David Cummings on Startups

Category: Sales and Marketing

  • 5 Favorite Super Bowl 50 Commercials

    With Super Bowl 50 in the books, the next thing to talk about is the commercials. As always, the commercials were varied from the way-out-in-left-field ones to the more mainstream brand ones. From the ones I saw, here were my five favorites:

    Congrats to Peyton Manning and the Denver Broncos for winning Super Bowl 50.

    What else? What were your favorite Super Bowl 50 commercials?

     

  • New Product Categories Require Salespeople

    While it’s awesome to read about companies like Atlassian getting to $100 million in revenue with no salespeople, the reality is that almost all B2B tech startups require salespeople. Why is that? Well, 9 out of 10 times it’s a new product category and new product categories, by their very definition, don’t have an existing base of buyers that are actively seeking out a solution. While the potential buyers might have a problem or opportunity, if they don’t know what the product or category is called, or the latent demand hasn’t been magnified, they won’t go shopping for a system (it’s the same reason inbound marketing doesn’t work for new markets). Salespeople are needed to take new buyers through the purchasing process.

    Here are a few thoughts on new product categories requiring salespeople:

    • Uncovering or exposing a potential buyer’s latent pain takes time and effort, requiring a salesperson to be pleasantly persistent
    • Even if a qualified prospect expresses interest, they have a number of existing priorities and obligations, necessitating a salesperson to help keep the proposed solution top-of-mind
    • When a new product requires change management salespeople help build the support and get buy-in from the necessary stakeholders to take action (no small feat for more complicated systems)

    New product categories, like Pardot with marketing automation almost 10 years ago, are challenging and exciting at the same time. Assuming the market timing is right (the most important consideration), new product categories are the most fun, and require the help of great salespeople.

    What else? What are some more thoughts on the idea that new product categories require salespeople?

  • SalesLoft Rainmaker 2016 Conference

    SalesLoft, which has an great platform for increasing qualified appointments and raised a $10M Series A last year, is putting on a conference March 7-9 at the Westin in Atlanta (Disclaimer: I’m an investor). I’ve talked before about the rise of the sales development platform and I’m a big believer in using technology to improve sales and marketing (see Pardot).

    Here are a few details on the Rainmaker 2016 conference:

    • 400+ modern revenue leaders (demand gen, sales development, inside sales)
    • 15+ Partners (6 being announced as part of the sales development cloud ecosystem)
    • Amazing speakers and content
    • Gary Vaynerchuk is the keynote speaker!

    If you’re interested in sales or sales technologies, it’s a can’t-miss event. I hope to see you in Atlanta in March at SalesLoft’s Rainmaker 2016 conference.

  • Video of the Week: Scott Dorsey on 5 Startup Ideas

    Scott Dorsey, Managing Partner of High Alpha, and co-founder ExactTarget, has a great video where he shares the story of building ExactTarget from scratch to over 1,000 employees. In the video he talks about five sales-related startup ideas:

    1. Look big!
    2. Don’t rely exclusively on the web to sell the web
    3. Hire (sales people) in groups of three
    4. Test different sales models
    5. Build channel distribution

    I always love hearing entrepreneur success stories and lessons learned. Enjoy!

  • Defining the Ideal Customer Profile

    Earlier today I did a live SaaStr AMA talking about sales and marketing alignment, among a number of other topics. One of the first conversations was on defining the ideal customer profile. As for startups, early on there’s a good bit of trial and error to find any customer that’s interested. Over time, as the business grows, patterns start to emerge and the ideal customer profile becomes apparent. One of the best things an entrepreneur can do is really narrow down their definition of the ideal customer profile.

    At Pardot, we spent years refining our ideal customer profile. By 2012, here’s what our ideal customer profile looked like:

    • Company with 20-200 total employees
    • 5-50 employees in sales and marketing
    • At least one full-time, in-house marketing person
    • Buys Google AdWords for direct response lead generation
    • Has an email newsletter sign-up box on their website
    • Closes deals with a consultative sales team

    By maintaining a tight focus on companies that fit our ideal customer profile, we were able to make our outbound prospecting and marketing much more successful. Spend time refining your ideal customer profile — it’ll be worth it.

    What else? What are some more thoughts on the ideal customer profile?

  • 4 Tips for Recruiting Great Sales Reps

    Earlier this week I started reading The Sales Acceleration Formula by Mark Roberge. There are a handful of great sales books out there and this ranks right up there as one of the best (and most modern). One of my favorite parts was the section on finding and recruiting talent.

    Here are four tips for recruiting great sales reps from the book:

    1. Target Sales Reps that Used to Work at Friends’ Companies – Make a list of friends’ companies that have similar values and sales tactics and then find sales reps that used to work for those companies on LinkedIn. After making a list, reach out to your friends and get input as to what people should, and should not, be pursued.
    2. Find Passive Candidates and Start by Asking for a Referral – Use LinkedIn to find sales people that match desired attributes (target market, schooling, years of experience, etc.) and email/InMail them explaining you’re looking for people like them due to similar, successful reps already on the team and how you wanted to see if they could refer anyone that might be a good fit. Of course, you want the person to raise their hand and express interest and this passive approach is a great non-committal way to do so.
    3. Figure Out Successful Traits of Existing Reps – Analyze the existing team and determine what traits result in success so that future hires can be screened against them. Examples of important traits include coachability, curiosity, prior success, intelligence, and work ethic.
    4. Role Playing During the Interview Process – Have the sales rep come prepared with basic product knowledge and have them role play an example sales process. Use the role playing to assess how well the candidate matches the traits of successful reps.

    Two of the hardest positions to fill in the startup world are great sales people and great programmers. Use some of these tips to find and recruit great sales people. Also, if you haven’t read The Sales Acceleration Formula, check it out.

    What else? What are some more tips for recruiting great sales people?

  • Customer Acquisition is Harder than Product Development

    Most entrepreneurs come up with an idea for a product and focus on building a prototype. Only, in the software world, it’s become progressively easier to build a decent product and, as an entrepreneur, it’s fun to iterate on the features. Now, there’s so much “progress” on the product that entrepreneurs continue to focus their efforts there and don’t focus on the much harder challenge: customer acquisition.

    Here are a few thoughts on customer acquisition for the product-focused entrepreneur:

    One of the more successful entrepreneurs I know went through three product pivots in the same market and managed to thrive because they’re so good at customer acquisition. For most entrepreneurs, customer acquisition is significantly harder than product development, especially in the early years.

    What else? What are some more thoughts on the idea that customer acquisition is harder than product development?

  • Revenue Growth vs Logo Growth

    As a growth-oriented entrepreneur I’m always focused on new annual recurring revenue. Only, at Pardot, we had a heavily-funded competitor that was focused on logo growth. Meaning, they’d do everything in their power to sign up a new customer — a new logo — even if that meant discounting their product by 50% or more in the first year so that they could then charge much higher prices in later years. In hindsight, we were playing two different games: revenue growth vs logo growth.

    Here are a few thoughts on revenue growth and logo growth:

    Revenue Growth

    • Best for most startups
    • Better if bootstrapped or capital light
    • Easier to understand the value
    • Fluctuates based on the customer size

    Logo Growth

    • Best for platform companies where scale matters
    • More expensive short-term but potentially more valuable over the lifetime of the customer
    • No difference whether signing a large or small customer

    If there’s an opportunity to build a platform company, and capital is readily accessible, logo growth makes sense. For most startups, revenue growth is the more common focus.

    What else? What are some more thoughts on revenue growth vs logo growth?

  • Sales and Marketing Drives Successful SaaS Startups

    One of the ongoing debates is the balance between the sales and marketing teams and the engineering team. Often, the startup is a reflection of the CEO’s passion. If the CEO is product-oriented, the startup will be more product-oriented. If the CEO is sales-oriented, the startup will be more sales-oriented. Only, for the most successful B2B SaaS companies, there’s a repeated trend: sales and marketing drives the business.

    Here are a few thoughts on sales and marketing driving the business:

    • Recognize the constant tension between the teams, especially the desire for engineering to produce new functionality faster
    • Know that sales and marketing can get too far out in front of engineering, and figure out how to slow one down or speed one up
    • One common strategy is presenting a demo of new product functionality at an annual user conference, knowing full well that it’s vaporware and might not be generally available for many months, if ever (this happens all the time)
    • Another common strategy is taking prospects through a multi-year roadmap (e.g. a visioning session) only to not be able to guarantee that the proposed functionality will actually be available at designed dates, if ever
    • Ensure that sales and marketing paints a picture of the future but doesn’t promise things that can’t be done (harder than it sounds)

    Sales and marketing is always ahead of the engineering team at the most successful startups. Finding a balance and not being reckless is a real challenge for ambitious CEOs. Sales and marketing should drive the business, while maintaining a healthy tension with engineering.

    What else? What are some more thoughts on sales and marketing driving the business?

  • How Much Does a Single Cold Call Cost?

    Cold calling is one those things that many people think is dead but is actually thriving in the B2B world. Now, there’s an entire industry built up about the Sales Development Rep and the Predictable Revenue methodology. One popular question that comes up is “how much does a cold call cost?”

    Let’s take a look:

    • Assume a full-time cold caller makes $36,000 per year ($3k/month) then add 20% for taxes and benefits for a fully burdened total of $43,200 per year
    • 40 hours of work per week and 50 weeks of work per year equals 2,000 hours per year
    • For a pure cold calling position that doesn’t include sending emails, doing demos, etc., assume 100 calls per day or 12.5 calls per hour (this is on the high side of things)
    • $43,200 spread out over 2,000 hours is $21.60 per hour divided by 12.5 calls is $1.72 per call

    Cold calling, at $1.72 per call, isn’t cheap but in certain industries, is very effective, especially for the appointment setting team. Here are 7 Ideas for More Effective Cold Calling, Cold Call Ratios, and Ideas to Test if Cold Calling Makes Sense.

    What else? What are some more thoughts on the cost and value of cold calling?