Thursday, 17 March 2016

Stephen Darori on Startups : Sales and Marketing Tools for Startups

Stephen Darori on Startups : Sales and Marketing Tools for Startups:                         Jim Barksdale served as the CEO of Netscape (‘95 – ‘99). Image courtesy of Lifehack Quotes  After spend...

Sales and Marketing Tools for Startups                        Jim Barksdale served as the CEO of Netscape (‘95 – ‘99). Image courtesy of Lifehack Quotes 
After spending months and maybe years looking for product-market fit, you now proudly got a product and are ready to go to market. However, after a few weeks of trying to make customers fall in love with what you’ve created, you realise that nothing is as easy as “build it and they will come”. You have to invest time and money into building a sales and marketing team to acquire customers beyond early adopters. Building on my experience of being part of a team that did exactly that for Dropbox in Europe, I will attempt to demystify the process and hopefully give a starting point, from which any founder can start building a distribution engine that creates happy customers.
To begin with, let’s illustrate the sales process with a simple graphic of the funnel that comes from an excellent post on Stratechery about marketing channels.  In short: customers need to know that your product exists first, before they start comparing it to other offerings, after which you need to convert them into customers. My post focuses mostly on conversion. I’ll start by telling you about the tools you can use to maximise impact with minimal investment. Then, I’ll share some tips on how to be effective at interacting with customers. At the end of the post, we’ll have a look at sales within the broader context of customer acquisition and customer success.
If you’ve never heard of the sales funnel before, here is a good overview of what we mean by that. The way you define the stages will be dictated by your product. The most important part is to start tracking “conversion” from one stage to another as soon as possible, because it will tell you what’s working and what can be improved. Equally as important is the understanding that sales take time. A lot of people get frustrated because they put a lot of effort into their work but it seems like nothing is working. Fear not – persistence will pay off!

Use the right tools

A data sample from Redpoint Ventures shows, that most high growth SaaS start-ups hire their first VP of Sales in their third year since founding. That is because good sales people are very expensive and means that you have to maximise the use of your sales team’s time, making everyone a productivity ninja. As you could have guessed, technology comes to the rescue. Thus, the first part of the guidebook is dedicated to the tools you can leverage to support your sales team (and I don’t just mean


The first challenge you need to solve is to make sure that your customers can reach you – for free and in a way convenient to them. If you display a UK phone number in Spain, many customers will be put off and won’t call. In my experience, even if you do not currently have a native speaker on the team, it pays off to display a local phone number of the website. Services like TalkDesk and Aircall allow to set up an international call centre in minutes and will scale with your team as it grows.
Record a greeting and set up a routing, asking a customer to choose the department they are after (i.e. sales or support). If there is currently no option for phone support for existing customers, your recording should explain them what is the best way to get hold of the support team. Expect some people still try to get hold of customer success, marketing or any other department through the sales line, because it will likely be the number that is the easiest to find on your website. 

Online chat

Another way connect with customers is online chat. Although less personal than a phone line, it is a great way to offer support to clients. It works both in a B2B and B2C context, as some studies show that 44% of online consumers say that having questions answered by a live person while in the middle of an online purchase is one of the most important features a Web site can offer. The key to success here is twofold – knowing whom to target and efficiency of the sales team. The great thing about online chat is that you can choose whom to target (you could of course give the option to everyone, but it’s a good thing to filter if you are scarce on manpower). 
Most chat providers will let you specify which website visitors will see a live chat option, for example only those who have been to your website before, saw more than 3 pages and spent at least 2 minutes on the site. LivePerson claims to use a proprietary algorithm to predict who will be a good visitor to target, others will let you set your own parameters (SnapEngage is a great tool I’ve used in the past). An easy integration with Google Analytics will let you see which customers ended up converting and you will soon be able to write your own success formula. In a B2C context, you definitely want to give the chat option to customers who got something in their cart but have yet to complete the purchase. Most notably, Apple used to deploy this tactic in their online store.
Another great aspect of chat is that one sales-ninja can talk to up to 4 customers at once, which is impossible to do in any other way. Pre-canned responses are the way to go here. Having spoken to customers for about a month you will have enough data to see certain themes emerge, which will allow you to write text expanders that answer these questions. Keeping track of what customers are asking is also very valuable for the product team, so it pays off to establish a process to capture customers’ questions early on (more on where sales fits in within the organisation later).
In terms of staffing, it all depends on your manpower. From my previous experience, Tuesday and Wednesday lunchtime and early afternoon are the busiest times of the week. If you can’t be online at all times during business hours, you can give customers the option to request a call back. Meeting scheduling apps like Doodle or Schedule Once will take care of scheduling.

Lead Generation

But before anyone calls you or wants to chat to you online, you need to make sure customers are actually aware of your product and come to your website (“Awareness” part of the funnel). The team at Hubspot have written a lot of great articles on that front and are considered a thought leader in what is known as Inside Sales. What Inbound Sales means is that customer proactively seek an opportunity to speak to you. Another way for you to get customers is to go after a certain group of prospects by cold calling and mass email, this is called Outbound Sales. Inside sales is heavily driven by marketing activities, such as SEO, paid search, paid social or PR campaigns.  Here is more about the 9 disciplines of marketing and which one to build out first (hint: Ops and Analytics). Outbound sales is generally considered more difficult and only worth is when the LTV of a customer justifies having an account executive and a sales development rep dedicated to them, i.e. when the deals are big. Behind the Cloud, written by Marc Benioff of, is a read about the changing nature of software sales and how to deliver great campaigns on a budget.

The sales’y part

Now you probably expect me to post a picture of Alec Baldwin with the capture “Always Be Closing”. Wrong. Let’s get one thing out of the way here – we are not closing sales, we are opening relationships. As one of my former colleagues used to say “Nobody likes being sold to. People like to be educated and entertained.
Let’s start with a short exercise. Think of the best buying experience you’ve had recently. How did the sales person make you feel? How have they approached you? Did they ask you questions about the problem you were looking to solve? Now think about your worst buying experience. Did the salesperson keep talking over you? Were they telling you about the features of their magical solution?  Remember the difference between these two experiences and strive to make every interaction you have with your clients as similar to the first one as possible.

Asking the right questions

Essentially, being good at sales is a function of two components – knowing the product you’re selling very very well and knowing how to ask the right questions. The best way to know the in’s and out’s of the product is to spend some time in customer support (more on that later!). Asking the right questions is slightly more complicated, but not rocket science either.
One of the best books I’ve read on the subject is SPIN Selling by Neil Rackham. Statistics show that, surprisingly, auditors and engineers become very successful at sales. Why? Because their training teaches them to diagnose problems, and that is what sales is all about. A customer is talking to you because she has a problem she needs to solve. The less time you need to figure what that problem is exactly, the better salesperson you are. SPIN Selling comes handy in teaching how to ask good questions to get to the core of the problem. 

Short example

Ms. Customer: “Hi! I have to replace our existing file server. And I also need a VPN. Do you provide that?”
Sales-ninja: “I’d love to help you! Do you mind if I start to asking you a couple of questions to understand your problem a little bit better?”
Ms. Customer: “Yes, go ahead.”
Sales-ninja: “Thank you. Could you tell me a bit more about your existing solution? What is your biggest pain point current?”
Ms. Customer: “Well we were quite happy with our server, but it broke down. Thankfully, we have a back-up server”
Sales-ninja:“Gotcha. And have you always had a VPN server and and back-up sever in addition to your file server?”
Ms. Customer:“No we are only starting to think about VPN now as our customers expect us on-site with files handy, but we can’t access our normal server from outside the office. It’s very inconvenient to carry paper copies all the time.”
Sales-ninja:“Let me see if I understood you correctly. You are looking for a solution that would replace your current server, manage automatic back-ups and provide you access to your files from any location. Is that correct?”
Ms. Customer:“Yes, that’s exactly what I’m looking for”
Sales-ninja:”You will be happy to know that there are cloud solutions that allow you to achieve these goals without buying servers or worrying about maintenance. You also won’t need a VPN server to access your files while you are not in the office. If you’re interested, I can tell you more about how a cloud solution can help your business”
This example is very simplistic and things rarely go that smoothly in real life, but you get the picture. Asking the right question to figure out what the problem is the holy grail of sales. Note how our sales-ninja didn’t jump right into telling Ms. Customer about all the wonderful types of servers and VPNs he has in the shop. Also, note how he asked about how Ms. Customer and her colleagues are using their existing solution. Other questions to ask would be “How would your ideal solution look like?” or “What is the important factor in your evaluation?”. These questions will get you to the core of the customer’s problem much quicker than reading out loud the feature list of whatever it is you are selling. 
And here comes another important lesson – decision makers think in terms of implications for their business. In reality, you will rarely be speaking to the person with the ultimate power to write your company a cheque and the actual decision will be made in an internal meeting behind closed doors. Your goal is to make the person with whom you just spoke on the phone to walk into the meeting and speak on your behalf. In our example above, we want Ms. Customer to go into the team meeting saying “If we go with a cloud solution instead of a server, we’ll safe ourselves the trouble of maintaining a server and we’ll be able to access our files from everywhere”.

The buying cycle

Now you more or less know how to make a sale. Another very helpful concept to know is the buying cycle. Essentially, nobody ever wakes up knowing that they want to buy something. It all starts with Awareness (“I may have a problem that needs to be solved”), which then grows intoResearch (“Let’s have a look at possible solutions”) and Comparison (“Vendor A versus Vendors B and C”) and ultimately Purchase (“15 licenses please”) to Post-Purchase (“Shall I recommend these guys to my mate down the road…”). It is very important which stage the customer you are currently speaking to is in, because it will allow you tailor your pitch to their needs. For example, if the customer is still very early in the sales cycle, you can be most helpful by providing information and not being too pushy. Comparison stage is when you want to schedule your demo, trying to do that too early will scare the customer and put them off from taking to you in the future when they are ready.
The length of a sales cycle varies between products and some times can be excruciatingly long. Jason Lemkin’s best advice on dealing with long sales cycles is to “Chill. And by that I mean get used to it”. Jason co-founded Ecosign and, after having sold the company to Adobe, dedicates a lot of his time to investing into and writing about SaaS businesses. My best advice on dealing with long sales cycles would be to establish a discipline around following up. That could be achieved through salesforce reminders, spreadsheets or any other medium as long as everyone in the team is following up. A great way to gauge how long the cycle is going to be is to ask the customer “Have you been through a buying process of this before?”.  The customer will likely tell you what needs to happen on their end before they can go ahead with the purchase.

The bigger picture

In my opinion, sales, marketing and customer success (and to some degree product) should always be viewed in conjunction to each other. Let me illustrate with an example. A customer calls the sales line and after a short conversation he is convinced to buy the product. The salesrep is happy to have “closed” them so fast and moves on to the next lead. Meanwhile, the customer is left on his own to set up and deploy the product. He comes across an issue and calls the support line. Having tried once and not able to reach the support team, he gives up and pushes off the deployment of the new solution. When renewal time comes, the customer is not sure anymore he needs the solution as nobody around seems to be a converted evangelist. In a less tragic version of the story, the customer does get through to the customer support line and spends half an hour on the phone with them, which is not the best use of the customer success team’s time. 
I’ve looked at lifetime value of self-serve versus sales-assist (i.e. those who had some interaction with the company before and those who just bought on the website) and found that the latter group is more likely to retain and upsell. I don’t know if it’s the personal touch or education aspect that sales teams bring to the table, but it is worth making sure that the sales team has some goals around retention and onboarding success. From the point of view of the company, this is great because it minimises the time customer success people have to spend to the phone solving issues that sales people could have prevented. 
To summarise, an effective sales person achieves two objectives:
  • establish a need for a solution and communicate value
  • make sure that customers are set for success by showing them where to get help with onboarding (a well organised help centre or daily emails do a great job at this)
If the second objective is fulfilled, the customer success team is freed up to focus on more exciting projects like upselling campaigns or customer forums and communities. Marketing is very important in educating potential customers and scaling the sales team’s efforts through initiatives like email campaigns and webinars. If you are as far along the way that you are considering webinars, you probably don’t need my advice. 
If you are just getting started, here is a quick action plan to help you build a sales and marketing engine:
  • Make sure you understand Google Analytics, and you’ve read the basics about conversion marketing
  • Get a Mixpanel/Kissmetrics account to dig deeper into what’s happening on your website or app
  • Get a phone number via TalkDesk/Aircall and/or online chat via LivePerson/SpanEngage
  • Establish the discipline of tracking metrics weekly and set incentives wisely 
  • If you’re dealing with business clients and significant ASP, you should probably get a account 
  • Teach your salesforce to ask the right questions, understand the buying cycle and follow up with prospects effectively
  • Get your team to see the full picture and think in terms of “opening relationships” rather than “closing sales”