Startup Sales: Get Your Demo Booked and Deals Closed!

A quick teaser video below ⬇️

Learning founder-led sales and learning how to build a sales team are the most rewarding parts of my journey at Cooby so far. Direct sales have helped us navigate through PMF by both validating and invalidating our value props.

I feel incredibly fortunate to have learned so much from our mentors and advisors Thomas Jeng (Head of Sales at Aspire, Ex-500 Startups), Shiladitya Mukhopadhyaya (Global Head of Truecaller, ex-CleverTap VP of Sales), and Pepe Agell (Partner at Pear VC, co-founder of Chartboost.)

In this post, I’ll share what we’ve learned on demand generation, which is the first part of the sales funnel. Demand generation is the first thing you have to get right. And building your initial demand generation function is challenging, since you’re still navigating through PMF. In fact, finding demand in a consistent way is a precise component of PMF, which makes it even more important.

Cooby is going down the path of product-led growth (PLG), but outbound sales have made a great impact on us. What we’ve learned is naturally more useful for early-stage startups.

As with everything in sales, numbers talk. So here’s the overall impact:

1. Our Deal Closing Rate has improved from 9% -> 29%
2. Our Demo Booking Rate went from highly fluctuating weekly numbers to 5 demos booked each week per SDR (Sales Development Representative), at a consistent attendance rate of 75–80%.

Let’s dive in.

First, Understand Your Market Maturity

People often plunge into channels and tactics directly. But before doing that, you have to understand the stage of your market, which is a crucial yet underappreciated step.

What is market maturity? From a customer perspective, it’s how familiar they are with your space.

1. In a mature market, customers are well-informed about the problem. They have a budget allocated for it and they seek out a solution proactively — think sales CRM or Employer of Record (EoR).
2. In a new market, although customers are experiencing the pain your solution addresses, they need education on the problem and how it impacts their business (example: Live Shopping in the U.S.).

You receive more inbound demand in a mature market, but you need to differentiate yourself from other products on the market. In contrast, you have to drive outbound demand in a new market since no one is looking for a solution like yours (yet).

In the early stage, the spend on massive marketing campaigns is impossible. But you need to educate the market about a new product category and drive inbound, so outbound is the best way to go for new markets and find PMF for new product categories. (read Steve Job’s talk in the footnote)

The Decision to Go Outbound

Our product, Cooby Workspace, is in a new product category, so our initial inbound motion didn’t work. It drove a lot of unqualified leads that went nowhere. No ad optimization or copy tweaking could make a difference.

We took a hard look at our initial inbound motion and arrived at the following conclusions:

1. Define a clear ICP: Although inefficient, the inbound motion provided data points and qualitative feedback that helped us define a very clear ICP (Ideal Customer Profile): Senior Sales Leaders at the Director or VP level, working at startups between series A and C in Southeast Asia and India. That clear ICP made our outbound sales much more efficient.
2. Right ways to influence decision-makers: Our ICP is directors and VPs who don’t respond to ads (at least not without a series of ABM campaigns). But we didn’t want to invest in ABM at that point. Therefore, we determined the best way to reach the decision-makers was via outbound direct sales.
3. Outbound direct sales is the best way to find PMF: It’s a highly measurable and repeatable process that yields qualitative insights from firsthand sales conversations.

So we decided to go outbound. Outbound direct sales took us a few months to get working. After that, we saw our Deal Closing Rate improve from 9% to 29%.

After adding a Sales Development Representative (SDR), we saw our Demo Booking Rate go from highly variable weekly numbers to, consistently, 5 demos booked each week, per SDR, at a consistent attendance rate of 75–80%.

Photo by Rémi Walle on Unsplash

How to Book Demos and Close Deals Efficiently

Next, we’ll explain what worked and what didn’t work for us in booking demos and closing deals. Two changes that helped us build a consistent pipeline were:

1. Social selling. It works. LinkedIn is your best friend for direct outbound — not only in the U.S., but also in Europe, SEA, India, and South America. On LinkedIn, we get a 5–10% demo booking rate from the first outreach to the demo scheduled.
   Note: Omnichannel can work wonders, but it takes more experimentation. And emails alone have a much lower demo booking rate — because a) spamming is rampant, and b) LinkedIn outreach is enriched by the salesperson’s social profile, which can bring credibility.
2. An SDR is necessary. After we built the demand generation function (1 performance marketer + 1 product marketer) and we’d been running campaigns for weeks, we still saw a gap in demo booking. Prospects would reply to our automated campaigns, but they needed more nurturing before committing the time to hop on a call. Having an SDR on our team gave us about a 2–5x increase in demo booking rate, so it’s worth finding a good SDR.

Two changes that improved our Closing Rate:

1. Enumerate the companies you’ll target. Early on, choosing who not to sell to is more important than choosing who to sell to. Every B2B software company in the non-SMB space needs to make a list of 500 accounts to close in the next 12 months. (That’s valuable advice I received from Insider’s CRO during a Sequoia talk.)
2. Hire a sales team locally. Cultural affinity is real. Local sales teams can pick up cues that a foreigner can’t. After we switched to a local sales team, our demo attendance and email response rate both went up. (That said, I know a few countries (e.g. India) have successfully cultivated local sales talent for U.S. and European customers.)

What Didn’t Work for Us?

1. Don’t use big demand-gen agencies: We worked with a long-established cold-calling agency, but it wasn’t what we were looking for. We had to educate them on messaging and social selling. Their demo booking and demo attendance rate performance was disappointing compared to the boutique sales consultancy firm that we partnered with for hiring and training our SDRs.
2. Don’t rely on full automation: We get spam often enough that our well-trained eyes can easily detect a human touch in automated campaigns. Prospects won’t reply to indistinguishable automated campaigns, so consider hiring an SDR. In fact, I highly recommend building from the top of the funnel — so hire an SDR before you hire an Account Executive (AE). As a founder, you can take the demo calls booked by your SDR first, until you’ve seen the funnel work well enough. A close rate of 20–30% is usually considered pretty good for early-stage startups.

Wrapping Things Up

There is still a lot more to talk about in sales — like sales team structure, sales hiring, how to write a sales playbook, demo call tactics, etc. We will dedicate articles to those topics in the future.

While outbound sales is not our main GTM motion now, our outbound sales effort truly helped us navigate through PMF. At some point, every PLG company will need a sales team. We’re certainly carrying that lesson with us as we move forward.

Footnote

In 1992, during his time with NeXT Computer Corporation, Steve Jobs gave a brilliant lecture at MIT which shed light on the best channels to leverage to bring an innovative product to market.

Students wanted to know why simply selling software wasn’t effective. Jobs said that to bring an innovative product to the market, you need a direct sales team to educate customers. And to afford a direct sales team, a business needs to sell products at a certain ACV (Annual Contract Value). They need to sell both the hardware and the software to achieve a high ACV.