The Perfect SaaS Inside Sales Team

Since I have been asked several times over the last 3 weeks on how to go about creating the perfect inside sales team for a software company, I thought I would take this opportunity to share with all of you my thoughts. On the highest of levels it's really quite simple.....

The "right" inside sales team depends on where your company/product is in its life-cycle, whether your product can be sold remote and the expectations of your targeted market. These 3 factors should determine the business objectives of the inside sales team. When your inside sales team is delivering on clearly defined objectives, you have set-up the "right" inside sales program. Notice I didn't say "perfect" because odds are you can always improve upon how you are doing things. "Perfect" is an absolute and I don't believe in absolutes.

Example #1 If your a software company that delivers an install product or even a SaaS product that has a sales cycle of 6-12 months and the product can not be sold remote, then you probably have a team of outside sales executives doing the selling. This means that the biggest bang for your buck is an inside sales team that generates highly qualified opportunities and assists in the nurturing process of all leads and opportunities. In this scenario I feel it's most beneficial to create an inside team that is a true extension to the sales executives. This gives your prospects two very credible contacts for any questions, concerns and assistance needed during the entire sales cycle. Their compensation plans should be directly aligned with the sales folks they are supporting. I like to break up the comp plan into 3 components: 60% on opportunities, 20% on a 60-day rolling pipeline and 20% on closed revenue.

Example #2 SaaS vendors that offer a product that can be sold remote, should have totally different business objectives. This team should be focused exclusively on closing revenue. For this type of team I like a 40% base and 60% commission structure. For every dollar of monthly recurring revenue sold, they should get $1 of commission. Since it's most likely a 12-month contract this equates to about 8.3% (1/12) of commission.

Stay tuned for one of my future articles on how to go about creating a solid comp plan for your inside sales team. I will include cost of sale and base salary calculations.

Inside Sales Teams Must Communicate Emotion

Companies are trying everything under the sun in order to get pre-sold these days. I'll explain pre-sold or pre-qualified as I like to call it later, but one way to get the word-of-mouth engine humming is for all inside sales teams to learn the art of communication through emotion. By communicating emotion and trust you get people to listen. It doesn't matter if you're a SaaS company or an install software company, you still need to deliver on this basic human principal. The Web 2.0 world is clamoring for an emotional connection. If they don't get it from you, then they will look to your competitors.

Inside sales team objectives vary from company to company. Some companies have teams of cold callers, some have folks who work on getting appointments set for sales directors and some sell from A to Z by themselves. All teams, regardless of their business objectives must share this quality of communication. If you tap in to people's emotions they in turn will turn to the biggest channel of communication....known as the world wide wide and share with their friends about the connection and trust they have for you as an individual, your product and your company. The inside sales group is usually the first person from your company that the prospect talks with. I want my team prepared. How about you?

I understand that this may come across as strange to a lot of "highly experienced" sales folks, but it is exactly what buyers are asking for today. This necessity to communicate on an emotional level is only compounded in the social-media world because of the power of word of mouth. You can make a 1000 calls a day, send out 1000 emails, have 3 hour phone conversations and do mass-marketing campaigns until your blue in the face, but it will all amount to a hill of beans if you're not connecting on an emotional level with your market. These attempts will get you heard, but it will not get people to listen. The only way people will listen is if you're hitting their emotion button. Once you press this "emotion button" with one, watch the good word spread. This person will spread the word on how much you helped them to all of their network. Word of mouth referral is the best pre-selling you can do. By pre-selling I mean that your company and its product is coming pre-qualified or pre-sold by way of a personal recommendation.

This may sound a little funny to some of you, so let me give you one example of connecting on an emotional level with a prospect. You're a company that sells IT Governance software and you're an inside sales rep who is talking to the Dir of IT. You have had multiple conversations with him and from a technical standpoint your company is going to be able to deliver on all of his business objectives. The golden gem on a personal level that you uncovered during your conversations, is that his inability to monitor his entire network efficiently means he has to work a lot of weekends. You also know he has two kids and both are into sports. Because he has to work on the weekends he is missing his daughter's softball games and his son's soccer matches. This is the emotional connection and the biggest value-add to your prospect. He wants to see his kid's games. Now let's jump forward in time. Your software is installed and he has gained tremendous real-time visibility across his network, has spear-headed problems before they impact the performance of the network and his boss couldn't be happier. He also no longer needs to work weekends! You follow up with him and ask him how his daughter's hitting is going and his son's corner kicks....the best answer would be an answer!!!! He has an answer now because he is at all of their games. Your software, has delivered for him on a professional level and more importantly on a personal level.

Hey...maybe I'm on to something here. Picture this...you know how on all company websites they have a ROI tab....well maybe we should have two levels of ROI: one level for the typical hard ROI numbers for the business and the other dedicated to emotional ROI. My example earlier might read like this..."By selecting ABC Company's product I was able to decrease my compliance costs by 50%. I also no longer have to work from home on the weekends fixing network problems. This allowed me to watch my daughter hit the game winning run in her softball tournament last Saturday afternoon."

"It's not personal, it's just business" going......going......gone!

Seth Godin does a great job of talking about this in this short video clip "The Mindset of a Winner"

Twitter Usage for Inside Sales Teams

I am a huge fan of elevating the game when it comes to an inside sales team. In this article I'm going to propose some ways in which your inside sales team can utilize Twitter. Before implementing any of these methods it is crucial that your company first establishes a public web participation policy. Here we go....

When it comes to the usage of Twitter for business, there are essentially 4 main buckets: Direct, Indirect, Internal and Inbound Signaling. I will focus on Indirect usage by inside sales teams. Indirect is basically empowering the inside sales team to tweet as individuals so as to improve their personal brand. Look at it as a channel of establishing credibility as individuals.

One of the jobs of inside sales teams is also to establish relationships and trust, which leads to credibility. Once the employee establishes credibility, by default so will your company. Here is an example: Say one of your inside sales reps tweets about a best-practice in your industry or tweets a video of an industry expert. Someone sees the tweet and applies it to their business. Or maybe they just thought it was great content. This prospect now views your inside rep as a valuable resource. The prospect then decides to click on the inside rep's profile to see where they work. The prospect does a little more digging into the company and realizes that your company provides a product or service that they could use at their own company. Who knows...they may even re-tweet your best-practice to their entire network of followers.

The usage in this case should be focused on providing peer-to-peer value, not the direct promotion of your company's products/services. This is called "Direct" tweeting and these kinds of tweets come from the company, not the individual. So that's it. Get out there inside sales teams and start tweeting as individuals.... and for the love of the Queen.... make certain your following the company's public web participation policies!

Here are a few more carrots:
1. Great way for them to keep tabs on the competition
2. Great way to share trends in the industry
3. Great way for them to learn more about your space in general and what is being said on the social-media wires

p.s. Here is a link to the Gartner report highlighting the buckets

Level-Setting Expectations Between Marketing & Inside Sales Departments

Historically Marketing and Inside Sales departments tended to be on different pages. Even worse, they were on the same page, but reading different books. Marketing and Inside Sales should be joined at the hip and have one of the best cross-departmental relationships within any organization. The desire to achieve Web 2.0 status has elevated the importance of this relationship. A great first step, is the process of agreeing on what is considered a contact and what is considered a lead.

My best friend these days is my Marketing department. Marketing used to focus on pumping out as many “leads” as possible to my Inside Sales team. The more “leads” generated from a campaign; the more successful it was viewed. The problem was Marketing’s definition of a lead was drastically different than Inside Sales. The $10,000 question was, “What constitutes as a lead? We collectively sat down and agreed on our own criteria and it has made a world of difference for both teams. It also sets the proper expectations with C-Level folks. Together we are now actively differentiating between a contact and a lead. Contacts are just as important as leads because contacts are the pipeline for leads. If your company is going to put a lead-nurturing process in place you must place equal emphasis on both. Do this and you are one step closer to being a Web 2.0 company.

Take things a step further and start ranking/scoring all contacts. Contacts grow up to be leads. The key is to nurture to the individual contact and where that individual contact is in “their own” buying cycle, not to the masses. When and only when they reach a certain level, do they constitute as a lead. Because there is such a focus on nurturing contacts very early on in the buying process, inside sales and marketing teams have to work closer than ever before. If you make this shift in the way you treat each contact in your database, you are properly adjusting the way you market to Web 2.0 standards. You have also changed the dynamics of the relationship between the two departments. They key is to get both departments on the same page of the same book.

Here are a few Inside Sales trends:

1. Corporate hiring of outside sales reps has leveled off at a .5% annual growth, while hiring of inside sales reps is growing at lively 7.5% annual clip (James Oldroyd)
2. By 2012 nearly 800,000 more companies will host inside sales teams (James Oldroyd)
3. Buyers are finding sellers today, which is a fundamental shift in the sales process.
4. Companies once marketed to the masses, industry verticals or by job title. Now sellers have to personalize content and marketing initiatives based on an individual’s online behavior.
5. Don’t chase everything. Have faith in your marketing drip campaigns and focus on objective criteria (lead ranking) to determine who is ready to buy and who is not. This also dictates when to proactively call prospects.
6. Lead nurturing has placed more of an emphasis on getting contacts in the marketing drip.

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.

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

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!

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?