Sales is a paid growth loop.
It's mainly constrained with money (salespeople cost quite a lot) and it takes a while to get a salesperson up to full speed (up to a year).
Sales can be also done by partners and suppliers.
What Is Easy to Get Wrong?
- Not specializing the sales roles early enough.
- Doing sales for a product that doesn't cost enough to cover the costs.
- Not filtering sales leads properly.
- Not agreeing with marketing the exact criteria for a sales lead.
The Three Questions You Need To Answer
- Can you understand their pain/problem?
- Have you solved it for other companies like them?
- Can they get a return if they spend the money?
Organizational Basics
It’s worth considering only if the revenue you are making is high enough - probably more than 500 EUR MRR per month per customer. So, it definitely should work for enterprise sales, for B2B, in general, you might need to narrow down the target group for sales a bit more (high-value customers only).
Terms
- Sales Development Representative (SDR) - specialized in generating outbound leads
- Market Response Rep / Inside Sales Rep - an inside salesperson who only qualifies leads coming in from a website
- Outbound Sales Rep - a sales rep who is specialized in outbound sales and doesn’t handle anything else (closing, success etc)
- Account Executive (AE) a quota-carrying salesperson (doesn’t matter whether inside sales or in the field)
Process
The results are a function of:
- the number of deals,
- average deal size,
- conversion rate (in various stages),
- and the time it takes to close them (incl first response time to campaign etc).
The whole process has to start with narrowly defining the target audience, their problems and your solutions.
The key to having a predictable sales pipeline is to specialize the roles from the beginning - as soon as the founders have proved that the product can be sold.
The biggest impact usually comes from creating a specialized outbound sales (development) team, made up of junior salespeople (experienced salespeople suck at prospecting and they hate it). They focus 100% on prospecting (no closing deals and no working inbound leads).
Prospecting (sales development) basically tries to catch the attention of those people, to sell them the dream, and to qualify (and disqualify them) for an appointment with an account executive. A scheduled appointment essentially means hand-off.
It’s important to keep a list of disqualifying criteria as well to quickly disqualify leads.
SDRs should be organized by territory. One SDR can typically support several account executives.
Outbound sales reps should both prospect into cold (new) and inactive companies (expired trials etc).
AE-s should concentrate on their past customers if they want to bring new business.
The most important metrics to track:
- Closed business
- Qualified leads per month
Cold emailing tips:
- Start with a short email that asks just one question:
- Who is the right person to contact for …? (Target C-level - the referrals that comes from C-level are more likely to be followed up by employees)
- When is the best time to discuss …?
- Include names of existing customers that they might know (even if these are not done deals yet)
- Send before 9am, after 5pm and avoid Mondays and Fridays
Compensation
The key elements of compensation are:
- Base salary;
- Quota;
- Commission rate;
- Variable pay (Quota x Commission rate);
- OTE (on-target earnings = base salary + variable pay).
Typically the commission rate for SaaS is 10% and the quota is 10x base salary.
