In SaaS, generating, qualifying, and closing leads is an exhaustive process. Before a company settles on a SaaS solution, the business development team must work with the CIO and IT team to identify an ideal solution, and legal must negotiate with the vendor before it cuts any checks.
Although you can’t bypass crucial steps in this process, there are ways to expedite the sales cycle and start pocketing revenue faster.
For example, Bridg, a retail and restaurant marketing automation provider, recently set out to correct kinks in its sales cycle. It assigned a dedicated team to build a robust algorithm that tracks and qualifies leads by leveraging multiple data signals, such as chains participating in tech conferences, competitors in the industry, and online reviews. All this information allowed Bridg to pinpoint its potential customer base.
From there, it aligned compensation and conversion rates, giving its sales team a strict set of criteria for qualifying leads. The company also hired an operations manager to oversee the closing process. Together, these changes led to higher conversion rates and cut the time spent on the legal diligence process in half.
Bridg understood that it needed to take control of the sales cycle to better predict results. You can apply this thinking, too.
The keys to a successful sales cycle Before revamping your sales process for success, you need to understand the essential steps in any winning sales cycle:
Optimizing the sales cycle Now that you know what the ideal sales process should look like, here are five steps for activating a successful sales cycle:
Don’t settle for an inefficient sales cycle. By revamping your sales process and keeping prospects moving through the pipeline, you’ll start to see more qualified leads, higher customer lifetime value, and a healthier bottom line.
TX Zhuo is a managing partner of Karlin Ventures, an L.A.-based venture capital firm that focuses on early-stage enterprise software, e-commerce, and marketplaces. Follow the company on Twitter.
Although you can’t bypass crucial steps in this process, there are ways to expedite the sales cycle and start pocketing revenue faster.
For example, Bridg, a retail and restaurant marketing automation provider, recently set out to correct kinks in its sales cycle. It assigned a dedicated team to build a robust algorithm that tracks and qualifies leads by leveraging multiple data signals, such as chains participating in tech conferences, competitors in the industry, and online reviews. All this information allowed Bridg to pinpoint its potential customer base.
From there, it aligned compensation and conversion rates, giving its sales team a strict set of criteria for qualifying leads. The company also hired an operations manager to oversee the closing process. Together, these changes led to higher conversion rates and cut the time spent on the legal diligence process in half.
Bridg understood that it needed to take control of the sales cycle to better predict results. You can apply this thinking, too.
The keys to a successful sales cycle Before revamping your sales process for success, you need to understand the essential steps in any winning sales cycle:
- Research: Identify businesses that fit your target market in terms of industry, size, and financial health. Look at companies your competitors are connecting with to better gauge their intent.
- Outreach: Using that information, distinguish who the decision makers are in each organization, and prioritize your outreach based on which companies show the strongest purchase intent. C-level executives might not always be the best place to start. Instead, approach those in managerial positions. These folks can extract value from your products daily.
- Lead qualification: Unfortunately, most SaaS companies get this crucial step wrong. Too many sales reps optimize for quantity because they see it as a direct reflection of compensation potential. But by assigning every lead equal weight, you’re wasting precious resources on unqualified leads. Instead, align the compensation structure with actual conversions, and provide sales reps with criteria to qualify a lead. For example, ChowNow set a minimum number of Yelp reviews as a strict criterion, vastly improving its lead quality.
- Demos: Within the next two weeks, schedule a demo meeting with hot leads either in person or over the phone, depending on the size of the contract. Kaleo Software, one of our portfolio companies, adopted a high-touch sales approach for all accounts but is slowly moving toward a lower-touch, remote selling approach for small accounts (at least for initial meetings), which has greatly improved the lifetime value and customer acquisition cost ratio.
- Contract and closing: Many times, contracts get stuck in legal, so it’s best to dedicate one person to closing contracts. Have this person come up with a flexible template for contracts that safeguards the company’s interests while reducing potential friction with clients. For example, if clients often have issues with three-year contracts, consider moving to one-year contracts with automatic renewals.
Optimizing the sales cycle Now that you know what the ideal sales process should look like, here are five steps for activating a successful sales cycle:
- Get the right team in place. SaaS companies rely on certain positions to support their sales cycles, so make sure you staff key players from the top down. This often starts with a vice president of sales or a sales director. You’ll also need dedicated market researchers to help feed leads, sales development team members to qualify leads, and sales reps to close qualified prospects. To round out your sales force, hire sales engineers to answer technical questions from sales reps and a client support staff to field questions from customers and help with onboarding. Of course, no team would be complete without legal and finance divisions to provide support in contract negotiations.
- Identify weak spots in your sales funnel. Track each stage of the sales process, and look for any bottlenecks within the funnel. If, for example, you see low conversion rates between qualified leads and demos, dig deeper to verify whether one of your sales representatives is struggling to connect with prospects or move them to the demo stage.
- Let your product sell itself. These days, an intuitive SaaS product is the gold standard. Getting a trial version of your product in the hands of internal champions is one of the easiest ways to spark interest and rev up the sales cycle.
- Dedicate resources to onboarding. Because switching costs are low, closing sales is no longer your main objective. Instead, your aim should be retention. Do everything possible to onboard customers quickly, and make it easy for them, too. Otherwise, they’ll likely churn soon after they subscribe, weakening your reputation and bottom line.
- Focus on solutions. Entrepreneurs tend to adopt a product-centric mindset but forget that customers aren’t looking for a product — they’re looking for a solution. Instead of selling them on all the bells and whistles, show them how your product remedies their pain points.
Don’t settle for an inefficient sales cycle. By revamping your sales process and keeping prospects moving through the pipeline, you’ll start to see more qualified leads, higher customer lifetime value, and a healthier bottom line.
TX Zhuo is a managing partner of Karlin Ventures, an L.A.-based venture capital firm that focuses on early-stage enterprise software, e-commerce, and marketplaces. Follow the company on Twitter.