SALES MANAGEMENT
Sales tales: lead me on — all sales start with a qualified lead
Today’s tale: missionary sales people — go forth and educate but make it personal!
by
Devin Hunt, Venture Partner, Seedcamp
Stephen Allott, Venture Partner, Seedcamp Sales Tales
You have funds. Now you want sales. That means you need leads.
And they have to be good leads.
Leads are the single first step on your sales journey. You are contacting every future customer of your business. And you have to educate them on the opportunity to use a product like yours. So you will be wondering where to start.
Early stage lead generation, by default, is difficult. And being a startup creating your sales process from scratch, the difficulty is doubled. Many investors help accelerate their portfolio by providing the first crucial customer introductions. Here is an excellent article on today’s fastest growing B2B businesses found their initial customers by both using their networks and hanging out in places their ideal prospects hung out.
But to build a high growth business, a startup needs to be able to generate their own leads
At Seedcamp, while we can help find top-tier customer leads, we focus on helping startups founders build their own sales process that can grow with the business. Here are some of our lead generation key learnings.
The first step is to create your plan. It has 3 parts.
- Sales and Marketing Mix: Are you going to use Marketing or, on the other hand, Rifle Shot Sales or a mix of both? Rifle Shot Sales is also called Targeted Sales Outreach and means very tight targeting of potential buyers (whom we shall be calling “suspects”).
- Rifle Shot Sales sector focus (assuming sales is part of the mix)
- Sales Development Rep (“SDR”) function performance measurements. SDRs are the roles who do Rifle Shot lead generation.
Sales and Marketing Mix
What is the difference between marketing led and sales led? Marketing led means they contact you. Sales led means you contact them individually. And what is “Rifle Shot” ?
Suppose you sell software to hotels for optimising pricing offers. Starting from the least targeted, a Super Bowl ad watched by 100m people is marketing. You publish a message to an audience and some of the audience respond to a “call to action” if they are interested in your software. “Spray and Pray” sales where you approach a broad range of suspects. You could be calling every hotel in town about your software. Spray and Pray is used for example in geographic sales activity. Selling photocopiers would be an example. “Rifle Shot” lead generation involves personally contacting suspects who have a good chance of wanting your product. First you create a list of upscale hotel pricing managers and then contact them personally.
Marketing led lead generation can cover a broad range of activities from digital to legacy:
- Search led advertising such as Google Adwords
- Content based SEO to create organic search traffic
- Display led brand advertising
- Outbound email campaigns
- Taking space at trade shows
- Working with industry analysts such as Gartner or Forrester.
- Public relations
Here are 8 decision factors you can use to help choose the right mix of marketing led and sales led lead generation.
Marketing is out of scope for the Sales Tales Blog Series.
Sales Tales covers the sales part of the mix.
Rifle Shot sales sector focus: 6 steps to hit your target customers.
- Pick the most promising focus sector (or perhaps more than one). A sector could be something like SQL Server database developers or retailers or banks. Reasons to choose a sector are that will win business quickly and that they are the right sort of customers. Indicators are:
- You already have some reference-able customers in the sector
- You deliver large and fast ROI to them
- You are many times superior to the competition
- Customers have short buying cycles
- Customers are open to buying from small vendors
- The focus sector is small but very high growth so you can reach a dominant share quickly and then grow with your customers. Big is not always better.
- The customer community self-references which will drive word of mouth lead generation in future
- The sector is seen as a thought leader in other sectors of yours and will influence future buyers.
2. Pick the parameters of an ideal suspect as narrowly as possible to make them as fruitful as possible. An example for targeting online retailers would be
- Sufficiently large basket size (value) of product
- The suspect has high growth ambitions and innovative track record
- The Job Titles likely to be interested are known and its easier to connect with right person.
3. Create a target list of names and email addresses using LinkedIn or sales enablement tools like:
4. Write a personalised message by hand for each individual suspect, researching and then mentioning personal details. Use a good subject line. Hand crafting works as you prototype your process. One founder tweeted that personalisation yielded 8 times the lead volume:
- sending 100 copy-pasted emails per hour: 1% conversion rate = 1 lead
- sending 10 personalised emails per hour: 80% conversion rate = 8 leads
and you’ll have practised your writing skills and done more research on the people you’re trying to help. When you scale, AI will help you generate computational creatives. Use of images is growing as they can produce great impact so consider imagery. Test for the best message channel whether LinkedIn, WhatsApp, email or whatever. Physical post is still in use in some industries so do not rule that out. Your marketing activities to build brand awareness will help support and improve the effectiveness of this outreach.
5. Make education the call to action rather than attempt to set up a sales meeting. Invite suspects to an educational seminar to hear a case study from a happy customer. In the early days, if at all possible, do this in person over a meal at a glamorous location. This is harder for well chosen suspects to refuse. Even if you are remote, you can hold an in person event in a city like New York or London and fly in your team and happy customer. Concentrating your prospects in a city is good business as self-referencing is more likely. Or you can organise your breakfast seminar at a leading trade show. As you learn what works, webinars can do much the same education job.
6. Qualify hard: when you follow up after your educational seminar, ask the qualifying questions that will reveal whether the suspect is a potential lead. Make sure they are a potential customer before starting a sales cycle and investing sales effort. Narrow the list as early as possible. Our Seedcamp portfolio rate this tip as “insanely valuable”. Great sales qualification questions are a key element of sales craft.
The most brilliant example I have seen of Rifle Shot Sales lead generation was done by my friend Robert. He was selling electricity network grid management software but the customers were spread out all over the world. By chance, the bi-annual trade show was coming up and most would be there. Robert managed to get hold of the conference attendee list and invited the most suitable suspects to a special case study breakfast and then booked face to face 1:1 meetings during the show.
Measure the success of your SDR function sales efforts
Finally, design the SDR function targets to deliver your business plan targets. Working from the top of the sales funnel, you can measure:
- Outbound emails sent
- Customer contacts converting from outbound emails
- Seminar attendees converting from contacts
- Qualified leads converting from seminar attendees
- Customers converting from qualified leads
The number of new customers and their average order value is equal to your revenue so you can track whether your lead generation activity will deliver your business plan. Adapt as you go along if you are not on track.
As your activities grow, ask every inbound lead what prompted them to contact you so you can measure the overall effectiveness of each lead source. Use your SDRs to do inbound lead qualification discovery calls.
Mixing it Up
Getting the maximum ROI on your various lead generation sources is possible if you know the number and value of leads from each source and how much you spend on that source. Many will choose a mix of sales led and marketing led lead generation and continuously optimise to get the best ROI overall.
Vendors like https://dreamdata.io/ are leading the way in this area.
You may be considering outsourcing your SDR function to an agency wholly or partially. You can spin up an agency resource overnight rather than taking weeks to hire in-house staff and they will be professionally managed.
However, in-house resources will find it easier to share sales process learning internally and be able to integrate into your business. And they will be cheaper. Eventually you’ll want to build an in-house function so you should start as soon as you can. Using an agency to pump prime and have a soft transition to in-house is often the best of both worlds.
Consider using other ways of creating leads. Industry analysts like Gartner or Forrester influence potential buyers. Thought leaders such as Josh Bersin in HR Tech have large followings. There are many industry newsletters where you can get mentions.
Whatever mix of marketing and sales is right for you …. go forth and educate but make it personal.
