PE-Backed CRO Guide to Growing New Logo Sales (Growth-Stage & Lower MM PE-Backed Companies)

Growing Your New Logo Sales

The blueprint below is meant to be strategic and is focused on driving growth at PE-Backed companies beyond an average benchmarked industry organic sales growth.

Assumptions:

  • Consistent Sales Pillars across Every B2B Company (especially software/SaaS)
    • every B2B SaaS company has many “commonalities” – i.e. Sales Pillars
    • it is thus feasible to create a playbook that is broadly applicable
    • however, there will be specifics that need to be customized to each individual company too
  • Your SaaS is ready for scaling:
    • your SaaS is far beyond PMF (product/market fit)
    • it is also beyond the stage of searching for a repeatable, scalable, and profitable growth model
    • you’re ready for the phase of scaling the business
    • Your SaaS company either has all of these “5 aspects” at least at a high level

Requirements for Scaling 

  • Great Product: To scale “disproportionately fast” you need a great product/solution that people need and that just works
  • Thoughtful Plan: You need to build an operating model so you know the numbers and key levers/knobs to hit the intended target
  • Right People: A-Player Sales Team & Capability to Recruit Very Fast and Very Well (this is harder to do than it sounds)
  • Accelerating Pipeline: Tier-1 and Scalable Demand / Lead Generation Engine (this is critical)
  • Scaling Expertise: The Sales Leader must have extensive expertise in scaling (this is a unique skill – i.e. not growing, but scaling !)
  • Analytical Sales: Data-Driven, Scientific, and Analytical Sales Management – the Sales Leader must track the key metrics daily

 

  • Planning – Scaling “Plan” 
    • Plans are nothing but planning is everything” – Eisenhower
    • develop Top Down Financial Model & Bottoms-Up Model
      • to what $ Revenue are you able to scale based on your context and specific constraints
      • financials – how to grow profitably (maintaining your requisite or Board-approved level of unit economics)
      • you should also try to benchmark yourself to the industry to assess your growth rate context
    • Now set clear goals for what scale level you’d like to achieve
    • Unit Economics
      • It’s important to understand that impact of your scaling on your unit economics and profitability and to get an agreement from the Board and the executive team after reviewing several scenarios
      • LTV:CAC – typically people mention 3x but that’s not realistic in 80% of the earlier SaaS companies prior to $50M in ARR (assuming mid-market B2B deal sizes)
      • Payback Period – another statistics that is misunderstood is a 12 month Payback but this is also not as likely for 80% of the B2B SaaS companies until the level of recurring revenue of around $50M ARR
    • Build a Sales Operating Model in Excel
      • this will have a capacity plan (with headcount & ramp data)
      • your Pipeline Creation / Opps Inflow by different sources, leads, conversions, etc.
      • distribution and breakdown of Inbound vs. Outbound SDR production
      • your # of deals closed based on Win Rates from relevant segments
      • your $ sales bookings based on the deals, win rates and average $ACV/deal sizes by sources
    • Sales Strategy that Produces Scale
      • what is the game plan for how you will grow
      • Review and make sure your Sales Strategy is sound and valid for scaling
      • Review and make sure you have a solid Go-to-Market (GTM) plan to scale
      • Assess which Sales Effectiveness Drivers you will use to scale
    • Products/Solution that Enable Scale
      • Strong product with high NPS, new product roadmap, product team aligned to enable sales
    • Use Common Sense & Sound Judgment (Logic & Reason)
      • don’t set goals that are unattainable (aggressive but attainable is key)
      • understand the key resources you need to hit your goals
      • understand and communicate the risk factors and align with others on the team
  • Scaling your Pipeline 
    • The #1 way to scale is to have Effective Lead Generation first and foremost!
    • A healthy and growing Sales Pipeline is critical for scaling – it is one of the 2 most important things in sales (the other is People)
    • Make sure there is a scalable handoff process between Lead Generation & Inbound SDRs
    • Build the pipeline & manage the pipeline well
    • Track your Pipeline Inflow, Pipeline Integrity, Pipeline Flow/Changes, Win/Loss
  • Sales Systems & Process for Scaling Growth
    • to build a “well-oiled” sales machine, you need clear and simple Systems & Processes
    • define a consistent + repeatable + scalable processes within each system
    • One key process you must define among the first is a Sales Process
      • It must be in the Playbook and the team must be trained on it
  • Scalable Sales Playbook 
    • develop a Sales Playook to ensure everyone is following a consistent process and training
  • Sales Org and Structure Designed for Scale
    • Determine the right size and structure that scales over time commensurately with scaling sales growth
      • You need to have the sufficient # of people (see your Sales Operating Model & headcount plan)
    • Sales Org Structure – must be designed for scalability
    • Scalable Recruiting Process – you must be able to recruit commensurately with your growth plan
      • Hire the same/consistent type of sales professional
      • Have a strategy to recruit fast but well (i.e. A-Players)
      • Focus on hiring *great* Front Line Managers (FLMs) as a priority even before hiring great reps
      • you are effective at recruiting these A-Players commensurately with your planned revenue growth rate
    • Get the right people in the right seats (in the right roles)
    • Sales Culture that celebrates rapid execution at scale
    • Compensation structure that rewards over-attainment, larger deals and retention
    • Aligned territories
  • Sales Team Development at Scale
    • Onboarding that ramps people quickly
    • 1-on-1 Coaching: coaching is about tweaking improvements and not making big changes all at once
    • Managing: a sales manager is there to help, not to babysitting
    • Ongoing Training
    • Internal Mentoring
  • Precision in Execution
    • Execution is a process & Execution is everything – you must execute well irrespective of a great plan
    • Focus only on What Moves the Needle – people typically think that working harder will produce more results – this is a misconception because “hard work” is not going to be effective if you put more effort into things that don’t work – doing more of what doesn’t work will not work instead, fix what doesn’t work and improve what works and do more of what works
    • Remember “Common sense is not so common” (Voltaire) – make a proactive effort to use sound judgment and common sense – when you are scaling rapidly, a lot of balls can be easily dropped because you are running very fast and this where you must be proactive/careful (for example, demand gen is not producing and pipeline is thus falling behind – this is a red flag and you have to know when to shift gears and fix that plus set expectations internally because things can easily get out of alignment)
  • Tracking Key Metrics Designed on Scaling Growth
    • Daily Check – Progress Trajectory checked daily where you are vs. where you need to be (trajectory)
    • Effectiveness ratios
      • what are the necessary KPIs to achieve intended results?
      • i.e. how many Dials:Meetings, Meetings:Opps, Opps:Deal you need
    • review regularly and optimize, course-correct, adjust
    • use metrics to identify positive opportunities
    • the primary focus of the process & metrics to help your each individual sales rep get better (not to punish them)
  • Optimize Weakest Points, Bottlenecks & Constraints
    • Identify bottlenecks & constraints and look for how to improve here
      • e.g. a good practical set of insights: “The Goal: A Process of Ongoing Improvement” by Eliyahu Goldratt
    • The process of scaling will present many constraints and it’s more important in scaling than at any other area of sales management to carefully assess the bottlenecks and constraints on a regular basis and to seek them out proactively
  • Attaining over 100%+ of Your Goal
    • Scaling is hard but over-achieving an already-aggressive B2B SaaS revenue goal is even harder
    • There are the primary ways to do this but it is not easy
      • Exceptional team
      • Hard work on things that produce results
      • Exceptional and high-performing Demand Generation / Lead Generation – i.e. DemandGen Machine
      • Levers
        • Identify better % win in Win/Loss Analysis – ex: use InsightSquared
        • Identify better Target Buyer using a Win/Loss Analysis – ex: use InsightSquared
        • Increase the Budget for Demand Gen
        • Increase the OSDR focus on bigger deals – higher $ACV / $ARPU
        • More OSDRs and thus # of Meetings and Opps created (see the Magic Sales Formula)
        • Improve Execution (see the Execution process)
        • Improve Sales Messaging / Differentiation
        • Offer Promotions to prospects
        • Improve Incentives to the team for the quarter

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Note 1 – The Great Ones Struggle to Explain How They Do What They Do

Before you read on, here is one thing that is important for a CEO to understand when you’re hiring great sales people or great sales leaders.  If you listen to the Sales Leadership Podcast by Rob Jeppsen – listen to episode 47 with Amy Appleyard who is the SVP of Global Inside Sales for Carbon Black.  Rob talks about how sometimes a really great sales professional or sales leader may actually have a hard time explaining how they do what they do so effectively. Rob also mentions John Barrows (who is a renown sales trainer and expert who trains sales teams at the world’s leading companies) – John Barrows also commented that if you are great at what you do, it is sometimes difficult to simplify the explanation on how they do so well.  Rob mentioned correctly that Picasso cannot easily explain in very basic and concise terms how he did so well.  And this is very common just because the expertise and talent and genius is not always something you can put in words in very simple terms.  How does Tom Brady do what he does?  How does Bill Belichick do what he does?  Of course, it is explainable but not in simple and concise terms – and that is the struggle because everyone desires a very simplified explanation where as talent and years of organically established expertise with some talent is not simple to explain.  Therefore, this is a question that requires patience to hear the answer and put it in perspective.  But nevertheless, I am going to lay out in the most clear terms the process to scale sales below.

 

Note 2 – While Contexts are Different, there are Pillars That Are the Same and Consistent

Also, when a CEO hears a VP of Sales offering his or her “playbook for growing sales” – this may initially seem questionable to some CEOs who have not run sales.  In fact, the first, initial instinct is that every company is different so it is presumably impossible for a VP of Sales to propose “their playbook” unless it is utterly customized and innovative and new. A playbook for growing sales has consistent pillars from company to company but also many things will vary based on different contexts – after all sales is sales (best practices of effective selling are the same everywhere), sales management is sales management (this also is the same irrespective of the company or industry), and scaling teams or implementing processes or developing people doesn’t change much for the most part

 

Source: see the original post on Revenue-Inc.com