What SaaS sales leaders and media sales leaders can learn from each other
Hi! As someone who advises both SaaS companies and media companies, I find it fascinating how their sales leaders approach sales in very different ways, even when selling to the same types of customers.
SaaS tends to be more science and process-driven, whereas media tends to be more relationships and insights-driven. Both approaches have their merits and bad habits so in this week’s post I’ve outlined two best practices each group can take from the other:
Two things SaaS sales can learn from media sales:
1) Salespeople can prospect AND close
100% of the best salespeople I know do their own prospecting. The reason is simple; the tenacity and discipline it takes to connect with prospects is the same tenacity and discipline it takes to move them through the buying process to becoming customers.
Salespeople doing their own prospecting is the norm in most industries (not just in media) and was actually the norm in software sales before the SaaS model emerged. In my first sales job I did my own prospecting and many of my sales friends outside the US still do their own prospecting today.
By contrast, most SaaS companies (particularly US-based, venture-backed ones) split prospecting and closing across two teams. They have a team of sales development reps (SDRs) tasked with cold-calling prospects to generate meetings for a separate team of Account Executives (AEs) to close. This actually creates 3 problems:
The company is relying on an entry-level employee in sales development to create a positive first impression with a senior-level prospect who has ten plus years experience in their domain. It’s always going to be an uphill battle for the SDR to have a conversation of enough substance to engage and qualify the prospect.
If the prospect is remotely interested, they immediately get bounced over to a new person (the AE) to whom they have to repeat what they told the SDR because the internal handoff from SDR to AE was poorly documented. It creates a poor customer experience, which you see in the data with prospects no-showing for the AE call or becoming unresponsive after the AE call.
The company is hoping that the cost of paying 2 people to win a deal (instead of 1) is offset by an increase in volume and conversion of deals. However, this rarely plays out in practice driven by issues 1) and 2) above, which in turn invariably lead to a focus on increasing the quantity of calls instead of quality of opportunities. You see this in the data with prospecting lists that are not a match for the ideal customer profile and low conversion rates downstream.
Just because having SDRs worked for Salesforce in 2005, it doesn’t mean they are going to work for your company in 2021.
2) Customer success reps can renew AND upsell
Customer Success is another role created by Salesforce that everyone else copied without much thought. I met the VP Customer Success at Salesforce in 2013 and asked her what she did. She said her team, “makes sure customers are happy and have a great experience with Salesforce”. There was nothing in her job about driving revenue growth. It sounded more like a customer service team.
As we saw in an earlier post, the majority of profit is generated in the post-sale through retention and growth (upsell). However, many SaaS sales leaders still view their Customer Success team like Salesforce did, as the “good cop” who keeps the customer happy and never asks for money, leaving their Sales team to be the “bad cop” who goes after more business and locks the customer into a contract. Last month a CRO at a $30M ARR SaaS company actually told me, “I don’t want the CS team anywhere near our customers asking for more money”.
By contrast, in media sales the entire post-sale is handled by Account Managers, whose primary goals are to drive retention and growth of the the account. This has been the norm since the last century. Account Managers in media are usually highly analytical and highly focused on earning the right to stay in the customer’s marketing mix — because in media there is no concept of locking in a customer to a long term contract like there is in SaaS. The idea of keeping the customer happy is important but is a direct function of demonstrating the impact on the customer’s business.
For SaaS companies, rethinking customer success through the lens of account management is the first step towards generating more profit from your post-sale. Just like most companies can have their AEs prospect and close new business, most companies can have their account managers retain and grow existing business.
Two 2 things media sales can learn from SaaS sales:
1) Demonstrating impact is not the same as adding value
It’s common in media sales to work with intermediaries (ad agencies) who mandate that media companies provide “added value” (things like free trials, free impressions and free creative development services) in order to be considered for a piece of business. The ad agencies do it to show their clients that they are earning their fees, regardless of whether it drives business impact—and the media companies play ball because they want to remain in the consideration set for future deal flow. It creates a culture of loading up proposals with shiny objects and has the downstream impact of increasing complexity and cost for the media company.
By contrast, SaaS companies generally avoid intermediaries and sell directly to their customers. They focus on identifying business problems that their product can solve and charge based on the impact of solving the problem. When a customer asks for more features or for custom development, the SaaS company knows the value and impact and charges extra, or trades them for a longer term contract. It’s fascinating that this norm exists even when selling to the same marketing teams that are buying from media companies.
As a media company, the best way to shift from to adding value to demonstrating impact is to sell directly to customers, ensure you are solving their business problems and understand the impact you are having on their business. Even when they bring in their agency to execute the deal, the conversation is focused on the customer’s problem and impact rather than the agency’s desire for added value.
2) New customers are won or lost during onboarding
Media sales is a highly transactional business. The customer’s business problem exists, the budget to solve it exists and the buyer personas are easily identifiable, so the go-to-market motion is primarily about competing in a crowded market to win a share of the budget. With the widespread use of programmatic ad buying, it’s become very easy for buyers to dip in and out of media companies’ offerings and you see this in the data with both high new customer activation and high customer churn.
By contrast, SaaS sales is largely about finding a business problem you can solve, finding the buyer persona who is most impacted by the problem and then helping them find the budget to solve it. Assuming you get them to sign a contract, it immediately becomes crucial to get them to see the results. SaaS companies solve this by having a structured customer onboarding process where they map out the steps and timeline for the customer to get to their “first value milestone” — the moment when the customer sees the initial impact of the product and feels justified in their purchase. It gives the SaaS company the opportunity to create a favorable new customer experience and build a long term relationship.
Media sales teams can learn from this by ensuring they identify the impact their customer is looking for, the date by when they need to see it and the steps to get there. This helps set expectations and maintain mindshare, leading to a successful activation and a lower likelihood of churning.
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