You are working through a complex never ending sales process for a big enterprise opportunity. Its the most important thing for your B2B SaaS right now. Ever find that your CRM system just doesn’t reflect reality? (Or ever wonder why a sales pipeline tool is called customer relationship management for that matter?)
Sorry I digress. This is not a process problem. Leads and various other clear and specific data are all recorded neat and precise in CRM. Yet all the things that matter seem to be missing. Or hidden in notes and free text fields.
There is a simple reason. CRM systems are designed for selling standard repeatable solutions. To customers with similar needs and predictable buying processes.
SaaS: You are selling a service not software
Unfortunately none of these things exist in the world of B2B SaaS. You are selling a service not software. (Check out this excellent article from Darmesh Shah for more). Customers will frame their needs in a different ways. Cultural factors will warp the style and method of adoption for your SaaS.
Layer on top of this the spaghetti medusa that is enterprise procurement and buying processes. There are a thousand different ways to SaaS. (Another small sidebar: Do yourself a favour and ignore any book/ article/ advice that offers a standard model for business procurement. These things are peppered with terms like influencers, decision makers and hierarchies. Its all rubbish. Every large organisation is different. Most don’t even know their own process very well.)
So your standard pipeline definitions are of no more than marginal relevance. You need to think about your enterprise sales pipeline a different way. Let me offer you a simple and flexible model which will help.
I claim no credit for this. I learned it from a lovely man and good friend, Carl Erickson the CEO of Beacon Worldwide. I have been using it for 10 years and it has never failed me. It unites people with 100% opposite approaches to sales. It drives intense debate about all the right things. And as a business leader it kept me informed and in touch with future growth prospect like nothing else.
A brief explanation of each step. And more important the simple test for moving an opportunity from one stage to the next.
0 - Development
Here you have the basics of your marketing plan. Which segments are you targeting? What is your value proposition? How do you reach the right audience? Nothing is specific at this stage. Its a way of capturing your market strategy.
Move after: A lead moves from 0 to 1 when you have direct contact with a named organisation.
1 - Identify
Inbound or outbound this is where you capture live leads. At this stage you only need to be able to name the organisation. If you can identify the key individuals or at least the department so much the better.
The key question: Is this the right type of customer? Deciding whether it is worth investing in the pursuit is the next stage. For now, you only need to know if this organisation would benefit from your SaaS. And figure out if they are the right fit for your company.
Move after: You have had a direct person to person communication. You have identified the customer business issues. You have confirmed the date of the next meeting/ discussion. (Note: you need to meet all of these criteria.)
2 - Qualify
This is where the toughest decision lies. Now that you are taking to someone, how much time and effort should you invest in the opportunity. The key to answering this question has nothing to do with business value. Instead you must answer three questions:
Note: For an established company with time to wait, question 3 is part of the evaluation stage. A startup can’t afford this time so answer it early.
Move after: You know you have access to power. No exceptions.
3 - Evaluation
Now you are in the traditional phase of enterprise sales. Responding to requests for information, completing bid documents, checking out the competition, agreeing budgets and so on.
This is expensive. And it feels exciting and important. But observe that the most critical decisions have already been taken. Your SaaS is a good fit for the customer’s business need. You know who makes the decisions and you are talking to those people (almost never one person). You also know that this is the right time for the customer.
I hope its clear why you should have this stuff sorted before you start heavy investment in an opportunity.
Move after: You have verbal confirmation that you are the chosen supplier.
4 - Selection
Read that last sentence again. When the call or email comes through to tell you you have won, the sale is not made. So don’t hold the party. Don’t pay commission. Don’t bank the money. Don’t count your chickens.
There is a whole load of contractual stuff to resolve. Most times, there may also be a bunch of interested parties inside your customer’s business who get involved for the first time. You know people who might use your product, that sort of thing. It can be a painful journey.
Contractual questions tend to dominate. But never lose sight of the need to deliver value to your customer organisation. A beautifully framed contract has an ARR of Zero.
Move after: The contract is signed AND you have a clear plan to install your SaaS with the customer.
5 - Win: Now Celebrate!
Keep the customer name on the column for a little while to remind yourself of success. But don’t think its over. Now is when real customer relationship management starts. Procurement's job is to sign contracts. The buyers are the users, managers and leaders who see the value your SaaS delivers every day.
Its become fashionable to call this Upsell. In reality its plain good business. Selling more to your existing customers rather than spending money acquiring new ones. A fundamental since forever.
The Chairman's View
For many B2B SaaS enterprise sales are the key to growth and success. There is a tremendous quantity of bad advice available in this areas. And the whole process is often built on the worst named IT category ever - CRM.
Despite the apparent complexity and the repeated insistence on structure, process and experience, its quite simple: Listen to the customer; Learn how your SaaS can add value; Remember you are always dealing with people not companies.
Africa gets in your blood they used to say. I have been infected for more than a quarter of a century. So this is a bit of an emotional column for me. 6th March 2017 is the tenth anniversary of the launch of M Pesa. The original mobile money system improves the lives of millions every day. And has been the catalyst for the leading innovation ecosystem in Africa.
You may notice that this year is also the tenth anniversary of the launch of the iPhone. Over that decade, smartphones have been the defining technology in the developing world. Yet mobile money is more innovative and helps tackle a much bigger, tougher problem.
We seem to have lost sight of this idea in the tech industry. UBI (universal basic income), taxing robots and so on are the ideas du jour. Many of our leaders seem to believe the priority should be advising Governments on how to solve the problems they expect the technology industry to create in the future.
Where did that come from?
How did renaming and retreading the failed social and economic planning experiments of the 20th Century become a thing?
Why do we want to risk the consequences if (sorry when) these plans fail? The pain and suffering that will be inflicted on billions of the world’s poorest.
How have otherwise smart people convinced themselves that the future can be foreseen, designed and planned for on a grand scale?
“Now all my lies are proved untrue
And I must face the men I slew.”
Let’s take a step back. AI, robots and the rest will transform the way many jobs are performed. Its hard to predict what will emerge from such a transformation. One things is certain.
The outcome will be to unleash a huge wave of human potential.
Over the next 20 years technology will be automating manual work, replacing routine clerical tasks and maybe rendering lawyers and tax accountants obsolete. No-one should shed any tears. Least of all the those who live by innovation and entrepreneurship.
Nor should we indulge in scaremongering and exaggeration. The machines are not about to take over the world. The brilliant philosopher Daniel Dennett summed it up in this week's Lunch with the FT.
"All we are going to see in our lifetimes are intelligent tools. Superintelligence is logically possible but it is a pernicious fantasy that is distracting us from far more pressing technological problems."
Tech has an opportunity and a responsibility.
Technology does not solve real world problems on its own. Coupled with innovation, it can. And we need to get on with it.
Nothing illustrates this better than the PR storm which surrounded the relaunch of Nokia’s iconic 3310 handset at MWC last week. This is retro chic in the West. Meanwhile in Africa, M Pesa and its imitators are still creating new value from the original technology.
We are on the verge of a further revolution in information technology. There will be losers. People and communities will suffer when such a fundamental shift takes place. Governments should focus on dealing with that transition.
The Chairman's View
The tech industry needs to remember how Vodafone, the UK Department for International Development (DFID), Safaricom CEOMichael Joseph and his team started out. They sought out the most disadvantaged and excluded in Kenya. And used the technology they had available to create a product that would make a real difference. They worked as a team. They observed how their customers used the initial product. And they were not afraid to think big when the opportunity emerged.
Yes, the leverage provided by M Pesa helped Safaricom build and maintain a dominant position in the mobile market. But the openness of the platform and the sheer utility and simplicity of the concept were the inspiration for so much more.
A decade on, lets draw inspiration from that example.
To learn more about M Pesa and the mobile money story:
Watch this brilliant 6 minute video featuring Michael Joseph The M Pesa Story
Be a scholar for an hour and read The Long Run Poverty and Gender Impacts of Mobile Money
Keep learning and being inspired by the story at GSMA Mobile for Development
Or get out to Africa and see for yourself....
Kenny Fraser is the Director of Sunstone Communication and a personal investor in startups.