Written by GTM: So Critical for SaaS and Ways to Do it Right
For Software-as-a-Service (SaaS) companies, an effective go-to-market (GTM) strategy is crucial for driving revenue growth and capturing market share (without burning all your cash). We explore key elements of GTM and discuss how SaaS companies can use A.I. tools to optimize ways to improve sales efficiency, reduce ramp time, and leverage key metrics for success.
Sales Efficiency:
Sales efficiency is a critical component of an efficient GTM strategy. It focuses on streamlining the sales process to maximize revenue generation while minimizing costs. In addition to hiring salespeople who have extensive contacts to enhance sales efficiency, SaaS companies can consider the following:
Targeted Marketing: By identifying the ideal customer profile, SaaS companies can tailor their marketing efforts to reach the most promising prospects. This reduces customer acquisition costs (CAC) and ensures that resources are allocated to opportunities with the highest likelihood of conversion. This makes sense as it’s about finding customers who intend to purchase your software.
Sales Enablement: Equipping sales teams with the right tools, training, and resources empowers them to engage with potential customers effectively. Providing comprehensive product knowledge, sales collateral, and ongoing coaching enables salespeople to articulate the value proposition, address objections, and close deals more efficiently. (Dont leave new hires to figure it out as you don’t want them to take nine months to book a win).
Sales Quota Attainment: Setting realistic and achievable sales quotas is crucial for motivating sales teams. Regular performance assessments, transparent feedback, and rewards for achieving or exceeding targets can boost salespeople’s drive and help them meet their quotas consistently. Success begets success, so help them get some wins on the board. A quota of $1.6M is a steep mountain to climb, so be thoughtful on targets for newbies.
Shorten Ramp Time:
Reducing ramp time is another key factor in optimizing a SaaS company’s GTM strategy. To minimize ramp time and accelerate sales effectiveness, consider the following:
Structured Onboarding:
Implement a comprehensive onboarding program that provides new hires with the necessary training, product knowledge, and guidance to quickly grasp the value proposition and navigate the sales process. We were very systematic at my prior companies in terms of the 30, 60, 90 day plan. Pairing new hires with experienced mentors can also help accelerate their learning curve. Have all the collateral ready to go for new hires.
Sales Playbooks: Developing and sharing sales playbooks that outline best practices, objection handling techniques (you will usually hear the top ten repeatedly), and successful sales anecdotes can empower new hires to quickly adopt proven approaches, reducing the time required to learn through trial and error.
Some popular voice recording, learning tools and targeting tools that can help your account executives that I’ve used to improve training include:
Gong: Gong is a conversation analytics platform that records and transcribes sales calls, analyzes them using AI, and provides insights on improving sales performance. Gong helps to identify patterns, best practices, and areas for improvement in their sales conversations, which can help close more deals. (https://www.gong.io/)
Chorus.ai: Chorus.ai is a conversation intelligence platform that records and transcribes sales conversations, analyzes them using AI, and provides insights on improving sales performance. Chorus.ai offers similar features as Gong, including call recording and analysis, but also includes integrations with popular CRMs and sales engagement platforms.(https://www.chorus.ai/)
ExecVision: ExecVision is another conversation analytics platform that analyzes sales conversations and provides insights on improving sales performance. ExecVision includes sentiment analysis and voice recognition, which can help salespeople to identify critical moments in their sales conversations and improve their pitch.(https://execvision.io/)
Refract.ai: Refract.ai records and analyzes sales conversations, provides feedback to salespeople, and offers coaching tools to improve sales performance. Refract.ai offers features such as call transcription, sentiment analysis, and keyword spotting, which helps to identify areas for improvement in sales conversations.(https://www.refract.ai/)
Avoma: Avoma is a conversation analytics platform that records and transcribes sales conversations, analyzes them using AI, and provides insights on improving sales performance. Avoma offers conversation highlights, action items, and call transcription, which can help salespeople to review and improve their sales conversations.(https://www.avoma.com/)
SalesLoft: SalesLoft is a sales engagement platform that helps sales teams to personalize their outreach and follow-up, automate repetitive tasks, and track engagement metrics. SalesLoft can help salespeople to streamline their workflow, improve response rates, and focus on high-value activities.(https://salesloft.com/)
Outreach: Outreach is a sales engagement platform that helps sales teams to automate their outreach, personalize their messaging, and track engagement metrics. Outreach can help salespeople increase their response rates, improve productivity, and focus on high-value activities.(https://www.outreach.io/)
ZoomInfo: ZoomInfo (sort of expensive) is a sales intelligence platform that helps sales teams to identify and target their ideal customer profile, build prospect lists, and enrich their data. ZoomInfo can help salespeople to prioritize their outreach, personalize their messaging, and improve their targeting.(https://www.zoominfo.com/)
Increasing New Logo Wins:
To increase the number of new deals won in a quarter, SaaS companies can employ the following strategies:
Sales Pipeline Management: Implementing a well-defined sales pipeline with clear stages and criteria helps sales teams focus on opportunities with higher conversion probabilities. Regularly reviewing the pipeline and coaching sales reps on deal progression can accelerate closing new deals. There is a whole category called RevOps which we will detail next time which deals with automation.
Targeted Sales Campaigns: By aligning marketing and sales efforts, companies can run targeted campaigns for specific customer segments or industries. This approach allows for personalized messaging and find the right buyer for your software.
Metrics to Monitor in Finance (Zuckerberg said it’s about Efficiency)
Tracking and analyzing relevant metrics is crucial to understanding the effectiveness of a SaaS company’s GTM strategy. Consider the following metrics for evaluating and improving performance:
Customer Acquisition Costs (CAC): CAC helps measure the average cost of acquiring a new customer. By monitoring CAC, companies can identify cost-saving opportunities, optimize marketing and sales efforts, and focus on channels that deliver the best ROI.
Marketing Qualified Leads (MQL) to Sales Qualified Leads (SQL) Conversion: Tracking the conversion rate from MQL to SQL provides insights into the lead quality and the efficiency of the marketing and sales handoff. By refining lead qualification criteria and nurturing MQLs effectively, companies can improve conversion rates and ensure that the sales team receives high-quality leads.
Annual Recurring Revenue (ARR): ARR measures the annual value of subscription-based contracts. Increasing ARR requires acquiring new customers, expanding accounts, and reducing churn. Therefore, monitoring ARR growth provides a holistic view of a company’s revenue trajectory. New ARR is great but also go after renewal ARR and expansion ARR.
Don’t Forget it’s The Year of Efficiency:
One metric that we measure consistently is the Bessemer Efficiency Index. It’s a metric that measures a SaaS company’s efficiency in acquiring new customers and generating revenue relative to the cash used. The formula for the Bessemer efficiency index is (revenue growth rate – CAC) divided by the revenue growth rate. A high Bessemer efficiency index indicates that a company is efficiently acquiring new customers and generating revenue. Here’s a great article from Bessemer on efficiently scaling.