Category: Sales and Marketing

As I talk to entrepreneurs, it’s apparent that the #1 challenge far and away is customer acquisition. The days of needing to raise serious cash to build a product are over. The days of worrying about scaling an app are over (see WhatsApp supporting 450 million users with 32 engineers). That’s right, if an entrepreneur shows up and hasn’t been able to get a simple prototype built and some people using it, they aren’t meeting the new minimum expectation.

As building a prototype has dropped to a few thousand dollars, it puts even more pressure on customer acquisition. If anyone can build a product, it makes sense that more products will get built, and more competition will emerge for the same potential customer.

Looking back, there are so many customer acquisition related posts that it makes sense it’s the most difficult problem to solve. Whether it’s Pick a Customer Acquisition Model that Make Sense, Lead Generation as the #1 Challenge for SaaS, or Double Inside Sales Rep Productivity in a Week, there’s no shortage of ideas to try.

Customer acquisition is much harder than entrepreneurs expect. In fact, it’s the hardest thing to master.

What else? What are some other thoughts on customer acquisition?

Earlier today I was talking with an entrepreneur who was trying to figure out a repeatable customer acquisition process. After digging into his model, I asked the question, “How do you want to acquire customers?” He replied that he preferred an inbound marketing model with self-service customer onboarding and paying. In other words, he wanted a model that didn’t require humans selling to other humans. After thinking about it further, it gave me more clarity around the importace of playing to the strength of the founding team and/or the talent available to bring on to the team. If the model requires building an amazing inbound marketing engine, and the talent’s not on the team, it either needs to learned, recruited, or the idea needs to change.

Thinking about it, there are three commmon customer aquisition models:

1. Pure Marketing – Tons of storytelling, content marketing, brand building, and campaigns to generate customer sign-ups. No humans selling. Minimal product customization. Self service as much as possible.

2. Inside Sales – Heavy phone, email, and web-oriented sales people — both lead follow-up and outbound prospecting (see Double Inside Sales Rep Productivity in a Week). Inside sales is labor intensive and requires a product price point and sales cycle to warrant people selling to people.

3. Field Sales – Large deal size and complexity often warrant face-to-face selling. As a model, it’s very expensive and often capital intensive to get started. Few SaaS startups employ this model, although many have tried and failed.

The next time an entrepreneur starts talking about an idea, inquire as to the expertise around customer acquisition models — especially marketing-based, inside sales, and field sales — and see if the shoe fits.

What else? What are some other thoughts on picking a customer acquisition model that makes sense?

Back in February 2012 I was at Startup Riot Atlanta and had a chance to hear Atlanta-based CallRail pitch their phone call tracking, recording, and analytics software. At the time, I didn’t pay too much attention to it as I was heads-down focused on Pardot. Well, fast forward a couple years and CallRail is one of the top bootstrapped startups in Atlanta with well over 5,000 paying customers.

Here are a few notes on CallRail:

• Experienced co-founders with strong technical skills
• Idea came from one of the co-founder’s previous experience running an automative lead generation site and wanting to track how many phone calls each listing generated
• Riding the wave of online and offline advertisers wanting to track inbound calls on a per ad basis so as to measure efficacy and return on investment (think banner ads, pay per click ads, websites, print ads, etc)
• Self-service model whereby everything is done in a browser with limited hand-holding
• Pricing in the $30 – $360/month range plus per phone number and per minute fees
• Strong internal expertise around lead generation and online marketing
• Powered by Twilio’s cloud-based telephony platform

CallRail plays to many of Atlanta’s strengths including cloud-based B2B marketing software and a capital-light business model. If you know anyone looking to implement phone call tracking, point them to CallRail.

What else? What are some other thoughts on CallRail?

Two of the hardest positions to fill are inside sales reps and software engineers. So, when an entrepreneur comes to me and says they want to expand their sales team, I first want to find out if they are doing everything possible to maximize existing productivity. More often than not, they are using a modern CRM, like Salesforce.com, but aren’t taking advantage of so many other good sales tools.

Here are tools to double inside sales rep productivity in a week (disclosure: I’m an investor in the last three):

• InsideSales.com PowerDialer – Queue up and crank through a ton of calls much faster than dialing by hand.
• Google Voice with Google Chrome Extension for Click-to-Call – When not using an automated dialer, dialing should be a simple click of the phone number in the CRM.
• Quality USB Noise Canceling Headset With Microphone (Jabra BIZ 2400 USB headset is recommended) – Always talk hands-free. Always.
• SalesLoft – Quality prospecting starts with quality lists.
• Rivalry – Cultivate a culture of competition with live leaderboards and automated coaching.
• Voxa – Automate email logging, follow-ups, and other tasks to maximize time selling.

Sales rep productivity is a function of data, technology, processes, and, of course, time. Double the productivity by taking advantage of technology to make the reps’ time twice as useful.

What else? What are some other ways to improve the productivity of inside sales reps?

Recently I was talking with an entrepreneur who has been implementing inbound marketing best practices for years but not getting much value. His startup is past the product / market fit stage and now he’s working on building a repeatable customer acquisition machine and needs to fill the top of the marketing funnel (see Lead Generation Drives SaaS Startups). On the inbound marketing front, he’s been writing blog posts, creating white papers, nurturing followers on Twitter, and following search engine optimization recommendations.

After thinking about it for a minute, I commented that implementing inbound marketing best practices is different from building a passionate community. Here are a few thoughts on it:

• Standard content, while keyword rich, often isn’t edgy or strongly opinionated
• Offline interaction and building personal rapport is an important ingredient in cultivating a community
• Audience engagement is readily measured based on number of comments, retweets, and follow-up emails
• Amazing storytellers, like the best programmers, are 10x more effective than their colleagues

So, as part of building a passionate following, think about the cult in culture and figure out what resonates with the people you want engaged. Inbound marketing is about relevant content while a passionate community comes from compelling leadership.

What else? What are some more thoughts on how building a passionate community is different than inbound marketing?

Cold calling isn’t dead. In fact, with so many people texting, emailing, and hanging out on social media, cold calling is even more effective because it is so under used. That said, cold calling isn’t easy. In fact, cold calling is very difficult and emotionally draining (for most people). Here are a few thoughts on cold calling:

• Allocate enough time and resources to be successful (e.g. trying it for a couple hours one afternoon doesn’t qualify as effort – allocate 40 – 80 hours of work to figure out if it’s going to work)
• Read Aaron Ross’s great book Predictable Revenue and learn how to do modern, internet-augment selling
• Build great lists of prospects to call on using a tool like the SalesLoft Prospector
• Pick at least three different job titles and call 500 people with that title (e.g. email marketing manager on LinkedIn)

Cold calling becomes even more effective with a proven methodology like Sandler Sales Training and other sales rep training programs. So, if cold calling isn’t on your radar, add it.

What else? What are some other thoughts on cold calling for fun and profit?

Insight Venture Partners has an excellent PDF up titled Insight’s Periodic Table of SaaS Sales Metrics where they break down seven different sales related categories and provide key metrics. This is super impressive as it was built using data from a number of their portfolio companies, so it’s real information from some of the fastest growing Software-as-a-Service companies in the world. Insight has an impressive track record with investments in companies like ExactTarget, AirWatch, and HootSuite.

Here are the Periodic Table of SaaS Sales Metrics categories with a couple key metrics:

• Business Development Reps (appointment setters)
  – 2 months new BDR ramp time
  – 10 sales qualified leads per week
• Inside Sales Reps
  – 3 months new ISR ramp time
  – $630k-$720k annual recurring revenue annual quota
• Field Sales Reps
  – 6 months new FSR ramp time
  – $800k – $1.3M annual recurring revenue annual quota
• New Business Bookings
  – 6% average commission on up-sell bookings
  – 66% of companies offer a trial before buying
• Retention
  – 2% median renewals commission rate
  – 50% of churn is uncontrollable
• Professional Services
  – 25% is the average professional services fees as percentage of 1st year contract
  – 25% of companies give quota relief for professional services but no commissions
• Account Managers
  – 60% account managers responsible for up-sell annual recurring revenue
  – 30% – 50% average net promoter score

Anyone involved in SaaS should study the table and use it to benchmark against their internal numbers.

What else? What are your thoughts on Insight’s Periodic Table of SaaS Sales Metrics?