Building the sales process after founder-led sales
In the initial stages of a company’s growth, the sales motion can be freewheeling. You have to manage getting customers in the door, getting feedback to the product, and building / inspiring the team.
For reasons of necessity, most founders will own sales at first. Founders are uniquely positioned to manage complexity – they can change the roadmap on the fly or provide no-cost pilots. As a company finds traction (and funding), however, it will invariably need a non-founder sales leader. Transitioning from founder led sales while still managing early stage complexity is very difficult.
To help founders navigate this inflection point, B Capital held a “Lunch & Learn” workshop with BCG Partner Matt Ward. Matt Ward has over 15 years of go-to-market and SaaS sales experience. Having been the sales leader at a SaaS startup that went from 30 full-time employees to IPO. He is now a Partner consultant within the Marketing, Sales, and Pricing (MSP) and Technology, Media, and Telecom (TMT) practices at Boston Consulting Group (BCG) where he spends most of his time helping companies ranging from VC/PE backed to Fortune 500, build new Go-To-Market capabilities.
The following are key learnings from this event.
Understanding Customer Pain Points & Value Propositions
Much of the foundational customer and product knowledge lives in the head of the founder. Establishing the sales process begins with documenting and transferring those insights.
“Learning by osmosis is critical because, at this stage, there’s no formal onboarding or training program,” said Ward. “Founders may have an implicit process for selling the product and knowledge of customer behaviors. The sales leader has to extract all that information and translate it into a refined pitch and lead-to-close process.”
The first sales leader at the company will have to learn the product and customer journey inside out. “Understanding the ideal customer profile (ICP), defining their pain points, and why our solution is better than the competition are all critical to establishing a process every salesperson can use to sell the product,” said Ward. In addition, the sales leader should analyze the current pipeline to learn where leads are coming from, whether and how they’re converting, and the different decision points needed to close a deal. Rather than relying on a “spray and pray” approach, the work aims to develop a sales process that focuses on converting qualified leads.
In developing this sales process, Ward advised sales leaders to maintain two critical guardrails:
1. Don’t over promise to customers – Founders may rely on the long-term product roadmap and company vision to convert first customers. However, this isn’t a luxury that a salesperson has.
The sales strategy needs to be grounded in what can be delivered today, said Ward. It’s important for the salesperson to draw a line between what the founder might tell the customer and what’s available today.
2. Maintain a data-driven approach – Sales can be an emotional practice. A salesperson may attribute lost revenue to a missing product feature, pricing strategy, or another Product or Marketing issue. Even if this is true for a single customer or prospect, a scalable sales strategy relies on a repository of data on customer wins and losses.
In Ward’s view, the sales process must be based on concrete data, and the sales teams should leverage that data and be pragmatic when requesting support or any changes to products.
The sales leader doesn’t need to establish the sales process alone. To establish mutual trust and confidence in the overall direction of the sales strategy, frequent (daily/weekly) communication between the founder and sales leader should be a part of the transition from founder-led sales.
Enabling Sales Success
An early-stage sales strategy should also provide sales teams with the resources they need to close and upsell deals. Sales enablement needs will vary by company and complexity of the product. “If you’re creating a new category versus building a better solution than what’s already out there, there may be a need for more buyer education materials and content,” said Ward.
However, there are some table-stakes components to sales enablement that every early-stage company will need:
1. Reliable contact data: Since your sales team will likely do a lot of cold prospecting, it’s essential to use a third-party contact provider like ZoomInfo to minimize time spent researching and verifying contact info and to engage prospects more effectively.
2. A sales engagement tool: As your Sales team begins to generate a pipeline, sales engagement tools like 6Sense and Gong can help both Sales and Marketing capture buying signals among customers and automate some backend workflows. You can boost win rates and efficiency even more as you hone in on your ICP and integrate it with your sales engagement tool.
3. A strong demo deck: A strong demo deck is essential in a salesperson’s arsenal and should clearly and succinctly describe the solutions your company offers. “The best demo decks focus on the customer and their pain points,” said Ward. “The goal isn’t just to rattle off product features, but rather show you have a clear understanding of the customer’s needs so that they feel confident that you have the solution to their problem, show me you know me.”
4. Customer case studies: Case studies may feel like a “nice-to-have,” but Ward believes they are essential to the sales process. “Having customers that can sell the value of your product is really important,” said Ward. If you need to collaborate with marketing on case studies, demonstrating how they will incrementally move leads further through the funnel can help to make them more important.
Evolving the Sales Process
Once the foundational sales strategy and process have been established, sales leaders should begin thinking about scaling up. Ward offered some considerations across essential levers:
- Keep your CRM flexible: “Most CRMs have all the capabilities early-stage companies need out of the box,” said Ward. Avoid going too deep into CRM customization in the beginning. This will keep things simple and manageable for your Sales and Marketing people, and avoid systems and processes breaking later as new leaders come in and want to change CRM strategy.
- Maintain a balance of AEs and SDRs: While hiring SDRs may be more cost-effective than account executives, it’s essential to have both. AEs tend to have a lot of specialized knowledge of buyer personas and messaging that is resonating with your ICP. That information can be mined by SDRs and Marketing to put more structure around the conversion strategy and refine the overall demand generation process.
- Avoid establishing sales quotas too early: While sales quotas can help calibrate your sales team’s efforts, setting them too early can unwittingly lead to misalignment. “Before you put a quota out there, you need the data behind how you got to that number (at least an early version) – how long the sales cycle takes, what the win rate should be, and how that backs into compensation,” said Ward. “Otherwise, your sales reps may not understand their quota or feel that it’s unrealistic.”
If you have an early version of a sales process, then you still may want to start at a lower Quota:OTE ratio or think about providing reps non-recoverable draws as they ramp up. Lastly and harder to manage would be to provide a set of MBO/KPIs to hit while establishing the sales process/quota baseline.
Transitioning from founder-led sales to a more defined sales process will require time, resources and the right sales leaders. Long term, this transition will pay dividends when it leads to better insights about customers, a more focused product roadmap, and (hopefully) higher win rates.
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