Insight: SaaS (7) Standardize the sales process

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In the previous article ‘Insight: SaaS (6) Calculate the sales team’s gross margin.’, we discussed how SaaS companies must achieve positive gross margin for the sales team before they can scale. Let’s talk about how SaaS scales in this article.

SaaS’s scale necessitates a series of steps rather than direct recruitment of members to join the team. Before standardizing the sales process, a goal must be met, namely, the gross margin of the sales team must be higher than 0. Then, a standardized sales process was developed, as well as the definition and design of the entire Leads to Cash process.

If SaaS companies do not standardize the sales process, two grievous things are going to happen:

1. Long-term losses. Despite a large number of salespeople, the sales productivity is low.

The majority of salespeople have no idea how to acquire customers, and they are constantly changing sales methods because there is no fixed method, and they have been relying on experimentation for a long time. However, the team has far too many members and runs at a loss for a prolonged period. This is the issue of expanding without a standard sales method and process in place. This phenomenon is similar to when your business model isn’t working and you start investing in large amounts. This is extremely hazardous.

2. Talent replication is difficult, new employee training is challenging, and motivation is insufficient.

In this case, your company may have a sales elite that could complete the benchmarks, but their sales experience has not been systematically summarized, and other salespeople are unable to learn effectively. The company’s new employees are not given a thorough training program and thus are unable to become qualified salespeople. The team will not be able to replicate and expand in a timely and quality manner. This is a common occurrence in SaaS companies with an ACV of more than $100k. The expansion of the sales team is derived from a standard sales process and a complete portrait of sales personnel.

So, what’s the ideal route to standardize the sales process?

Let’s look at an example: The average transaction period for SaaS Company A’s product is 2–3 weeks, and the ACV is $5,000.

Step 1: The marketing manager places advertisements in order to entice customers to visit the official website and create an account.

Step 2: MDR phone to verify the customer’s situation, understand the customer’s basic needs, identify the customer’s pain point, introduce the product, ask the customer for key information such as budget, authority, and so on, and forward it to AE.

Step 3: AE calls customers, submits more professional and detailed plans, quotes, and informs implementation.

Step 4: AE finishes the contract. Onboard begins, and the case is transferred to CSM.

Step 5: Customers begin to use, and CSM continues to serve them.

(MDR — Marketing Development Representative; AE — Account Executive; CSM — Customer Success Manager)

For this case, we must create the overall sales process of Leads to Cash. Leads to Cash encompasses the entire process of the customer’s ongoing in-depth understanding of you, as well as the final transaction and purchase order. Prospects, MQL, SQL, and Win are some of the concepts that can be divided.

Prospects: Customers may be interested in your product(Customers visited your website / You received a phone call from a customer).

MQL: The customer’s needs are basically matched with the product, potential problems are waiting to be discovered, and some primary customer information is grasped. (Customers communicate their desires via email. / The customer has read the content on your website, created an account, and begun the trial period. / Become a free customer. / Filled out the form to inform you that he has a requirement.)

SQL: The customer’s requirements are clear, they fit the company’s standard type of customer, and they are willing to pony up. (It could be a customer who started the trial, and it’s a good idea to get in touch with them. / Contact you that there is a demand and a budget. / Free customers who are active for a long time.)

Win: The customer paid successfully. The transaction is retitled New ARR/MRR.

Prospects, MQL, SQL, and Win must all be defined clearly in every SaaS company. Avoid unnecessary disagreements in the definition. The SaaS company must have a clear judgment on the customer’s stage, from Leads to Cash, and be able to count the accurate data of Prospects, MQL, SQL, and Win. You can easily create a sales funnel, check the conversion rate of each part, and try to optimize it.

It must be obvious that the majority of your customers adhere to the process you designed step by step. Each company defines MQL and SQL differently. Create a process that reflects a transaction. Using company A as an example, the following standard sales flow chart can be created:

SaaS companies must define each position and their goals.

Marketing Team: Getting more MQLs. Turn Prospects to MQL.

MDR: “Inbound Lead Development and Qualification”. Turn MQLs to SQLs.

SDR:” Outbound Lead Generation”. Turn prospects to SQLs.

AE: “SMB Sales/Online Sales”. Turn SQLs to Win

CSM: “Onboarding to get to use”. Turn Win to Renewal

(MDR — Marketing Development Representative; SDR — Sales Development Representative; AE — Account Executive; CSM — Customer Success Manager)

All sales standardization is implemented in these roles’ specific tasks, such as:

1. MDR ignites the customer’s desires, listens to the customer’s needs, and introduces the product in 2 minutes. These topics can be designed. What are the most frequently asked customer questions, and how do you respond to them?
2. MDR determines which MQL is willing to pay and can be converted to SQL. Is there a particular standard? For example, is there a budget, is it a key person, and is there a high demand?
3. Prepare 3–5 templates commonly used in SDR’s first email communication.
4. When AE contacts customers, it focuses on introducing the product’s characteristics, whether a DEMO display is required, whether a product information introduction pdf is available, and so on.
5. How does AE submit a transaction request, what words are commonly used, and how does discount management work?
6. How does the customer complete the first use with CSM? What must be demonstrated to the customer, and is there any related documentation or blog support?

Standardized sales include these specific methods. The work of sales standardization is completed when each role’s strategies and mission are clear and can be trained, the sales process is straightforward, and the sales process data can be traced. SaaS businesses rely on volume customer acquisition. They need complete sales standardization.

So, how do we figure out how much standardization there seems to be? I believe there are two points to consider. One is that different SaaS companies have different standards, which vary depending on the size of the target customer. Second, the more detailed the standardization, the lower the ACV of SaaS; the higher the ACV of SaaS, the process must be clear, and the specific actions may not be fixed.

The next article ‘Insight: SaaS(8) Build a Sales team’ is published. Simply send me some claps and feedback if you enjoyed my article.