Thoughts from my journey

The hot topic at Sales 2.0 Conference today in San Francisco remains (surprise, surprise) social selling (for B2B companies). Lots of speakers and lots of wisdom but also became abundantly clear to me that for most B2B organizations it is very early days in the adoption of social selling techniques. Therefore, for my wrap-up blog of Sales 2.0 I decided to summarize six things that any organization could do to get started with Social Selling.

I hope you find this blog helpful. Please tweet if you do: your own text or this clickt0tweet link.

1. Use your second degree connections

Mike Derezin (@mikedfresh), Global Head of Sales, Sales Solutions at LinkedIn shared that second degree (LinkedIn) connections are 87% more likely to respond to any e-mail or phone call as compared to a cold call. If there is one place to start it would be to use your second degree connections as part of our (outbound) sales efforts. And not just your own second degree connections: also the second degree connections of the rest of your team. The new LinkedIn TeamLink product looks promising in this regard: it lets you tap into the second degree network of your entire company’s team.

2. Follow and engage strategic accounts on Twitter

Jill Rowley, Director of Strategic Accounts at Eloqua is the queen of using social media to engage with strategic accounts. You cannot do this for all your prospects and customers, but the best place to start is to create a short list of accounts that you are targeting for this quarter and deeply engage with them via social media. Follow them on Twitter and engage with them. Make the conversation personal. Often twitter, and sometimes even a text message, can be a great alternate way to get in touch with target accounts these days when people’s e-mail inboxes are overflowing. Be careful about engaging with prospects on Facebook. Mike Denizen shared research that shows that 80% of people want their social and professional networks separate.

3. Turn all employees into customer coaches

Your goal as a salesperson is to add value. Think of yourself as a customer coach: your job in sales is to make your customer successful and revenues will follow. Jill Rowley, super-star sales queen mentioned above, calls herself a “content concierge” on behalf of her prospects. “Think of prospects as as future advocates for your brand”, says Jill Rowley. “She clearly does a good job”, says Matt Heinz, a marketing consultant on stage at Sales 2.0: “Until today I didn’t know Jill is in sales. I thought she was an evangelist”. Eventually, not just your sales reps should be customer coaches, but every employee in the company is representing the brand and could be building trust with prospects and customers on social media.

4. Focus on lifetime customer value

Eryc Branham said it: “the only sales metric that matters in the end is customer lifetime value”. Customer lifetime value also featured high on Matt Heinz’s Top 10 Sales Metrics list, but I am with Eryc that all that matters in the end is customer lifetime value. Jim Cyb, VP of North American Sales from Zendesk shared: “the key to the success of Zendesk is a land and expand selling strategy”. It is not about the first sale, but about a lifetime of purchases. You can start small, establish any kind of paid relationship with your customer and grow from there. And, as Donal Daly, CEO of the TAS Group pointed out, when calculating Customer Value include “network value”: the revenues generated from referrals made by your customers.

5. Assign leads based on social proximity

I wrote about this before in Top 5 Trends in Sales 2.0 but this is still one of my favorite social selling black belt techniques: assigning leads based on “social proximity” (remember Tip 1 on leveraging second degree connections) makes the most sense. This time, Jim Cyb from Zendesk offered a good alternative if you are not quite ready for “social territories”. Zendesk is assigning leads based on a round robin system which is straightforward, eliminates any territory fights and aligns with today’s low-touch, virtual selling environment.

6. Make your product social

Research says that by 2020, 85% of the buying process will be completed before a salesperson is called.  In a day and age that direct contact with buyers is sparse, you should be listening to other channels.  Deploy social media tracking like Radian6 and Google Analytics to listen to your prospects. If your product is software, you should also be listening to what your product is telling you. Which trial users are active and what are they doing with your application? Did your paying customers stop using your application (and may cancel their subscription soon)? Of course this is the core of what Totango customer engagement is all about.  Even better – make your product a two-way social communication channel.  Communicate with your customers when and where you are top of mind: in your application with free tools like Appbox.js.

Promotional discounts, credits or value-add offers can be an important part of a product launch strategy. A properly timed discount, upsell or cross-sell or “bundling” can positively change the perceived product value and dramatically impact adoption of SaaS applications.

But, making on-the-fly changes according to the dynamic needs and circumstances of customers can inherently complicate your billing and pricing models. How does your billing system support the various iterations of a subscription discount, promotion or credit?

For example, how does the discount get applied? What is the duration of the discount? Does the discount apply to all subscription types (recurring, one time charges, activity)? What about conflicting offers? What types of customers are eligible for discounts?

Subscription discounting can get complex very quickly because most billing platforms use a very limited set of “price levers” (time, duration, quantity) capable of shifting the Perceived Product Value.

What you want is to have many price levers around where you dynamically configure and reconfigure services and pricing on the fly: subscriptions + sign-up/activity/event fees + bundles + add-ons + incentives + promotional products.

The ability to add and manage activities, consumption or usage-based price levers to a promotion gives a company a powerful tool for growing its customer base (recurring revenue) and maximizing lifetime value of the customer (reduce churn).

Effect of Changed Product Value

Positive changes in the product – or its perceived value proposition – have the potential to drive improvements in ARPU. Product differentiation can lead to short or long-term market advantages, depending upon how quickly the differentiation can be continued.

As stated earlier, with the simplest subscriptions, a business only has control over the price, the term of the offering, and the product mix of the relationship. Because choice is limited, tweaking price levers in those three categories provides limited results.

For example, if a $10 per month subscription is the MSRP, reducing the price to $7 to attract more users may simply cannibalize the existing customer base.

For this reason, it is important to add additional pricing levers around consumption or usage parameters to evolve the relationship with the customer. For example, the consumption or usage price lever can be implemented as a limit or as a set of charges that are generated by ongoing use. For example, as a person consumes, reward him with a discount or promotion every time he reaches a certain threshold, thus enticing him to continue to consume (along the lines of airline “point” systems.

When charging for different classifications of the good or service, customers paying the set amount for unlimited access will have a different value equation than those paying a lower price for limited access.

Over time, customers can migrate from an unlimited ($10 per month) to other price segments, depending on the customer experience or the changing perception about a subscription’s value – especially to those initially not interested.

Customers that do not see value in paying a set amount for unlimited access to a good or service may become interested if offered a chance to pay a nominal per piece price. For those subscribers, the value comes in the flexibility to consume the good or service at will. In a SaaS application, for those not willing to pay for a $10/month for unlimited access to articles may be willing to pay a $7/month plus a discounted price of $0.25 per activity such as time entry, project, download, computing cycle, contact, or any other measureable activity.

In this scenario, the customer who does not see value in paying $10 for unlimited access may become interested when he can pay $0.25 for only the activities that have value. At $0.25 per activity, the customer has a low barrier to trying out the new content, and the business succeeds in making money on content that previously would not be monetized. But the real value for the business is the opportunity to convert the customer to different subscriptions over time, as the subscriber’s situation and interests evolve.

Billing: A Strategic Asset & Enabler of Innovative, Sustainable Business Models

In a subscription business model, it is the relationship with a person that matters most, and no customer touch point is more important than billing, as it connects businesses with customers on an ongoing, personal basis.

Though not the sexiest topic, “billing” is the medium by which companies can truly drive and capitalize on customer usage patterns and preferences.

Billing is, therefore, central to improving adoption. Product management and sales strategies that focus on long-term relationships and maximizing customer lifetime value must address billing models.

Utilizing any one of those practices requires sophisticated billing that goes beyond a cookie-cutter approach for maximizing volume and per-unit profits. Now, billing has to boast real-time intelligence, the type of which is derived only from sophisticated rating and charging engines built to dig into data about actual usage (as opposed to forcing business people to pore over enormous reports after the fact, when opportunities have slipped away).

The next generation of billing has to enable business users to dynamically implement, enforce and change parameters on the fly. By implementing activity, usage or consumption-based billing, companies create more opportunities to innovate and drive new sources of revenue.

About the Author

Christopher Couch is COO and co-founder of Transverse, LLC. TRACT, from Transverse LCC, is the all-in-one activity, rating and subscription-billing platform that can bill for anything. SaaS, cloud, MSP, ISVs, telcos or wireless providers with TRACT’s pricing levers to rapidly build and evolve any business model: if it can be metered or measured, TRACT can bill for it. Learn more at www.tractbilling.com

So how do you know which sales model is best for you – zero touch vs. low touch vs. high touch vs. field?

In his last tip from the Sales 2.0 Convention, Mark Roberge, VP Sales at Hubspot explains that it’s really depends on your buyer, what you’re selling and the full sales context and it does require some experimentation.

Preferably you should aspire to go on no touch or low touch as possible as the economical will always be best if you can pull that off.
But it is best to simply run experiments – set 100 leads to no touch and 100 leads to low touch and check the conversion rate, revenue, Customer Lifetime Value and in SaaS see what the CAC to LTV is  (Customer Acquisition Cost to Lifetime Value) and what the payback periods are and take the approach which has the best economics.

Furthermore, as mentioned in many of my previous posts, it is highly recommended to keep a thorough and updated Cohort Analysis for your metrics so that user behavior would come out accurately. This is the only way a successful SaaS business could reach the right consequences and choose its suitable sales model!

Review Mark’s first tip “Do you Distinguish Your Sales to Hunters and Farmers?”

Review Mark’s second tip “Top-of-Funnel Strategy”

To read the full transcription of the video, click here

Video Transcription:

Mark Roberge, VP of Sales at Hubspot.

Yes so, zero touch versus low touch versus high touch versus fields, the quick answer is it depends, unfortunately, and I’ll walk through the dynamics. It really depends on your buyer and what you’re selling in the full sales context. And it’s gonna require some experimentation. I think in general you’d prefer to go as no touch or low touch as possible.

I think the economics will always be best if you can pull that off. But hey, if you’re wondering, “Here’s a lead that has 50 employees in this particular segment. Should this be a no touch or a low touch or a high touch?” You run experiments. You send a hundred leads like that to no touch, you send a hundred leads like that to low touch, and you see what the conversion rates are, you see what the revenue is, you see what the lifetime value is, in a SaaS role you see what the LTV to CAC and the payback periods are, and then whichever ones have the best economics, you take that approach.

At the Sales 2.0, I’ve also met Mark Roberge, VP sales at Hubspot, who gave me some sales tips.
On today’s video post, Mark explains the difference between Hunters and Farmers sales skill sets and recommends to protect the hunters from doing the farmers’ job as finding good hunters is hard and we don’t want to waste their time on doing things they’re not skill to do.

I agree with Mark that a business should know to distinguish between those roles and have each of them focus on their own specialties. As discussed in my post: “Does your SaaS Business have a VP Customer Success?“, Some B2B sales leaders have the farmers focused on customer success. Others now call themselves “Chief Revenue Officer”. Either way, we can see more and more of these roles in the SaaS industry lately and therefore can conclude this distinguish exists and becoming more and more acceptable.

To read the full transcription of the video, click here

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Video Transcription:
Mark Roberge, VP sales at Hubspot.

You’ve got hunters and you’ve got farmers. The hunters are typically out there, generating new business, finding companies that don’t know who you are and turning them into new customers. You got farmers, who are really good at building those relationships, helping them see the hour line of your product and getting them to spend more money with you overtime.

Usually those skills are extremely different, and it’s really hard actually, I think, to find good hunters. The last thing I want them to do is spend more time on farming, more time making their number, not with my new lease and new companies. So, I wanna really protect that asset and also, I think, it’s such a different skill set that I want it separate.

Another tip taken during Sales 2.0 from Darren Suomi, VP Sales at HootSuite – this time regarding self service model and how to adjust it to reduce churn.

You know how it is that you get many leads and you just don’t know who to refer first? This situation is common in many SaaS companies.

With the right metrics and cohort analysis, it’s easy to decide who are the more engaged customers that are ready for sale and it’s usually more likely that if you’ll approach those customers, they’ll signup for your product.

Darren is also claiming that even in a self service model (low-touch model) like HootSuite, once they find out who are their active users in their service, they proactively reaching them and by that they reduce churn.

Tomorrow I will publish a tip by Mark Roberge, VP Sales at HubSpot who will explain the difference between the hunters and the farmers skill sets.

To read the full transcription of the video, click here

Video Transcription:

I’m talking to Darren Suomi, VP of Sales from HootSuite.

Bring me a model which where we play, it is a self-service model. So, we’re really trying to look at it from turning down the churn. I guess I’m looking at what people are trying to play instead of going from just a self-service. We’re actually just playing with the model in terms of a little bit of more of a high touch point. So, we are really taking a look at our customer who are quite active on social media. We are actually proactively reaching out of them and seeing where we might be able to help them versus just letting them fend for themselves.

Anthony Iannarino’s sales blog on “All Opportunities Aren’t Created Equal” got me thinking about prioritizing your time, given limited sales and marketing resources.

This is especially important for lean startups and high velocity sales businesses, where there are a relatively high number of prospects as compared to the number of sales and marketing resources.

However, prioritizing your time in a self service sales model is changing as compared to the traditional enterprise model where every prospect requires sales touch. Consider these reasons
why a prospect may not be ‘Mr. Right’ or ‘Mrs. Right’ in the traditional sales model (as mentioned in Anthony’s blog):

#1 – When a Prospect Has No Money. The art world’s ‘starving artist’ is the ‘struggling start-up’ of business. Both may produce beauty, but without a stable income neither is worth bringing
home to your parents.

#2 – When a Prospect Has Too Much Money. They have big ideas and big budgets to make them happen—they just need your software, customized almost beyond recognition; causing too much work and distraction.

#3 – When a Prospect Is Dissimilar. Trust, communication, shared values, and a united vision for achieving goals are all factors of a great relationship.

Interestingly, if you are offering an online, self service trial for your service and have a low touch or zero touch sales model, you may not need to be too concerned about these factors
upfront. You can let customers self qualify through your sales funnel. It is ok to have any of these three customers sign up for a trial. Then actions speak louder than words. When a prospect
is active during the trial and engages with your product as-is, he is probably worth your time.
If, on the other hand your prospect never logs into the free trial or is aggressively calling your support team, it may be worthwhile finding yourself another ‘date’.

It was a jam packed day at Sales 2.0 in Santa Monica today. It was a great opportunity to meet with and learn from some of the brightest in the Sales 2.0 community.  I have summarized my key takeaways for Sales 2.0 leaders below:

#1 – Attract many, then focus on filtering

If your prospects do research online, will they find your company, or your competitor? Mark Roberge, VP Sales from HubSpot argued that you should keep the top of your sales funnel as broad as possible. Attract as many people as possible to your website through good content. HubSpot itself is attracting 50,000 leads a month, of which 40% get passed to the inside sales team and about 400 (or less than 1%) convert into new customers.  The leads that don’t convert still help to reinforce the HubSpot brand and trust. With so many leads, strong filtering and lead scoring algorithms are keys to sales success.

#2 – Give all sales people a social media address

Scott Holden, Senior Director at Salesforce.com argued that not just companies need to be discoverable, but also individual sales representatives. Social pages are often the first ones to come up in search results.  Darren Suomi, VP Sales from HootSuite called it “giving all sales reps a social media address”. He said it is no different from issuing a rep a cell phone and e-mail. IBM indeed has done just that, said Douglas Hannan, BU Executive at IBM: all 1,000 IBM sales reps have a web page with built in 2-way video and chat. They are also asked to get on Twitter and LinkedIn. IBM marketing maintains a social messaging calendar to make it easy for reps to find content to post.

#3 – Deliver value first, sell later

Jim Cathcart, the well-known author of “Relationship Selling”, defined what customer relationships are all about: in a relationship people know each other and have an exchange of value. Ask yourself: who is truly glad to know me? In a sales relationship, provide value first, sell later. Don’t talk about up selling customers, but rather up serving them. If you do a good job others will vouch for you and recommend your services. Scott Holden summarized this as moving from self-promotion to social referrals: “trust me, he is a great lover” and not “I am a great lover”.  I expressed a similar sentiment in my blog earlier this week on Genuine Customer Engagement.

#4 – Use online demos to drive sales

Salesforce.com recently did a survey of 1 million influencers in the buying process and found that 50%-70% of sales processes start long before a sales person ever gets involved. The most important deciding factor in the sales process was “online demos”, not sales person interaction.   HubSpot data points in the same direction: the most reliable indicator that a lead will convert into a customer is a request for a demo (46%) as compared to download a white paper for example (22%). As we discussed in many blogs including Trial Conversion is Top Priority in SaaS, I would add that interaction with a free trial version of your product has an even higher correlation with conversion to customer.

#5 – Consider a territory model based on social proximity

A somewhat radical idea was presented by Michael Lodato from Network Hardware Resale. He argued that in a commodity business (he sells network hardware) buyers are deciding based on personal relationships and customer service. Therefore he moved to an open territory model, where leads are assigned based on the personal relationship of a rep to the lead, rather than geography. On paper this social proximity model sounds great, but in reality it is still difficult to implement. Michael admitted to have a team of marketers manually assigning leads based on social parameters.

#6 – Move towards a lower touch model

Gerhard Gschwandtner pushed speakers to learn from B2C selling models:  Amazon has $30 billion in sales with ZERO sales reps. B2B companies need to learn from this and move to lower touch selling models, wherever possible. One of the speakers, Rini Das from PAKRA, has achieved just that. She is closing 95% of her business based on social media leads. She has hardly met any of her clients in person, but is still doing $30,000 to $150,000 in revenues per customer each year.  

Gerhard and gang; thank you so much for a great conference!

Tomorrow: Enterprise 2.0!