From Impossible to Inevitable: How SaaS and Other Hyper-Growth Companies Create Predictable Revenue

by Aaron Ross

Engagio rearranges those steps into an Account Based Marketing approach integrating Outbound Marketing and Outbound Prospecting: First decide who (which companies or people) we want to speak with, then Map out what they want to hear and learn about, based on our account research, and Figure out how to get that value front of them: online marketing, webinars, cold prospecting, events, direct mail …?

The “magic bullet” in creating this Account-Based Marketing revenue team: shared goals, metrics and target accounts between sales and marketing, then working together toward them, and keeping up regular communication to spot and fix the inevitable problems.

If you're struggling or don't have much to rely on, here's a simpler approach. First, here are some mistaken beliefs in marketing: Build it and they will come (a fairy tale). More is better (not necessarily). Inbound leads are free (an urban myth). It should happen fast (an evil expectation).

When you host live events, especially in person, it's a visceral experience to see people show up and get value. Or not. You're forced into clarity, revisiting which niche you're trying to nail: Who do you want to attend? Why would they come; what will they get out of it? What will you teach or offer, and how will you deliver? What action do you want them to take afterward?

When you host live events, it's a visceral experience to see people show up and get value. Or not.

Other things to love about events: They create reusable content. They build your audience. They generate leads and revenue. Your team connects with real live humans (oh my!).

Pro Tips First, pick a date for the live event. Announce the date to people you know (before you have all the details, or even a title or location). It's okay to change it before it happens. No matter what, don't chicken out! Go through with it, even if no one shows (which can happen). What you learn from this is more important than the results (how many people attended or took your Call to Action). Do it again, and again, and again, and again …

Marketing with partners is the simplest way to expose new people to your brand. It's hard building an audience from scratch. Working with partners who already have a relevant audience makes pretty much any kind of project more effective.

Marketing with partners is the simplest way to expose new people to your brand.

When salespeople have been trained as prospectors, they develop the mind-set and skills to be entrepreneurial and make things happen instead of waiting around for something to happen for them.

Easier to double: After you've figured out the messaging and steps, outbound prospecting is a place where you can double your results by doubling the team.

Increase deal sizes: Your average outbound deal could be 3 to 10 times larger because you can specifically target bigger opportunities and avoid small ones.

Small team, big impact: You don't have to invest a ton and hire a huge team; even a small number of outbound reps can add another 10% to sales. And even a 10% increase in recurring/SaaS sales per year has a huge impact on your profit and valuation.

You can sell deals that are large enough to be profitable, usually $10,000–$20,000 in lifetime value (bigger is better). Yes, outbound can work with smaller deals, but it's harder to do it profitably.

Your value proposition is easy for a prospect to understand and say yes or no to. If your proposition or messaging is jargonish or vague (“we can help you grow revenue or reduce expenses”), you'll struggle. Products tend to be more concrete than services, so tend to be easier to sell. We're talking on average. The more concrete you can make your offering and value—even in services—the easier for a prospect to “get it,” the better.

You're selling something they “add in” without having to rip-and-replace a prior system: If you're trying to call in and compete with DropBox or some financial system, to get a company to rip that out and replace it with your service, it's hard. You have to have a damn good reason for them to do it—a reason that you're 10 times better. It's much easier to look for opportunities where the buyer doesn't need to replace or trash an entrenched system that works “well enough.” Whether you call this white space, green fields, blue skies, or magenta flowers, look for that kind of market or way to position yourself.

You're not differentiated, or your different because “we have the best service/most experience.” That won't fly with outbound—too vague. However you're differentiated in your own mind, does it resonate with prospects? Probably not. You can't have 100 competitors selling similar stuff or sounding similar and expect easy outbound success. There's too much noise (= confusion) and prospects just tune you out. Go back to the Nail a Niche chapter and exercises.

Crowded market: Related to the earlier point, some markets are just extra crowded with thousands of players: hosting, MSPs, VARs, website design, creative/digital agencies, to name a few. Is it harder? Yes. Can outbound work? Yes, if you niche your outbound programs in ways you can differentiate. Compare: “sales training” versus “cold email training” versus “increasing cold email response rates.” (Hint: Don't outsource outbound in these markets, start with an internal SDR hire.)

Unrealistic expectations: “Hey guys, it's been 60 days—where are our closed deals?” It takes three to six months to go from scratch to consistent pipeline generation—and longer to see regular revenue, depending on how long your sales cycle is (and outbound cycles will take longer than your inbound cycles). Stick it out! We break down time frames at the end of this chapter, in “Build an Outbound Program Right the First Time.”

It takes three to six months to go from scratch to consistent, quality pipeline generation—and longer for revenue. Stick it out!

Phone calls aren't obsolete: Don't let reps succumb to “phone fear.” Pick up the damn phone! Prospectors should be having live conversations every day.

Teams get Sales Specialization wrong. Common: Making an SDR do both inbound lead response and outbound prospecting—they don't mix! And lumping inbound lead response and outbound prospecting metrics, dashboards, and processes together, muddy the results waters of both.

Prospecting went from generating 0% to 40% of all new business sales pipeline (thus almost doubling their new business growth rate).

What's Expected of Acquia's Prospectors? Send 600–800 cold outbound emails a month. Make 350–450 outbound calls a month. Daily: Mix in some social media touches (LinkedIn, Twitter, etc.) and personalized emails to executives. Schedule 20 longer demo/discovery calls between influencers and Acquia salespeople, per month. Tally 15 Sales Accepted Leads (SALs) passed to and accepted by salespeople, per month.

The way the math works out with prospectors, revenue comes faster by finding bigger deals, not by pursuing every single opportunity.

Growing sales at portfolio companies (as opposed to other methods like cost-cutting) is the best way we've found to triple value fast.

Potential acquirers will pay a lot more for a faster-growing company than a slower-growing company. So organic sales growth is our #1 focus.

Base Case is for financial planning, Target Plan is the management commit, and the Stretch Plan is our aspirational target.

The number of new initial qualified meetings held, The number of proposals sent, and The number of opportunities won/customers signed. … … as well as measuring and improving every step of the journey between those milestones.

We set aggressive targets for each step in the funnel, and backcast our way to the number of sales activities (# of calls, # of emails, # of social touches, etc.) needed to achieve the new target (ignoring conversion improvements for now).

We set aggressive targets for each step in the funnel, and backcast our way to the number of sales activities.

Let's say the prior 12 months’ results were: ~120,000 emails sent, 251 qualified meetings held, 153 proposals sent, and 50 opportunities won. We know we need to sign 200 new customers per year ($3,000,000/$60,000). To hit this target, we create quarterly goals to generate ~480,000 emails, 1004 qualified meetings held, and 612 proposals sent. We plan the best ways to grow these activities while also improving conversion, which helps offset diminishing returns we see from higher volume outbound emailing.

When we analyze all the lead sources across our portfolio companies that add new customers, outbound prospecting, and especially cold emailing, has created the most predictable pipeline (it commonly sources ~70% of new deals). But not all cold emails are equal, and the difference between amateur and expert cold emailing is dramatic. We target a 1-in-200 email-sent-to-meeting-booked ratio (yes, it can be much better in small samples, but not at the scale we operate at). We've seen an email-sent-to-meeting-booked ratio as poor as 1 in 9,000. The value of a qualified new initial meeting can be worth $5,000 or even much more, so improving this ratio is worth millions to us.

To hit these outcomes in only two or three years, we focus on outbound prospecting first.

We want to immediately improve the conversion rate of “New Initial Meetings Held” to “Closed Won.”

All sales reps (experienced or not) benefit from call scoring and coaching.

For an interview and more details on how this call scoring works (or can be done for you) go to PredictableRevenue.com/scoring

Conversions: The number of emails sent to a new initial meeting held should be closely tracked and improved.

“Who's your ideal customer? What do they care about? When we write emails or make calls, what makes us sound mechanical versus human?”

Get the Sagemount Sales Acceleration Deck at www.FromImpossible.com/sagemount.

You can triple your company's value, too. Assess your willingness and your team. Measure and set the goal. Be ready to slay the sacred cow (usually something your team has been saying needs to happen for a long time, but you haven't listened). Then create a Forcing Function to create leverage—like taking an investment, publicly announcing a goal, or hiring/assigning a key executive to lead the effort—and burn your bridges to force the changes you know need to happen, but have been putting off.

Burn your bridges to force the changes you know need to happen, but have been putting off.

Zuora looks to see if a prospect is pursuing one of the “Eight Growth Initiatives”

Zuora looks to see if they fall into one of the “Eight Growth Initiatives,” signaling they are serious about considering a major shift to subscription: Launching a new product or service Going international Move into new segment (Up- or Downmarket, Launch Self-Service or Sales Assisted, Multichannel) Pricing and packaging model change Cross-sell/upsell additional products Massive sales team growth Reduce churn Acquisition/spin off of business line

Marketing's measured on the number of qualified opportunities that sales accepts.

Zuora mixes a variety of functions into a mini-business “franchise team.”

Push for, and expect, outbound results soon …. maybe not revenue, but at least meetings and pipeline. If you're not seeing qualified pipeline increase within six to eight weeks, something's wrong. If you're building an outbound prospecting program from scratch, you'll see revenue in year one, but not exponential revenue until years two and beyond.

To see the video interview of Zuora executives Kyle Christenson and Franke Ernst, go to www.FromImpossible.com/resources

Revenue Per Outbound SDR = (# New Customers Per Month) × (12 Months) × ($ Avg Outbound Deal Size)

Estimating # of New Customers per Month: At SaaS and differentiated companies, one well-trained Outbound SDR can set up 12–20 Discovery or Demo calls a month. Of those, 8–10 end up in the sales pipeline as Sales Accepted Leads (SALs). We're using baseline averages.