By Chris Reisig, Operating Partner, Jungle Ventures
Building your own start-up is an uphill task. Moreover, leading an early-stage enterprise software company comes with its own set of challenges. The leadership is under constant pressure to expand its client base, exhibit repeatable revenue growth, and refine their offering. There is a relentless urgency to sell and an ever-present difficult exercise to accomplish the correct balance, especially in the Go-To-Market territory of the business.
In this short article we lay out some of the foundational elements of a winning sales strategy. We will explore how to focus on the ideal customer profile, develop a productive sales team & build a repeatable model.
1) GET YOUR CUSTOMER RIGHT
If founders start to believe that everyone’s going to buy their product right out of the gate, they are going to waste a lot of time and effort. The initial Go-To-Market strategy has to be focused on the right market segment, the right companies in that segment, and the specific buyer/user personas within those companies.
This doesn’t mean the Founder needs to compromise the bold vision for tomorrow, but they will need to reduce the aperture of that long term vision in order to ensure that today’s sales execution is as efficient as possible.
As a Founder, you need to have a big and bold vision for your company, but remember the goal in the early days is to maximize your return on invested capital. It is critical that Founders recognize the need to focus on a subset of their overall vision, particularly with regard to sales and marketing, as you need to prove that what you are selling is repeatable and solves a real problem for your customers.
Build your Ideal Customer Profile (ICP) by asking the right questions
Isolating key personas & crafting a rich ICP is a critical first step in developing a comprehensive sales strategy. Founders must ask themselves tough questions.
Where is my product really strong? Where am I uniquely differentiated from the competition? Where am I able to solve painful problems for my ideal customers?
They need to empathise with the customer, demonstrate that they solve an urgent problem & codify the language they need to speak. They must map out the use cases & identify who owns them in order to communicate their value proposition with greatest impact.
Now look for companies with the highest propensity to convert
It is time to make difficult choices & focus on specific industries. Often the most valuable customers exist in the most unlikely places.
Founders need to look beyond the categories they are immediately attracted to & instead keep an open mind as they execute an objective & wide-ranging analysis.
MongoDB, a cross-platform document-oriented database program, is a great example. Rather than chase the big financial services organisations they identified highly competitive industries working to fast product life cycles, hiring top developers & investing in leading-edge tech. This led them to prioritise gaming, an unlikely starting point but a lucrative one. The customer’s propensity to buy is an often overlooked factor by many Founders, and I would say at the early stages this is a critical success factor.
Focus on companies with least time to close / least sales complexity
Big business is not necessarily good business. Within a single industry, different companies represent very different challenges in the last mile.
Founders must do their homework in finding those companies with the structure & processes that will ensure the deal is processed fast & the implementation is relatively simple.
For example, if you are selling into the finance sector, it may be that a large global bank could have a strong need for your solution, but the reality of selling into that large entity is complex and takes forever. Because they are large and bureaucratic and tend to be fast followers vs. early adopters, their propensity to buy is relatively low. On the other hand, perhaps mid-sized regional banks or local credit unions could be a better alternative. They have the same pain and need for your solution, but are smaller and have a more streamlined decision process. The goal is to build a model that is repeatable so that you gain multiple customers and learn faster.
2) NOW BUILD A HIGH IMPACT SALES TEAM
Sales teams, at both the manager and seller level, must be on a constant learning journey. Yet, upskilling individuals, particularly as the company grows and the offering evolves, is tedious and costly. Hiring the right people and encouraging them to take charge of their own development is key.
However, as your business progresses to the next phase of growth, finding the right ratio between sellers & managers is a challenge. It is a delicate balance to strike & even the most experienced founders and sales leaders can get it wrong. So how must founders approach the challenge to ensure they achieve the optimal mix?
We find that there is very often a push & pull within leadership teams. There are those who see managerial teams as a cost & those who see them as an investment.
John, who has grown technology companies across the globe, encourages leaders to fundamentally rethink the metric of success in order to find the ratio that is right for their company. A conversation that revolves around cost will never maximise the growth potential of the company. You have to think in terms of overall sales productivity.
Not all change is transformational. Sometimes it is the marginal gains that in aggregate make the biggest difference.
If managers are trained to do their job right they will ensure the sales process is more effectively implemented, they will ensure onboarding happens faster & they will maximize retention of the highest performing team members. Every incremental improvement they achieve can have an exponential effect on the productivity of the team & the profitability of the business.
3) FINALLY, BUILD A REPEATABLE MODEL
In early-stage technology companies, accurate forecasting is critical. Eventually, if you cannot accurately predict your sales you won’t be able to manage headcount and maximize profitability. Building a repeatable and predictable sales model is therefore paramount.
Map out your Sales Process
Imagine your sales team as a sports team. They need to know every play and have the knowledge to react to each twist and turn of the sales journey.
A sales process is a definition of the step by step, stage by stage sequence that has to happen for your company to close a revenue-bearing transaction. This process can be distinctive for various innovations and markets.
As an early stage Founder, you ought to scrutinize your initial deals in order to identify the key steps needed to close those exchanges and define a standard sales process. You should consistently review this on each deal until such time as you believe you can archive all the means needed for you to consummate a transaction.
Note that for a hefty enterprise sales motion you will have a totally different process from what you will need for a more transactional motion, yet in any case, you will need to document your specific sales process.
Develop a robust Qualification Methodology
Unless your sales teams are able to qualify their opportunities they will never be able to optimise their efforts.
If they don’t know accurately the potential customer’s readiness to buy, and where they are in a campaign, they will not accurately identify the next conversation to have or the next person to engage.
I have used MEDDIC in this area in my career, but there are other qualification methodologies out there as well. The qualification process allows you to look at each transaction and see where you and your sales team may be missing key elements of the formula that will lead you to closing a deal.
You can study Meddic here:
It is important that a robust, bespoke qualification approach is overlaid over the Sales Process to guarantee each ‘play’ is informed by an understanding of the buyer’s needs and interests.
While focusing on business repeatability it is important to understand that sales process and a qualification process go hand in hand. These are two distinct things, that when utilized together can be integral assets in driving your business growth. All things considered, only one of them isn’t sufficient.
Speak a common language
Every company has its own lexicon. Words and phrases that are repeated constantly across customer connections. This is a language each and every individual from the sales team must be fluent in. Specifically, a typical language around sales qualification is critical, especially as your business group grows. Therefore, you may need to utilize this basic language and standards to qualify a deal in Singapore and in a similar way in Chicago.
The advice is this article was drawn from an interview with John McMahon conducted by Chris Reisig, Jungle’s Operating Partner. John is a global legend of software sales having run hugely successful sales teams throughout his career including GeoTel, BladeLogic, BMC & PTC, which he scaled from $100M to $1B in revenue. John also serves as a Board Member and GTM Advisor to Snowflake, MongoDB, and Sprinklr, to name a few.
He shared with us some of his playbook on building early-stage sales teams for SaaS businesses & the advice he gave to the founders of Snowflake in its early days which then went on to become one of the highest valued IPOs in the history of NASDAQ.
He has built a career out of delivering smart growth- growth that is not just fast but sustainable. We are excited to see our founders embrace John’s advice as they seek to build businesses that stand the test of time.
Watch the full interview here: https://www.youtube.com/watch?v=io3YXqUQ1go&t=255s