How B2B SaaS founders can use these 3 core principles to build a winning sales strategy in their business.

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See below the recording of the webinar and the written out text.

We recommend watching the full webinar, want to quickly know about the 3 core principles, see the table of contents on the right.

Intro to Webinar

Joran  0:08 

Thank you for joining our webinar today. We’re going to talk about startup sales secrets. The title is also going to be how b2b SaaS founders can use these three core principles to build a winning sales strategy in their business. We’re gonna have a guest today, next to being still in a sales role at the moment he gives consultancy to other companies. He’s written a book and actually found time today to join us on this webinar. Thank you, Gavin. Floors, all yours.

Gavin  0:39  

Thanks. Sure. Yeah, well, everyone, thanks if you’re watching this webinar, thanks for tuning in. Let’s get into it.

So today, what we’re going to cover is the difference between sales strategy, methodology, and process. And I think that’s really key when we talk about developing a winning sales strategy.

We’ll talk about five things that we have backward when it comes to startup sales that we really must unlearn. Or startups really must unlearn to make progress, then we’ll talk about, we’ll get into the three core principles.

So, the first principle is why becoming an expert in your buyer’s decision-making journey is vital for b2b startups. Then we’ll talk about how to investigate your target markets and their tiers within those markets as well. And it’s, you’ve probably heard some of this stuff before, but it’s a little bit different take on some of the literature and some of the theory that’s out there. And also, how to use a technology adoption lifecycle to build your sales strategy, that’s key.

Intro to Gavin Tye

So really, let’s start with who am I. I began selling b2b SaaS, in 2015, for an Australian tech company out here in Australia called Red Eye. Our average ticket price was $20,000 per month in recurring revenue, and we were typically chasing, you know, five-year terms, five-year deals. And, as you can imagine, with such a high ticket price, any flaw in our process was really highlighted. And it really forced us to think differently, and me to think differently about sales.

I learned the typical sales processes and methodologies aren’t enough to close sales without a strategy. And I learned that over many, many, many meetings, hundreds and hundreds of meetings, applying the methodologies that are out in the market today, and just not getting the outcome that we were hoping for. And it wasn’t until we applied the right strategy, then we were able to make consistent, repeatable process progress.

Selling b2b SaaS online was going to need to be approached differently. And that’s one of the key things I learned as well. Having the motivation to sell wasn’t enough, I needed to figure out how to how to get my target markets to buy. And we’ll talk about that, that’s really the core of this presentation today.

But what I discovered in my journey is people all over the world, in our personal lives, and in our professional, follow the same process to buy something, the mindset journey, the change in our mind to buy something. And once I discovered this, I was able to reduce the length of sale for the business I was working for by upwards of 75% for an average deal size of around $2 million in revenue, so they’re considerable deals, but we were able to reduce the sales cycle from some instances, from three and a half to four years down to less than 12 months. And it’s by applying these very some of these principles in this presentation today.

Definitions used

So first of all, let’s talk about the definitions. And we’ll talk about strategy.

So, strategy is a plan of action designed to achieve a long-term overall aim. Now, if you think about it in the military sense, the art of planning or directing overall military operations and movements in a war or battle. So, we can actually take many lessons in sales from military scenarios and also in other areas as well. So, we might talk a little bit about that today. As a startup, if you’re entering a competitive marketplace, you’re effectively going to war against existing competitors. And I think that often gets lost in the startup community, we really have to outsmart our competition. Now, methodology.

Methodology is defined as a system of methods used in a particular area or study of study or activity. And that’s different to strategy as you can see. Now and process again, it’s a series of actions or steps taken in order to achieve a particular end. And the same sales inside of business has room and needs or three, but often a business is missing the strategy. Now, this is a common mistake I’ve seen in many startups when it comes to sales. Most startups confuse methodology or process with strategy.

And I’ve learned this the hard way, I would follow methodology, step by step collect all the information that I needed to collect, in line with the methodologies I was following. And they still weren’t taking action. And I, I didn’t have anywhere to go, I ran out of tools in my chest, because I was following a methodology. And I didn’t know where to go from there.

So, methodology isn’t enough. People out there, or startups are just doing what everyone else is doing. They’re, developing a go-to-market strategy or go-to-market plan, or, you know, doing a certain amount of calls or saying, hey, do you want a demo. And that’s exactly the same as every other, nearly every other competitor that’s in the market. So, you’re really not differentiating yourself from a sales strategy. And that’s from the sales process. And that’s one thing a startup must do, they must differentiate themselves and add value from the outset.

They don’t pay the right amount of attention to developing the right strategy.

It surprises me that this isn’t paid more attention to, and I can appreciate founders are wearing multiple different hats, how to build the business, how to how to build the product, how to engage with stakeholders, and sales is one of them. And often it’s not their strongest suit. So, they’re naturally drawn to the other than not drawing attention to areas that they’re stronger in.

So, founders don’t own the strategy. If you’re a technical founder, I’m going to assume that it’s not uncommon for founders who are technically minded to think that they don’t have any value to add in the sales in the sales process. And I’m here to share with you today, that is completely false. I think a founder is key to owning the sales strategy within a business. Their technical knowledge about the problem is going to be key to getting those clients to buy what you’re offering.

And also, the only guarantee within a startup is a founder is going to be there for long periods of time. And startups, people may come and go, they may come for three, four, or five years, or they could come for six. And they really should implement and build the process or the strategy while the founder owns it and has oversight. And most of all, people don’t focus on the right strategy.

And we’ll go through that today.

Joran 8:02

Yeah, and we got a question for the previous slide. Because we have startups in multiple phases some don’t have a product yet, or they have a product they want to get started. Some already have a couple of clients, others are a bit further. As you mentioned, the strategy doesn’t get enough attention. When should you think about having the right strategy or at least building a strategy?

Gavin  8:26 

I think you should think about it from the outset. Like if you don’t know, if you don’t have any clients, let’s say you have an idea to start building a startup. And you start developing and you don’t have a product to even take to the market yet.

You should really start engaging with the market. Your strategy, while you’re still forming, it would be to engage with and meet with as many potential customers as possible to share what I’m doing, to try to build interest, to build rapport, and to make connections in those target industries or markets that you want to go to.

Because the last thing, let’s say for instance, you want to, it may take six months for someone to want to buy you if you take a year to build your product. And then you start engaging with the market. It’s another six months if not close to the two years, that’s two years.

You should be engaging with the market early and they’ll buy into what you’re doing and support you and be interested in what you’re doing. That could be a strategy at the beginning because you want to actually make sure you’re on the right track.

Build interest, share that you have domain expertise. And as you go, you can build it out and build that strategy out. No one has the right strategy; the strategy always evolves. And you only need to look at the COVID situation in the last two years. The whole way we need to approach things has changed. And I think sales is a practice, I don’t think you achieve it and you like it’s a skill that you have, I think you always need to evolve and iterate. Does that make sense?

Joran  10:00  Yes, definitely makes sense, thank you. 

Gavin  10:05  

What is a Sale?

So, here’s a question for everyone. So, at the like, what is a sale? Your what, what in your mind? What is the sale? What does that mean to you? And what do others say when you think about a startup that? 

Joran  10:23  

I mean, when I look at a sale as a founder, it means that somebody buys my product, and I get money in the bank account? Like that’s, for me a sale that I think everybody here will agree on that.

Gavin  10:35  

Yeah, look, the common thing is closing a deal, or calling them calling prospects or revenue, right, or runway, you know, or the success of the business, really, at the end of the day.

A sale in any form is a consequence.

And it’s a lag indicator of something else happening. And it’s really a consequence of someone deciding to buy. Now, when I started in my role at this company called Red Eye, we had so much interest in what we were doing, we were clearly a disruptor in the market. But interest never turned into a purchasing decision.

We were waiting and all their words were saying yes, we’re going to buy you but they just weren’t making that purchase. And it doesn’t matter how much you want to sell, or how much value you think you have. It does not matter; you cannot do anything until someone decides to buy. And that’s true for anything, whether it’s a $50 pair of jeans, or a million-dollar house, a sale cannot take place until someone decides to buy it.

So, this whole process of this sales strategy that we’re talking about today is if we can’t. Selling doesn’t work online, particularly. So, we need to work on how do we get people to that buying decision?

How do we get them to want to buy us, and that’s what we need to focus on as startups to differentiate ourselves from the beginning? And once you recognize that, then we can control more of the process and reduce the length of the sale, because we know the journey they’re going to go on. And everything changes from that instance. Does that make sense? 

Joran  12:17  

Yeah, and I guess, one question because I mean, everybody has it right, as you mentioned, people are gonna say they’re gonna buy it and not gonna do it. But do you then consider that a sale? Or is it for you still a sale when somebody actually hit that purchase button?

Gavin  12:34  

There’s two different types yet a sale only really occurs when you get the PO or you get the contract, right? Or it’s nothing. Anything can derail. Before that even in my day job now, I’m waiting on a million-dollar contract they’re saying yes. They’re saying yes, we’ve gone through the terms and conditions. And they’ve all gone. Our legal teams have gone yes, we all agree on it, but we just haven’t received that signed contract. So, it’s still at risk. Okay.

But often in a business, what happens in a business is they’ll make a purchasing decision well before that day. So, you’ll know or they’ll make a decision that you may not be aware of three, four or five months before. What they’ll do is follow the business process second, so they’ll buy with a motion first. And then they’ll follow up with the business process second, and you need to look out for that.

You can see it if you know what you’re looking for. But it only counts really, when you’re on the right track to a sale, but anything can be derailed, and we need to actually have a good defense to know and make sure we cover a lot of those areas of risk. And the Medic book by Andy White is a methodology that says, hey, we need to cross off all these to make sure to increase our chances of a sale. It’s a methodology and not a strategy if that makes sense.

Joran  13:54  

Yeah. 

Gavin  13:54  

5 Things we have backward in sales

And that’s where we use methodologies to tick those boxes to increase our chances. And we’ll go beyond that. So, let’s talk about the five things that we’ve all had backward when it comes to b2b startup sales.

1. A startup salesperson’s role is to sell

So, in the early days at a startup, a startups person or startup sales person’s role is to sell. Now, I think a sales person’s role is one of the hardest inside a business particularly a startup. To do, you have to go and create a market for the product, you have to go and engage with the market to try to get them to buy you, it’s really a problem-solving role. And it’s not about selling. Sometimes, in an early-stage startup, the best tool in the sales process is the founder.

The founder, is so technically minded and has, has an aura around them that my role in the early days when I was starting is I would position set up the sale, and I’d bring the founder in to close it, because he was the technically minded one. And he was the one that always wanted to sign off on the contracts. But I, that was the problem, my problem in getting them to buy as he was the best tool in my tool chest to get him to buy it. So, a salespersons role isn’t to sell, it’s a problem-solving role.

And there’s many problems in the sales process. And a salesperson found out whatever hat that is, it’s the same that applies, okay.

2. Businesses that aren’t meeting their revenue targets have a sales problem

Now, if businesses aren’t hitting the revenue targets or have a sales problem, I can guarantee Joran, in your business, if you’ve got 20 new clients signing up for your business tomorrow, you could do that, you would make it work. You would get those 20 customers on board and you might have a delivery problem, you don’t necessarily have a sales problem, right? Because you could make those sales if you want to. That’s not your issue. If we go back to a sale as a consequence, what you have well, what startups have is a demand problem. There’s not enough demand for the startup. And that’s the real issue. Because if you have demand, you can make the sale. Okay?

3. Startups must go out and sell to hit their revenue targets

Now, startups must go out and sell to hit the revenue targets. No one likes to be sold to particularly online these days. If you go out and try to sell someone on the first call, they just won’t take your call again. It’s not that’s not what we need startups to do, what we need to do is go out and engage in the market, share, share our vision, share our journey and start building relationships.

The higher the value SaaS that you have, the more relationships, the more you have to spend on building relationships. But you also have to build relationships one way or another. To have them continually maintain as a domain. Keep using you as a business, right?

4. Sales is purely a numbers game

Sales is purely a numbers game. It’s, it is a numbers game, once you figure out the strategy and understand. I’m gonna swear here so you beep this out if you want. Have you heard of the saying shit in shit out? Like if you have a very bad process. It doesn’t matter whether you’re, or strategy, it doesn’t matter it doesn’t matter how much you put into it, if you’re not capitalizing on understanding how to get them through the journey. It’s not the numbers game, that won’t do it. And that’s why you see people doing lead generation, they’re getting one, two, 3% reply rates on email cadences because their strategy is not working. They’re just trying to smash the top of the funnel, and hope some things come out.

5. If I build a great B2B SaaS product, customers will automatically buy.

The fifth one is if you build a great b2b SaaS product, customers will automatically buy. And unfortunately, that’s just not true. Sadly, business businesses have, they are set up to say no to buying things, they just can’t go out and buy things left, right and center.

Many, there’s been many great SaaS products that just haven’t understood how their target clients buy, and haven’t aligned their process or strategy to helping those clients through that, through those stages that they must go through.

You know, we’ll talk about this in one of the slides. But businesses sometimes need to create business cases they need to prove the value and you can either let them do it or you could help them do it. And if you let them do it, you are flipping a coin and hoping they’ll come back to you at the end of it.

Or you’re hoping that they see the problem in the full context that you offer and the chances are they don’t. So, what we actually do is need to help them through that buying journey and we’ll talk about that in the next principle. Before we go on from there, do you have any questions?

Joran  19:01  

I maybe wanted to add one more thing I wanted to ask your question where you kind of already said it but for your quote: “Shit in, shit out”, like even though if you are able to close this shit in this sense, your attention is gonna be awful, I guess because if you are going to close leads or sales which are not really a good fit, then at one point like they are going to churn which is bad for your churn rate, which your investors are going to complain about. So, you, even though you are able to close them, make sure you have like the ideal customer profile set. Also talking to CES.

Gavin  19:38  

Absolutely. And some, if you bring on a bad client, you will spend twice the amount or three times the amount of revenue they generate in managing that client. And they’re just not worth it.

One of the things, often salespeople are notorious of not caring what happens after they get the sale. But with SaaS businesses, the sale is just the beginning of the relationship. And you need to deliver, you need to really ask yourself, how do we want the customer to be, when they sign that contract? You want them to be super excited, super enthusiastic, and see the value in your business from that contract signing and you go well, that’s a great end state to aim for. Okay, well, what do we need to do all the way back up the chain? And that’s another conversation for another day.

But I’ve seen the wrong clients come on board and they just suck revenue and time out of the business. Yeah, that’s a great, it’s a great point.

Principle 1. Become an expert in your buyers journey

So, let’s talk about principle one. So, my observation in seeing a lot of the literature online is, the problem with the literature is it’s really good. They say to understand the buying journey.

But when you think about the buying journey, in relation to a SaaS product is they’re typically talking about what’s their journey;

  • How they interact with us on our business?
  • How do they interact on our website?
  • When they go to the landing page, they go to the product page, they go to a sales funnel?
  • How do they interact with our pages?
  • Or how do they interact with our company?

And it’s kind of true, but it’s missing a really critical part. Now, in being an expert in your buyer’s journey, it goes one step further and really understanding the buyer’s mindset and how to get them to a buying decision quicker.

So, because a sale is a consequence of someone deciding to buy, how your clients get to a purchasing decision, and how fast they get to a purchasing decision, is everything. And we need to do everything in our power to maximize our value in their eyes from the outset, and make them need us. And make them need us, open our eyes to problems that they didn’t know that we’re aware of. And that’s where our technical founder’s expertise comes into, they should know the problems faced after all, they’ve started the business based around it.

Regardless of the geography, culture, age, or gender, we all go through a similar mindset change in the way we want to purchase something. So how we make those purchases may differ depending on the circumstance. And we’ll cover that a little bit. So, it’s similar, it’s a similar path of a $50 purchase to a million-dollar purchase, we must see value for our money to make the purchase. Even for a $50 pair of jeans, if you think they’re only worth $10 from a bargain shop, you are not going to spend $50 on a $10 pair of jeans, right?

But you spend $50 on a pair of jeans, that is probably fashionable. And if it looks like they’re worth $300 or $400, you’ll say I can see the value and I’ll purchase. And the same as a million-dollar purchase, you need to be seeing a return on investment, however, you measure that or value for that purchase. Now with a $50 purchase.

This is more subconscious. But as you get a high ticket price, it’s what comes more into your conscious mind. But it’s pretty much the same. It’s the same journey we all go on. Now, and also because businesses are made up of people, they go through the same journey as well. And this is roughly this is roughly the journey we go on. So, let’s just say in your situation, Joran, you wanted to go on. You wanted to buy a house, right? So, you’re interested in buying houses, they’re interchangeable slightly.

So, your problem is, well, what do I want.

Do I want to live near the water? Do I have a big family? or you’ve got your dog, I know you’ve got that rescue dog and your partner. So you probably don’t need a five bedroom house. Right?

So, you ask yourself what you have. What’s your budget? What’s the problem that I have? Well, I want to buy a house and then you ask yourself I’ve got you to know, my girlfriend and my dog. I only needed two-bedroom apartment. Maybe three-bedroom apartment. I don’t want a yard, though I need somewhere close to a park for the dog. Okay, now I’ll go look at real estate companies to look at houses and then I’ll engage with a real estate agent then I’ll purchase. It’s the same when you have. I need a new pair of jeans. Well, okay, well, what’s the problem? Well, they’re ripped. Okay, well, I’m interested in this brand. Well, what do I need? I’ve only got a budget of $150 Blah, blah, blah. or I’ll have a look online or go look in the shop, engage with the salesperson, then I purchase, it’s the same.

It’s the same with a business, if they have a, we have a hitch, a human resources problem where we have with our payroll is not working properly. Okay, well, what’s the actual problem? Well, it’s doing this okay, well, what do we need to solve it? Okay, I’ll engage with the market, then I’ll purchase, and we all do the same thing. Alright. Does that make sense?

Joran  25:00  

It makes sense. But I have one question, because you have, specifically here, a $50 purchase is the same as $1 million purchase. I mean, I understand that they follow the same flow. But in the end, you have a lot more stakeholders, right? If some, if you want to get a new HR system, it’s not buying a pair of jeans, like how do you, I guess, see this differently? Like, where are those stake extra stakeholders in this path?

Gavin  25:26  

Yeah, so we’ll get to that in the next one in the next principle, but generally, people need one thing we need to recognize is they need to see the value, right? They need to see value in their purchase, right. And one of the difficulties with SaaS businesses is they’re often intangible. You can’t touch a SaaS business. It’s not like a car, you know, a car will get you from A to B. It’s not like a product.

Yet they’re often webpages and apps mostly like they could be hybrids of other things. So, they’re often a solution and we’ll get to that in a second. So, but what they need to see is the value, and one of the biggest mistakes b2b startups make is they assume that their clients know the problem, right?

So, we, assume the client knows the problem. And but they engage with the client up in this stage and say, Hey, we’ve got a solution that fits his requirements, but they haven’t actually taken into consideration that the client may not even understand the problem in their business. And they will never go forward because they don’t have the context. Does that make sense? And make no go? Yeah, so and we’ll get into looking at the multiple buyers in the next slide, in the next one up, the next principle.

So, if we know the journey that they need to go on, if they need to see value to make a purchase, then we can then maximize the value we offer. And because people must equate a value to a purchase, and particularly with SaaS revenue, what I think the numbers are they need to see a 10x to 20x return before they make a purchase decision. One to one or two to one three to one is simply not enough.

Well, like what I mentioned before, is one of the challenges is for b2b startups is they only demonstrate solutions. And that’s understandable. They’re building a solution to solve a problem. The founder of the startup or the startup has already gone through that problem journey. They’re at the solution stage. But if we think about a sale as a journey of the buyer, the buyer is not there yet. They’re still at the problem stage. Does that make sense?

Joran  27:35  

Definitely makes sense. Yeah. 

Gavin 27:36  

So, if here’s to give you some context, now let me show I’m not particularly interested in cars. But this car, I said, Yeah, look, it looks pretty good. Like I’m, I’m, that looks like it’s been looked after. But I have no context to where it comes from. So, I don’t know if this is valuable or not. But if I show you how it was before they started working on it, then I’m like, holy cow.

That is, such a huge improvement. Right? And a startup is essentially the shiny car. And they’re coming in and fixing a broken process within a business. That’s essential. That’s all. That’s all a b2b SaaS business is. It’s a process improvement inside a business. Right? But if they’re only talking in solutions, how can they show or demonstrate an ROI or the value if they’re not focusing on what how broken the current problem is? Or how bad the current problem is? Within a business?

Joran  28:37  

Yeah, and, that’s also what you mentioned that makes them need us as in creating urgency to actually get them to buy a product, right?

Gavin  28:46  

Yeah, your biggest startup’s biggest competitor, is not the existing competition. It’s indecision. So many times I’ve been at this particular when I was selling high-value SaaS, right, like, they weren’t paying for a product they were using Dropbox or, or a file share system. Why would they want to spend $1,000,000, $2,000,000 on something they’re not spending money on?

The only way to get them to move from that is to show them how bad their current problem was, like, when I would do it. I would build that problem out into a million dollar a month problem by direct and indirect costs.

And they were like, I cannot stay in that state anymore. I have to move towards a solution. So, we have to create movement. And when there’s movement from one state to another, then there’s opportunity. Without that movement, without that need to move, then you really, the business has no opportunity, it’s really, people just don’t see that there’s a problem, and they won’t pay to solve something if it’s not a problem. 

Joran  29:30

Really good advice.

Gavin  30:04  

Principle 2: Know your target markets and tiers

So, this is how we move, let’s move on to principle two now. So, principle two is really no need to know your target markets and tiers. So, this is a diagram I created just to break down people or understand your target market. So, I’ll talk about the revenue generated per industry, you know, all those kinds of things. But everybody does that.

So, what we really need to understand is, what are the factors that will affect us to make a sale or consistently make sales in that industry. So, every market is different. And so are the drivers in that market. So, every market has a different tier. So, if we talk about tier one being what you mentioned before, large organization, government organization, water power utility, you think of a tier-one, like that, tier two maybe a mid-tier organization. And a tier-three is a, you know, maybe a subcontractor or owner operator or something like that within a market.

And every business has tiers within the markets as well. So, you may, as a b2b startup, enter a department inside a larger organization, that may be considered a tier-three in a business, we can break this down even further, the decision-making processes are less complex. But as you go up in the organization, it gets more complex, which we’ll go through in a second.

So, as you go through the tiers, as you can see here, this arrow on the bottom, their buying process complexity changes. Now, what I mean by that is, if you’re a b2b startup, and you’re only selling to one person, it’s really b2b, but it’s still a consumer, it’s a consumer type of sale, one person can make the sale, they can quickly make a decision. And you would expect that to have the total addressable market would be much larger. And there’d be far more competitors in that industry as well.

But you would also, the time to win a deal would be low, and then you would expect the revenue to be lower as well, I’m just skipping through here a little bit. But in those tier threes, you would expect the features and outcomes, the organization or the person in that tier three would be lower as well. If you think a tier-one, the tier-one organization is going to require ISO 27,001 Certification.

It’s going to require regular pen testing; it’s going to require far more stringency on your process and your features and outcomes in your business and what a tier-three would ask if that’s a comparison to make. So, you would also expect that time to win a deal would get longer as you go through the tiers. And the real reason that a deal goes longer is that they have to go through different stages in a business.

In tier three, a person may make the buying decision when you speak to them they may be able to make that purchase decision. Because it’s a lower ticket offer a tier two, you may be speaking to a manager who has to go to the owner or has to justify the cost a little more, they have to make sure they get a return on an investment. And then when you go to tier one, if you went to a tier one business and you say hey, I want to spend a million dollars, the CEO or the operations manager, their responsibility is to say no, we are not going to spend that money until have a demonstratable ROI.

And a business case built around the benefits that we will get from that product. If I’m gonna spend a million dollars, I want to see a $10 million return or a $10 million de-risk in the business. And that’s why the process takes longer because the gates I need to move through is longer. Does that make sense?

Joran  33:26  

Yeah, and I think you know, touchback on what you said before as in. If it’s a million-dollar purchase, then it needs to do 10x. So, you need to already get that problem out there. At the beginning.

Gavin  34:07  

Yeah, yeah. And you need to focus, the higher the ticket price the more you need to focus on a problem, to be honest, it takes you really need to because they’re going to do a competitive scan. They have to do a competitive scan of the industry.

So, if you don’t help them, someone else will and then you’ll be at a disadvantage. So, as you go through the tiers as well, the total addressable market decreases, so you need the revenue to be higher in these higher tiers, because they don’t come up very often, the length of sale is longer, they’re going to require more features.

So, you really need to understand where you’re where you’re best suited. So, and also the competitors decrease as you go across, but you’ll, they get more sophisticated, and they get more, they get bigger, like the SAPs of the world only play in this space, right, or the auto deaths of the world and things like that. So really need to understand b2b startup to go.

The common mindset is, hey, we’ll just go in and we’ll sell to a big company and we’ll be set. We’ll be a billion-dollar unicorn. And it’s often those competitors do everything in their power to stop you from being successful in those tiers. And it’s like, it’s like a war, they don’t let you, they don’t want you to be successful because you are stopping them from being successful. Okay. So, what we need to understand as a startup, what you need to understand as a startup is where do you have a competitive advantage.

We really need to understand where our feature set or where your current feature set or the outcomes that you provide through your features can create a competitive advantage in the Tirol, the market that you want to enter. So, you need to understand where you have an advantage over your competitors. And there’s nothing worse, and I’ve done it before is I’ve created a state where the client has to move away from the current state, and they’ve gone straight past our business to a competitor.

Because I hadn’t, I thought it was naturally going to come to us. And what I did is I basically created an opportunity for a competitor. So, you need to understand, once you do an assessment of the market you’re in, you need to ask yourself, are you engaging in the right tier, and other drivers in the market so that you in the market tiers you can capitalize on currently in Australia. And in my role in the day job, I sell workforce compliance software, the Australian Government passed an act called the Critical Infrastructure Act Amendments.

So, it means there are over 1000 large clients who operate critical infrastructure, have to implement workforce compliance or, have to monitor critical staff and suppliers in their supply chain. So, this will be an unproven visit unprecedented movement from their current state to a new state, that our CIS, our software has the ability to help them on. So, I’m tying all my efforts into the drivers in that market to help them from their current state to a newly proposed state.

But I’m, I’ve only done that because I’m investigating the markets. And it’s really only affecting the upper-tier twos and tier three ones of the industries that we operate. So, ask yourself, are there drivers in the market like, you know, low emissions, or you know, global warming or electric car industry, they’re drivers and industry that startups could potentially capitalize on, to drive people to a solution like this.

Sorry, and entering at the right point of the market can increase your sales success as well. And it can help increasing more sales often to build an out strategy and process then as you learn, as you get one client, we learn, take the learnings from them and build out our strategy to apply to the tomorrow’s client, and, and so on, and so on.

And over time, you will add all the pieces to the strategy, and it’ll start forming over time. Now, what I want to do is give you an example here. So, this is a potential market where a startup may have a competitive advantage in the upper part of tier three, or just into tier two. But if they’re engaging, here, in the market in tier ones and going, hey, we’re gonna close all these tier one clients, but they don’t have the features or the functionality that they want.

But they can fit competitive advantages actually down here, then they actually won’t win clients. And that’s why we need to understand the tiers, the buying process complexity, what they want in those markets, and engage where and when we can deliver those outcomes that those markets expect. Does that make sense?

Joran  39:09  

Yeah, makes sense. There was going to be one question like, how do you find I guess, in which tier you’re going to enter the market? You kind of already answered that by looking at the features you have and what the tiers are looking for. Right?

Gavin  39:23  

Yeah, and you know, remember before when you asked what do we do, what do you do when you don’t have a sales strategy. So, one of the things I said is we need to engage with the market. You need to speak to as many people as you can and share, share what you’re doing and what your vision is, and, and your roadmap and how things should be. And if you, do it, right, the market will tell you if they’re interested or not.

Like, you need to, you can only come up with this theory, but you need to go out and actually speak to the market. And that’s why what we need to do is, engage with the market, have conversations, share our vision. And if you, do it right, in the next principle, we’re talking about the innovators, those innovators will present themselves. And say yes, I’m interested in this and now on that, and you go, okay, well, that’s interesting. I’ve seemed to have traction at this type of organization, can I duplicate that? Okay, well, that’s the tier that I should enter.

So, all these ties in together, these principles, they all are interrelated. And what I want to do is I want to talk about a case study, this is a case study when I worked at Red Eye, which is an Australian engineering drawing management company. And PlanGrid is an engineering drawing management company based out of the US.

So PlanGrid was founded in 2011. It first started with a simple mobile app platform, and it, the functionality afforded them to enter tier three, the tier three market. So, they were actually selling to plumbers, builders, domestic builders to help them manage their engineering drawing plans on site, where before they were using paper. So, it was a simple feature set that suited that market, so they can engage the market and get to revenue quicker.

And then they entered different tiers as they developed functionality and their reputation evolved, they moved up the tiers like what I was talking about before. So, if we just go back to this tier before, they knew, they knew their competitive advantage was here, their feature set was here.

Their total addressable market was high, but also so were their competitors, but what they did is they entered that market. And as they actually developed features, then they moved into different tiers. So, they started in 2011. And in 2018, they were acquired by Autodesk for 875 million. And now, at my time of leaving Red Eye, they were starting to lap into the tier ones, tier-one organizations over here in Australia, so they were moving up the tiers. Now I want to give you the contrast of Red Eye. So, Red Eye was founded in 2012.

The founder decided to only develop enterprise software or b2b enterprise software. And he was really only interested in tier-one organizations, and he afforded revenue, he afforded years of revenue before he could even get something that was close to what a tier-one organization wanted. It was always an incomplete product. So, and, they still haven’t pivoted into other tiers from what I understand since I’ve left that business, where their functionality is more suited. So as a result, PlanGrid is now in the tiers and taking market share from that business.

And Red Eye has been forced to pivot into other products like bushfire software and things like that, because they’re not getting the traction. And that and their revenue is a fraction of what Plan Grid’s revenue is. So, this is another example I just got back to this slide before is the reason I brought this up is Red Eye strategy was to engage in the market in tier ones.

And where their real competitive advantage was. It was really down here, somewhere in this area here. Now, the reason why the founders should own the strategy is because at the end of the day, the founder rounded the strategy and we stuck to tier ones, I had to do what I was told in that instance. But then again, that afforded me to figure out how to help tier ones by with an incomplete product as well.

So, there were advantages of doing that over time, but they certainly didn’t capitalize on the market opportunity like PlanGrid did per se into the market, where their functionality was suited and grew as their business evolved.

Joran  44:00  

What will like, what will be your ideal situation like PlanGrid, trying with a small product getting talking to clients then move your way up? Or I mean, I think you already answered it, but Red Eye are still not figuring things out or, not closing the deals they want to. So, I guess like a PlanGrid situation would be, for you, the most ideal situation to get started.

Gavin  44:29  

Well, I guess you have to ask what is the goal of a startup? What’s the goal of the business? Is the business to only enter into a tier-one or is the business, is the goal of the business of a startup is to help as many organizations that have the problems, we solve in the most efficient way possible, right.

Like, I think one of the, when I said before is we can take many lessons from, we can take many lessons from nature. And one of the things with and I’ve done this mistake in sales is, when I started in sales, I would only go for large clients, but the true mix of, of how you should have clients you should have a certain amount of large ones, then a subset of mid-tier ones and a larger set of smaller ones.

And if you think about how lions, or animals hunt, in Africa, they don’t always go for big animals, they go for them sometimes, but they supplement their diet with big animal, mostly medium animals and a lot of smaller animals, right? Like, it just, I think it’s a more stable way to approach the market, like you learn from the smaller ones. And then you take those learnings. And when you build out your strategies, which we’ll go through it in the next slide is you use those smaller clients or those tier threes to build out that problem and the tools to demonstrate the problem and the case studies.

And then when you’re ready, you will go through the technology adoption curve and go into those larger organizations, as well. So, but if you’re a startup, and you can withstand, if your goal is to not generate revenue, and wait till you get to tier ones, then hey, that’s your goal, like, it’s at the end of the day, it was the founder’s goal at Red Eye to do that. And it was his prerogative, but I see that I would see most founders want to create a billion-dollar unicorn, right. And the best way to do it is get to revenue quicker and grow and scale as you get bigger.

Principle 3: Using to the Technology Adoption Lifecycle to build your sales strategy

So, principle three is using the technology adoption curve or lifecycle which we’ve all seen out there, there’s, there’s a lot of literature, and to build your sales strategy. So, one of the things, if we talk about the journey that a client goes on, needs to go on in their mind or to make a purchasing decision. The more, as you move through the market, the more proof people need of the problem. And this is why there’s only a small subset of innovators, and then you use that data, which we’ll get into in a second to go through to the other markets. Now, by narrowing our focus in criteria, it increases our chances of success.

So, we’ve looked at the tiers, we understand, we need to go out and engage with different people in different tiers, to see the interest. Now what we need to do is narrow our focus even further, to increase our chances of a sale. So, we need to find clients who are already on their buying journey. So, they’re already experiencing the problem. And they’re already looking may not be looking for a solution or they’re looking for a solution just haven’t found the right one yet, because they can see everyone else hasn’t been solving, hasn’t solved the problem.

So, we need to find them. And it’s only by engaging with them and sharing our journey and what we’re going on or what a startup’s going on. Well, they will let you know if they’re them or not. If you can create. If you can create your messaging, right and your value proposition, right, they will naturally self-select and let you know they’re there. But you can only do that by engaging with the market. So, these innovators, they’re already living in the problem. They know the solution. And they’ll know the solution, as soon as they see it, they’ll see it in a lightbulb moment.

And I’m sure there’s founders out there, or b2b startups who will watch this, that go, yes, that’s exactly what I need, I’ll buy. But then. And it would be a mistake to base your whole sales process on, hey, we’re a disruptor in the market. Now, I’ll give you an example. At Red Eye, we were doing a lot of client, you know, meetings and things like that. The governor of Nevada was actually doing a tour around Australia, when we went and we showed them what we were doing at Red Eye. And so, we’ve had that problem for a long period of time, we’ll buy you, and that’s how they got into, we got into the US. We didn’t actually sell anything.

They were an innovator sitting in the problem for many, for two or three years, and they were looking for a solution. And we showed them and they went, yes, that would do it. We’ll purchase. And I’ve even said to them, we really didn’t actually sell anything to you. You actually saw us and bought us and it was like yeah, you’re right. And they were an innovator but they just were experiencing the problem. A good example of this would be Joran, I would imagine that you are not interested at all, or you and I, both of us are not interested in heart stents. We have no interest in it. We’re skeptics, we don’t care about heart stents and heart stents are used for people with a heart attack to open up their arteries, right?

If you, if you had a heart attack tomorrow, if I had a heart attack tomorrow, and it was me and it’s saved, it was going to save my life. I’d be an innovator within a day, I would be, I’d be keen to do it, you wouldn’t have to prove it to me. So, I already have the problem. And I know that’s an extreme example. But people can move along these curves by how much they see the problem in their business, if that makes sense.

Joran  50:17  

Yeah, makes sense. And I guess like at the beginning, you said, like, you need to get the messaging, right. And we did, of course, you mean talking about the problem, making sure that people actually understand that they have the problem. And then they’re gonna find for the solution which you’re going to offer?

Gavin  50:32  

Correct. So, you bring up a really good point. Founders talk about their business, from a founder’s perspective, I’m developing this software, it solves this problem. Or we’re doing these features and things like that. But it’s the market, think about it from the market’s perspective, they only care about what they get.

And we need to position our messaging in that way. So, if you go to a hardware store, ask yourself, like, if you go to a hardware store and you buy a drill, do you really want the drill or do you want the hole the drill will give you, right? So, people want the hole, they don’t want the drill. So, if people can get away without buying you, they will. If they think they can solve the problem without using you, they will.

And we have to always think like that. So, our value proposition is understanding what value we really offer. And then framing our messaging around that. And in the terms of what makes sense for the buyer, because remember, it’s the buyer’s journey, the buyer’s mindset journey we need to focus on and that’s the whole strategy that we’re formulating is helping our buyer move from, I don’t know who you are, to, I really, really need you in my business.

And that’s not a binary journey, it’s a series of steps along the way. Okay. And innovate is to make purchase decisions quicker, typically. And, but they also can be of low value, because it’s under a budgetary cap or something like that, or they’re experiencing it or, in our case with Nevada, it was a large purchasing decision. And we just got to the right people at the right time.

Now, the value of innovators and early adopters, so let’s go back to this image that we were showing earlier. So early clients can help you start building content for your sales strategy. You can work with them to develop tools. So, if you let’s just say you enter a large mining company in a certain department, you can work with those people in the business to demonstrate the value you offer. And one of the ways you need to do that is to create tools to help them measure the current state of the problem they solve. And we really need to work on those direct costs and indirect costs.

And they can be qualitative or quantitative depending on what and a combination of both. If you do it, right, and you need to do it, right. And you use those early innovators because they, they know it really well. And they’re creating those tools for their business. And then you should be able to you to capitalize on those skills. And that’s where founders’ knowledge is critical to help round out those problems within their business.

And then you can use the tools are expanding their business as possible. But also, the tools can be repurposed and used in the sales process to help organizations along their journey faster. Now, the best example I have of this is I followed a client for two years. I chased them; it was a water company here in Australia.

And they wrote a tender for us. And they were like, Yep, you’re the preferred. I knew I’ve done a lot of work upfront. And by the time we got the tender, it was all written in our language and I was like we’re issuing we were 100% and I was my coming of age as an as a SaaS salesperson. But we lost it. We lost it on a procurement because they couldn’t buy from a startup and whatever the reason was, but I took those set of requirements, turn them generic, so I could reuse them. And every time a client, prospective client said yes, we’re about to go through a procurement process to purchase, we’ll definitely invite you.

Compiling those requirements would have taken three or four months, what I did is I said, Hey, I’ve got a set of requirements and may shave off a couple of months of your journey, can I share it with you, and use what you want, discard what you want, and then it will help you along your sales process. It took about six months, once I started doing that, for him to come back, but our win rate went from, like 5% in tenders to like 45% in tenders because we were helping them. And we were repurposing content.

And so, we could tell when they wanted to purchase us because they weren’t changing any of the words, we’re just using it word for word, and we were outsmarting the competition that were fortune 500 companies. So, and that helped build out the strategy

Joran  55:18 

was really, really clever. And in the end, you’re gonna help them to save time, give them value by giving them requirements. So, you help it’s a win-win in a way.

Gavin  55:27

Yeah, yeah, correct. And it builds a law of reciprocity. It shortens the sales cycle, you can never ask in business to speed up really, you can’t often ask the business to speed up a purchasing decision. What you can do is remove the speed humps and roadblocks that they will come up against to say, Hey, you’re about to go into requirements exercise, you’re going to interview all these people.

Let me give you a template just to shave off a couple of months. And they will go, Oh, that’s really generous of you. Thank you very much. And, they’ll look at it and go. Yeah, we need this functionality. And it works. It works 100% of the time. And you get this exponential value.

So, I turned that one loss, which was I think from memory $35,000. And there was like it was it was a big deal and a 60-month term. But I turned that into about 20 wins, it was an exponential value, even on a loss. So, and that’s how we leverage the early adopters and innovators to gain other companies across that chasm into the early majority. So, this doesn’t automatically happen.

People don’t automatically buy; we have to work at it. And we need to be deliberate in our approach. But it actually is easier than you think, as well. But it has to be a deliberate process. And that’s why the founder needs to own the process. Because you’ll get traction reasonably quickly. And you’ll start seeing indicators that you’re on the right track.

But it really takes a consistent effort over time, you know, a couple of years to really build out an effective sales strategy. And that’s why you need to walk before you can run.

Where to from here?

So, I guess, where to from here? So, start today, by developing your sales strategy and focus on the buyer, how does the buyer, how do you want the buyer to be when they purchase you and work backward, like they have to make a decision to buy and they have to see you as the only choice to help them in their business. So, if that’s the only choice, you have to help them on that journey because it’s fraught with competitors, or indecision. So, the only way to get into that choice is to lead them through their buying journey.

And so, unpacking that is the strategy that is the only winning strategy that I’ve seen in startups with a repeat, repeatable sales. You are focused on getting your clients to a buying decision and needing you in their business. To take lessons from other industries and even in even nature, as I mentioned, is a great teacher. When we see in other industries like the real estate industry or the car like car sales, they’re well proven industries.

And there’s different approaches to according to the tiers that companies are engaging with because the buying complexity changes. We can see in real estate, in the real estate industry, domestic real estate or residential real estate is a very different buying process than high rise or industrial real estate. Because the buying complexity changes and the sophistication of tier one buyers in that industry changes so they have to change your process.

And I think b2b SaaS is still a relatively young industry, it’s still in large enterprise. It’s less than eight years old, and most businesses had no cloud policies. So, it’s still an infant industry, in its infancy, and we’ll see over time how this will play out. And again, you need to work before you can run. There is no shame in taking a lot longer to do a client and then slowly speeding up and going hey, what can I repurpose? What did we learn from this process?

What information or what tools or business cases did we get from our client? That can we take, repurpose and share with a client’s tomorrow to speed them up on that journey and, and do we get the same outcome. And it’s just having that. Don’t be afraid to fail fast and have an iterative approach, then you will start, you’d be surprised at how quick you make progress in the strategy. And again, don’t be afraid to fail fast. And be aware, sometimes you’ll make a mistake, or you choose, to ignore something in the beginning of a sales journey.

And it’ll actually come back to bite you six months down the track. So, we need to be ever aware of what’s going on, so we cannot make those same mistakes again. Your skills as a founder are critical to sales success. You can’t outsource the strategy to your sales team, you have to be a fundamental component to it, because your skill set is vital. Now you can download my book. We’ll send out a link to start up sales secrets. It takes a more in-depth look at these principles as well.

And it will help you to start employing these strategies and applying it to your business as well. I also have a limited availability for coaching and things like that. That’s not the purpose of the call today, but you can reach out, or reach out to Joran as well, and we can have a chat about your current sales challenges and I’ll try and point you in the right direction as well. And I guess that’s it for today. Do you have any questions there? 

Joran  01:01:34

Well let me ask one before we jump into questions from everybody. Where can peoples find you? Where can they get in contact with you?

Gavin  01:01:36  

Yeah, you can see at the bottom of my presentation there, I can be found at salesmarketfit.co, you can reach out and there’s a contact button there. You can find me on LinkedIn: Gavin Tie, I’ve got a YouTube channel as well, that’s under Gavin Tie, where I release sales content regularly as well. 

Joran  01:01:50

Yeah, one quick question. Is there a frame where people can fill out to get really started with a sales strategy? Is there something else you would recommend besides using these three core principles?

Gavin  01:02:15

There is a sales framework that I’ve created, it’s called finding your sales market fit. A lot of companies spend a lot of time on product sales market fit. But they’re not actually changing their sales process to the markets they want to enter and they really need to find that sales market fit framework. So, there is a sales market fit framework, and the three core principles will help you along that way. But I do have some information on that. That’s kind of in that coaching realm as well, but yeah, there is a framework. So that people can start adding to. 

Joran  01:02:51

Good, good, definitely a good time to get in contact with Gavin. For the people watching this live, or watching this afterwards, we will send a link to get the book. I guess finally, can we also add a link for the people who are not watching this live, but are looking at the blog we’re going to put it on. 

Gavin  01:03:16

Yeah, yeah, we can put the link and then there’ll be some kind of page to download. Yeah, it’ll be no drama. 

Joran 01:03:30

Yeah, good it’ll be down there somewhere, We’re gonna put the link in the blog and then you can get the book from there. https://go.salesmarketfit.co/book

Gavin  01:03:38

Yep, no worries. Thank you for today, if I was gonna leave you with one final thought, it’s just start. Even though you don’t know where the ending is gonna be. Starting a sales strategy is important because if you have plans to move geographies, or move to a different country if you can’t figure out how to get your clients to buy from you in the region you’re in it’s very difficult to get that to happen in another geography. Work backwards, in every meaning. Go what’s the think what is the best outcome that I’m shooting for here. How do I get them to the next step, what do I look for? How will they react to certain information and how do I know I’m on the right track? And its small iterative steps that make a sales process, or make up a sales strategy that get’s you to a win. It’s like golf. You never win it on the first hole, but you can lose it, so sales is like a game of golf. It’s a lot of hits towards a good score. 

Joran  01:04:42

That’s a good metaphor, so thank you and that’s why we’re happy to building a sales process as in, you can’t have other people do sales for you, which is basically what freedom marketing is, if you haven’t figured it out for yourself. So, this has been really valuable for everybody who is going to watch this. They can really get the sales going themselves and then expand to have other people try to sell for them. 

Gavin  01:05:09

You hit the nail on the head there. Like, I’ve seen startups who have struggled to figure out how to sell their business. They try to outsource it through a partnership program. They’re just outsourcing the problem. They haven’t solved it. If the founder can’t do it, then the partnership company or the partners will find it difficult and they won’t get the success, so, it’s imperative that you learn to do this to get the maximum benefit from a partnership program and referral program, like you guys and like Red Eye did. 

Joran  01:05:49

Thank you very much for today, Gavin, on behalf of myself and on behalf of everybody else.

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