Repeatable Sales Process for Success

Repeatable sales process evolved. Nick Frost from Mattermark (https://mattermark.com/) wrote on an article on their blog and published it on Medium (https://medium.com) addressing the need to change sales processes in order to achieve success. It is a good article which outlines what many sales teams may see as a radical change to their present process. What is exciting for me is that what Nick is presenting is very close to the ZEBRASelling methodology which has been so successful over the years.  You can read his article here (https://mattermarkdaily.com/the-three-main-elements-of-building-a-repeatable-sales-process-49749a600697#.x43iwvw0b) and then below was my comment.

I love to see this kind of evolution in thinking of the sales process. I, too, was a sales person and sales manager who thought that if you throw enough mud against a wall, some of it will stick. Not too successful with that! However, our closing rates of around 15% were no worse than the B2B industry standard today and I was doing these 30 years ago.

What is so interesting to me about this article is that it covers most of the Selling to Zebras methodology that I have written about on this blog           (http://dewellconsulting.com/index.php/whats-zebra/) that has been working well for almost 2 decades now. Nick points out that in the qualifying stage sales people can get off track because by nature they tend to rate their prospects highly even without really qualifying them. They want to keep their prospect list full and their forecast full since they believe activity is the key to success.

Nick also says that the sales teams need to pare their prospect list down by 50% — that will scare the beejeezus out of most sales teams. I actually like to apply the 80/20 principle here and say that only about 20% of the prospect list is ever going to be a customer. But those 20% will generate 80% of their sales quota.

What Nick is calling for, as we do, is to change the culture of the sales organization. We both are saying to the sales team and their managers and to the C-suite, you can do better; you can close more sales with higher pipeline flow through rates and higher sales $ values if you simple change the way you approach the process. Tough to do since change is a 4-letter word to humans in general and sales folks are human after all 🙂

In closing, I recommend that everyone on the sales and marketing teams in companies serious about achieving great success read “The Challenger Sale” by Matthew Dixon and Brent Adamson of the Corporate Executive Board Company (CEB). This book will change how you view the sales game completely!

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SaaS and the future of Software

SaaS and the future of Software“. Jos White, the co-founder MessageLabs back in 2000, wrote a piece recently on his website (http://www.joswhite.com) with this title.

It looks at what has happened and is happening in the software industry where virtually everyone now builds cloud-based software applications. This is how puts it:

“The world of enterprise software IS now the world of SaaS. It still might be a smaller market overall but the whole software industry is gravitating in this direction. If you’re not already in it you want to be. If you are starting a new enterprise software company today it is almost inconceivable that it wouldn’t be SaaS.” (http://www.joswhite.com/post/102e0ke/saastr-the-future-of-software)

What I find interesting is the business model these companies, new ones and established ones, use to grow their businesses. I’ve written about this before, The SaaS Industry , and still wonder how long the model can work until there are massive failures when rounds of funding dry up before the companies are profitable?

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Congratulations everyone –another loss this month!

Congratulations on another loss! Can you imagine that from the CEO or CFO at the monthly company meeting?

Well, OK, maybe not really in those words. It’ll be more like, “Congratulations on meeting top line revenue targets again!”

But since the focus in SaaS companies is always on top line growth and never on the growing red numbers at the bottom of the income statement, the headline has some truth in it.

As I have written before, I really question this business model as being sustainable. I know there are some companies that are getting on in years that are still surviving, but they only do that with continuing rounds of funding by VCs and other investors who believe in the top line “uber alles” growth strategy.

In addition is the nagging thought that VCs, who by nature support lots of losers to get a couple of big winners, will only play that game with your company for so long before they decide you are one of the losers.

When you look at income statements for big SaaS companies, you see large numbers under “Operating Expenses > Sales and Marketing”. Here’s an example from a well-known company I’ve been following for a couple of years, Hubspot (HUBS)(https://www.hubspot.com/) in their Sept 2016 10-Q:

 

HUBS loss

 

Sales and marketing accounts for 64.2% of their operating loss, and loss from operations in total accounts for 98.4% of the total loss. But investors look at the gross profit increase from 2015 to 2016 and are happy that it is up 55%. And that even though “Net loss per share, basic and diluted” is shown as ($0.91)!

Later in the 10Q comes this, as a warning?

“We have focused on rapidly growing our business and plan to continue to make investments to help us address some of the challenges facing us to support this growth, such as demand for our platform by existing and new customers, significant competition from other providers of marketing software and related applications and rapid technological change in our industry.

We believe that these investments will result in an increase in our subscription revenue base. This will result in revenue increasing faster than the increase in sales and marketing, research and development and general and administrative expenses, exclusive of stock-based compensation, as we reach economies of scale. With this increased operating leverage, we expect our gross and operating margins to increase in the long term. However, we will incur losses in the short term. If we are unable to achieve our revenue growth objectives, including a high rate of renewals of our customer agreements, we may not be able to achieve profitability.” (Emphasis  mine)
This is, however, a typical financial report from companies in this space. So far, I’ve only run across one such company that is shifting its focus to profitability and that is Cornerstone on Demand (CSOD). In his Q4 2016 earnings call transcript on Seeking Alpha (http://seekingalpha.com/article/4045582-cornerstone-ondemand-csod-q4-2016-results-earnings-call-transcript), CEO Adam Miller said this” I’m also very pleased to report that 2016 marked our first year of profitability…”

Hats off to Mr. Miller!

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