Selling Up in #SaaS. Not what it’s cracked up to be

The single most common pitfall I see in 90% of earlier stage product plans is a lethal misconception that aspiring to sell software to the highest levels of the organization, is better.

This is blatantly obvious to many product leaders but foreign to equally as many.

Trust me. It isn’t necessarily all that.

It’s expensive: the higher up the eyeballs you aim to attract, the more it costs to generate attention. The targets CEO isn’t going to be reading your tweets so don’t budget for a spray and pray marketing. This is high touch stuff if you want to play hard.

It complicates the sale: The CXO isn’t likely going to mandate the buy. If she does, she ends up owning the execution or undermining her team. Don’t make the sale unnecessarily awkward for everyone involved.

It reduces velocity: If you sell a low(er)-margin/high volume product, you live and die by high sales velocity. Whilst the sales operations team is wired to back up the truck and fill orders as fast as it can, trying to go upstream is counter culture. Adding a quarter and lowered probability (see next point) simply breaks momentum.

It lowers probability: The decision often ends up being one that is of the manage-by-committee kind. Your sales teams spend more time trying to decipher who is influencer, buyer and user in the room when they are more than one person. So you better make sure you add a few extra multiples to that pipeline to make budget if you just must go upstream. From experience, my rule is no than 2 decision makers. Anything more is lethal.

It threatens renewals, your lifeblood: There is no heart in the project. The implementer or real buyer feels like it was shoved down his throat.

Now, genius is marketing to and gaining share of voice in the C-Suite. Every single successful SaaS company has perfected this. You want the best influencers in your corner before you show up to the pitch. And you want to create that strategic headroom in your product messaging that allows your buyer to make an easy case for budget approval from her C-suite manager.

Some of the most successful SaaS companies hire and build product and sales teams for one of the following three scenarios:

  1. To crack the c-suite. Because the product is a c-suite sale.
  2. Or, to make the sale super palatable and practical to buyer who controls the budget.
  3. Or to make the product ridiculously seductive to the end user and come back later to get an enterprise contract.

But successful SaaS companies know that you can never ever achieve all three with the same product and same sales team. Never ever.

What’s perhaps just as dangerous is when product and marketing teams make broad statements such as ‘I sell to IT” or ‘I sell to HR”. If you don’t know exactly who the buyer is (e.g. Sr. Directors or V.Ps in the IT infrastructure group at a gazillion $1–4 billion companies), you’re going to create tons of useless and bloated code in your product, spend lots on misaligned marketing and burn out your engineering teams.

It’s human nature to want to sell strategic stuff. Ferraris over Hondas. But it’s just as lucrative selling extremely targeted software to a more junior buyer that comes in much larger volumes and with supreme clarity of intent, propensity to pay, and goal alignment. Honda makes over a 100 billion euros. And Ferrari makes 2 billion.

Not knowing exactly the right rung on the corporate ladder that happens to be your sweet spot is lethal. Incredibly strong products went nowhere simply for this single reason.

Originally published at on June 5, 2016.

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