Tuesday, June 30, 2009

Hey SaaS Vendors…..Want to be Part of the Next Bubble of Irrational Exuberance?

Then revamp your messaging, website, and SaaS Inside Sales team to meet Web 2.0 specifications, but deliver a Web 1.0 product. Every aspect of your company’s existence has to be Web 2.0 and it all starts with your product. Your product has to support all of your claims and meet the expectations of your prospects. If it does not, then your prospects will get mixed messaging and this will lead to a loss of credibility which will lead to bad word of mouth which will lead to (fill in the blank). Spending thousands of dollars on new marketing campaigns can be wiped away with one free negative post about your product in the social-media world.

Most companies are overwhelmed by the level of effort involved in becoming a true Web 2.0 company. Yes it is a lot of work…no it doesn’t happen overnight….but it is very obtainable. Your upper management needs to be passionate about making their Web 2.0 dream a reality. We all know that when things are pushed from the top down, the likely hood of success is greater. Remember…"One small step toward your passion is a giant leap toward making it a reality.” (Jason Dorsey)

The good news is that there are a bevy of websites and blogs out there to help you achieve Web 2.0 reality. The bad news is a lot of these sources are the cliff notes to the novel. Since the attention span of bloggers is 90 seconds, blogs by nature are designed to do a lot of dangling. My blog “Inside Sales in a SaaS World” is a hopeful exception. My intent is to deliver and learn from the delivery of others.

I want to deliver on the SaaS inside sales side of Web 2.0 achievement. So let’s start off things with what to look for in hiring a great Inside Sales Manager, Director or VP.

1. At least 4 years experience in SaaS Inside Sales Management
2. Someone who places an emphasis on mentoring.
3. Someone who understands that the word “community” applies to within your organization, not just outside your company walls.
4. Someone who knows how to deliver a service. Marketing, Sales, Services and Account Management teams need to all be on the same page. You are a SaaS company, which means you are providing a service. Never forget about the acronym (Software as a Service). The service life cycle starts with marketing, then moves to inside sales, then moves to services, then moves to account management.
5. Someone who is open and transparent. These are two of the main themes of Web 2.0, so make certain your candidate possesses them as well.
6. Someone who has a record of growing a SaaS company from X amount of revenue to Y amount of revenue. You determine the compelling percentages.
7. Someone who understands Web 2.0 and can help build a Web 2.0 strategy or add to an existing one.
8. Someone who knows how to sell remotely with a focus on building credibility with your prospects.
9. Someone who has a passion for inside sales
10. Hire someone who appears to have no guard and got you to lower yours immediately. This quality will influence who they hire, how they train and how effective the team will be in a remote world.

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Thursday, June 25, 2009

Who is King…..Content or Collaboration?

I’m going with collaboration. In their simplest form social media/networks/communities are nothing more than organized collaboration, or un-organized collaboration depending how empty your glass is. Every company is scrambling to figure out how they can tap into this world wide web of social collaboration. Who needs content when you have 1 million followers on Twitter?

Twitter is a King because it's a collaboration hub. I’m sorry, but 140 characters are not content. It is a quick shuttle service ride via a tiny URL to the hottest new SaaS inside sales blog or the coolest new movie or the worst restaurant or just a simple narcissistic update on exactly what you are doing right now. By the way…I’m writing an article right now on the new King in town…..Tweet!

Think about it…you could have the hottest new SaaS product going, backed by the most content rich website, but if people are not collaborating and talking about you, recommending you to others, then how successful do you expect to be? Social-networking sites or collaboration hubs as I like to call them are the hottest real-estate in town. In real-estate it’s all about location. Location….Location….Location. A rundown hole in the wall in a great location is worth more than a mansion on the wrong side of the tracks. Why is it good to be King? Because King’s are platforms and social networking platforms happen to be the alpha’s of location.

Twitter is 5th Avenue, Facebook is Park Avenue and Google is the entire city of Manhattan. Both Twitter and Facebook are the places where people go to collaborate both good and bad. What they have figured out, is that it’s all about building a following in the beginning. They want to be that platform in which people gather, communicate, recommend, rant, and be creative. Ever notice how few of applications Twitter actually provides themselves? It’s tiny compared to the 1000’s of Twitter apps built by others. Empowering the masses to be creative and collaborative on their platform…how ingenious is that? They built a great platform from the get-go and now they are a King. Being a King allows you to be a platform in the software world and let’s face it…platforms always seem to get the biggest multipliers. Look closely and you’ll see that most Kings are indeed platforms.

Not every company starts off as a platform. The typical evolution is from tool to application to platform. I understand that you just built the world’s most amazing social-media application, but you need to pump the brakes a little and think both short and long-term about your goals. In today’s world you have to start off as a platform or plug into the world’s best platform as a tool or application. The easier route is to start off as a tool and plug into a cloud. Tools can grow into platforms, which is the ideal evolution of a software company. Platforms don’t become tools. If you find your platform going down the tool rabbit-hole, then odds are your going out of business. Start small, but think enormous!

SF.com is the King of success when it comes to this approach. They essentially started off as a fairly simple sales automation tool, with a focus on sales teams. They soon grew their tool out to be an enterprise application, with multiple departments using their functionality. They realized that even the best enterprise apps become commoditized, so they built a platform. Welcome Force.com. In their world it’s all about controlling the most desired location…..your desktop.

So yes, it is great to be King, but Kings always get replaced. What does not get replaced easily...are castles. Castles carry over to the next King. The castle in this horrible metaphor is the platform and that’s where I would focus my efforts and dreams. Tweet dreams!

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Monday, June 22, 2009

SaaS Inside Sales-Is Your Team Worthy of the Adjective Web 2.0?

Google has become a verb and Web 2.0 has become an adjective. Web 2.0 is just as much about an evolving buying process, employee mindset and way of utilizing your employees to their fullest, as it is about technology evolution. Web 2.0 has become an adjective you want associated with all of your products, services, processes, employees, trainings, compensations and culture. Are you Web 2.0?

15 Warning Signs That Your SaaS Inside Sales Group is Web 1.0-
1. It’s an entry-level job
2. The job is positioned as a great stepping stone
3. Decent pay
4. Primary goals of the team are not aligned with the business goals
5. The group is not considered strategic
6. The hiring process is easy and there are plenty of candidates
7. Phone conversations are based on requirements gathering only
8. The group never has the opportunity of going on an implementation of your software
9. The group never visits clients with sales directors or account managers
10. No or very little formal training/ramp up period
11. Little growth opportunities
12. The group is not part of sales strategy meetings or product development meetings
13. The group reports to the VP of Marketing
14. The group rarely works trade shows
15. The group does not know how to demo your product

15 Great Signs That Your SaaS Inside Sales Team is Web 2.0-
1. It’s a very sought after job
2. Turnover is very little
3. Excellent pay
4. You nurture prospects based on where they are in their buying process
5. Compensation is directly aligned with the company’s business & revenue goals
6. You set-up highly qualified calls/appointments for the sales directors
7. It takes time to find highly qualified candidates
8. Training program is very extensive and continuous
9. Phone conversations are focused on business goals and delivering value coupled with requirements
10. The team reports to the VP of Sales
11. The team accompanies services team on implementations
12. The team accompanies account managers on initial on-site
13. The team is part of product roadmap discussions and sales strategy meetings
14. The team works the booth at various tradeshows
15. The team can demo your product at a high-level or walk someone through an automated demo

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Thursday, June 18, 2009

SaaS Ease of Use is an Intangible Wrapped Around a Tangible

I used to believe that a major reason why people chose one SaaS solution over another was based on intangibles like ease of use and UI. The more I thought about this, the more I realized that settling for a response like “We just want a SaaS solution that is easy to use” or “I chose your solution because it was easier to use” does me and my prospect no good. This may have been the reason they preferred you in the sales cycle or even why they ended up selecting you over the other vendors, but it isn’t what keeps them as a long term customer. Ease of use is an intangible wrapped around a tangible. Dig deeper into what your prospect/customer is saying and you will uncover the hidden tangible.

What keeps customers happy is the fact that you are constantly helping them achieve their business goals. Everything needs to tie back into a business goal. Uncover the business goals and you have got your baseline for success and improvement. I decided to share a phone conversation I had earlier this week, to demonstrate what I am talking about. In fact the deeper I dug into ease of use, the more I realized that the real reason my prospect was looking for a SaaS software solution was to increase their project margins by 20%. Here are some of the juicy details of the call…… about 5 minutes into it.

Kevin: What are your business goals?
Prospect: We are doing everything via Excel spreadsheets and this does not scale…we would like one central place to manage all our projects and to log time and expenses….it must be easy to use…. ease of use is the most important thing for us…this will determine who we go with.

Kevin: Why is ease of use the most important thing for you?
Prospect: Because my consultants need to use the solution for time and expense capture.

Kevin: Why is an easy to use time and expense solution important?
Prospect: Because my consultants won’t log all their time and expenses associated with projects if it isn’t easy to do. You know how consultants are.

Kevin: So what does that mean to the business if your consultants don't log all of their time and expenses associated with projects?
Prospect: Well, there have been cases we're we've lost money on projects because we aren't capturing every billable hour and that can directly affect the profitability of our projects.

Kevin: So you feel like your not making as much money as you should on your projects today?
Prospect: For sure

Kevin: Do you know what your margins are today on projects?
Prospect: They vary…but around 30%.

Kevin: Is 30% a good number for you…is this what you want?
Prospect: No I want to increase that number to 50%

Kevin: Perfect…so the real business goal is to increase project margins to 50% and you feel that an easy to use solution will help you achieve that?
Prospect: Yes exactly

Now that I know his real business goal (business goals always start with increase, decrease, or improve upon) I can focus the demo on how our solution can help. After they sign up as a customer my implementation team can circle back to those goals. This is a way to re-enforce what they told us was most important. After they have been live for a few months, the account management team can see how well we are tracking against those goals. If we are hitting their goals, then we have a very happy customer. If we are not, then we need to figure out why. Maybe they are not using the solution properly or to its fullest. Either way, we are still proving that we are constantly listening and making certain that we deliver on all of their goals.

PS. As a side note, if you can get the prospect to equate what the 20% increase in profitability means in real $$$, then the chances are the cost of your solution is minimal to the value of them reaching this business goal. Your solution then becomes an investment with great return.....rather than a cost!

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Tuesday, June 16, 2009

30 Tips for SaaS Companies Looking to Become More Social

Every SaaS company wants to become part of the giant social network, so I have put together a tip list.

**Some of these tips may be obvious to some and not so obvious to others. They are also in no particular order of importance**

1. Build a community/website
2. This community needs to be findable
3. Spend money up front on paid ads on all the major search engines
4. The goal is to get more organic searches
5. Get your company on Facebook and Twitter
6. Provide Live Chat BoldChat
7. Provide customer tutorials, ratings and reviews like Bazaarvoice
8. Provide industry white papers
9. Utilize landing pages as much as possible
10. Provide automated flash demos
11. Provide free trials
12. Provide case studies with hard ROI
13. Have third-party industry experts do webinars on best-practices, record them and put them on your site
14. Your website needs to talk about business challenges, not products and services
15. Build trust and credibility as an expert in the industry
16. Invest in a SFA solution like SF.com
17. Invest in a Marketing Automation solution like Eloqua
18. Have very targeted email campaigns
19. Do lead scoring (High Value Contacts vs. Low Value Contacts)
20. Track # of website visits
21. Track the popularity of all web content
22. Track form submittals
23. Track certain keyword searches
24. Build an Inside Sales Team (IST)
25. IST handles all the high-value contacts: hand holding them throughout the entire sales cycle, all low-value contacts remain in the marketing drip
26. IST should be able to offer up best practices advice and demo. It is imperative that they remain consultative
27. Nurture call all high-value contacts
28. Talk about business goals with your prospects not requirements
29. Be comfortable with the fact that buyers "will find you" in the Web 2.0 World
30. It’s all about social-networking….provide the social community and you will build a network of followers, prospects, customers and yes even a few enemies

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Thursday, June 4, 2009

How Generation “Y” Killed Cold Calling and Gave Birth to Credibility

Every generation brings with it change. If you and the way your company sells doesn’t accept and go with the trends of each new generation, you will become extinct. Welcome Generation “Y”. I’m not going to spend any time describing this generation, but if you want to understand them fully visit www.jasondorsey.com or read his book “My Reality Check Bounced”. It’s on my must read list for anyone who wants to understand how this new generation thinks, how they operate and what they expect. Once you understand them you will be much more effective at selling to them.

It is because of Generation “Y” that we are now talking so much about Web 2.0 today. Web 2.0 can be characterized as facilitating communication, information sharing and social communication over the internet. This is not only how they communicate, it is also how they buy. People are looking to social-networking sites to do the majority of their homework. Take Bazaarvoice for example. Bazaarvoice is a local company here in Austin that is making headlines daily by providing UGC (user generated content) for major brands across the globe. They understand completely that people/prospects want agnostic, third-party advice and recommendations prior to engaging with any sales folks. The good news for all of us in sales is when they do come calling; they are highly qualified leads and more than happy to talk with a representative from your organization.

Nurture calling, not cold calling is the most effective way to sell these days, especially for small to mid-sized SaaS companies. It’s the old “build it and they will come” mentality. Build the community, establish credibility and watch the really qualified leads come in. These are the types of leads that you want to call in to. Picking up the phone and calling prospects is an absolute must, but you have to realize that people today don’t want the cold call, they want the nurture call. A call that offers additional information pertaining to their initial interest or information specific to their industry or role - you know, something that actually means something to them.

The key for your company is to create a community destination for all of your prospects. Engagement coupled with best-practices content, testimonials and reviews is how you stay connected with all prospects very early in the sales process. Just because you’re not calling them doesn’t mean that you’re not communicating with them. In fact, this is how they prefer to communicate. Prospects need a place to share success and failure. A community that is available for everyone, you can't be scared of open and honest feedback, in fact some times negative feedback can be looked at as valuable information when enhancing your product or services. The feedback is, after all, what YOUR market is telling you they want and need. They want to talk with peers prior to talking with you. This is where a great marketing team comes into play. Building a website that acts as a community establishes credibility, which produces results. Results for all of us inside sales teams are qualified leads, which turn into qualified opportunities, which turn into revenue.

It is imperative that you establish creditability. Your company needs to be perceived as an expert in your field either from a functional standpoint or an information standpoint. Not all products can be as viral as a Google, but Google’s success can be attributed to the fact that people bought from friends or from a network of recommendations. The success of Google is really what Web 2.0 is all about today. It’s this idea of letting users do your marketing for you. Word of mouth is king.

So focus on the community or building a website that acts as a community; provide white papers and host webinars all geared towards your industry, not your solutions. In fact, it’s better if all content comes from industry experts outside of your company. Be the epicenter of valuable information for everyone in your field. Build this credibility and the customers will come. Google didn’t worry about how they were going to make revenue at first; they wanted to be the de-facto search engine. They were the best functional search engine out there. Once they got a huge following, they then said ok time to start selling add space, applications and o yeah a platform to all their devoted fans. Don’t focus on how you are going to make money, focus on building a following.

I would love to hear from others on how they built out their communities to foster this new approach to sales…..please share.

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Tuesday, June 2, 2009

Thanks to SaaS, Inside Sales Teams Are Now Vital to the Organization

SaaS has not only transformed the way we do business, it has also elevated the importance of a great inside sales team. Inside sales has grown from an extension of marketing to a true extension of the sales team. Inside sales once had a negative connotation both internal to the company and to the external world. Don't believe me? Ever been cold called? Yeah if you ask CEO’s and VP’s if they think their inside sales team is important they will say yes, but ask them what they do and they will inevitably say, “they bang the phones and get leads for our sales guys.”

If your inside sales team is just blindly banging the phones, then I'm here to tell you that you're wasting company money. No inside sales department should be cold calling. The true value of an inside sales team is to sell. By selling I mean one of two things: either they are nurturing potential buyers throughout the entire sales cycle in conjunction with a sales director and selling your brand/credibility or they are managing their own pipelines and closing business themselves. Selling has essentially become a nurturing process. The inside sales model you select is dependent on the goals of the company. Do you need a focus on building a pipeline or do you need a focus on closed revenue? You can look to your inside team to do one or the other or even both. All models work. It just depends on objectives and where your company's product is in its life cycle. Calling prospects is a must, so I don't want anyone to think that they don't need to pick up the phones. There is a time and a place and I will go into this in much more detail in another article, but I want to stress the importance of nuturing in this article. It's the Web 2.0 way.

Prospects are having to be nurtured for longer periods of time given the state of the economy and a fundamental change in buying behavior. Prospects need and want to be nurtured. This being said, there should be no difference between the skill sets of your inside sales team and your outside sales team. Recruit, interview, hire, train and pay folks as if they were the best outside sales director money can buy. In fact, the majority of your sales team should be inside sales.

Companies looking for SaaS solutions want to buy online and they are becoming very comfortable with an online/remote sales process as well. Gone are the days where face-to-face meetings are critical, especially for small to mid-sized SaaS companies. Yes...there will always be a need for the classic "outside" sales role in any organization, but 80% of business is now being conducted over the web. Salesforce.com is the poster child for success when it comes to creating a great inside sales team. The overwhelming majority of their sales folks are inside and never travel. They are living proof that SaaS vendors can and must be able to sell their products via an inside sales team.

What are your experiences with inside sales, now that SaaS has become so main stream? Are you noticing a shift to more of an inside sales model?

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We Just Built the Next Google, Now How the Hell Do We Sell It?

I have read a bevy of white papers, sales books, and marketing slicks over the past 15 years and not once have I read one that speaks in common every day language. That being said, I’m going to venture off the proverbial path most traveled and talk to you all as if we were two friends sitting at a local Starbucks discussing how we are going to set-up a marketing and sales team to support the newly developed $10 billion dollar app.

SaaS has revolutionized the way we deliver software. Unfortunately, software delivery is just that, software delivery. There is an entire integrated process that needs to be in place in order for the company to succeed. Most small SaaS companies have focused exclusively on building an offering and have not spent much time thinking about the internal processes required to market, sell and support their SaaS offerings. I’m here to tell you that’s ok. You’re no different from most companies out there. But this is where the complacency ends. If it does not, you will be like every other failing SAAS vendor out there.

We have entered the world of social marketing, a refreshing evolution from the Selling to Vito days if you ask me. If buyers and their processes for buying have changed, then your internal processes for marketing, selling and supporting this change have to as well.

My goal with this blog is to create a community of folks who share ideas and thoughts on everything inside sales related. What works and what doesn't work. I will create a series of posts in the days ahead sharing what has worked well for me and I am excited to learn from everyone.