How to Design a SaaS Sales Machine in 5 Steps
In this post, we will be discussing how to design a sales machine and its components which will make your startup’s sale operations become optimized. The techniques and methods provided will give you an insight about how to perfect your sales by using a sales funnel and how to interpret that funnel. It is important for people familiar with SaaS to follow these steps for a successful sales operation.
Step 1: Designing a Sales Funnel
Firstly, in order to understand the sales process clearly, it is important to design a sales funnel. The sales funnel is each step that someone or a business has to take in order to become your customer. The sales funnel is one of the key points of a sales process because understanding the funnel helps find the holes and shortcomings present in the funnel. The funnel should be simple and actionable. It does not require to be fancy but it requires simplicity.
The sales funnel does not differ from business to business. Every sales funnel follows the same structure. This structure can be explained easily with the acronym AIDA in which each word stands for Awareness, Interest, Decision and Action. Now, we will explore each component of a sales funnel in depth.
- Awareness is where people first become aware of your product or service. They may hear about you from your advertising, social media, even word of mouth. In order to optimize this, the company should ask itself the following question: “Who exactly are we selling to?”. It is important to find the optimal ICP (Ideal Customer Profile). Selling to the right person is essential and customer development should be given emphasis because most of the time the problems in the sales funnel occur at this stage.
- When consumers reach the interest stage in the sales funnel, they’re doing research, comparison shopping, and thinking their options throughly. This is the time to show content that helps them, but you shouldn’t sell to them at this stage. This is because if you push the customer at the beginning, they will most likely to back away. At this stage, they’ll think about the problem they’re trying to solve and conduct competitive research to make sure your offering is the best solution.
- The decision stage of the sales funnel is when the customer is ready to buy. He or she might be considering their options. This is the time to make your best offer. The offer should be made so irresistible that your lead can’t wait to take advantage of it. Sales pages, webinars, and calls are helpful in this stage to help sway prospects to make a purchase.
- At the bottom of the sales funnel, the customer acts. He or she purchases your product or service and becomes part of your business’s ecosystem.
These are the stages of a sales funnel. In order to optimize the sales funnel, each stage should be examined carefully and the possible questions which may occur should be answered. Some of these questions can be:
Who exactly are you selling to? Where are they and how can you get in touch with them? Are these actually the right people who will get value from your product or service? Can you successfully sell them on your value?
The path you want your customers to follow through can be explained more easily with using the AQC Funnel framework in which AQC is an acronym for Activity, Quality and Conversion.
Here’s an example: Let’s say you’re running a sales call campaign and you dial 100 prospects, reach 15 of them, qualify only 10, and close 5. In this case, your sales funnel will look like this:
- Activity: How many numbers are dialed?
100 dials
- Quality: What’s the reach rate? How many times do you actually get to speak with a decision maker on the phone?
15 reaches and 10 qualifiers (in which reach rate is 15/100*100=15%)
- Conversion: How many of the people you spoke with did you close on the phone? (Closing means not ending the sales in success but also moving onto a next step)
5 closed sales
With the help of a sales funnel, it is easy to locate where the problem is and get rid of it. For example, the reach rate may show whether the problem is in reaching or the conversion results may show whether the company does not struggle in reaching a customer but at closing that customer. The sales funnel creates a clearer understanding of the independent parameters in a sales process.
Step 2: Improve the Top of the Funnel First
Although the sales funnel shows which part of the funnel is problematic, the top can be optimized always. The most important part of the funnel is the ICP. The company should always be aware of its IPC and follow the current customers’ activities. The similarities and the patterns among the current customer profile should be examined clearly. Moreover, the rejecting customers and the current customers should also be compared in order to notice the differences as well. When the ICP is known with certainty its effect on the remaining of the funnel is huge compared to optimizations in other stages. It will be easier to reach the customer, qualify them, and close them, because you already know they’re a good fit for what you’re selling. Otherwise, you’re just wasting all that activity on prospects that are not even a good match for you.
Step 3: Create Learning Loops
We all know that it is very important to optimize your sales process and there exists many outside resources in which this information is present. However, an inner source for a company to find out their rights and wrongs when it comes to sales is customers.
The customers are the addresses of salespeople. The customer have explicit knowledge and feelings about how your tactics and strategies affect them. Therefore, it would be beneficial for you to find out which part of your pitch they tend to like and not like.
For example, if a prospect is optimistic about your offer and the sales call is moved to the next step such as booking a demo, arranging a second meeting etc., then you can ask the customer something like this:
“Hey. Before we start the demo, I’m curious what made my email stand out to you?”
On the other hand, assume that the customer is pessimistic about your call, shows little to none interest in your products and eventually rejects you or the customers does not reply at all, then you can direct a question similar to the following:
“Hey. I sent you an email yesterday about our business. I assume you’re not interested and I’m not trying to disturb you. I was hoping to get a bit of advice from someone as experienced as you about how I can make my sales better. What was it about the email that made you not interested in responding?”
In both cases, you get feedback, both positive and negative, and this is what matters. The feedback can lead you to the right direction and you may continue with what works best with most of the customers. At this point, it is important to ask many customers in order to differentiate the patterns from preferences. Ask many people about your sales strategy, make the customers experts and try to learn from them.
Step 4: Eliminate Complexity
Simplicity is key for a SaaS sales funnel. Complex sales operations decrease predictability and scalability of the sales funnel. It makes it harder to sell, lengthens your selling cycle, confuses and wastes your salespeople’s time. So how to eliminate complexity? Eliminate the following:
- Reactive sales workflows
Startups of SaaS tend to consist of a smaller number of people compared to other companies. Therefore, this leads a person to do multiple jobs and have many assignments. Having an overload of assignments may become not so efficient in the end.
The salespeople should not be trying to perform multiple tasks at the same especially when some of these jobs do not belong to their job description. It is optimal that the people working in the company work in an assembly line-based manner in which everybody does their own specifically assigned job at the same time. If such an assembly line is impossible to take place, in other words if salespeople have to do various tasks, then their weeks should be planned very carefully. The week should be divided from task to task and the do not switch between tasks very easily. In this case, the workflow becomes more efficient and less chaotic.
- Aggressive discounting
Some companies tend to do huge discounts when their customers are examining their competitors. They think that they can change the customers mind with saving money and compensate the difference between them and their competitors with money. However, this is a faulty approach. One should not discount when customers are looking at competitors. The company should makeup for the discount with confidence and value. If the discount is given then the company gives a compromise which decreases the level of confidence of the firm. Moreover, every deal becomes complex and different on its own since every customer becomes treated differently than the other customers. The discounts become amok eventually and it becomes difficult to keep track of the details of the deals. It is important to maintain give and get type of healthy relationship with the customers. Giving a discount and a compromise is an only give type of relationship which leaves space to abuse.
- Closing bad deals
Closing bad deals hurt businesses to a huge extent. It is important not to include emotions in a sales process and try to do what is best for the firm from an objective point of view. The type of sales representatives who tend to do this are greedy or nice most of the time. With the close of a bad deal, your investors might be happy that you hit your monthly revenue number, but you’re setting yourself up for long-term failure.
Step 5: Shortening the Sales Process
We all know the saying “Time is money”. This step is mainly about this proverb. Time really is money and shortening the lifecycle of a sales process decreases the workload of both the salespeople and others in the firm as well as decreasing the expenses and increasing the revenues. The shorter the sales cycle, the less it costs you to close a deal, the faster you can learn, react, and improve, and the more profitable you become.
In order to shorten the sales process there are three things you can do:
- Waste less time and attention: keep everything short such as calls, meetings, demos etc.
- Power of now: make decisions, take action, schedule next steps. For example, when talking to a customer do not delay the actions but perform them at that exact moment instead. Take the action while you still have the full attention of the customer.
- Map out buying process: know all steps, run them in parallel. Ask the customers to outline the process from now to the close. Then, map out every stage of the journey.
In conclusion, in order to optimize your sales process, it is important to have a sales funnel. Sales funnels are useful because it helps you detect the bottlenecks in a sales operation. Even though the funnel shows the location of the specific problems stage by stage, the most important part is to find the ICP. By following the provided methods and advices, it is possible to optimize your sales process with not much effort.
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