Category: Sales

March 22, 2022

How to Maximize Revenue Through Prospecting

When we spoke with Jose Martins from HubSpot about prospecting, he emphasized that maximizing revenue through prospecting leads is all about having an effective process and doing your research upfront.

So in this post, we will look at the key takeaways from that webinar by focusing on the four stages of a B2B sales process.

Utilizing the Four Stages of B2B Sales Processes in Prospecting Leads

Inbound Sales methodology - prospecting leads

Step 1: Identify your target audience.

In order to generate quality leads, you need to know precisely who your target audience is. Having this clarity will help you spend time and money wisely in connecting with the people that care about your product and your business.

Start by crafting your ideal buyer profile. Who is your ideal buyer? The more specific your picture is, the better. In order to create the most accurate picture possible of that ideal customer, utilize any data that you have collected via social media, questionnaires, or cold calls. What are their goals and what are the challenges that stand in the way of those goals?

After that, you want to create a positioning statement that incorporates all this data. In a few short sentences, you should be able to answer the questions.

Try framing it something like this: “We help (who) that are (usual goals) but are frustrated because (usual challenges)… Does this happen to you?” Remember, your positioning statement is not about you, it’s about your leads. In other words, now is not the time to dive into your product, company, or current promotions.

Step 2: Connect with your target audience.

Once you have your ideal buyer profile and your positioning statement, you can start connecting with your target audience to transform leads into qualified leads. Connect in authentic ways by matching your values with their values. In addition, create avenues for communication that allow you to get to know more about your leads.

Some great places to look for leads include:

Existing relationships
Company verticals
Social media
Target accounts
Current/past clients
Your community network and alumni

When you connect with leads, make sure you keep your goal in mind and make a call or send an email to establish an initial relationship. Schedule an exploratory call and understand the high-level challenges that they face.

When making those prospecting connections, there are a few common errors to avoid. Most important, drop the elevator pitch completely. Keep the conversation about the potential customer and don’t deep dive into how you can help them just yet. Remember, your goal is to qualify the lead and set a meeting; not close the deal.

The hardest part of the connect call is reaching out to strangers.

Therefore, you need to be prepared to be uncomfortable, or there will be no growth. As time goes on reaching out gets easier and better. Remember that the fear of connecting with prospects is all in your head and be prepared to override that fear. The most important thing to do is to put time on your calendar for prospecting. Make it part of your daily routine. Once it is routine, your fears will be gone and your communication will be more natural and authentic. However, this doesn’t happen overnight – only through practice.

Be prepared to reach out more than once, you can be persistent without being annoying. For example, use a two-day follow-up technique and set a maximum of six to 10 calls or emails. Your CRM can help you keep an efficient prospecting cadence. Make use of task queues, filters, templates, and sequences to keep you organized and on schedule with prospecting.

Step 3: Explore the needs of potential customers by asking “how can I help?”

This is a critical step where data and information about the real-life problems that your potential customers are facing come into serious play. By reaching out and asking “how can I help?” you position yourself as a business that might provide the solutions they are looking for.

Step 4: Be prepared to offer advice in the form of your product or service.

A lead becomes a customer when they see a clear match between their problem or their need and the solution that your business provides.

Research Is Vital for Successfully Prospecting Leads

Do your research, not only on your leads but on your industry and market. Look for signals a business is looking to solve the problem you solve. Likewise, find ways to differentiate your approach from cold callers. Transcend the solution, focus on the problem, and start with urgency from the get-go.

Prospecting checklist:

Define ideal buyer profile
Define sources of leads
Develop your connect call positioning statement
Establish a prospecting sequence
BLOCK TIME IN YOUR CALENDAR – EVERY SINGLE DAY
Define your research and start reaching out

Key takeaways

It’s NEVER about you
Focus on the problem
Do your homework (research)
Define a process
Put it in your calendar!

For more details, watch the webinar here:

March 3, 2022

Mastering Your SaaS Pricing & Billing Strategy in 2022

You have built your product, found some customers, and now it’s time to make a sale. Product pricing is often something overlooked in SaaS, but pricing can have the biggest impact on your overall business.

The state of SaaS pricing – Some Quick Facts

Before we dive in, lets take a quick look at the state of SaaS pricing in general:

39% of SaaS companies spend 10 hours or less on their pricing strategy per year.
80% of companies change their pricing at least once a year, with most changing it multiple times.
98% of Saas companies earned positive results from making core changes to their pricing strategy.

Let the first and last point really sink in – almost 100% of SaaS companies do better by making core changes to their pricing – but less than 39% spend more than 10 hours per year on their pricing strategy!

If you want to get the most out of your pricing strategy, it’s important to a) spend more time on it, and b) review it frequently. Reviewing your pricing strategy at least twice a year is a good start. It’s important to ensure you are optimizing your pricing, but also not annoying customers with constant changes.

Different Types of pricing models

There are 5 different pricing models common among Saas startups: Flat rate, Usage based, Prepaid, Hybrid and Event-based. Let’s take a look at each one:

Flat Rate Pricing

The Flat Rate model is the most common. It’s easy to set up, since you only need to define the recurring price and billing frequency.

Usage Based Pricing

Usage-based pricing aligns monetization with how customers actually consume your products and services. You’re probably familiar with how cloud service providers charge, or even how your monthly utility providers bill you – all based on how much of the service you consume.

Nearly 39% of SaaS startups bill based on usage – and that number is growing.

The Prepaid Model

The Prepaid pricing model gives the you revenue upfront, whether the customer uses the service or not. This provides more security for the merchant, since the consumer has already paid for the service, and it’s easier to use.

The prepaid model allows you to have a predictable revenue stream going forward and is about the closest thing you will get to billing customers for exactly what they use.

The Hybrid Pricing Model

The Hybrid model combines multiple billing models to create hybrid pricing to maximize revenue growth. For example, you can have a base rate plus a per transaction fee.

We are all farimlar with the 2.9% + $0.30 that payment providers charge us – this is a perfect example of two-part tariff pricing hybrid pricing.

Events-Based Billing

Last but not least, event-based billing is thought to be the next generation of billing for SaaS companies; and is all about linking value to price. In this model, a company only charges customers for specific actions taken, for example the number of videos watched, miles driven, messages sent, etc. This requires more work on the seller’s side, including advanced metered usage and billing.

Building blocks for your pricing model

There are several different building blocks that will determine which pricing model works best for your business. For example:

Business model
Your value proposition
The total cost of your product
Revenue optimization
The competitive landscape

SaaS companies can have different business models; some are more low-touch (self-service purchases, and a low learning curve), while others are more high-touch (direct sales approach, usually B2B SaaS. These different models will affect your pricing model. Low-touch businesses usually offer a free trial and a lower price point, while high-touch businesses can start at a higher price point.

Customers care more about the value they receive as opposed to the price they pay, so your overall value proposition is central to how you determine the actual product price.

Another building block for your pricing model is the total cost of your product. This includes any fixed costs, variable costs and your profit margin.

You can use optimization to seek your ultimate revenue and profit goals for different pricing segments and distributed levels of granularity. The goal is to have certain revenue and margin targets, which will influence your pricing strategy.

When deciding on a pricing model, it’s important to keep an eye on your competition. That doesn’t mean you should use competition-based pricing, which can be dangerous in the long run. Instead, differentiate yourself with value-based pricing.

Executing your pricing strategy through your billing ecosystem

It’s important to understand the difference between pricing and billing, and how the two can work together. Pricing is the monetization of your products, the market and customers’ perception for value. Billing is how you’re going to collect revenue. The engine of barter from your customers to your product.

Once you’ve decided on your preferred pricing strategy it’s time to find a billing ecosystem that lets you execute it. Make sure the billing system to choose has all capabilities that you might need for your pricing system, for example freemiums and trials, ease of setup and maintenance, billing frequencies, targeted promotions, integrations and efficient invoices.

Your billing suite should act as your Revenue Operations Generator

Your billing ecosystem should guide you and your customers through the funnel from beginning to end, starting at Customer Sign up and Consumption of product catalog, to Billing Dates, Line items generated, Invoice generated, Payments, and Dunning. All of these functions should support your ideal pricing strategy.

Summary

Don’t be like the 60% of SaaS companies that leave money on the table; take a value-based approach to your pricing strategy. Making your pricing and billing customer-centric will provide you a competitive edge in the bloated SaaS market. Fine tuning your pricing model and implementing a strong billing ecosystem is key to hyper-growth SaaS companies.

Remember to start with your pricing model – which makes the most sense for your business? And more importantly, which pricing model makes the most sense for your customers?

Thinking about the building blocks for your pricing strategy ensures that you don’t lose sight of the bigger picture.

The tools that make up your billing ecosystem are critical to successfully monetizing your product. Make sure your tools are aligned with 1) Your pricing strategy, and 2) Your overall goals for monetization.

Watch the full webinar presented by Chargify below for more details and Q&A

June 22, 2021

Leading Sales Teams through Inputs instead of Outputs

It’s the first day of the month and the entire sales leadership is looking at the Sales Results for the previous month. What’s the overall team quota attainment? Which segments did better? Which segments grew the fastest?

While these are undoubtedly important metrics to monitor as a company, they are considered Lagging Indicators because they measure sales teams’ performance “after the fact”. They tell you information at the end of the road and there’s nothing you can do about it.

You can’t course-correct at the end, and as a sales manager, you would rather be leading while looking through the windshield and not looking in the rearview mirror. Sadly, many leaders of sales teams do this. They are the ones asking questions like: “can you tell me why you didn’t get to your quota this month?”.

In contrast, high-performance sales teams monitor, manage, and coach, with Leading Indicators – those that help project the end results and enable teams to “take action” if performance is looking off-track. Most sales leaders I admire pay obsessive attention to the inputs of the team and seem to never focus the conversation on quota attainment.

Let’s compare the behavior of Sales Managers focusing on Lagging Indicators vs. those focusing on Leading Indicators:

Lagging Indicator Leaders

In team meetings, these leaders tend to highlight what the quota is and how the team is tracking against quota, both as a team and as individuals.
1:1s focus almost exclusively on pipeline review and reporting on which deals have moved forward and which ones are projected to close this month.
“Coaching” managers who use this style will discuss what needs to happen to advance the deal to a close. Therefore coaching is focused heavily on negotiation and closing skills.
Role-playing exercises are usually focused on specific deals that are currently in the pipeline (later deal stages).
Satisfaction with their individual team members is mostly a reflection of quota attainment. If the quota was achieved, then there’s not a ton to talk about, if the quota was missed, then all the “corrective measures” meetings need to happen.
They feel less control over outcomes which can result in more micro-management of their reps. They will increasingly join “closing calls” at the end of the month to make sure the rep “doesn’t drop the ball” and to make sure the deal closes since this is the only way they can feel more control on their team achieving sales quota.
These managers are more stressed and intensively involved at the end of the month or sales period.

Leading Indicator Leaders

In team meetings, these leaders tend to highlight how the team is tracking in terms of their inputs. At HubSpot, Sales Leaders will address net new opportunity creation per rep, team rankings on the number of activities (calls/emails), meetings, discovery calls completed, and demos delivered. They provide a map to the level of these inputs required for success (e.g. 2x net new opportunities created per rep per day)
1:1s focus is on pipeline “creation” – are we still talking about the same 5 deals we spoke about last week? What’s new in the pipeline? How much time are you investing each week in sourcing and prospecting?
“Coaching” managers who use this style will address time management – is the rep allocating a good balance between advancing deals, closing deals, and creating new deals? While coaching runs the gamut from deal creating to deal closing, most of the emphasis is on better prospecting and qualifying to improve the quantity and quality of deals coming INTO the pipeline.
Role-playing focuses on Customer Discovery and mapping pain to a solution (earlier deal stages)
Quota attainment is not the main signal these managers track. When a rep has a great performance in a given month, these managers will look into the strength of the remaining pipeline – is the pipeline for the new month depleted, or has this rep found a consistent way to generate a robust new deal pipeline? If a rep does not get to quota – is it that they need coaching moving deals past the discovery stage (which may be the case) or is it that their pipeline was too weak and they had to chase deals that were never going to close? How can these reps be generating enough pipeline coverage the next month to avoid chasing bad deals?
Because they focus on controlling the inputs of their sales teams, these managers have more time to spend on coaching and improving their team’s skills and execution and are more trusting of their team’s ability to execute.
These managers are more stressed and intensively involved at the beginning of the month or sales period.

How to define Leading Metrics for your Sales Teams

By now, you’re probably getting a good sense of the type of manager you feel more comfortable being/working with. If you’re leaning toward the Leading Metrics management style, one of the challenges is figuring out exactly what these input metrics would look like. Does your team need to be creating 2 net new opportunities a day or a week? Should they be prospecting 1 hour a week or 3 hours a day?

One way I’ve found to get to these numbers is to reverse engineer your pipeline. This is harder in the beginning and you’ll have to make some assumptions, but then it becomes easier as you gather more information with each sales cycle.

You basically start at the end with the amount of revenue you want in a sales period (the shorter the period the better). You then work back to the amount of prospecting.

Monthly Revenue Goal = $50,000
Average Deal Size = $10,000
Deal Close Rate = 20% (you may need to make an educated assumption here)
Lead to Opportunity rate = 10% (you may need to make an educated assumption here)

With these in mind then you have a better idea of the inputs

Deals Closed target = 5
Pipeline Coverage (how many deals to close 5) = 25
Net new deals per business day = 1 (this would be my north star for the team)
Leads worked per day = 10 (1 in 10 leads end up in an opportunity)
Prospecting time per day = 2 hours

This is a roadmap I can share with my team. If I have a team of 5 reps then every week I want to see 25 net new deals. If the team is at 10, then that is something we need to address. I’d rather know that on day 9 of the month than at the end of the month.

I can monitor and share reports on team activity both as a way of enabling the competitive spirit in the team, but also as an example of where the highest watermark is. Who on the team is creating more deals per week? Who’s making more calls? Who’s sending more emails? Or the most effective emails (those with the highest meeting booking rate)? Who has the highest lead to opportunity conversion rate?

I strongly believe this leads to a consistently high-performing sales team. I believe it because I’ve been part of a team like this. It became the fastest-growing team in all of HubSpot. You may want to give it a try.

This blog post was contributed by Jose Martins from HubSpot. Introvert Entrepreneur and Engineer. Jose had to really get out of his comfort zone to learn sales and marketing. He claims he does not have a Sales personality AT ALL but has read, studied, and learned on the field for the past 10 years. Consequently, he became a Top 1% sales performer at HubSpot and a Sales and Growth Coach and Mentor for Startups. Jose is a proud father and husband, loves progressive rock, and all sports, especially Soccer and Football (Go Seahawks!)

Click here to learn more about HubSpot for startups and how they might be able to help your business.