A few reflections on building an effective sales process…

At Beringea, we’ve been investing in software companies for the best part of two decades. Clearly, the SaaS model has become all the rage for valid reasons, but can require finessing your go to market strategy.

I’ve been lucky to work with some incredible founders, investors, and advisers, who have helped me to refine my thinking on SaaS sales. There’s no doubt it’s not easy in today’s market — but there are some simple lessons that I’ve found can help you to put your best foot forward.

1. One strong use case is far more effective than ‘we can solve all your problems.’

At the beginning of the 2010s, we were early investors in a no-code / low-code enterprise software company. While the product was great — it genuinely made so many business processes more efficient — the sale was hard.

A key issue was that we were offering to solve too many issues at once: “tell us your problems and we’ll tell you how our software can address them.” It put the onus on the client to tell us what our product should do for them — no matter how great the benefit, it turned out they simply didn’t have the time to structure and articulate relevant challenges.

This changed when we told a mortgage provider “we can significantly increase your mortgage processing output by cutting out X days and improving risk measurement by Y.” Suddenly, it was completely clear what the product did for them. Once we landed one part of the bank, it become far easier to go across the hall — perhaps to speak to their friends in corporate lending — and hone the pitch to solve their specific processes.

My key takeaway: when selling any piece of software, solve THE problem of the person across the table. Describe the specific outcome that solves a problem faced day-in-day-out by the person opposite you. Features and capabilities can come later when demonstrating how it creates the output — once they are bought in on the specific solution, you can then move on to articulating the other problems and processes you can also solve for them.

2. They may not buy on ROI.

I appreciate this is controversial but hear me out…

Think of the last three times your team bought a piece of software. Was the internal discussion around a spreadsheet that calculated the costs in detail of the hours of time saved by the software and compared these against the cost of the software itself?

Or was it a demo where a few people felt like “yeah, this could make managing our CRM so much easier” or “we’ll be able to make payments across multiple geographies with this?”

ROI does matter, but the traditional cost saved versus the cost of the product is probably most relevant to the approving FD or CFO. The actual buyer of the product is probably looking to solve a specific problem that is causing them a major headache today, and they just want the problem to go away.

My takeaway: keep in mind what “ROI” means specifically for the person you’re pitching.

3. The renewal is decided in the first 90 days after sale. (And, you can predict renewal based on number of active users).

This is a variation of a mantra that I’ve learnt from my friend and mentor, Natasha Christie-Miller. Natasha, sales guru that she is, believes that the renewal is always decided in the first 30 days after sale — but I’m going to be a bit more generous here.

The reality is that if the product isn’t adopted quickly and widely with results apparent immediately, the customer is pretty much waiting out the contract. If you only have a few users, your contract will only last as long as those users last in the business.

A key data point that Natasha also evaluates is the required number of active users to predict a renewal or churn; each company can do this by evaluating number of active users per client vs historic churn, which paints a picture of the minimum number of users required.

The key idea here is that after-sales engagement needs to be as well measured as the sales process and pipeline conversion. Clients may also not actually know what they should be expecting from the product or what a successful outcome looks like — so remind them, set up the metrics, and provide them with the reports to show success right from the get-go.

As I mentioned in my second point, even when your spreadsheet says your product is saving the customer money, if the primary business user doesn’t see the value, the product will be dropped. There may be a financial decision maker who must sign off on the purchase, but there is no PO to approve unless the users are advocating for it. Again, solving the users’ problem is often paramount to traditional ROI.

Please do get in touch for questions, comments, or if you are looking to raise!