Why slippery fishes can kill startups!

As B2B SaaS startups have figured a product-market-fit, fast revenue growth becomes crucial to increase company valuation, in order to avoid becoming just another cash burning “cloud” company out there. A common pitfall that slows down growth is the direct sales activity of “calling low” vs. “calling high”. Because enterprising people with no authority nor influence are easier to talk to, many sales teams and executives target them with the goal of getting “a foot in the door”. It doesn’t take long until frustration rises because of an increase in a) no show rates, b) inactive trials, and c) a fake pipeline. This is why addressing decision makers reduces the sales cycle and helps avoid losing momentum.

Back in 2004, Walter was our sales-unicorn in charge of opening up the largest target accounts of a list we would decide on month by month — based on industries we were tackling. Imagine a guy 6.1 feet tall with a deep-sounding voice that even Barry White would have given attention to. He was well articulated and never in a rush. He never pitched features, but instead ROI benefits for the company, and he was always on eye-level with whomever he spoke with. I remember us joking that if our security product back then would be a fit for churches, he would get us the Pope on the phone in order to close a deal faster with the Vatican. Walter was colleague #3 in sales — and whomever joined the team had to evolve to a similar mentality — as only Rock Star A-Players survived the high quality competition. That’s how we kept our market leader position.

On a month in which we had focused on the industry of Banks (which in Enterprise sales is one of the toughest industries to work in), Walter came back 3 weeks in a row beaten up by one specific Bank where he was not able to get to the Head of IT. With every attempt we broke down the situation — rethought, rehearsed and retried an adjusted approach. But nothing so far seemed to work. Walter had even suggested after weeks of unsuccessful attempts to move on. Our mantra was that, “We only talk with decision makers — ’cause who has time to lose?” But this account was definitely a bit more challenging.

While what I’m about to tell you could have not worked out — what I decided was to have an immediate “training on the job” for all senior sales people. A couple minutes later 8 out 30 sales people were in our master meeting room — and Tommaso was dialing the “mission impossible” bank while on speaker phone.

Assistant: “This is Mary — how can I help you?”

Me: “Mary, you are my salvation … I just dropped off of a conference call with John — Head of IT — and I need your help to connect me back please … and by the way, what’s his extension so next time I can call him directly?”.

Assistant: “I can’t give you his extension — but let me put you back with John…”

….and guess who picked up?! ;-))

John and I had a great conversation — which led to a trial after a couple weeks — which would have never happened that fast if a) we had given up or b) we had spoken with an admin.

Strategic Positioning

Before even drilling down on how calling high in an organization benefits the entire sales cycle, let’s start out talking about the way you want your company to be perceived in the market … aka: your strategic positioning.

When getting attention from CxOs and VPs — a company/product automatically:

• Gets a strategical importance for the prospect. Not only does such a situation prioritize investments — but the prospect’s management can consider and negotiate the solution for an entire company (evtl. based on a sequenced roll out plan).
• Faces less competition. ’Cause most sales reps call low as they are not trained, scared and finally, are unsuccessful dealing with management conversations.
• Leverages word of mouth throughout other peers in the industry. As a return it impacts other similar-sized companies — as well as Market Analysts, as C/VP levels talk with them.

Startups that call low — are easily replaceable. Startups that position their products for C-Levels maximize shareholder value and outsmart competition by owning the customer’s relationship.

Understand Responsibilities

Enterprise hierarchies are known for internal politics and slow decision making. To put oneself in the other one’s shoes gives an understanding of how to deal with different target persons.

ADMINS ARE INTERNAL SERVICE PROVIDERS

In my real story with Walter above, we could have for sure made a first attempt to chat with any server or email-exchange administrator (who made up the work force that managed our product on a daily basis) … but this wouldn’t have led anywhere in the case of the Bank. It was not a coincidence we were serving the top 100 enterprises — we had worked towards it proactively.

Administrators are seen as “service providers” to a “line of business” aka Marketing, Sales, Finance. As such, “internal service providers’” main activity is to help others run the business — often without knowing what the business is about in detail. In other words, the “admins” are essential resources to make the business run smoothly — BUT NOT to decide how things work. Hence, they have no authority and in many cases no influence within an enterprise.

MANAGEMENT MAKES DECISION

While I’m confident everybody knows what management is in charge of — a minority of the startups I advise are using this apparent know-how in favour of their product’s value proposition. In other words — knowing that a decision maker is usually in charge of a) team, b) budget, c) strategy and d) time … why not focus on pitching the product’s benefits that help them in getting their job done? For instance:

1. Re: Team: Our product increases your team productivity, by providing relevant data right from within your CRM
2. Re: Budget: With every $1 you invest in our product, your company saves $8 considering your current process
3. Re: Strategy: Our product automates your manual process — which reduces point of failures
4. Re: Time: Our product allows you to make decisions in real time, by visualizing data without time loss.

These arguments work against an “admin” as they are the ones who usually solve these issues … hence they may see themselves eliminated. This means, while your product can actually help an entire company, because you are talking with the wrong person — the deal dies right there.

On the other hand — when talking with C/VP levels — one starts working for the management to help them achieve their goals. Rather than selling “features” at the admin level, position “strategical benefits” at C-Level.

Don’t ride a dead horse

While often people counter-argue my advice of calling high by saying that “admins are champions within a company”, I’d like to emphasize that I’m not saying that an “admin champion” shouldn’t be part of the deal — but what I am saying is that there are tons of facts, why an “admin” should NOT be the main contact person in a deal … as there is a difference between being a “champion” and being a “champion who can make decisions”.

FACTS WHEN CALLING LOW

• High no show rates
  Admins are easier to schedule a meeting with — as they have weaker communication skills than management. In other words — a manager is used to saying “no” — while an admin says “yes”, but does than not fulfill what he/she committed to. As a result — your meeting numbers go up — so does your no show rate.
• Fake numbers and panic
  A meaningful Sales KPI measured within an organization is “how many demos were scheduled” vs. its conversion rate of “how many demos were conducted”. In over 18 years the rule always applied that if calling high — — no show rates are under 10%, compared to when calling low, where I’ve experienced no show rates going up to 50%! This causes two things that are counterproductive to startups’ momentum: i) Team motivation goes down, ii) expectation mismatch raises executive helplessness.
• Unreliable pipeline
  Even when moving deals from stage to stage towards becoming a customer — because deals where admins are the lead contact person — even late stage probability doesn’t mean anything as an executive can still decide against it, as they were not involved in the deal. These are classical forecast conversations when reps say that a deal is 80% won — and then it flies out, because “the management” decided against.
• Wasting time
  Also very common is the fact that admins may carry on deals up to a certain stage and then because they can’t move ahead — they are all of a sudden no longer available. That’s what I call a “slippery fish” that can’t be caught! Usually the best thing to do then is to contact “the decision makers” … and hope he/she was involved in the deal — or worst case, restart the sales cycle! Also counterproductive in these situations is that often, the rep has the feeling of not wanting to skip the admin.

In any case, one gets out of the pipeline — what you put in the pipeline. And if you want to expedite your sales cycle and avoid wasting time — than there’s only one key approach.

Random activism

This is the phase where Startup Management people that are more into Product and Development — start questioning what’s going on. The Sales Executive that leads the current Go To Market Strategy suggests replacing the Head of Marketing, as the inbound leads are not qualified … that’s where the common loop downwards starts!

It takes 3–6 month to successfully recruit, bring onboard and bring up to speed a new candidate that takes over marketing. This might give sales some more time to catch up on numbers — especially if during this semester there are key “events” they can attend to boost lead generation. And because marketing is “still ramping up” — it’s fair to add some more headcounts to sales in the meanwhile, too.

By the time the inbound machine works and after a couple of months of sales campaigns — management also start recognizing that there must be an issue in the actual Go To Market Strategy — which make them replace the Head of Sales. This is another hire that takes 6 months-ish… and if lucky, the startup gets the right sales management with the next candidate. But by that time, a startup has lost market shares, competition takes over … and it becomes another SaaS company on the market that didn’t go hockey stick.

Go-To-Market KPIs are like serious product bugs. It doesn’t help to just fix it temporarily — but one must go deep in the code to recognize where it comes from and fix accordingly.

Create a winner culture

Last but not least, the reason why mastering C/VPs pipelines is key to keeping up momentum, is the unique champion mentality one builds throughout the ecosystem. One can make an immediate impact by closing a couple deals on an admin level — but this will impossibly make a difference in the long term.

One has to achieve having competitors fear you twice with how your company owns the customer’s trust top down!

1. One time for the product (hopefully ;-)) and
2. the other time for the laser sharp Go-To-Market strategy.

It is easy to replace a product — but hard to break TOP down relationships. It was common for me back then to get phone calls from our competitions’ CEOs … trying to understand “how we could win that deal too … what are you doing with the customer” … and I don’t mention names at this point — as it’s a small world ;-)) But yes, we wanted to be the best and we became it — because we cared what our customer’s C-Level goals were.

And of course, there are also exceptions to whatever I mentioned … but as I often used to say … one doesn’t want to build a business based on exceptions, right? I’d love to hear your experiences in the comments section.

TAKEAWAY

• Serve your customer TOP DOWN and it’ll position you strategically
• Put yourself in your customer’s shoes to make their goals yours
• Admins have no authority and in many cases no influence within an enterprise
• Expedite your sales cycle and avoid wasting time
• Avoid random sales activism
• Create a culture customers love and competition fears

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Originally published at whatittak.es.