails: too long, confusing/lots of jargon, filled with lies, boring, vague calls to action. Aaron's mantra: "make it simple to understand and easy to answer."
- If you're vague, like "let me know the best way to reach you," it's easy for a recipient to not respond. Simple, specific questions are much more likely to get answers. For example, "Are you free Thursday at 3pm for a phone call?" Even if the reply is 'no', at least you've gotten the prospect talking.
- Keep it short. Relevant HubSpot study result: the highest response rates were for emails that are 300-500 characters (1-4 sentences). Keep emails personal, but take out filler material. Don't beat around the bush.
Fatal mistake #4: not specializing and trying to do too much
Salespeople often avoid prospecting because they're either not good at it or don't like it.
Over time, you want inbound and outbound salespeople who qualify leads, account execs who close sales, and customer success managers who increase the value of existing accounts.
If salespeople own the entire process, customers get horrible service because salespeople focus on deals they're trying to close that month, and prospecting and customer success suffer.
Even if you're at a small startup and you own the entire sales process, at least separate functions by day of the week so that you're not neglecting anything (e.g. Tuesdays are for prospecting; Thursdays are for customer success.)
Most marketers try to do too much (webinars, events, white papers, etc). It's better to do a few things very well instead of a lot of things poorly.
Specialization leads to predictability: you will get insights on what works and what doesn't, better scalability for each layer, and a talent/farm team system where you can hire more junior people and help them grow into more impactful roles. You will struggle without specialization.
Salesperson churn is usually due to unrealistic quotas, poor management, or lack of coaching. It's rarely about compensation.
Online resources that Aaron recommended during the talk:
- Jason Lemkin's blog
- David Skok's blog
Uncovering a Treasure Trove of Sales Opportunities With Customer Data by Lincoln Murphy
Tip #1: Even if you don't have enough customers for meaningful data right now, you need to start collecting now.
Tip #2: Focus on your ideal customer. Founders are often afraid to do this because they have a fear of missing out on other customers, but in the early days, you don't have the resources to handle everyone, so you may as well be choosy.
Ideal customers have 7 key attributes: ready to buy, willing to buy, able to buy, will get value/success out of using your product, profitable (you can make money off of selling to them), have expansion/upsell potential, and have advocacy potential. Lincoln focused on the last 4 attributes during his talk.
General methodology for finding ideal customers:
- Determine what situation you're solving for (e.g. potential customers who will refer others or sign a contract quickly or pay a lot.)
- Get access to your customer data.
- Find existing customers who match your situational criteria.
- Look at all of the data you have for those customers: which product features do they use? What industries are they in? How many employees do they have?
- Look for patterns among customers who match the profile you're looking for.
- Use those patterns to find new customers who match your profile.
Basically, find your most successful customers, then try to find more customers who are just like them.
Different types of customers, and the patterns that reveal them:
- Customers who are most likely to find success with your product. Data to look at: average Net Promoter scores over time, short sales cycle length, quick time to getting value out of your product, customer support data (tickets that are resolved quickly and thoroughly). You can also poll your account managers for their gut "health" scores for each customer. That may not sound scientific, but it's basically wisdom of crowds and it works. (Gainsight, Lincoln's company, makes tracking all of this stuff easy.)
- Customers who are the most profitable. Data to look at: on the cost side, look at fully-loaded customer acquisition cost (ads, sales time, trials and POCs, cost of converting from free to paid). Include post-sale costs and ongoing support costs. On the revenue side, look for high lifetime value, long term contracts, increasing usage/purchasing of add-ons over time, and low support costs. Also look for short sales cycles.
- Customers whose accounts grow over time. Data to look at: intra-company virality (land and expand), roles/departments of initial purchasers within the company.
- Customers who are your biggest advocates. Look for: companies that speak at your events, participate in your case studies, refer customers directly, provide testimonials, etc.
In general, customer success is a prerequisite for each of these customer types. That is, if customers are not getting value out of your product, they are not going to increase their spending, advocate for you, or be profitable for very long.
How To Fast Track Sales Reps To Peak Performance by Bridget Gleason
Speaker background: Bridget is VP of Sales at Yesware, which offers email-based tools that make salespeople more efficient and more effective.
Everyone wants to be a peak performer, but how do you increase each person's probability of success?
- Culture always precedes great results. If people don't hit numbers and the rest of the company is okay with that, you get a culture of mediocrity. (Personal note: the reminds me of the Broken Window Theory in software development.)
- Need to hire A players. If the team isn't exceptional, then other exceptional people won't want to join.
- Need a great system. "A great assembly line comes before a high quality car."
5 things to think about as you create your system and assemble your team:
Ideal sales reps
Just like you expect salespeople to know ideal customer profiles, you should know the ideal sales rep profile (which might change over time). For your first hire, the ideal rep is probably someone who is both a great individual contributor and a great team builder -- not just one of the two.
Strong onboarding program
You can't just hire people and then expect them to hit the ground running. You should have a training plan for making reps more successful. This plan can include content you create, or a collection of public content like blog posts and videos. Regardless, you shouldn't expect people to come in and just 'figure it out'. You don't have to teach people everything at the beginning, but you need to provide enough for them to get started.
New reps should know what to expect in terms of what they'll be working on, their works hours, quotas and goals, attitudes, etc.
Involve the rest of your team in onboarding (via training, mentorship, social events, etc). The more the whole team is involved, the more everyone feels vested in the entire team's success.
Commitment to the system
Onboarding is not a one time event, it's an ongoing commitment.
Q: Thoughts on commission-only vs. commission + salary?
A: Not a fan of commission-only because people aren't as committed. In the early days, when there's less predictability in the sales process, might need to pay higher base and less commission. Over time, shift to lower base and higher commission. Bridget favors people who prefer more commission because they are betting on themselves. At her previous company, Engine Yard, new hires were given a choice of taking more salary or more commission. (Personal note: this is like engineers often having a choice between more salary or more equity.)
Step-By-Step: $290K MRR In 14 Months by Tim Sae Koo
Speaker background: Tim is the CEO of Tint, which lets you display social feeds anywhere.
Path to $290k MRR (and lessons learned along the way):
- First 10 customers: LinkedIn direct targeting. Used Rapportive hack to guess emails.
- Change your LinkedIn settings to let people see when you've viewed them. Occasionally, people you view might contact you.
- Charging early makes you seem valuable from the get-go. Release a beta version of your product and your business model.
- Charge more. People are afraid of charging because they want growth and usage. However, charging more lets you quickly figure out who your real customers are, the ideal customer profile, etc.
- Charge based on value, not cost. Ask customers, "if you built this yourself, how much would it cost?" Charge based on their answers. Tim used Qualaroo on the pricing page to learn about what customers wanted.
- You need a distribution strategy. Ask: where do your customers look for tools? In this case, Tint integrated with app stores, built WordPress plugins, etc.
- Work on SEO for terms your customers search for. Add backlinks to landing pages within your product -- especially for non-premium customers. Those customers may not pay, but at least they will improve your SEO. Build up content on your blog, Quora, etc.
- Set up as many lead opportunities as possible: after you resolve issues, give people discounts; set up drip campaigns; upsell people who use the product the most; etc.
Tint's sales tech stack/process:
- Wufoo forms for inbound sales leads. Wufoo can track sources, which is handy.
- Gmail for responding to form submissions.
- Assistant.to for scheduling. Conversions were high because Assistant.to makes it so easy to book a demo.
- For each inbound request, send a short email that basically says, "Here's a video describing the product, and here are a few times if you'd like to do a call with someone from the team."
- Pipedrive to track the sales process.
- DocSend to track docs. (Personal note: doxIQ is another good tool for document tracking.)
- Boomerang for follow-ups. (Personal note: I like NudgeMail, which is currently free.)
- Ballpark for invoicing.
Tricks for scaling up:
- Sponsor conferences.
- When asking people to spread the word, offer pre-written email/Twitter/etc. templates.
Build A Massive Personal Brand-Powered Referral Network by Carolyn Betts
Speaker background: Carolyn founded Betts Recruiting, which helps companies hire sales and marketing people.
After you attend a conferences or event: prioritize your follow-ups, make the follow-ups personal, and invite people out socially to form deeper relationships.
Have a strong online presence:
- Use professional photos and descriptive titles on sites like LinkedIn. Make sure your profiles are fleshed out.
- Google your name to see what others see when they search for you. Polish up all of the results that you have control over.
- Create relevant, valuable content and share it widely.
- Be active on social sites, blogs, etc. Make connections with readers, and with other writers.
- Build relationships within your company. This is often undervalued. When people that you have good relationships with move on to other companies, they might be able to get you new clients or help in other ways.
- Pay it forward. Send referrals, connect people, compliment people to others, etc. The more you do that (in a genuine and honest way), the more people will want to work with you.
Build a Hyper Targeted Lead List in 12 Minutes by Ilya Lichtenstein
Speaker background: Ilya is the cofounder/CEO of MixRank, which helps sales teams automate lead prospecting (i.e. find new customers).
MixRank has grown dramatically over the last year. Ilya talked about how the company did that while spending time on sales, but not on marketing.
Main theme: you don't need marketing when you're starting out. If you have a product that costs more than a few hundred dollars per month, you don't need marketing, but you will need sales. Blog posts or SEO are helpful, but they're not required. In fact, at a typical company, 80+% of closed deals come from sales, not marketing.
In the past, qualifying criteria included attributes like job title, company size, location, and firmographics. Today, it's also possible to use tech signals (what technologies does a company use?), social signals (who are they connected to?), fundraising signals, user activity (in freemium/trial product), etc.
The traditional way to qualify a lead is linear: go through a list of leads and qualify them one-by-one. Today, you can take a more lateral approach: find reasons to say 'no' to most prospects and only focus on the perfect customers. When you're big, you want to add as many customers as possible. When you're small, you don't have enough bandwidth to sell to everyone, so just focus on the customers who are the lowest hanging fruit/the easiest to sell to. You can address other customers as your team grows.
Think about who your ideal customers are, then figure out what they have in common. Some company attributes to consider: industry, location, funding level, and technologies used. Purchase attributes: seniority, title, and dpeartment. To generate more ideas, first look at common attributes among your own customers, then among your competitors' customers, then among your partners' customers.
Use Google's advanced search operators to search LinkedIn for new leads. Google shows more results and allows you to do searches that you wouldn't be able to do directly on LinkedIn. Examples:
- "demand gen specialists logo" site:linkedin.com (people in a group called Demand Gen Specialists)
- "internet industry" "11-50 employees" site:linkedin.com inurl:https://www.linkedin.com/company (small companies in the Internet industry)
- "15..20 employees on LinkedIn" site:linkedin.com inurl:https://www.linkedin.com/company (companies with 15-20 employees)
- "people also viewed * * marketo" site:linkedin.com inurl:linkedin.com/company (companies related to Marketo)
Q: How do you find someone's email address?
A: Use Google/Twitter searches to find people at the same email domain and see what kind of email address convention they use. Then try that convention for other names at the same domain. toofr is a handy tool for this kind of stuff.
How to Sell a Product Before You Create It by Josh Isaak
Speaker background: Josh used to own a brick and mortar business, then went into consulting, then recently moved into SaaS where he has successfully pre-sold products before building them.
Most businesses fail because they build something that's not wanted. Often, they start building too early and start selling when it's too late. One solution is to sell something before it exists.
Two key topics covered in the talk: believe you can sell something before you write a single line of code; apply this process to create your first product, or to add new products to your business.
Ideas come from problems. Good ideas come from problems of people who have lots of money for solutions.
So, pick a market that has people with money (dentists, engineers, etc.), and ask those people about their problems. You can just call or email them. You can use a very simple script like: "Hey, I saw your website and really liked ______. My name is ______ and I'm reaching out because I'm doing research on what problems lawyers are facing. Can you tell me about a challenge that you face? I'd love to hear back, even if it's just once sentence."
Email dozens of people a day until you have enough data.
If you already have a company, ask your current customers about their problems.
Is the problem you're thinking of solving universal? Keep emailing and talking to more people until you're sure the answer is 'yes'.
3) Pre-sell validation
This is scary =).
Remember that you have to deliver if pre-selling works!
How do you presell? 1) build a wireframe, 2) get feedback from potential user, 3) tweak wireframe, 4) go back to user, 5) ask them if they want to join as an early adopter. (Note: users know they're looking at wireframes and not an actual product.)
After incorporating feedback, invite users to pre-pay to become early adopters. Given them incentives like the ability to be involved in product development and discounted pricing for life. Offer bigger discounts and incentives for longer up-front contracts. For example, you might offer 6-, 12-, and 24-month contracts at 30% off the retail price. If someone signs up for the 12- or 24-month plans, you will give them an additional 2-4 months free. Note that the discount is for life -- the value of great customer advocates is worth more than the lost revenue.
When you're pre-selling, explain that you want customers to pay so that they can be committed to the product and to giving good feedback, and because pre-selling helps you fund product development. You can also offer a guarantee (e.g. refund within 3 months for any reason.)
First, launch to early adopters and build up case studies. Next, launch to the public. Josh has done this twice now (with clinicmetrics.com and clinicrise.com), and both products were funded with pre-sales.
Q: Beta customers often want different features, so how do you avoid feature creep?
A: This works best if you target people in the same industry or with same problem.
Growing B2B and SaaS Sales Teams by Armando Mann
Speaker background: Armando build out sales teams at Google, Dropbox, and RelateIQ.
3 parts to this talk: defining your sales process, measuring success, and maximizing success.
Part 1: Defining your sales process
Guiding principles at RelateIQ:
Computers are cheap and people are expensive, so...
- "If a computer can do it, a computer should do it."
- "If you do something twice, automate it."
- The team should focus on tough problems that only humans can solve.
Use tools and integrations heavily because..
- Reps do things faster, and that leads to more sales closed. For example, contacting someone within an hour of them singing up can double the close rate!
- Tools help reps remember things so that their brainpower is freed up for other tasks.
- Tool usage results in cleaner and better data.
- Tools improve visibility into what's going on in the company.
Part 2: Measuring success
- Measure key milestones (e.g. what makes someone a lifetime customer?)
- Isolate leading indicators for those milestones. What makes them happen?
Milestones to measure: white paper downloads/engagement (see doxIQ), trial usage, customer satisfaction, renewals, upsells, etc. In general, measure everything. Identify the 3-5 metrics that drive your business. For RelateIQ, it turned out that trials and the brands of existing customers were among the key growth factors.
Churn is a bad metric to measure (e.g. you might lose 10% of your customers over the course of a year, but be making 2x the revenue with the customers who stayed -- the churn metric looks bad, but your revenue actually grew dramatically). Instead, measure cohort growth over time (ACV by cohort).
Ways to expand your business:
- Add capacity (more companies using your product)
- New use cases (e.g. RelateIQ can be used by the sales team, but also the customer success team, the marketing team, etc.)
- Adjacent orgs/teams within the same company.
Random statistic from the talk: 15x close rate (!) for RelateIQ if someone from RelateIQ connects with a self-service client -- even if it's just for a short chat.
Another lesson specific to RelateIQ is that most people sign up if they've imported data during the trial, so imports receive a lot of focus.
The recurring theme: figure out what makes people sign up and stay, and then focus on that relentlessly.
Part 3: Maximizing success
Most sales orgs are set up like a production line: BD reps get leads, account execs close them, and customer success managers (CSMs) make sure those customers are happy.
RelateIQ sets people up in "pods" with a biz dev person, a junior and a senior account exec, and a few CSMs. By setting the system up so that the same sets of people keep working together on accounts, accountability goes up. Pods also make it easier to create career progressions. For example, a junior account exec can move to a new pod as their senior account exec.
Q: Thoughts about pricing?
A: It's common to give discounts to enterprise, but Armando thinks it's better to go the other way: lower per-seat prices for small customers, higher prices for bigger companies. This could either be done with different license tiers, or with decreasing discounts as company sizes increase.
Q: Thoughts on free/fremium?
A: Free makes sense if it's winner take all, or if users don't get immediate value from using product, or if the end user and the decision maker are different. However, there are many situations where not offering a free tier makes a lot of sense -- it depends on the industry and the product.
How to Write a 3m Page View Article by Nick O'Neill
Speaker background: Nick organized Sales Conf and used to be a prolific blogger. He grew one content site to 1.4m uniques per month.
The power law applies to articles. Nick has written 3,500 articles, and 25% of the total page views came from the single most popular article. Given that dynamic, it makes sense to work as hard as possible to produce a hit.
Miscellaneous tips for content marketing:
- Backlinko, Videofruit, and Nick's personal site are all great resources for content marketing.
- Uses Google search suggestions for relevant keywords and ideas. For example, if you're writing an article about Facebook, check which c Google suggests for "facebook a", "facebook b", and so on.
- Buzzsumo is a great resource to see what's shared by topic/domain. Look for patterns and inspiration.
- Find a great, heavily-shared article and use the Skyscraper Technique to build something even better.
- Follow Copyblogger's suggestions for magnetic headlines.
- Link-building tips: http://backlinko.com/link-building
- Invite people to do something (share/subscribe/comment/etc) at the top and bottom of every page.
How Mattermark Sold Their First Million by Danielle Morrill
Speaker background: Danielle is the cofounder/CEO of Mattermark, which provides private company research, prospecting, and tracking. Prior to Mattermark, she was the Director of Marketing at Twilio.
Danielle told the story of how Mattermark reached its first million in sales in the course of a year. The talk was more storytelling than bullet points, but highlighted many valuable lessons.
- When you're selling a brand new product, you need to have very, very high expectations. Because you don't know how high to set your goals, it's easy to settle for sales that seem healthy but are actually suboptimal.
- Making the first sales hire is scary.
- The first sales hire needs to be able to run the whole sales process.
- Upgrading from a spreadsheet to a CRM for tracking sales is a huge leap forward in effectiveness.
- Lead velocity is more valuable than lead quality in the early days. If you have a ton of leads, that's a great asset for customer development.
- Don't just go through questionnaires on your phone calls. You need to understand what your customers are looking for. A good technique is to spend the first 25 minutes of a 30-minute sales call engaging a potential customer, building rapport, and understanding their problems, then spend the last 5 minutes demoing just the product features that they would appreciate. That's a lot more effective than pitching the product in the same, general manner to every prospect.
- If a potential lead isn't a good fit right now, save your call notes for future reference. The person might be a better fit as your product evolves, and taking good notes will help you close in the future.
- Good practice: email customers about new features every few weeks. (Personal note: I like this practice and am surprised by how few companies seem to do it.)
- LeadGenius is effective.
- When hiring a VP of Sales for a startup, make sure they can function well in a small organization. Sometimes VPs from big orgs look great on paper, but are used to working with expensive tools and well-defined processes and a well-known brand. Those things rarely exist at small companies.
Sales Hot Seats with Hiten Shah, Lincoln Murphy, and Steli Efti
This was a panel Q&A session where attendees would ask the panel how to solve a specific problem.
Problem: in a previous business, selling was easy because there the product had scarcity built-in. In new SaaS business, that's not the case. How does one create feeling of scarcity -- especially without fiddling with pricing and discounts?
- Fiddling with pricing and discounts is not a bad approach. It works.
- Instead of discounts, offer more product for the same price (e.g. free upgrades/more features).
- Understand customer priorities and what is urgent for them, then try to connect that to your product.
- False scarcity can also work. ("Only 3 more 10% coupons available for this month.")
- Estimate customer's usage and predict the ROI they'd be missing out on. (Example: "you have 12 salespeople and our tool saves 2 hours of work per person per week, which means that at $50/hour, you're losing $1200 for every week you wait.")
Problem: easy to get people on the phone, but they're rarely the decision makers. Often that's not obvious until well into the call. How do you quickly figure out who the decision maker is without offending the person you're talking to?
- If you know who the decision maker would be (e.g. VP of Product), your emails can mention that that's who you're trying to reach.
- Ask: "in the last 6-12 months, have you championed any tools? What was the process like? What can I do to help with that?" This doesn't hurt someone's ego and makes it easier for them to explain who needs to approve the purchasing decision.
- If you know what you need to get the deal done, you can give the prospect a checklist so that they know who else to invite to the calls.
- Treat the prospect as one of several decision makers. "After you approve, is there anyone else who needs to be involved? If you need to present to a team, what concerns might they have that I can help you address?"
Problem: Product is truly scarce and can only be sold to a certain number of customers. How do you maximize profit/make sure you pick the best customers?
- Tell prospects that supply is limited and you want to sell to the people who get the most use out of the product, so you want to determine how much the product would help the prospect.
- Make prospects go through some hoops in order to demonstrate their level of interest.
Problem: Sometimes sales cycles take a very long time, especially at big organizations. What can be done to address this?
- Ask the potential customer what the process is on their end. For bigger companies with complex processes, ask if you can do some steps in parallel.
- If you have the flexibility to set a unique price for each customer, ask them what a reasonable time frame would be, then offer a discount that incentivizes them to stick to that time frame. ("You said it should take 3 months? I can give you a 10% discount if it's done within that time frame.") People aren't put off by this and it makes them hustle more.
Problem: When selling to larger companies, they often want custom work done before committing to a contract. How should that be handled? How should the custom work be priced?
- Charge for the pilot.
- Create scarcity for custom work. You can say something like, "we're very successful with small companies and are now moving to larger deployments. We're doing to work with 10 partners, and we want to work with the companies where this would make the biggest impact on success. If this turns out to be a good fit, you can put down a refundable deposit to be part of our early access program."
- Note #1: note the use of 'partner' rather than 'customer'.
- Note #2: note the use of 'early access' (which sounds exclusive) rather than 'beta' (which sounds buggy).