Addressing Your SaaS Sales Issues
Bridge Group is a B2B SaaS sales consultant. We hold them in very high regard and connect Bridge with our portfolio companies when there is a need. They do strategic assessments, write playbooks, and can also do management training and coaching. We did a Q&A with Kyle Smith at Bridge (ksmith@bridgegroupinc.com). A transcript is below.
1. What is happening in the market? There is a ferocious obsession with AI. Executives are asking Bridge how they should leverage AI as part of the go-to-market motion. Sales reps are trying to figure out how to be more efficient and take away the tasks they hate doing. AI is working well for researching prospects and getting starting point suggestions of what the intro message should be, using the data AI discovered. The output from AI is not perfect so it still needs human review, but it’s adding massive value. Reps are editing the AI output, versus researching, thinking and writing. Productivity is way up.
The second topic of conversation is tension around SDR’s and AE’s. AE’s are complaining that the lead quality of SDR’s is declining. The real reason is businesses are scrutinizing budgets, deal sizes are smaller, and sales processes are elongating. AE’s think it’s the fault of the SDR not uncovering high quality leads, but it’s really a function of the market. In the last 6 weeks things have improved, but there overall theme of 2023 is a tighter sales environment that has created extra pressure on all sales professionals.
2. If the budget of your clients are tightening, how do you respond to that? Kyle actually isn’t seeing smaller budgets. Budgets haven’t shrunk and they grown, but the scrutiny of the budget is higher. There are far more individuals involved in the sales process now and the number of approvals needed are much higher. Executives beyond the budget holder want to hear the business case whereas in the past they allowed the budget holder to make the decision. Overall approval processes have gotten crazy, and that has added complexity to the sales cycle.
3. If more stakeholders are being added to the sales process, what can you do? You have to figure out who all the stakeholders are, and then engage them early. Figure out anyone who can touch or kill your deal and get in front of them. Find out what they will ask about to potentially kill your deal, and start to mitigate that risk. You’ll still have an elongated sales cycle, but you’ll get deal risk down. This is a classic enterprise sales rules that now applies to all deals, even smaller ones.
Another thing reps can do is to start the client with a smaller contract size. For instance instead of selling your product to 5 of a client’s factories, sell to 1 factory and then land and expand. Don’t go bigger out of the gate. Post a win, even if it means the ACV is lower on day one.
4. Who should own the expand motion? A year ago, Kyle would have said he likes role specialization whereby you keep AE’s sourcing new business and then you have a dedicated rep doing the upsell. But this is a different environment today. Because we’ve had to do a land and expand strategy, in Kyle’s view you need to allow the AE continue to expand his deal they just landed. If you want to incentivize them to be ok with landing a smaller deal, you’ve got to give the AE a chance to grow it. Perhaps you let the AE own the upsell motion for 6 to 9 months before you hand it off to a dedicated upselling rep. This is how you get your AE’s to be ok with closing smaller deals on day one. But Kyle could go either way here and it really does depend on the company they’re consulting with.
5. There are a lot of SDR’s and AE’s looking for a role. How do you hire the right AE and SDR? For SDRs, Kyle doesn’t put much emphasis on past experience. SDRs by their nature are very early in their careers and don’t have a ton of experience (otherwise they’d be AE’s). So, for Kyle it’s all about the interview process. Does the SDR candidate know the company and all the public info out there? Are they well prepared? What does their writing sample look like (always get writing samples of prospecting emails)? For SDRs it’s all about the interview.
On the sales rep side, there is experience you can evaluate, so what Kyle recommends is getting back door references. These are not references from the candidate themselves. B2B SaaS is a small world so surely you can find someone who knows the candidate. Also in this environment, you can ask the AE to actually do work before and after the interview to prove themselves. Make them do a case study of how they would handle a complex sales process with a prospect. In 2021, you could never ask for this, but in this environment, you can ask the AE to do some work that proves themselves.
6. If your ICP has deteriorated, what do you do and how do you rediscover the ICP? You have to figure out why the ICP is deteriorating. For instance, did you even have the ICP nailed or were you just the beneficiary of a good macro environment in 2020 and 2021? Everyone was able to sell in a good environment so there are some companies with deteriorating ICPs that really never had the ICP nailed. Now that we’re in a challenging environment, whoever you’re closing deals with now is the real ICP. Who you sold to during better times may not have been the ICP. You may have just been getting lucky. Also within your current customer base, look at who is straining the support function. Whoever is straining the support function may not be the ideal customer.
Bridge Group is the best out there. Reach out to them if you need help building or re-evaluating your sales function.
Thank you for your readership. Visit blossomstreetventures.com for more SaaS data and blogs.
