Growth hacking enterprise SaaS sales: What’s new in sales?

You have heard many examples of successful growth hacking techniques mainly used in B2C websites, social networks and market places. Facebook, Twitter or Airbnb have great stories about how they hacked their growth. But how about growth hacking sales in SaaS? We are talking about higher value per customer and fewer of them, but is it a reason not to be able to drastically increase growth?

Before getting there, let’s see how things have changed. If you have a long experience in Enterprise Sales, you have seen the fast evolution of the Sales Process at SaaS companies which sell Enterprise or other Business application technologies.

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1. Direct Sales is predominant

The Internet has removed intermediaries in many segments and Enterprise Sales is no exception. We are seeing VARs and other channels playing a much less important role in most cases. Even though integrators still play a key role in deploying the solutions, their role as sellers or even advisers to recommend solutions has drastically reduced thanks to higher level of customers’ awareness and their direct connections to the vendors.

According to Matrix Partner’s recent study, channels represent in average only 5% of SaaS companies’ sales. They used to represent in average 30% to 50% in the last decade.

2. The sales cycle has become infinite

In the old days, often more than 50% of customers’ lifetime revenue was taken at the time of the initial sales (and much more if you exclude the maintenance revenue). The sales cycle was defined as the period of time from the initial contact to the PO. That model is long gone. Sales cycles make less sense today. Now the revenue collected from a customer is spread out over time. As explained in the graphic below, after the initial sale, the cumulated collected revenue from the customer grows significantly thanks to the renewals, upsells and expansions. I am replacing the traditional sales funnel by the symbol of infinity; amazingly, the 2 funnels side by side do look indeed like the symbol of infinity in mathematics! We like symbols and metaphors in sales — I hope you enjoy this one.

In the past, vendors could unfortunately make it through without necessarily providing a great customer support. Anecdotally, vendors used to even “control” the users group by organizing and financing the events to make sure all communication is smooth. Today customers’ satisfaction rates are much higher. They share their experience publicly on social media. Organizing these communications through social media groups is still both desired and feasible, but customers have much more freedom. The great consequence is that SaaS companies must provide excellent customer service. Besides, the very nature of the SaaS business model’s constant need for innovation in a highly crowded marketplace means vendors need to be the best in class in order to avoid cancelation — which pushes vendors to maintain quality and novelty.

Customer support’s massive shift to social media creates a new channel for upsells and expansion. Frontier between Inside Sales and Customer Success Teams or Community Managers is now a bit blurry. This leads to my next observation: Sales are needed everywhere now!

3. Sales organizations have become more sophisticated: more roles, tools, and automation

As customers got connected to the web, some power started to shift from the sales rep to the customer. In the old days, a good account executive had full control on the sales process. He/she was the one to deliver the sales presentation, educate the prospect and make a proposal. He/she was the main, if not the only, source of information for the prospect. Today the prospect already knows a lot about the product (webinar replays, articles, etc.) and the price (if not public for the Enterprise market, usually there are lower packages sold online giving good ideas of prices). As a consequence, sales organizations adapted themselves to more sophisticated customers by working smarter and became themselves more sophisticated so that they try to maintain power in the relationship. Sales are going to be omnipresent wherever there is interaction with customers in order to seize sales opportunities. Some organizations will provide sales training to all customer facing employees, while others include sales persons in each department.

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4. Social selling

I could not write about the trends in sales without mentioning social selling. There is a lot of hype about social selling, but it’s an absolute must that every salesperson needs to understand and practice. LinkedIn has even created a social selling index page which shows your SSI (Social Selling Index). Check yours! If you are in sales and you are not in the top 1% of your Industry Rank, then you need to fix it fast (since you have naturally a lot of non-sales connections, you should be in the top 1 or 2%, unless you are selling a product or service to sales people).

Keep in mind that social selling IS NOT selling! It’s sales people’s social presence. It’s about connecting to people (including your partners and clients obviously), building relationships, engaging and educating. Imagine an after work company event in the old days where your company has invited customers, partners, suppliers, employees, shareholders, everyone. Imagine you are sitting in a corner, not talking to anyone. That’s who you are if you are not into social selling. You don’t exist. So you can’t sell if you don’t exist. But existing is not enough to sell. It’s necessary but not sufficient. You need the good old fundamentals of sales to be successfully selling. So make sure you are “social-selling” and don’t forget that it’s not selling. To re-use the analogy to that event, you need to get back to your prospects after the event and apply your winning sales process and effectively SELL.

5. Sales process fundamentals have not changed

Even though many phone calls got replaced by emails and instant messages, and some simple sales processes are now automated thanks to some brilliant marketing automation techniques, at the end of the day, sales people need to convince customers that their product or service is the best solution to the customer’s needs. The bigger the opportunities, the more you need rain makers. The fundamentals of sales have not changed. And sales methodologies like MEDDIC or building your own winning sales process become mandatory to help sales teams rationalize what they do and allow successful sales teams to drive the sales process.

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These five new trends in Sales for SaaS companies — new processes, channels, and ways of building relationships have all evolved based on customer demand. As with B2C, the B2B buyer is more educated, and therefore empowered than ever. As their needs changed, sales has finally started inserting itself in each of those channels of the customer. In part two of this series, we’ll be exploring some of the growth hacking techniques for enterprise SaaS companies.

Darius Lahoutifard is an enterprise SaaS executive and entrepreneur, founder of Business Hangouts, an enterprise app for Google’s Hangouts on Air, and 01consulting. You can follow him on LinkedIn.