I help a group of early stage SaaS businesses in Scotland. The meetings are some of the best fun I have. These are entrepreneurs with great products and awesome determination. Whatever the subject they come up with awesome ideas. This week we jammed about customer acquisition. The single killer problem for everyone in the group.
The evening resolved into a debate about Inbound v Outbound. To be exact, we talked at length about the merits of direct selling strategies. Most based on targeted eMail campaigns and direct calling. Most of the group felt that some element of sales is a priority. You need to get early customers and revenue.
Others argued that Inbound, marketing led growth is the future. Customers no longer want to be sold to. Besides, the economics of sales led growth are not sustainable. Not for companies that sell to SMEs anyway.
The majority of leading SaaS analysts appear to side with the sales model. Many books and articles advocate a straightforward path. Work with early customers to establish product/ market fit. Iterate as necessary to create a scalable model. Then hire a sales team, allocate quotas and drive your growth metrics.
This model has helped create large successful companies since at least 1945. Tech giants such as HP and IBM adopted the approach with enthusiasm. It is established and proven. Salesforce even built a great SaaS company on automating the process.
Thought leaders in the startup world believe technology will change everything. Why do they believe the sales model will survive without disruption?
This is not a new debate. And there is no single answer. Every business needs to find its own path. No amount of change will make this easy. But think about:
- The in built resistance to change among enterprise buyers. Procurement is an entire industry created as a response to the sales model. Complex organisation cultures mean lots of vested interests and accidental blockers. Traditional B2B sales is a viable option for some.
- SMEs are becoming more like consumer buyers. Except they don’t have time to play/ experiment with your product. Consumer marketing is changing. Moving away from in your face techniques. Consumers hate unsolicited sales approaches of any kind. You need to find ways to get found by people who will love the value your product offers.
- Received wisdom on inbound is already out of date. SEO, first wave social media and some types of content marketing dominate. A host of advisors and experts now tout these ideas. The big growth strategies have already moved on.
- Mobile is the interface that counts in the real world. Even if customers prefer your app on a PC, they will find it and engage first via smartphone.
- New ways of reaching customers are growing fast. Messaging, sharing, referrals and invitations. All are making inroads.
- In a crowded world, the quality and relevance of content is ever harder to achieve. Following established formulas is no longer enough.
- Getting to scale needs money and takes time. By any path. Startup resources are always limited. Invest with care. Test and experiment to find what works. Be different and be relevant. Be as individual as possible.
Remember, finding and growing customers is the fun part. Seeing people benefit from the product you have built is awesome. No SaaS startup has cracked the growth agenda completely. I do small business consulting for startups. Because I love helping your business find your unique way to a great revenue model. Find out more at Sunstone Communication or subscribe for regular stuff.