Selling for a SaaS Start-up
A hot topic among start-up CEO’s and business leaders, when moving into accelerated, let alone, hyper-growth, is how to hire the right type of sales person. Whether during, or in anticipation of a round, they will ask their Head of Sales, HR, Ops, and Marketing…. “Can these Reps produce in our environment”? Will they have the “fit & finish” to work well with our team? And, as we expand, will they prosper as we all have to learn to survive with an often dwindling set of resources?
In support of the business, this also needs to be risk averse because mistakes are very costly. Not so much in fixed costs, but in lost opportunities. Brand and good will are important, but not so at this stage. As a CEO of two of my own Enterprise start-ups, which had steady and profitable growth, I did my own hiring for sales reps, and naturally, within my own style.
I did however, weigh all the same elements that my peers do today, but I added a couple of extra’s to help round out the completeness of the hiring model. Before I write about that, it’s very important to keep one thing, first and foremost; it’s is NOT about the Rep, or the Company, it’s about the Customer (prospect). They do not care about our software issues, our shortcomings. It’s more operationally. They only want what is SOP (standard operating procedure). The Sales Reps needs to properly conduct a sales cycle and act accordingly of the buying practices of the company; especially if you are from a small start-up. Act and look like IBM, sell like a rocket sled.
Getting back to the two critical elements, we break them down into quantitative and qualitative. The first is quantitative, as in do we bring, measure and benchmark our worth as a vendor partner? This is of course measured in value. There is soft value, where vendor’s use “lite ROI’s”, often unsubstantiated. Often is the case, the assumptions are weak, vendor biased, and the decision maker, behind the deal will discard this ill positioned mechanism. There are value or business cases, where the findings are well documented, customer verified, and speaks in terms of the CFO, the person who is always involved in a signature. These cases speak to NPV, IRR, Cash Flow and risk quotients. Sounds complicated. It’s not! These are models that can be built and used on any deal, over and over. The CFO loves it, the CIO respects it, the CEO notices it, the CMO asks how it works, the VP is grateful for it, and IT is afraid of it so they are more cooperative. Everyone wins, and especially the only one who really matters, your client.
Value is not a sales tactic, it permeates a start-up. It’s not a sales tool it’s a start-up mindset. Value helps sells and more so, destroys competition. Hire Reps that know this, who can explain it, use it, teach it, love it, and you will be very well served. If they have just standard selling skills, you’ll:
- T’up 15% more meetings with Sr. Executives.
- Sell 20% larger deals.
- Lower SG&A by 2-5%.
- Improve margin by 500 basis points.
The second critical elements will the Sales Rep fit into the company?Not always. Yes, they need to be personable, respectful, collaborative, and smart. They need to be a “quarterback” who you can trust. So, in a small start-up, all Sales Reps must be all things; from a heavy closer on a one million dollar deal, to the boy next door when just chatting about code sets. Many folks forget, a Rep can be fired after 3-4 months of dismal work. They have innate pressure to perform, and typically do it remotely. So, yes they need to fit in, but more so, they are there to produce. If they have sold $10-15M over the last several years, have faith they will work hard to be a great part of your team. Read my expose’ on Hunters to get an expanded view on this.
In the end, a startup that lives value, is blessed. One that is compassionate with its Rep’s will build a rocket sled that may end up where their peers are going, to $1B in a couple of handful years.
Thank you for reading this and please share any of your thoughts. Ed