As the founder of a young business, you are the one responsible for developing relationships, closing deals and securing the funding you need to move forward.
It makes sense that you would be your company’s number one salesperson since you understand your mission and value proposition better than anyone else. And in the early days, budgets are tight and it makes more sense to invest somewhere else.
Building on these relationships is crucial because it’s where your initial round of business comes from. It’s easier to secure a deal with someone you’ve met and pitched personally (and likely done business with previously) as opposed to someone who is getting a cold email from one of your sales reps.
Once you have secured these early deals that prove your product is something people want to buy, you can begin pitching your company to professional investors to secure funding (we are assuming that you’ve already bootstrapped and done a friends and family round).
But leveraging personal relationships and your extended network has a finite value, and that’s where many founders have difficulty scaling.
There are only so many dollars you can squeeze out of the same opportunities and contacts.
You may be able to leverage that early success to convince an investor to write you a check, but you can’t assume it will be enough to keep them happy.
The Investing Dilemma
The moment you cash an investor’s check, an imaginary countdown timer starts. When it hits zero, the investor who gave you the capital expects results in the form of milestones achieved toward a return on that investment.
They may believe in your mission but your passionate pitches and colorful pitch deck slides will only get you so far. They are going to want to see both short-term results and a long term game plan.
The road ahead for a founder with VC money becomes tougher when you realize the old model of sales started to falter in the late-2010s.
Even the updated Predictable Revenue Model is not so predictable.
Sales managers routinely tell us that it is much harder to generate opportunities because of trends like most people working from home, buyers doing more of their research online before “raising their hands,” and for SaaS propositions at higher ARRs, wider and dynamically formed teams of people involved in making buying decisions.
The Old Sales Model (Invented at Salesforce.com by Aaron Ross)
For the predictable revenue model to work, you must employ a significant amount of reps in order to make the number of touches needed to achieve consistent results.
You end up hiring young and inexperienced sales development reps to make hundreds of touches a week (emails, calls, LinkedIn connections, etc.) to set appointments for still other older, yet still relatively green reps to sell complex software solutions to seasoned decision-makers.
Furthermore, because the SDRs are expected to hit high quotas, they end up reading from stale scripts and sending formulaic emails that provide absolutely no context or personal touch--and so is most of your competition.
Today’s B2B buyer craves and demands personalization and authenticity when interacting with a brand. They want the sense that you know them on a personal level and their business situation in some relevant context before you even try selling to them. Your prospects want to have an experience in B2B like they do as consumers.
This is where building an inbound marketing engine comes in; it’s a strategy centered around providing informative, inherently valuable and truly thoughtful and enjoyable content that attracts your target audience and positions you as the expert.
The point of the investment in the content: If you are the one answering their questions, or better yet pointing out the questions they should be asking, you can be the one selling them the solution.
Basics Of Inbound Marketing for SaaS Founders
Until a few years ago, implementing an inbound marketing strategy was relatively simple. The marketing team would develop content that generated traffic to the website, point site visitors to gated content which required contact information to download, the form fills and other activity qualified them as marketing leads, which we’d then pass to the sales team to close.
There was not a lot of content being generated compared to what is true today, so it was relatively easy to get found on search engines. And Google was less sophisticated (and possibly more altruistic), so there were more organic slots per page than is true today. B2B buyer behavior changed to one of self-education before connecting with reps and for the first eight to ten years--the fish literally swam up to the boat.
However, several obstacles have appeared to complicate this process.
First, inboxes are flooded with marketing messages offering free content and sales pitches. The burst of the e-mail marketing bubble was inevitable but it was certainly sped up due to the current COVID-19 pandemic. Senior execs routinely talk of receiving hundreds of emails a day.
Everyone in B2B uses email to contact their target audience at scale, so the effectiveness is going down. Not to zero yet, but it is getting much harder to get through.
Second, all of your major competitors are doing content marketing in one form or another. There’s a literal flood of content competing for search traffic. It used to be as easy as, “post it and they will come.”
It’s a lot harder to crack organic search than it used to be - not impossible - but a lot harder. So you will likely have to invest in advertising to generate traffic that used to be “free.”
Third, and perhaps less widely accepted, is the reality that just because someone downloads a lead magnet (a.k.a. premium content or downloadable), that does not make them a qualified lead.
Since prospects are comfortable ignoring emails, they don’t really care if they give you their address. The reality is that they will download something whether they have an immediate and actionable interest almost as freely as if they are just researching the topic for background.
Plus, they rarely remember downloading the content by the time a sales rep calls to follow up on it. And if you call right away, you’re just a pesky rep who hasn’t given them the time to read it.
Quite the conundrum.
The New Sales Model – We're All in this Together
The solution involves examining the way marketing, sales and even customer success are aligned in terms of KPIs and incentives.
Your marketing team can no longer afford to focus on executing tactics that provide a large quantity of leads for your sales team to sort through. Their incentives need to shift from marketing-oriented metrics such as clicks and conversions to more sales-based results such as demos held, deals closed and ARR booked.
Marketing also must take into account the myriad ways that buyers want to do research and develop strategies to keep them engaged until they’re ready to attend or watch a demo or take a call from a sales rep. Now it’s marketing’s job to make the discovery process as compelling as possible to reduce resistance to the sales process.
This is where the Flywheel concept that HubSpot created comes into play. This concept at its core focuses on ensuring your entire organization is aligned in its effort to deliver a remarkable customer experience.
Where the old model focused solely on outcomes such as content downloads and lead generation, the Flywheel focuses on providing a consistently positive customer experience by offering things the customer wants such as valuable content, free services, easy-to-purchase products and thoughtful support every step of the way.
This model forces marketing, sales and customer success to adopt the same mindset, share a common set of measurements and pursue similar outcomes.
How To Make The Change
As a business leader with finite resources, you can’t hire employees to execute every part of your marketing strategy and also expect them to be expert in the SaaS business model.
Many successful founders adopt a hybrid approach; they hire in key roles (CMO, management, project leads and admins) and bring in experts where and for the time needed.
An agency such as ours specializes in SaaS go-to-market strategy and organization design for sales, marketing and customer success. And once we’ve helped build those functions out (including tech stack), we can, as needed, create strategy, build the content and process, and help run the automation, too. Usually the effectiveness is greater and the overall costs of doing business will be lower with this approach as we often “turn over the keys” to clients after everything is up and running.
The right agency will help optimize your sales process, help you set long-term goals, and align your sales and marketing teams around them. They should also understand the importance of presenting this strategy to your investors including what points to hit on and common fears to alleviate.
What Got You Here Won’t Get You There
The strategy that got you off the ground in the early days will not drive the scalability you are hoping to achieve.
Relying solely on personal relationships or a lead-focused sales team will result in diminishing returns, decreasing profits, and increasingly concerned investors.
As a business owner, it is up to you to understand the time is now to abandon the old sales model and usher in the new one.
Want to talk about it? Book a no-obligation consultation and let’s talk SaaS go-to-market. I guarantee the time will be worth the investment and that no salesperson will call.