B2B Product Sales 101 for Startups : Support deck
Post on 23-Jan-2017
B2B PRODUCT SALES FOR STARTUPS
PRESENTATION SUPPORT DECK
B2B PRODUCT SALES FOR STARTUPS
PRESENTATION SUPPORT DECK
The aim of this deck is for the presenter to support the presentation of B2B Product Sales for Startups
So not to be presented as such ! ;), still I made it available to Slideshare for the purpose of sharing
The presentation was made for Accelerators to educate early stage startups about the different aspect of B2B sales
Contact me here
LUC@ROCKSVENTURES.COM @LUCBOILLY LINKEDIN ANGELLIST
LETS SALE ! :)
Wait , lets set the stage first !
GO TO MARKET STRATEGY
GO TO MARKET STRATEGY
is your product is horizontal or vertical Market?
What is your market target SOM, SAM, TAM ?
Which Segments , the first one aka Beachhead ?
What are your Marketing channels ? (landing, email , social, PR,..)
Who is your ICPs (Ideal Customer Profile) ?
What is your revenue target ?
Which sales channels : Self Service ; Direct : inbound, outbound; Indirect : partners
WHATS IN IT FOR ME ?
This is the answers to your customer
WIIFM : Whats In It For Me
JTBD : Jobs To Be Done
A products value proposition is composed of :
Functional benefits (solution, utilities providers)
Self-expressive benefits (act of using)
Emotional benefits (results of using)
delivered by your brand that provides value to the target customer
Then is it a Gain or Save
Value Management is an approach to align
Other business functions
Goal is to create a sustainable and profitable revenue growth
VALUE IN B2B
Value is relative to an alternative
Value is composite and decomposable in value drivers
Primary value in B2B is economic but can be also
Value should be quantified per use case adapted to the target
B2B VALUE SHIFT
Shift to a Customer Value Orientation
VALUE FOR THE CUSTOMER
Time to market
Business Process improvement
Value is always relative to an alternative !
Current solution (software or/and human process)
Building in house (software or/and human process)
Customers now do the Math !
Understand Customers Math and speak their language
The Economic Value is seen
For the Buyer as ROI and TCO
For the Seller as EVE
Still keep your communication aligned and simple !
EVE : ECONOMIC VALUE ESTIMATION
CREATION OF VALUE DRIVERS
Direct impact on a customer financial metric or KPI
[Financial Metric] * [Impact Measure]
Impact on a non-financial customer metric or KPI
[Non-Financial Metric] * [Impact Measure] * [Dollars]
You may add to both, factors as time,..
FROM THE CUSTOMER VIEW
It is not always a 1 to 1 translation !
YOUR VALUE PROPOSITION VS BUYERS
STRATEGIC ROLE OF PRICING
Pricing is the integration point of your Go-To-Market
Encapsulate your Value Proposition
Communicate your Value , your Brand
Position you to the Customers and Markets
Position you within your Competition
Last but not least , make your revenues and investment !
And Use pricing to scare away the customers you dont want ;)
Pricing Power !
PRICING IS PARAMOUNT !
Whats your average selling price?
Intersection of supply and demand which measures external factors
while it constrains operational metrics like
Your ASP places a ceiling on your CAC, which in turn draw sales model(s)
Customer financial view : OPEX vs. CAPEX
Transactional : License fee plus annual maintenance fees -> CAPEX
Subscription based as SAAS - > OPEX
Do not leave money on the table !
Professional Services, Training, Certification
Accounts Up Sell , Cross Sell . Partnerships
Freemium ? (e.g Box, Dropbox)
MARGINS , PROFITS
Net sales = Gross sales Discounts, Rebates
Gross profit = Net sales COGS
(e.g : 80% in SAAS , 20% in eCommerce)
Operating Profit = Gross Profit OPEX
Net profit = Operating Profit taxes interest
Total and Segment these
STARTER - PRO - ENTERPRISE e.g
Typical for SAAS
Revenue advantage over Volume Pricing
Segmentation , tiers fences
How many customers you expect to enter at each tier
How many customers you expect to upsell over what period of time
How much churn you expect at each level
Discount for yearly , multi year contracts with payment upfront
Why do you discount ??
Investment in a Logo, references
Your pricing should take in account discounting upfront
Make sure that there is a ROI for you
Align with your Revenue Management
Draw the red lines per segment, channels
Do not accept upfront discount asked by a customer, acknowledge and reframe it to your value first
Beware of not dragging down your overall pricing , get a return in exchange
Beware of payment terms which should be discussed upfront prior negotiation
WHY BUY ?
WHY YOU ?
WHY NOW ?
LEVERS IN A B2B SALE
SALES IS A HUMAN PROCESS
Beyond methods, metrics, decks
Your Solution is not my F* Problem!
First , it is a human relationship
Be a problem solver
Be a partner
FACTORS OF THE COMPLEXITY OF B2B SALES
C-level , Executive , Users, IT , Procurement, Legal,.
Educate, Evangelise your product value proposition
THE PRESENCE OF CHOICES
You versus Competition, substitutes, in house, doing nothing
Map it to your Product Management still focus first on the value proposition
LACK OF TRACK RECORD
Brand building, Trust building , Reach, Testimonials and customers use cases , PR
RFP : Request For Proposal
Low Complexity Low Price
Full revenue responsibility, creating awareness, educational content and automation capable of driving business through the entire purchase process from awareness to close. Inbound
Provides automation and tools for easy on-boarding, plus templates and educational content that allow customers to resolve any issues they encounter on their own.
Low Complexity , High Price
Inside sales reps supported by online content and automation, tools, training, incentives and metrics that enable high efficiency and many transactions per rep.
Feeds highly qualified leads to the sales team to build pipeline and improves efficiency by removing roadblocks through educational content and automation that drive complexity out of the purchase.
Inside support reps that meet a range of SLAs from limited pre-sale support through premium post-sale support with tools, training and metrics that enable high efficiency and many transactions per rep, complemented by customer self-service tools, templates and educational content
High Complexity , High Price
Territory-based sales reps focused on a narrow set of target prospects directly supported by product marketing and sales engineering resources at a deal level.
High-end marketing that facilitates brand awareness, education, relationship building and trust, complemented by direct support of the sales team, including telemarketing speeding access to target prospects and detailed sales tools such as product roadmaps, ROI calculators, etc.
High touch support up to onsite issue resolution complemented by educational tools and training tailored to the specific needs of individual customers.
Expect long sales cycles, budget for it and select
Are you addressing their top 3 problems
Decisions are made by stakeholders, not "the company
Sell to multiple stakeholders
Deals might fall apart even if you done right
They have budgets for each FY and some others bucket available
Even you negotiated with the buyer, procurement could negotiate again
CALL HIGH VS CALL LOW
The aim in both case is to have
A champion who will help you take ownership for your success
The air cover of a senior executive
A buyer who has influence and authority
Reach the highest level appropriate and get him refer to the person making decision
Get Higher priority
Avoid gate keeper
Avoid time wasters
Learn internal politics
Find a BU leader with a positive and quantifiable impact
Run a quantifiable pilot , better payable ;)
Make this BU leader a champion if this is the one
Provide data and proof in hand for the Sr Exec.
Good marketing replaces the need for sales
Good branding replaces the need for marketing
Product virality make the brand story
Bottom up from the users to the management
SaaS Kills Sales People? thoughts by @Steli @hajak @LucBoilly via @saascribe bit.ly/1UawRA2 #sales #SaaS
ICP : IDEAL CUSTOMER PROFILE
It all start with your ICP
What type of companies
Which companies fit that mold ?
What are they buying, where are they buying it, what are they spending? What other products might they be using?
Who at that company is the decision maker, user, buyer
Segment by group of Customers , ICP
2. SMBs , Enterprise ?
3. Getting the same value
4. Same Buying process
5. Act as references to each other
6. See your differentiated value as high
IDENTIFY YOUR STAKEHOLDERS
Identify analyse each stakeholders
Identify the buying process
Identify a champion , the mobiliser
Identify Showstoppers, Enemies, IAs, NINAs
Do not forget the Technical experts, Security folks
MAP YOUR CUSTOMERS
Model and visualise all your stakeholders with relations between them
Quantify their Influence
Quantify their Authority
Quantify willingness to pay
Quantify the time to purchase
Scoring : SQL
BANT (Budget, Authority, Needs, Timeline)
GPCT (Goals, Plans, Challenges, Timeline) and BA (Budget Authority)
MEDDIC (Metrics, Economic Buyer, Decision Criteria, Decision Process, Identify Pain, Champion)
B2B CUSTOMERS SHIFT
More people (5.4) than ever before are involved in the decision-making process
Diversity of stakeholders has changed
The customer is far more informed than before
The customer know, do not know or ignore their pains
The informed customer can engage you at a later stage in the sales
Still no shift on risk adverse for the incumbents
CROSSING THE CHASM
CORE SALES ROLES
Customer Success Reps
OUTBOUND SALESPEOPLE PROFILES
5 Profiles depending on your product positioning
SDR AND SALES REP
1. Revenue Target Average Deal Size = Number of Deals Needed
2. Number of Deals Needed Conversion Rate of SQLs to Closed Deals = Number of SQLs Needed
3. Total SQLs Needed Individual SDR Quota = Number of SDRs Required
5. Optimal ratio for SDR to Sales Rep (AE) is 1 to 3 still often 1 to 1
EARLY STAGE ENTERPRISE SALES
First sales person should be one of the founder
Then hire a first Sales person as a Closer/Hunter, not an Sales VP !
Do sales together
Then hire a SDR to generate leads to the first sales person when this one is spending more than 20% on Lead yen
When an SDR spend more than 20% on inbound lead qualifications , time to consider to split the Outbound and Inbound roles
Hold on partnership until you have a sales machine in place ; unless this is your core sales channel
Align from the start Marketing and Sales !
HOW TO CREATE YOUR SALES PROCESS
Sell process should be aligned with your customers buying journey
Observe your previous deals (won and lost), identify
Map your observations to a workflow with steps (6 to 10 max)
Define prospect actions to move from step to another
LEAD PROSPECT CUSTOMER
Identify the Customer Champion which will support you
Identify the Customer Mobiliser
Sell by teaching, tailoring
Control the sales process
Build credibility by relevant data or insight.
Reframe the conversation
Teach the customer that their current view is not optimal
Prove the Business Case
Involve emotionally by story telling where the pain points are identified and come to believe that his view needs to evolve
Paint the new way forward in which your solution, product has a key role
BASIC SALES PROCESS
Prospect : Source leads or gather leads from your marketing (MQL)
Qualify : Leads match with your ideal customer persona (SQL)
Connect : Call, email, social , meet the prospect
Identify Pain and Needs : Ask prospect questions to understand their issue
Buying process : identify stakeholders and buying process , timeline
Present : demo , presentations to stakeholders
Handle Objections : Address any doubts of your prospect
Issue Proposal : Deliver a proposal and present it to stakeholders , negotiation
Close : Close the deal
Deliver Product/Service : Onboarding , support, consulting
Customer success : measure the customer experience, identify opportunity and churn
Upsell/Cross-Sell : AE to follow up and expand the account
SALES TIMELINE ON AVERAGE
1. Deals < $2,000 in ACV should close on average within 14 days
2. Deals < $5,000 in ACV should close on average within 30 days
3. Deals < $25,000 in ACV should close on average within 90 days
4. Deals < $100,000 in ACV should close on average within 90-180 days depending on # of stakeholders and gates
5. Deals > $100,000 in ACV will take on average 3-12 months to close.
Of course, some faster, some shorter
Depending also on the business process change and if within an RFP
Stage 1: The customer becomes aware of a business problem. Alternatively, the salesperson creates a pre-stage 1 opportunity by introducing an idea or challenge that is not yet on a customers agenda, or raises the visibility of an issue the customer has underestimated.
Stage 2: Customers are doing their homework and assessing how much of a priority the issue is, determining their options, and developing decision criteria and decision process. It takes a knowledgeable and skilled salesperson to learn and add value at this stage.
Stage 3: Customers research, compare solutions, narrow down choices, and refine decision criteria. The salesperson must differentiate, focus on business outcomes, and prove value.
Stage 4: Knowledgeable customers make selection and negotiate. Involvement of procurement prior to this stage.
Step 5: Customers make the purchase. You support implementation and follow-up.
Step 6: Customers are in an evaluation mode. In the post-purchase stage, customers implement, measure outcomes, and evaluate performance against the sales promise
BUYING AND SELLING PROCESS EXAMPLE LINK
Large companies have dedicated Procurement service
They have Procurement playbook
They manage the product and services purchase portfolio
They have relationship with Legal
They have a power to negotiate your contract
Understand the pricing thresholds , DOA and process
First and not last get your champion to prepare the ground
MARKETING AND SALES : FRIENDS OF FOES
Mark Roberge from Hubspot puts it well in his book, The Sales Acceleration Formula
Marketing sits in one corner of the office, harboring the perception that the sales team is a group of overpaid, self-centered brats who fail to see the big picture strategy.
Sales is in the other corner of the office thinking the marketing team sits around doing arts and crafts all day, and has no idea what qualified leads look like.
Obviously, Not good !
MEASURING YOUR SALES PROCESS
Usual suspect ! If you cant measure, you cant manage
Measure the time for each prospect spent in each step
Measure the prospects move across each steps across the timeline
Do not delete the Lost deals ! Analyse Win/Loss !
Get the Not Now into nurturing
Use a CRM / SFA / Analytics
SALES KEY METRICS
AVERAGE SIZE OF SALE
SALES CYCLE TIME
CLOSING RATE (WIN RATE)
SALES FUNNEL LEAKAGE
Set , refine your metrics goals , and segment
Analyse the datas to refine your processes and targets
Let you identify predictable revenue
S&M COST EFFICIENCY METRIC
Customer Acquisition (Customer Acquisition Cost)
CAC = Sum of S&M costs / Number of Cust. acquired
Ratio CAC: CAC / LTV
Customer Retention (Customer Retention Cost)
CRC = Sum of M/CS/AE costs / Number of Cust. retained
Ratio CRC : CRC (Customer Retention Cost) / Retained-Renewal LTV - Churn
CEC = Sum of M/CS/AE costs / Number of Cust. expanded
Ratio CEC : CEC (Customer Retention Cost) / Upsell Cross-sell LTV
Again average and segment ! and LTV > 3X CAC Months to recover CAC < 12 months
MORE COMPLETE SALES METRICS
Asking , listening, teaching
Questions help to engage , connect, relate, collaborate
Open ended Questions from the seller help the buyer then to clarify their objectives , challenges, objections, priorities,
Open-ended Questions : Answer are lengthier
How, Which, What, Why
Close-ended Questions : Answer are a Yes or a No , or X or Y
Can, Do, Are
LEADS TO PROSPECT
Create a playbook, scripts
Call , Email, Social content and structure
Per lead Average of 8 touches in 2-4 weeks
Answer within 5 minutes
Triple touch : Call, Email, Social
Call length under 10 minutes
Always plan for the Next Step
CUSTOMER DISCOVERY CALL
For ICP non-BANT SQLs
30 second value proposition
Buyer personas (BANT)
Use cases relevant to the ICP
Recap and set next step
Create a Playbook, scripts, objection handling
Quality of your sales depends on the conversation quality
Find the time Balance between you and them
Adapt to culture
Always plan for the Next Steps
Lead the process, cadence
HOW TO HANDLE NON-EXISTENT FEATURE REQUESTS
1. Ask why Certain Capabilities Are Important
2. Ask Them to Prioritize Features in Order of Importance
3. Find Out Who is asking for This Feature
4. Challenge the Customer
5. Be Wary of Competitors
HOW TO HANDLE OBJECTIONS ?
Lack of knowledge
Warranted concern (e.g Price)
Risks working with you
Not clear on their interests or priorities
Not the right stakeholder or change in company
HOW TO HANDLE OBJECTIONS ?
Be Grateful to receive an objection
Restart the discovery
Ask, Probe, Confirm
Show the value
Back It Up With Proof and Customer References
Reframe Turn a sales objection into an opportunity
Objection Chunking Take a step back and look at the big picture
The Best Friend Formula (Relate - Bridge the gap - Ask again )
Curiosity Gain Their Interest By Asking new Questions
BUT WHEN A DEAL WILL CLOSED ?
Strong Business Case
Painkiller / Vitamin
Gain / Save
Timeframe driver (urgency)
What is their project timeframe
What is their urgency
Identify Initiator, Influencer, Decider, Buyer, User, and Gatekeeper (Procurement, legal, ..)
RFI, RFQ , RFP
Customers Workflow to purchase , budget threshold and management
P.S : Technical fit
Make sure that there are no technical showstoppers to integrate your solution ;)
Negotiation pressure on timeline
Circle back and reposition on a No
Do not force a fit
Establish closing question
LAND AND EXPAND
easier and cheaper to expand within your customer base
MEASURE YOUR CUSTOMER HEALTH ?
Relevant data points help your diagnosis and actions
Measure Customer happiness
Measure usages and patterns
Grow your revenue
Reduce Customer Churn
Achieve Negative Revenue Churn
As more you grow , replace churn with new booking become harder
THINK OF IT LIKE A MARRIAGE
Do not expect your partners to do all the heavy lifting
The most productive partnerships require effort from both parties
Good fit Partnerships
my partners products or services should complement mine, and vice versa
My partner should also possess skills or resources I lack
Build and maintain a healthy relationship
Provide them with the right tools: Empowered with the right training, resources and tools
cross pollinate audience
Value Added Resellers , System Integrators
When product require heavy implementation
Product Partnerships/Integrations / OEM
Yours as an ecosystem via your API , Platform
Others ones (e.g : Salesforce )
Leverage for growth otherwise we do not scale ?
Maybe , still it depends on the Partner size
Easier and less expensive than direct sale?
Wrong , it is hard to build your own direct sale, harder to have an indirect sale
Partners want to sell your product
Well, you may just end up in their catalog if too few sales success, or interest conflicts
I need a build channel
Well, only if it satisfies your customers needs and reach (e.g : geography , specific markets)
INDIRECT SALES ECONOMICS
Consider the costs associated with a direct sales team versus the overhead for an indirect sales team
Indirect Sales means you provide a Commission which should be part of your Pricing and Revenue strategy
Commission are in average between15% to 45% depending of the deals
Take in account the cost overhead to manage the partnerships relation, content, marketing and operations
THANKS YOU !
CONTACT ME AT
LUC@ROCKSVENTURES.COM @LUCBOILLY LINKEDIN ANGELLIST
CREDITS AND REFERENCES
Content Source references