How to sell a B2B product(calv.info)
calv.info
How to sell a B2B product
https://calv.info/how-to-sell-b2b
107 comments
Very helpful post, actually included a lot of interesting tidbits that I hadn't read before with other b2b sales material.
One question that occasionally pops into my mind is, what is the legality behind charging BigCo A $x and BigCo B $x + y?
Surely one wouldn't be able to do this with products (I'll sell this burger to you for $5 but this other person must pay $10 for it), so how is it justified in b2b especially if the feature sets are the same?
One question that occasionally pops into my mind is, what is the legality behind charging BigCo A $x and BigCo B $x + y?
Surely one wouldn't be able to do this with products (I'll sell this burger to you for $5 but this other person must pay $10 for it), so how is it justified in b2b especially if the feature sets are the same?
Perfectly legal, afaik. For software, and hamburgers
That's right - that's how coupons work - price discrimination. https://www.investopedia.com/terms/p/price_discrimination.as...
Got it, seems like the only illegal aspect of it would be price discriminating solely on the basis of religion, race, and so on.
My brother and I cofounded a company together. We're both engineers and by far the hardest part has been learning sales. We're not full-on nerd stereotype engineers who can't talk to customers or network but a master's in comp-sci covers exactly zero sales or marketing.
We finally embraced that we are not going to be the best at sales or "always be closing" but the things we are really good at are automation, experimenting, and iterating which has enabled us to talk with more prospects and slowly improve conversion rates. In non-sales speak that means we have more customers having more success on our platform which is awesome.
We honestly believe we are offering something powerful to our customers to change their lives. That belief doesn't put food on the table though and shameless sales tactics like cold emailing, LinkedIn messaging, Instagram DMing, etc DO. (though we are super respectful and won't hound anyone that isn't interested)
I have a friend who works for transamerica selling financial packages and recruiting other people to transamerica. His ability to talk to anyone anywhere is constantly amazing and embarrassing.
We finally embraced that we are not going to be the best at sales or "always be closing" but the things we are really good at are automation, experimenting, and iterating which has enabled us to talk with more prospects and slowly improve conversion rates. In non-sales speak that means we have more customers having more success on our platform which is awesome.
We honestly believe we are offering something powerful to our customers to change their lives. That belief doesn't put food on the table though and shameless sales tactics like cold emailing, LinkedIn messaging, Instagram DMing, etc DO. (though we are super respectful and won't hound anyone that isn't interested)
I have a friend who works for transamerica selling financial packages and recruiting other people to transamerica. His ability to talk to anyone anywhere is constantly amazing and embarrassing.
I think there is some slant against "shameless sales tactics" here because many HN'ers aren't in a position to recognize exactly how valuable sales is. There are some well known and well loved "tech companies" that grow to be 90% sales and marketing and 10% engineering after they put their funding to use. And for those here that arent familiar, quite often VC money is meant for growth via sales and marketing, not via hiring more engineers.
What's interesting is that if you do think what you are providing is actually useful or meaningful, then there is nothing shameless about promoting it directly to those that might get use from it. And you promote it to people where they are: in their inbox, DMs, LinkedIn, etc. (We actually get tremendous results by supplementing cold email with phone simply because people are so surprised that we went through the trouble to call. But that's a discussion for another time.)
All that is to say that reaching out to people that might benefit from what you offer isnt sleazy in the slightest and is a practice as old as time itself. They will let you know if they arent interested, usually by ignoring you. Doesnt mean you should stop or feel bad about it.
Best of luck to you.
What's interesting is that if you do think what you are providing is actually useful or meaningful, then there is nothing shameless about promoting it directly to those that might get use from it. And you promote it to people where they are: in their inbox, DMs, LinkedIn, etc. (We actually get tremendous results by supplementing cold email with phone simply because people are so surprised that we went through the trouble to call. But that's a discussion for another time.)
All that is to say that reaching out to people that might benefit from what you offer isnt sleazy in the slightest and is a practice as old as time itself. They will let you know if they arent interested, usually by ignoring you. Doesnt mean you should stop or feel bad about it.
Best of luck to you.
Much appreciated! I've had some great conversations with sales/growth consultants that got our thinking onto this track. No surprise to you, I am sure.
How do you find phone numbers and what are some best practices in making follow up calls?
There are free tools for finding direct dials but the hit 4are us pretty mediocre - 40 to 60% on average depending on sector.
HQ # are easy to find although navigating phone trees and gatekeepers is a job unto itself
Zoominfo and a few others are super expensive but have better data.
Google works better than you think. Sales navigator has some numbers.
We usually call when an email has been opened multiple times and get really good hit rates for demos when we actually reach the person (when talking about SAAS). Last week one of my guys used that to book demos with Disney, Sony, and NBC Universal at the VP level to demo enterprise marketing software.
HQ # are easy to find although navigating phone trees and gatekeepers is a job unto itself
Zoominfo and a few others are super expensive but have better data.
Google works better than you think. Sales navigator has some numbers.
We usually call when an email has been opened multiple times and get really good hit rates for demos when we actually reach the person (when talking about SAAS). Last week one of my guys used that to book demos with Disney, Sony, and NBC Universal at the VP level to demo enterprise marketing software.
The biggest change I’ll make in my life after reading this article. I’ll ask the question “what does success look like?” more often.
Step 1: Get tons of VC money.
Step 2: Hire a big sales team.
Step 3: Be really good at marketing.
Step 2: Hire a big sales team.
Step 3: Be really good at marketing.
The process really goes 3, 1, 2.
Due to person experience, this strikes me as pretty ironic. My company had a very bad experience with Segment, so much so that we changed product roadmaps to move away from them. In my mind they're an example of how not to sell a product. Very much not a company I would want to partner with again.
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Why is the CTO talking about selling? Dont mean to be harsh just curious
Every executive in a company at a minimum should have a general understanding of other functions. If the CTO knows what selling looks like, then the CTO can better assist the sales team. Likewise, if the sales team understands how software engineering works (at a very high level), they'll generally understand that "getting a very complicated feature RIGHT NOW for one deal" is ... not realistic.
etc.
etc.
The CTO should start every program or problem by thinking "how does this generate more revenue for the business?" And that means thinking through a sales lens. I would want to work with a CTO that DOESNT think about sales.
I'm a CTO and I work closely with our CRO. In my experience, being involved in the sales process is an eye opener for a CTO. In early stage startups (heck, even in a billion dollar company), a CTO cannot be disconnected from sales. This allows help bridge gaps in product and how engineers think about product features. It also makes the CTO leave their ivory tower of technology and be more grounded to reality.
I'll probably do a blog post on my experience some day
Because revenue is dependent on the "T" in "CTO."
I don't know, but I want more of them.
Know your customer, works well for me. I focus on Fortune 500 at my job, and people forget to ask what the customer wants and go straight into a sale. Meta: not sure about this blog, it is in itself a sales page.
Not sure why the negativity here. This is actually a great post that sets up a high level framework for thinking about the problem. Regardless of your personal experiences with Segment its good advice.
Thanks for sharing this. For me, this was the biggest takeaway.
> In every case, a viable option for the customer will be to “do nothing”. They don’t have to buy your product, or any product for that matter. The best way to prove the case for your product is with your metrics. Doing nothing should be a very expensive option.
That fundamentally speaks for having a problem to solve and not a solution looking for a problem. I think this key distinction is a good sieve to filter out potential ideas especially if you're in the business of SaaS.
> In every case, a viable option for the customer will be to “do nothing”. They don’t have to buy your product, or any product for that matter. The best way to prove the case for your product is with your metrics. Doing nothing should be a very expensive option.
That fundamentally speaks for having a problem to solve and not a solution looking for a problem. I think this key distinction is a good sieve to filter out potential ideas especially if you're in the business of SaaS.
In enterprises there are plenty of problems that are just not important enough to spend money on. For example there may be a yearly reporting process which takes 30 days for an accountant to complete, which could be automated by a SaaS product. That is less than $20k a year of cost. The CFO may be perfectly fine with the manual process. Just because someone could save money with your product doesn't mean that they will want to.
Actually money-saving devices sell poorly if you can't provide hard numbers.
If the product/service you're selling has an obvious benefit / fast ROI (for instance your customer can rent/sell it for more to their own customers, or save huge amounts on their business process), it's pretty easy.
However if your product / service is just "nice to have" and "can save money / help sales on the long term" it's almost impossible to close the deal unless your product /service is so cheap as to not be a problem at all.
If the product/service you're selling has an obvious benefit / fast ROI (for instance your customer can rent/sell it for more to their own customers, or save huge amounts on their business process), it's pretty easy.
However if your product / service is just "nice to have" and "can save money / help sales on the long term" it's almost impossible to close the deal unless your product /service is so cheap as to not be a problem at all.
IMHO a decision maker (say a CFO) will
1) choose battle to pick depending on his/her burning priorities
2) make investments where he/she can maximise ROI
Also keep in mind she/ he has limited Bandwidth for new initiatives.
Also keep in mind she/ he has limited Bandwidth for new initiatives.
Assuming I'm paying that accountant less than 20k for those 30 days, it doesn't make much business sense to switch when presented that way. Businesses don't always optimized for saved time even if it's obvious, it has to make business sense on an ROI level aka that solution only costs me 2k rather than the $20K I spent on the accountant. Also like you said they just may have bigger fish to fry since 20k is nothing compared to their other issues
> it has to make business sense on an ROI level aka that solution only costs me 2k rather than the $20K I spent on the accountant
With these numbers, I’d stick with the accountant. They work. They are flexible. They can be easily replaced.
With a SaaS product, I have to worry about whether their product works, if they’ll be around in a few years, how they’ll safeguard my data, if they’ll try to lock me in and increase prices, and if they can adapt to my changing needs. This decision process, alone, could easily nullify the projected savings.
With these numbers, I’d stick with the accountant. They work. They are flexible. They can be easily replaced.
With a SaaS product, I have to worry about whether their product works, if they’ll be around in a few years, how they’ll safeguard my data, if they’ll try to lock me in and increase prices, and if they can adapt to my changing needs. This decision process, alone, could easily nullify the projected savings.
That's not how you sell that product. You sell it by saying that once a decade the accountant is going to make an error that costs your company a billion dollars during due diligence before an IPO or sale. In the enterprise 20k isnt cost savings at all and, agreed, not going to result in many sales.
eh...
In enterprise/saas... you eventually always have a solution looking for a problem. You have a salesforce or whatnot, and you have to sell it.
In enterprise/saas... you eventually always have a solution looking for a problem. You have a salesforce or whatnot, and you have to sell it.
I wish I could even start a B2B startup, but I have zero experience in any other industry beyond software, which pretty much limits my possibilities to just making software tools.
God I wish I had knowledge in more domains.
God I wish I had knowledge in more domains.
Just start, you can read about starting all day long and doubt yourself or you can start, today. Decide on your first step and complete it, then choose your next step. You will have sleepless nights and tearful days but once you start, you learn. You don’t have to have it all figured out or a plan, just start in the general direction.
Having experience in other domains would be great. But it is by no means the only way to build successful companies.
You only need to have passion for a particular domain to then engage with people who share your passion and also have more experience in that field.
You only need to have passion for a particular domain to then engage with people who share your passion and also have more experience in that field.
Isn't this the reason that non-technical founders are a thing?
> At the end of the day, selling well means that you are helping the customer actually understand their problem, and the path to evaluate a solution.
Lipstick on a pig in 99% of cases.
I've been a CEO, CDO, a consultant, a middle manager and an IC. Well functioning high output teams (in any sector of business) almost never need a new tool/service to provide value. On the flip side, poorly functioning teams are constantly chasing new tools and processes as fixes to their broken organizations. So the vast majority of sales are convincing broken organizations to buy organizational nudges.
The single place where I am consistently happy to spend money is on things that our organization cannot internally build that we need to scale immediately. In the long run though, I want to eliminate as many outside dependencies as possible, so my goal is to either absorb you or build processes and systems that replace your service.
Lipstick on a pig in 99% of cases.
I've been a CEO, CDO, a consultant, a middle manager and an IC. Well functioning high output teams (in any sector of business) almost never need a new tool/service to provide value. On the flip side, poorly functioning teams are constantly chasing new tools and processes as fixes to their broken organizations. So the vast majority of sales are convincing broken organizations to buy organizational nudges.
The single place where I am consistently happy to spend money is on things that our organization cannot internally build that we need to scale immediately. In the long run though, I want to eliminate as many outside dependencies as possible, so my goal is to either absorb you or build processes and systems that replace your service.
I too have had those roles, starting my career as an IC, then a middle Manager, then a consultant, then a CEO/founder, and now a CTO. What I’ve focused on is how to help my teams and then my company operate as efficiently as possible while spending our resources where it benefits our customers the most.
Some examples of decisions I’ve made:
- IT/engineers won’t spend time building and maintaining email servers, we’ll spend $5/month/employee on G Suite and use their time on things that make our products more valuable
- We won’t outsource support even though that would dollar for dollar be more efficient, because understanding and building empathy for the customer is more important
- no we won’t spend money on email lists, but yes we will spend money on tools that allows our outbound sales team to more quickly determine prospects that fit our ideal customer profile
- bringing finance in-house much sooner than other people recommended because being more efficient at Accounts Receivable, Renewals, and thus cash flow allowed us to grow faster than we otherwise would have
- paying for a third party SSO solution for our products and instead using engineering time to build first class integrations between our products and complementary products, because having an artisanal SSO System doesn’t benefit our customers
Some examples of decisions I’ve made:
- IT/engineers won’t spend time building and maintaining email servers, we’ll spend $5/month/employee on G Suite and use their time on things that make our products more valuable
- We won’t outsource support even though that would dollar for dollar be more efficient, because understanding and building empathy for the customer is more important
- no we won’t spend money on email lists, but yes we will spend money on tools that allows our outbound sales team to more quickly determine prospects that fit our ideal customer profile
- bringing finance in-house much sooner than other people recommended because being more efficient at Accounts Receivable, Renewals, and thus cash flow allowed us to grow faster than we otherwise would have
- paying for a third party SSO solution for our products and instead using engineering time to build first class integrations between our products and complementary products, because having an artisanal SSO System doesn’t benefit our customers
> IT/engineers won’t spend time building and maintaining email servers, we’ll spend $5/month/employee on G Suite and use their time on things that make our products more valuable
In-house email servers are not constrained by the time to build them, but rather by reputation/spam considerations. Sorry, but that's a lucky guess ;-)
> paying for a third party SSO solution for our products and instead using engineering time to build first class integrations between our products and complementary products, because having an artisanal SSO System doesn’t benefit our customers
That's one of vendorlockiest vendor lock out there, which is a very YOLO decision.
The idea that buying stuff is more efficient then building it yourself is at the cornerstone of the modern economic theory, but that's only a theory. In the wilds there's much, much more factors to consider then just comparing cost of building versus cost of buying.
In-house email servers are not constrained by the time to build them, but rather by reputation/spam considerations. Sorry, but that's a lucky guess ;-)
> paying for a third party SSO solution for our products and instead using engineering time to build first class integrations between our products and complementary products, because having an artisanal SSO System doesn’t benefit our customers
That's one of vendorlockiest vendor lock out there, which is a very YOLO decision.
The idea that buying stuff is more efficient then building it yourself is at the cornerstone of the modern economic theory, but that's only a theory. In the wilds there's much, much more factors to consider then just comparing cost of building versus cost of buying.
Of course there are more factors. We are not blindly outsourcing everything to services and we are equally not blindly building everything in house. Those factors often come down to core competencies and “best and highest use” of time. These will vary by company. Case in point: lots of companies use highcharts and D3 for charting. why? Because building and maintaining a world class graphing system is not their core business and doesn’t meaningfully advance their business. And outside of a small minority of companies building your own charting from Scratch does not provide a meaningful advantage for your customers or over your competitors.
Deciding what is core and should be in house and what is not is hard and it’s only partially a technology decision. It’s primarily a business/market decision and being able to do those is a mark of a good CTO.
Deciding what is core and should be in house and what is not is hard and it’s only partially a technology decision. It’s primarily a business/market decision and being able to do those is a mark of a good CTO.
I'd venture to guess that for the tools and services that you buy, you weren't sold them, you sought them out and bought them because you recognized a need to buy vs build. I'm not saying don't buy things. I'm saying, if you're being successfully sold to in this fashion then you likely have more fundamental organizational problems.
My Dad told me something when I was little that stuck with me:
"You never see ads for broccoli"
Of course while that's not strictly true (weekly grocery flyer) his point was that, if you actually need something to survive you'll figure out how to get it without having to be sold to.
My Dad told me something when I was little that stuck with me:
"You never see ads for broccoli"
Of course while that's not strictly true (weekly grocery flyer) his point was that, if you actually need something to survive you'll figure out how to get it without having to be sold to.
> if you actually need something to survive you'll figure out how to get it without having to be sold to.
And if you don't know what you need to survive?
And if you don't know what you need to survive?
If you don't know what you need, what chances do you have to make a right decision, especially talking to people who are interested in selling you stuff?
I don't see how there is any alternative to researching stuff first in order to know what you need, especially if we are talking about "efficiency" and "value" which are not rigorously quantifiable.
I don't see how there is any alternative to researching stuff first in order to know what you need, especially if we are talking about "efficiency" and "value" which are not rigorously quantifiable.
That advice only applies to a narrow set of functionality within the organization though. It's usually not cost effective or wise to write custom marketing systems if you can get one off the shelf. Your teams turnover rate, documentation, support, and feature creep all contribute to the maintenance of that system. No way it makes sense in the short or long term for non-core business functions.
I think "vast majority of sales" is too cynical, though there's undoubtedly some merit to your sentiment in certain cases.
I manage a high-output team, and we _love_ Mode. Could we write our own connectors to our BI warehouse to extract tables into pandas and jerry-rig streamlit to make our own Mode? Eh, maybe. We actually did dumber versions of this in the past. But we can stay lean by not having to worry about all the stuff Mode worries about for us, like credentials, auto-updating, pushing to slack, setting up a python environment? Absolutely, as long as it makes financial sense.
Again, maybe we're just disagreeing about software being shitty 99% of the time vs just 80% of the time. But I think my point would be that it doesn't have to be a sophisticated tool to be a pain point.
I manage a high-output team, and we _love_ Mode. Could we write our own connectors to our BI warehouse to extract tables into pandas and jerry-rig streamlit to make our own Mode? Eh, maybe. We actually did dumber versions of this in the past. But we can stay lean by not having to worry about all the stuff Mode worries about for us, like credentials, auto-updating, pushing to slack, setting up a python environment? Absolutely, as long as it makes financial sense.
Again, maybe we're just disagreeing about software being shitty 99% of the time vs just 80% of the time. But I think my point would be that it doesn't have to be a sophisticated tool to be a pain point.
So no sales high output team needs a CRM ?
no engineering high output team needs a versioning tool ?
no designer high output team needs a design tool ?
High output teams always need several tools
no engineering high output team needs a versioning tool ?
no designer high output team needs a design tool ?
High output teams always need several tools
I think we picture "high output team" differently.
The way I see it, a "high output team" usually knows all the tools in their respecive field, and knows 99% of them are trash and this fundamental thing has to change before a better tool becomes possible. Which in turn makes conversations with salesmen mostly pointless.
On the other hand not a "high output team" don't know exactly what they need and just chase hype.
The way I see it, a "high output team" usually knows all the tools in their respecive field, and knows 99% of them are trash and this fundamental thing has to change before a better tool becomes possible. Which in turn makes conversations with salesmen mostly pointless.
On the other hand not a "high output team" don't know exactly what they need and just chase hype.
I suppose the one exception (which is hopefully the real niche any saas enterprise should aim for) is when a tool is so novel it hasn't become well known yet, but will become so soon. Of course, if a tool is in that path, any competent member of your team will immediately see it's value with even a cursory look at what they're selling.
I can personally say that when I first started knowing about snowflake it made so much sense it might be the perfect tool for my org, and a few weeks later when my boss said they're considering snowflake I immediately communicated my excitement. Tech like Snowflake fundamentally changed how data engineers work, and it's not a change you can just invent in-house as a SME. Unless you're a large corporation it's probably wise to keep a lookout for tools that could make your work more fun and efficient.
The question is if your team never wants to embrace the new for risk of it not working out or it's always excited to try out things that might make their life easier. That's an acceptable practice too, as long as there's some teams left to do the experiments, any saas worth its salt will become "standard" in your field that you too will embrace.
I can personally say that when I first started knowing about snowflake it made so much sense it might be the perfect tool for my org, and a few weeks later when my boss said they're considering snowflake I immediately communicated my excitement. Tech like Snowflake fundamentally changed how data engineers work, and it's not a change you can just invent in-house as a SME. Unless you're a large corporation it's probably wise to keep a lookout for tools that could make your work more fun and efficient.
The question is if your team never wants to embrace the new for risk of it not working out or it's always excited to try out things that might make their life easier. That's an acceptable practice too, as long as there's some teams left to do the experiments, any saas worth its salt will become "standard" in your field that you too will embrace.
What exactly made Snowflake the perfect tool for you?
You're thinking in black and white. This is all hypotheticals of course, but the teams you speak of probably already have something, but why should they switch to yours? What do you even know about what they might already be using?
> Well functioning high output teams (in any sector of business) almost never need a new tool/service to provide value
High output teams benefit as much, if not more, from new tools/services than anyone else.
- Accounting is much more effective with an ERP
- Sales is much more effective with a CRM
- Engineering is much more effective with CI/CD
None of these things are necessary, but they make good people even better.
High output teams benefit as much, if not more, from new tools/services than anyone else.
- Accounting is much more effective with an ERP
- Sales is much more effective with a CRM
- Engineering is much more effective with CI/CD
None of these things are necessary, but they make good people even better.
ERP like peoplesoft and SAP? If anything a previous discussion in HN suggested to me that Tesla's decision to build their own ERP probably saved time and money compared to going with an archaic monolith.
> On the flip side, poorly functioning teams are constantly chasing new tools and processes as fixes to their broken organizations.
The data suggests otherwise. Historically the industries which have the most broken and convoluted processes also have the lowest investment in technology.
The data suggests otherwise. Historically the industries which have the most broken and convoluted processes also have the lowest investment in technology.
Could you share what kind of data points you use to describe "broken and convoluted processes"?
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Beautiful. Thank you.
> The infrastructure used to run our Salesforce instance probably costs somewhere on the order of $100 per month. Yet, they charge us tens of thousands of dollars per month… how?
Not really. Unless the subscription is in tens of hundreds, that benefit-of-volume is not possible. Even more so when the solution involves bleeding edge stuff (AI/ML/real-time analytics etc). Easy to say, very very very hard to even achieve decent margins on such infrastructural cost. It's always a tradeoff between { feature-richness, time-to-market } and cost-efficient SaaS. Only the players who got a solid customer base would ever get to enjoy that privilege.
> Though it’s far down in the acronym, the identified pain is really where you should start with the customer. You should be able to answer in great detail why their life is currently painful, and how they handle the problems you solve today.
There's a slippery slope. Any "solution" won't help, in the era of "disruptive solutions". During the initial stages of industrial revolution, cities were scared of all the horseshit they thought they'd have to deal with. A 'con'sultant would've typically come up with an efficient way to dispose off all that manure into the sea. Only a mad scientist working on an automobile somewhere ended up solving that poop of a problem really. And in hindsight, every mildly lucky person would consider themselves "disruptive" without actually having to be one though. Such is our world! :D
[edit] just noticed that all comments in this thread that are critical of the narrative are voted down. one is fine, all of them?
Not really. Unless the subscription is in tens of hundreds, that benefit-of-volume is not possible. Even more so when the solution involves bleeding edge stuff (AI/ML/real-time analytics etc). Easy to say, very very very hard to even achieve decent margins on such infrastructural cost. It's always a tradeoff between { feature-richness, time-to-market } and cost-efficient SaaS. Only the players who got a solid customer base would ever get to enjoy that privilege.
> Though it’s far down in the acronym, the identified pain is really where you should start with the customer. You should be able to answer in great detail why their life is currently painful, and how they handle the problems you solve today.
There's a slippery slope. Any "solution" won't help, in the era of "disruptive solutions". During the initial stages of industrial revolution, cities were scared of all the horseshit they thought they'd have to deal with. A 'con'sultant would've typically come up with an efficient way to dispose off all that manure into the sea. Only a mad scientist working on an automobile somewhere ended up solving that poop of a problem really. And in hindsight, every mildly lucky person would consider themselves "disruptive" without actually having to be one though. Such is our world! :D
[edit] just noticed that all comments in this thread that are critical of the narrative are voted down. one is fine, all of them?
The author was talking about the marginal cost of Salesforce running their instance. If they stopped being a customer, it would save Salesforce $100 in server costs, but Salesforce would lose $10k’s. That means, Salesforce needs to deliver that much value to the customer in order to keep them. In addition, they need to deliver that much value over any lower cost competitors.
That's what am saying as well. Such thing works for SFDC. Not for any ordinary B2B firm that's struggling to gain their 10th/100th customer.
Great post from Calvin. Every founder, even if they're the CTO, should learn at least the basics of selling. Having the whole team aligned on what moves the needle makes a huge difference. It's not enough to offload thinking about selling to the CEO just because it's not the CTO's primary responsibility.
And if possible this is a great lesson for early employees, up to maybe 50.
Having an engineer or PdM take 1 hour per week to jump on sales calls and just listen is one of the best things they could be doing early on.
Having an engineer or PdM take 1 hour per week to jump on sales calls and just listen is one of the best things they could be doing early on.
I frequently recommend https://openviewpartners.com/blog/founder-led-selling/ as a good early stage enterprise sales framework. It is addressing a different, but complementary, set of questions to this post. If you're at a stage to need this kind of feedback, you should read it too.
A rule I gave myself after running a company for several years is that I never reply to incoming offers or sales pitches. In my opinion it’s very rare that someone really offers something that my company needs at that exact moment, so most interactions resulting from such offers will be a waste of my time. In the past I reacted to such incoming offers, but I always regretted it and usually burned some money and time as well. Now they only way I pick suppliers is by sourcing them myself exactly when I need something.
I think many executives / entrepreneurs have developed a similar adversity towards incoming offers, and my own experience with cold outbound selling seems to confirm this. I’ve contacted hundreds of companies myself trying to sell our service, but the only deals we closed so far were either with companies we already knew via our network or ones that did actively seek out our services themselves. It’s of course possible that an experienced sales person would be able to generate outbound interest, but as a founder without much sales experience it is very tough. I therefore think inbound sales is the future, at least in B2B.
I think many executives / entrepreneurs have developed a similar adversity towards incoming offers, and my own experience with cold outbound selling seems to confirm this. I’ve contacted hundreds of companies myself trying to sell our service, but the only deals we closed so far were either with companies we already knew via our network or ones that did actively seek out our services themselves. It’s of course possible that an experienced sales person would be able to generate outbound interest, but as a founder without much sales experience it is very tough. I therefore think inbound sales is the future, at least in B2B.
C-levels and other executives of large enterprises typically approach companies like Gartner for this. As a SaaS startup, we’ve been quite successful partnering with Gartner which opened doors to us we otherwise would never be able to.
In general, I think it’s better for a technology provider to partner with organizations to handle this tough enterprise sales process than to do it yourselves, but it depends upon your market and organization (we’re a database provider).
In general, I think it’s better for a technology provider to partner with organizations to handle this tough enterprise sales process than to do it yourselves, but it depends upon your market and organization (we’re a database provider).
How do you partner up with Gartner?
I can see that it costs anywhere between $40k to $80k. And the starting price is only for research.
Another way of looking at this is focus on what you do best.
I co-founded a bootstrapped B2B hardware startup and we are not salespeople. In the early days, we had mediocre prototypes and tried selling them by cold emailing prospective customers. We closed some deals but we were not happy with the outcome and we did not like doing it. So we completely stopped sales, put out some content and survived on contractors works. Eventually emails started coming in. We tried our best to help, even though it meant recommending a competitor. We missed sales but we were able to build a network of people who supported us. At some point, these people started requesting new products and now these products sell themselves.
I guess if one of us was experienced in sales, it would be a different story but if you are not a salesperson, focusing on the value you can bring is a sensible bet.
I co-founded a bootstrapped B2B hardware startup and we are not salespeople. In the early days, we had mediocre prototypes and tried selling them by cold emailing prospective customers. We closed some deals but we were not happy with the outcome and we did not like doing it. So we completely stopped sales, put out some content and survived on contractors works. Eventually emails started coming in. We tried our best to help, even though it meant recommending a competitor. We missed sales but we were able to build a network of people who supported us. At some point, these people started requesting new products and now these products sell themselves.
I guess if one of us was experienced in sales, it would be a different story but if you are not a salesperson, focusing on the value you can bring is a sensible bet.
like you i never reply , but my previous boss does- and i've seen him get caught in their sales tactics.
truth is the marketing works on a percentage of people, just like any other method.
truth is the marketing works on a percentage of people, just like any other method.
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> I think many executives / entrepreneurs have developed a similar adversity towards incoming offers, and my own experience with cold outbound selling seems to confirm this.
This article wouldn’t disagree with you. When you’re building the product the trick is to build your product almost alongside your first customers - invite them in and show them Figma mockups and ask what would provide them value, and bring them on the journey with you. Come with a compelling enough value proposition and solve for a large enough pain point and you’ll absolutely get executives of at least SMEs on calls.
Once you have that first customer, the outbound motion becomes a lot easier as you have references. It’s easy to fall into an ‘if you build it they will come’ attitude with inbound sales. In truth it rarely works on its own. (Work in sales / marketing for a large vertical SaaS)
This article wouldn’t disagree with you. When you’re building the product the trick is to build your product almost alongside your first customers - invite them in and show them Figma mockups and ask what would provide them value, and bring them on the journey with you. Come with a compelling enough value proposition and solve for a large enough pain point and you’ll absolutely get executives of at least SMEs on calls.
Once you have that first customer, the outbound motion becomes a lot easier as you have references. It’s easy to fall into an ‘if you build it they will come’ attitude with inbound sales. In truth it rarely works on its own. (Work in sales / marketing for a large vertical SaaS)
>When you’re building the product the trick is to build your product almost alongside your first customers
I agree with you up to a point. Real customer use cases are important and good references are gold--both for getting other customers and for getting onto some analyst radars. However, it's important not to pivot towards building what a customer wants so much that you basically end up being a consulting company doing a bunch of one offs. (Assuming that's not what you want of course.)
I agree with you up to a point. Real customer use cases are important and good references are gold--both for getting other customers and for getting onto some analyst radars. However, it's important not to pivot towards building what a customer wants so much that you basically end up being a consulting company doing a bunch of one offs. (Assuming that's not what you want of course.)
Of course - you'd want to do validation with 4 or 5 companies, and identify common pain points, as well as separating 'nice to haves' from 'table stakes'.
Usually by the time you've done 3 or 4 calls with customers in a good target segment, you start to hear some common themes again and again. As you say though, you have to avoid the temptation to wrap yourself around the weird edge cases of one customer (especially if that customer is a 'big fish').
Usually by the time you've done 3 or 4 calls with customers in a good target segment, you start to hear some common themes again and again. As you say though, you have to avoid the temptation to wrap yourself around the weird edge cases of one customer (especially if that customer is a 'big fish').
Well said, and I appreciate your perspective.
I also 100% disagree.
Inbound is a waiting game. Referrals are a waiting game. And hoping to be found at the right time by the right buyers ENOUGH times puts external factorsnin charge of your business but just thriving, but surviving.
My business exists precisely because we believe so strongly in outbound as a strategy. But wherein you are right that random cold outreach is distracting and a waste of time, outbounding that is targeted well and focused on problem solving can be the best ROI you have all year.
The difference, we have found, is between prospects who are aware their businesses are imperfect AND are curious about solving problems and prospects who know their businesses are imperfect and willing to live with those imperfections until such time they become intolerable. Those that choose the status quo until such time that they choose to go looking, as you have self-identified.
Candidly, there are a lot more of the latter than former but there are still plenty of the former.
I also 100% disagree.
Inbound is a waiting game. Referrals are a waiting game. And hoping to be found at the right time by the right buyers ENOUGH times puts external factorsnin charge of your business but just thriving, but surviving.
My business exists precisely because we believe so strongly in outbound as a strategy. But wherein you are right that random cold outreach is distracting and a waste of time, outbounding that is targeted well and focused on problem solving can be the best ROI you have all year.
The difference, we have found, is between prospects who are aware their businesses are imperfect AND are curious about solving problems and prospects who know their businesses are imperfect and willing to live with those imperfections until such time they become intolerable. Those that choose the status quo until such time that they choose to go looking, as you have self-identified.
Candidly, there are a lot more of the latter than former but there are still plenty of the former.
Agreed. I use Hubspot as a model - stellar inbound strategy, but still has a very strong outbound strategy too.
And tbh, the majority of sales I've ever made were from outbound. Usually very targeted outbound where I had the prospect more/less pre-qualified (after talking to lots of prospects you develop an instinct)
Been in business for 8 years, dev turned sales
And tbh, the majority of sales I've ever made were from outbound. Usually very targeted outbound where I had the prospect more/less pre-qualified (after talking to lots of prospects you develop an instinct)
Been in business for 8 years, dev turned sales
What do you think after the transition? Do you miss dev work? Has your sales role been good or worth the change?
I actually still do a fair amount of dev, but I've hired out for most of it. I turned to sales because I needed to really focus on selling the product I'd built.
If you're the type who likes learning new things, you'll like both. It's a new and valuable skill set that applies to other areas of life. Even if you're not an extrovert (I am certainly not), you find a style that works.
Several times I've been able to build and automate things that helped me do some very creative sales work. So having two skill sets was big.
So to answer the question, I like both and maintain interests in both.
If you're the type who likes learning new things, you'll like both. It's a new and valuable skill set that applies to other areas of life. Even if you're not an extrovert (I am certainly not), you find a style that works.
Several times I've been able to build and automate things that helped me do some very creative sales work. So having two skill sets was big.
So to answer the question, I like both and maintain interests in both.
Maybe I just didn’t get any good inbound requests so far then. We’re a small startup so I think we don’t attract a lot of outbound interest, this might be different for larger companies of course. Taking time to learn about the specific interests and needs of a small startup with little budget is probably overkill, so we just get the “spray and pray” treatment I guess.
Do you have a good strategy for identifying open-minded companies that are willing to learn about new approaches?
Do you have a good strategy for identifying open-minded companies that are willing to learn about new approaches?
> Taking time to learn about the specific interests and needs of a small startup with little budget is probably overkill, so we just get the “spray and pray” treatment I guess.
> Do you have a good strategy for identifying open-minded companies that are willing to learn about new approaches?
The answer to both your questions is segmentation, segmentation, segmentation.
The trick with segmentation is to find clusters of companies who are likely to share like-minded problems, hone your messaging and positioning to reach them (Basecamp is a classic example of how to do this well, they have always had a very clear idea of who Basecamp is for and who it is not for), and then identify the _individuals_ within those organizations who are most open to change.
Again, the temptation is to head straight to the C-suite - this is usually a bad place to start. C-suites are time poor, usually quite cynical about new software, and removed from the problems of the people on the front line. Usually better to start in middle-management with PMs, and arm them to build a business case to take further up the org.
> Do you have a good strategy for identifying open-minded companies that are willing to learn about new approaches?
The answer to both your questions is segmentation, segmentation, segmentation.
The trick with segmentation is to find clusters of companies who are likely to share like-minded problems, hone your messaging and positioning to reach them (Basecamp is a classic example of how to do this well, they have always had a very clear idea of who Basecamp is for and who it is not for), and then identify the _individuals_ within those organizations who are most open to change.
Again, the temptation is to head straight to the C-suite - this is usually a bad place to start. C-suites are time poor, usually quite cynical about new software, and removed from the problems of the people on the front line. Usually better to start in middle-management with PMs, and arm them to build a business case to take further up the org.
Don’t forget to sell to the stakeholders under the management team as well. I may be just another DevOps guy in my company, but my opinion holds sway in purchasing decisions even if I don’t control the budget - as do the other lead devs on the team.
It’s not always about companies it can also be about personas.
Who in the org is incentivized to solve the problem your tool or software solves?
Who in the org is incentivized to solve the problem your tool or software solves?
Another way to say this is that if you wait for customers to come to you, you are not in control of your own destiny.
> It’s of course possible that an experienced sales person would be able to generate outbound interest
I am at the receiving side of them, with currently no way to escape. (Ouch!) But well, the strategies I see them using are:
1 - If you see some large change on society (laws, tech, etc), focus on solving the problem those bring. That way, everybody will have the same problem at the same time, and you can pitch for it.
2 - Keep in contact until they need it. Maybe even try to help your possible clients in solving the problems that make your tool "not our largest problem today".
3 - Have a portfolio. Discover what problems the client has first, so you can decide what to sell second.
That said, I still didn't buy nor have seen anybody buy anything from a company that approached us first. As I said, those are techniques I see the experienced sales people using. I didn't see them working, but I assume sometimes they do, otherwise those people wouldn't have a job. Also, all of them look very expensive in some way.
I am at the receiving side of them, with currently no way to escape. (Ouch!) But well, the strategies I see them using are:
1 - If you see some large change on society (laws, tech, etc), focus on solving the problem those bring. That way, everybody will have the same problem at the same time, and you can pitch for it.
2 - Keep in contact until they need it. Maybe even try to help your possible clients in solving the problems that make your tool "not our largest problem today".
3 - Have a portfolio. Discover what problems the client has first, so you can decide what to sell second.
That said, I still didn't buy nor have seen anybody buy anything from a company that approached us first. As I said, those are techniques I see the experienced sales people using. I didn't see them working, but I assume sometimes they do, otherwise those people wouldn't have a job. Also, all of them look very expensive in some way.
Thats an interesting perspective. Maybe narrow down the cold outreach based on research such that you're sure your product will fit into their stack?
It just seems hard to believe that cold outreach won't work for SaaS
It just seems hard to believe that cold outreach won't work for SaaS
It definitely works to some degree, I just think it might be better to first work your way through your "warm" network i.e. companies to which people that know and trust you or your product can make qualified introductions.
As I said I think if you can hire a professional sales team they will make it work, but that usually takes one year and costs a signficiant amount of money, so for an early stage startup it's often out of reach and very risky.
As I said I think if you can hire a professional sales team they will make it work, but that usually takes one year and costs a signficiant amount of money, so for an early stage startup it's often out of reach and very risky.
I'm telling you flat out it works EXTREMELY well.
I've been at a startup with strong sales people and it definitely work to get clients, and pretty big ones. But the catch is that they were selling at a higher level than the operational teams, to not very technical buyers. Needless to say the usage was then often disappointing.
Agreed.
Unsolicited inbound requests go into the spam folder without looking.
Where things are getting bad now is with cold calls, LinkedIn, Twitter etc messages. There isn't a channel that salespeople aren't using. They'll come by the office or send you a letter. If they can't get to you directly they'll go to your subordinates or peers... It's neverending.
It's to the point where it's just exploiting the urge of business managers and leaders to not be jerks.
Unsolicited inbound requests go into the spam folder without looking.
Where things are getting bad now is with cold calls, LinkedIn, Twitter etc messages. There isn't a channel that salespeople aren't using. They'll come by the office or send you a letter. If they can't get to you directly they'll go to your subordinates or peers... It's neverending.
It's to the point where it's just exploiting the urge of business managers and leaders to not be jerks.
> my #1 rule for this is teach people something they didn’t already know.
You just went full meta
You just went full meta
Having been on both sides of this, I think this is great advice, but misses something key. If you are selling a relatively high-cost product (>$10k min spend), then there needs to be some acknowledgement of that up front. It's a waste of everyone's time if I'm running a startup that can easily spend $100s/month on a product, but simply have no way to invest tens of thousands in a product. Whereas, when I'm leading an established company that can easily afford tens of thousands of dollars, then I care about the value. In short, know your customer should include, know when your customer is a 2-3 person seed stage startup and either offer some version of the product at a price that they can afford and growth into/with you on, or just be upfront that it's out of range right now. A great example of this would be Looker. Great product (in my opinion) and provided a ton of value to Kiva, but it's a significant investment. I'd love to use it at my small startup but the price is out of range so for now we use Google Data Studio instead. And yet the sales agents come knocking anyways. Understand your customer, know when something would provide value they can afford vs. is way out of current range for current budget/scale.
Well, in enterprise Saas usually the pricing is not shown on the website without contacting a sales rep, so it usually eliminates companies which don't have a lot of money.
But even if a small company is reaching to you, as a salesperson, this is your job to qualify the lead, and to not loose your time on a lead that has low chance of signing
But even if a small company is reaching to you, as a salesperson, this is your job to qualify the lead, and to not loose your time on a lead that has low chance of signing
What’s the reasoning behind not putting the prices up? For me that’s always a huge downer and means „that’s going to be quite expensive“.
In enterprise sales, the price is not the main decision maker, you will usually only disclose the price at the end of the sales cycle.
Not showing the price on the website is one way to push people to contact you. You don't want people to decide on their own if they should buy your product, you have a big sales team to help them do that.
I've wrote about it here, if you are interested : https://blog.luap.info/why-most-saas-companies-cant-be-succe...
Not showing the price on the website is one way to push people to contact you. You don't want people to decide on their own if they should buy your product, you have a big sales team to help them do that.
I've wrote about it here, if you are interested : https://blog.luap.info/why-most-saas-companies-cant-be-succe...
I just assume if there's no price shown then I (as an individual) cannot afford it, and it's in the tens of thousands. Seems to have worked accurately for me when I'm looking for individual-level use.
However when I'm looking at tools that can help my org, I'm definitely frustrated that there's no pricing mentioned in many offerings - clearly I have three tabs with three solutions open and I have no idea about the costs. I'm NOT emailing you because I as an engineer won't have the same interest in this idea tomorrow when you email me back (probably because tomorrow's Monday and I'm in sprint planning). These ideas just fizz out and I never get a chance to follow up because of this
However when I'm looking at tools that can help my org, I'm definitely frustrated that there's no pricing mentioned in many offerings - clearly I have three tabs with three solutions open and I have no idea about the costs. I'm NOT emailing you because I as an engineer won't have the same interest in this idea tomorrow when you email me back (probably because tomorrow's Monday and I'm in sprint planning). These ideas just fizz out and I never get a chance to follow up because of this
Good case study. If it was more burning, you'd email.
Enterprise sales at 100k+/yr levels can take a lot of work by both sides to get to the finish line, at least until everything else is smooth, screening out inquiries like this saves everyone time.
An even better business would have a way to make you succeed early as a single dev with low interest, and grow to enterprise level.
But that is now building 2 products and a fancier business. Hard to do both at same time, esp. initially. Sometimes you are lucky -- Concept, $$$, etc. -- but probably not.
Enterprise sales at 100k+/yr levels can take a lot of work by both sides to get to the finish line, at least until everything else is smooth, screening out inquiries like this saves everyone time.
An even better business would have a way to make you succeed early as a single dev with low interest, and grow to enterprise level.
But that is now building 2 products and a fancier business. Hard to do both at same time, esp. initially. Sometimes you are lucky -- Concept, $$$, etc. -- but probably not.
If "that's going to be quite expensive" is a downer for you, that's fine because you aren't the target audience. If you saw the actual price you'd probably think "no way am I paying that", so showing the price doesn't help the seller.
The target audience is companies that don't really care about the price, as long as it's in some vague order of magnitude they are used to paying for other things.
Also the price is usually not fixed if it's not listed. The answer to "how much is it" is implicitly "who's asking and what can you afford". I.e. it's negotiated, and negotiations are much easier when the buying side doesn't know what everyone else is paying.
The target audience is companies that don't really care about the price, as long as it's in some vague order of magnitude they are used to paying for other things.
Also the price is usually not fixed if it's not listed. The answer to "how much is it" is implicitly "who's asking and what can you afford". I.e. it's negotiated, and negotiations are much easier when the buying side doesn't know what everyone else is paying.
We have lots of small companies with 1-3 employees sending a handful of messages a month, to big multi-national corporations sending many thousands of messages a day.
For the big companies we're typically a crucial part of their business and they typically require several integrations and other specialized modules which have upkeep. So we charge a bit more for the software. On the other hand, they typically have a very high message volume so they get a decent message volume discount.
For smaller companies the software is typically a bit cheaper, but with a significantly higher per-message cost.
Then of course there's negotiation for each contract which would make "web prices" rather moot anyway. Maybe a company wants lower fixed cost but can accept a higher per-message cost, as messages are often directly linked to their revenue, or vice versa.
For the big companies we're typically a crucial part of their business and they typically require several integrations and other specialized modules which have upkeep. So we charge a bit more for the software. On the other hand, they typically have a very high message volume so they get a decent message volume discount.
For smaller companies the software is typically a bit cheaper, but with a significantly higher per-message cost.
Then of course there's negotiation for each contract which would make "web prices" rather moot anyway. Maybe a company wants lower fixed cost but can accept a higher per-message cost, as messages are often directly linked to their revenue, or vice versa.
Segment is backed by a ginormous sales operation from its multiple successful funding rounds.
This article is very fluff heavy and contains almost no actionable insights.
This article is very fluff heavy and contains almost no actionable insights.
As someone who has been on the other side of the table as a buyer, I'm not particularly fond of this advice. Especially when the customer is the one who reached out. Time is valuable and it's not feasible to have a close relationship with every vendor; I'm buying a product because a need has been identified, your product fits that need. Most likely I am not looking for:
- consulting
- running a brainstorming session with a third-party
- learning something I don't already know about x/y/z
- sharing sensitive info such as success metrics
Sometimes you really want a hands-off, transactional relationship, where the partner simply delivers what you paid for, no more, no less. I understand this approach might be very valuable for a certain kind, or stage, of company, but it won't be ideal for every enterprise.
- consulting
- running a brainstorming session with a third-party
- learning something I don't already know about x/y/z
- sharing sensitive info such as success metrics
Sometimes you really want a hands-off, transactional relationship, where the partner simply delivers what you paid for, no more, no less. I understand this approach might be very valuable for a certain kind, or stage, of company, but it won't be ideal for every enterprise.
I was on a call with their sales rep and he was awful. Even if I told him what kind of volume we're looking at, the guy didn't want to talk costs, over two meetings. Very poor experience. Seems like they're designing pricing around how much money you have.
1. The user is not always the buyer. Many founders know who their users are, but may not know who really made the yes/no decision. The sales and marketing need to communicate value to the buyer just as much as (if not more than) to the user.
2. Buyers need to be convinced that your product will solve their most important business needs--their desired outcomes. Things such as lowering overhead or meeting compliance requirements. (Similar idea to "Job to Be Done.") That’s what your sales and marketing should primarily be about, with benefits, social proof, and other selling points as backup.
Simple in principle but it takes months of research, customer/prospect interviews, and experimentation to figure out your buyers' desired outcomes and how to talk about your product in a way that directly aligns with those.
(Slightly longer version of this: https://www.gkogan.co/blog/buyers/.)