Top 5 Tips for SaaS Founders on Enterprise Growth Hacking
Takeaways from our event with Dannie Herzberg, Head of Mid-Market Sales at Slack
By nihal mehta with guest author Dannie Herzberg, Head of Mid-Market Sales at Slack
As an early-stage VC fund, one of our driving factors is to invest in startups with technical founders, and while the founders may have deep knowledge of computer science or a rich history building products, often experience in sales, especially enterprise sales, is limited to none. As their biggest champions, we do our best to provide them with the support they need, often introducing them to subject matter experts in our network who can offer direct, hands-on help as well.
We partnered with our friends at Emergence Capital for an event to address the many challenges navigating early-stage growth including when to make your first sales hire, how to qualify leads all the way to determining pricing structure.
We were lucky enough to snag Dannie Herzberg, Head of Mid-Market Sales at Slack, as our guest speaker. Her impressive background, overseeing Mid-Market, BDR & SDR sales organizations across North America and working across enterprise sales, sales management, and channel sales divisions, made her an excellent source for advice.
Dannie was kind enough to help bring the evening’s top questions back to life to share with the rest of our community.
1. First sales hire- who and when?
Dannie: The first sales hire is you! As the founder, no one knows the company, the technology and the product better than you do.
Once you are ready for your first sales rep, you don’t necessarily need the traditional sales hire. The #1 enterprise sales rep at Oracle is unlikely to be the best first sales hire for your early-stage SaaS company. Such a person is sure to be a great hunter and closer, but they may not have some of the key traits necessary for your first few sales hires.
Instead, look for someone who thrives in ambiguity, demonstrates insatiable curiosity, and loves spending time getting to know customers. Ideally, this person is equally enthused by on gathering, synthesizing and relaying feedback from frontlines to the product team as she is about the thrill of closing deals.
Nihal: Founders sell almost exclusively until the Series A. Need the shortest possible feedback loop from customer to founder to iterate on product/market/ fit the fastest.
2. How much do we charge?
Dannie: Pricing strategy should vary depending on the market you address. If selling to SMBs and incorporating any level of freemium in your model, then a transparent pricing strategy that’s listed on your website is the way to go. If you’re selling primarily to enterprise buyers, then some version of “contact us” call-to-action is typical practice, as there are too many factors (beyond budget) that you’ll need to consider before recommending the appropriate product SKU and potential services package. If you’re selling something to both audiences, you can incorporate both strategies.
Nihal: For ‘whales,’ charge as much as you can. *wink*
3. How do we sell into the R&D buyer?
Dannie: The R&D buyer is technical by nature and likely has an aversion to salespeople and sales pitches. The goal of all product sales is to meet the buyer where she is and insert human outreach only if or when it becomes instrumental and helpful. For R&D, the more you can allow the product to do the selling, the better the buyer’s experience will be and the more discipline you’ll incorporate into your product growth strategy. To learn from a company that has mastered this discipline, watch this great talk by Jay Simons from Atlassian.
4. How do we convert pilots to annual recurring contracts?
Dannie: Pilots are a very tempting place to start, but seller beware: drawing boundaries is a must. First, figure out what value can (or can’t) be evaluated during the pilot and what questions can’t be answered without a pilot. Second, determine who will be running pilot, how they measure success and if they’ll be running simultaneous pilots. After all of this, if you still end up running a pilot, make sure you learn about the buying process that would take place if and when the pilot is a success. Agree upon the price and plan for success in advance so that a successful pilot can immediately parlay into a full-blown contract.
Nihal: Auto-convert pilots to annual recurring contracts from the beginning in the pilot contract. Also, another strategy that seems to be working (h/t Villi Iltchev), is to eliminate pilots entirely and instead offer a 90-day out.
5. What are some bottoms up sales strategies that work well?
Dannie: Emphasize creating value versus extracting value. With that lens, a great bottoms-up sales strategy is to connect with individual end-users of a product to understand how they use it. Seek to understand how it helps their day-to-day, what additional challenges they run into and the potential benefits if more people at their company were using the product.
Next, synthesize what you learn in these user-interviews to an exec-level buyer. This way, you are essentially teaching her about what’s happening in the organization that she isn’t aware of, and it should earn you a meeting.
Product usage and engagement data is your best guide for determining how to use your time wisely. Remember, you’re aiming to help people exactly when they need it, so identify point-in-time notifications, such as an alert when someone new swipes their credit card or an alert when a team has crossed a particular threshold that would require them to use a different SKU of the product.
Nihal: What Dannie said!
We hope these Q&A’s were helpful for you, and thank you, Dannie, so much for all your support!