Shifting Your Startup from Product Mode to Sales Mode
For companies building B2B software, there comes a time when the focus must shift from product mode to sales mode. Products don’t sell themselves, and you always anticipate the day you’ll have to hire top salespeople, sales engineers and sales management to push growth to the next level. When the time came for Datahug to make that shift, we had such an awesome product and strong initial traction that I assumed the transition would be seamless.
As it turns out, two major assumptions made the road bumpier than expected.
As a founder and tech CEO, I was unfamiliar with the idea that how you sell is as important as what you sell. I believed our advantage lay in product differentiation and outperforming our competitors, and assumed we could sell to companies solely on the basis of our product’s benefits and features.
The second mistake I made lay in assuming that I could outsource strategy to a newly formed sales team. I thought everyone else could continue with their day jobs while the money started to pour in.
My journey isn’t one of a product-focused CEO turning into a general-purpose CEO, nor does it provide a magic formula for selling a substandard product. Rather, it’s a roadmap for CEOs to reorient their thinking towards optimizing the modern SaaS company to generate revenue.
Getting Started with Sales
When we started out, we focused all sales efforts exclusively on product differentiation. I was a product architect; we won or lost our first deals based on product vision and individual features and functions. We saw a lot of success with this approach, proving that applying better UX, focusing on solving real business problems, and building tighter integrations created a huge opportunity in enterprise software.
Staying close to customers, getting early adopters on board, and building referrals generated the initial traction that we needed. Growing further and building a scalable business required facing up to some major changes in the industry and figuring out what that meant for our company as a whole.
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The most influential idea to permeate the B2B sales industry in the last five years—triggered by the emergence of the educated buyer — is that companies outcompete each other based on how well they educate their prospects, navigate their internal pitfalls and align with their buying processes. Much of this approach is product agnostic, placing a major burden on our sales and marketing teams.
The question for me was, “what does this mean for the rest of us? How can I can create awareness so that every part of the company contributes to sales?” To answer this question, we decided to make changes across the board – tuning all departments to maximize sales team effectiveness.
I began the internal shift with sales. As this was our newest team, it proved the easiest to shape. My primary initiative was to create a culture of transparency and accountability, where team members would share their progress on every step of the sales cycle rather than only on closing deals. Sales people are naturally competitive and sometimes revert to lone-wolf mode. Your startup will not survive with a pack of lone-wolves. Creating a culture of transparency is crucial to building a winning sales team, as this enables team members to share successes and failures. In addition, your VP of Sales must coach proactively rather than managing up to you.
We made a significant change in our marketing department as well. Over-reliance on technology and e-traffic—paying for clicks—has its limits; in some instances, its relationship to the conversion process is dubious. Instead, we shifted those dollars towards creating content that yielded champions and mobilizers. Case studies and market insights enable internal champions to build a consensus and advocate for change. Channeling efforts in this direction underscores the relationship between marketing and sales, and helps involve the former with the latter.
Traditionally, our Customer Success efforts were focused on growing adoption and finding opportunities to expand accounts. However, dedicating some of that energy towards building convincing case studies proved equally as valuable. Avenues for generating and publicizing customer insights and referral programs can support the sales process in a more comprehensive fashion than focusing merely on upsells. Above all, compensating Customer Success for referrals yields faster payback during the early stages than what you pay Sales Development people for cold meetings, because the conversion rates are so much higher.
Surprisingly, we found that the greatest impact on sales optimization lay in product and engineering. In particular, focusing on shortening “time to value”. Dedicating as much as 80% of your resources to delivering value to your prospects or customers as soon as possible helps to accelerate sales in two ways. First, if a product is easy to try and delivers on the value promised, it becomes easy to buy. Second, if your customers get value quickly, they will tell their friends and generate more leads for your team.
Shifting to sales mode requires much more than hiring sales people and perfecting a process. It transcends traditional reliance on product differentiation and heavy-handed sales tactics. Putting the focus on how your customers buy, rather than what you sell, helps each department make decisions that ultimately drive revenue.
For us, our changed focus has created a culture of collaboration between our teams and helped us align around company goals. This shift requires a dedicated effort on the part of all units involved, and a top-down approach from upper level management to successfully implement. Once completed, it enabled us to scale faster and recognize the role that everyone has to play in fulfilling our customer mission.