8 Mistakes B2B SaaS Startups Are Making In Sales
“IF YOU’RE NOT MAKING MISTAKES, THEN YOU’RE NOT DOING ANYTHING. I’M POSITIVE THAT A DOER MAKES MISTAKES! - John Wooden
Venture-funded SaaS startups can sometimes make a few mistakes, especially in the beginning. Things like hiring AEs without a pipeline, adding territories too soon, no lead generation strategy, and lack of workflow automation can have a detrimental impact on your business. Which makes you wonder, what mistakes do most SaaS startups make and can they be avoided? Here you have a list with 8 of the most common mistakes we see in venture funded startups.
A lack of automation
Many times, SaaS startups have their AEs or SDRs wasting time on doing repetitive tasks such as list development, one-off emails, scheduling meetings in the calendar, and moving repetitive internal and external communications manually vs in workflow automation. All these things can be automated or outsourced. It’s a really good idea to automate as much of this as you can, otherwise you can end up with a lot of wasted time, confusion and lost opportunities.
Messy sales funnel
It’s very important to understand how leads are being generated and entering the sales funnel, but also how they are assigned, interacted with and when they’re converted. Many times, you will find businesses that leave leads in forgotten queues and never to be followed up with, because they were not properly assigned or pushed into workflows. Hiring a demand generation expert in the beginning of your sales and marketing efforts will strengthen the sales process as well as how opportunities are entered into the sales funnel and CRM . The demand generation expert will be able to monitor and map these processes, preventing messy sales funnels and lost opportunities.
Early territorial implementation
The sales and prospecting process usually changes quite a lot, especially in the beginning, and especially for B2B SaaS startups that are learning the best way to approach the market with their SaaS product . At first, maybe you want to focus on manufacturing companies, but later you discover that banking or telecommunication are the better verticals to focus on. In case the thing that drives your process is territories, then you must adapt and target the right prospecting process. This will prevent situations when you have reps without prospects because they are solely tapping into territories vs targeting the appropriate verticals.
Implement territories late in the sales and prospecting process, this will offer better insights into the verticals that will quickly adapt your SaaS service and products. It’s ok to hire reps for different regions, but don’t focus on the territory division especially in the beginning.
SDR’s are not executive assistants for sales reps
It can be a good idea to pair sales reps and SDRs. However, you need to ensure that their roles are properly defined and written down to prevent any issues. For example, the SDRs shouldn’t manage the sales rep’s calendar or perform data entry once an opportunity has been passed to the sales rep. What you can do is to define the way the SDR process works, automate as much of the process as possible, keep an eye on it to see how it goes and adjust accordingly. Having the right expectations from the start can make a huge difference down the line. We share the following quote by Brian Tracy, with our own SDRs and sales reps, “Keep your sales pipeline full by prospecting continuously. Always have more people to see than you have time to see them.” Remove any and all obstacles that will prevent your SDRs from prospecting continuously.
No training or onboarding process
Many SaaS startups (more than 80%) don’t have a training program for their new SDRs and sales reps. Instead, they just give them a few whitepapers and videos, and then the new reps have to shadow existing ones. It’s crucial to ensure that there’s a proper onboarding process to ensure everything is working as expected. In the end, investing the time to properly train your SDRs and sales reps will ensure your team performs at high levels. Remember, a significant portion of the SDRs and sales reps process should be automated, so you’re going to want to train them properly in order to keep the workflow automation running smoothly.
Unattainable sales quotas
We’re all eager to hit big numbers and drive huge amounts of revenue into a startup, however creating quotas that are realistically unattainable and close to impossible to reach for a new hire is the fastest way to failure. Overworked and overstressed SDRs and sales reps is a losing combination for any startup, and If the talent you onboarded misses their quotes to often, then you will notice that even the best reps lose motivation and end up leaving, because they don’t earn as much while burning the wick from both ends. Which is why you want to be realistic and set up the right quotas from the start.
Hiring SDR and AE hybrids
Every once in a while you’ll discover a unicorn capable of defining their sales pipeline and closing their own opportunities. However, most salespeople logistically can’t perform both the prospecting and generation aspect at the same time. Which means half of every quarter is spent on pipeline creation, while the other half they focus on closing deals. Once the next quarter initiates, they start from scratch and with few to no opportunities in the sales pipeline. This is a good option if you have a sales cycle of 45 days or less, however, if you offer an enterprise solution that takes longer to close, then you’ll need to divide prospecting and sales tasks between two or more resources. A good way to solve this is to start using specialized roles from the beginning of the entire process, like outsourcing a fractional demand generation expert and onboarding a senior sales representative.
Hiring closers without having a pipeline
AEs with a lot of experience spend a lot of time focused on booking a meeting. However, their pitch is not ideal, since they lack practice. After a few months, they end up leaving or even worse, they stay on the payroll and perform poorly while looking for another opportunity. To prevent such problems, it’s important to enhance the SDR team from the start. Ideally, you want to have just a single REP/CEO that’s closing deals. In my 20+ years of B2B SaaS sales and marketing, it has been my experience that purchasing leads have never been fruitful. However, recruiting an internal fractional demand generation or CMO resource has always benefited the sales pipeline. A fractional CMO or demand generation resource tends to fill the sales pipeline with targeted opportunities which allows the sales reps to focus on improving their sales pitch and closing deals.
These mistakes are very easy to perform, especially if your team lacks sales and marketing experience. (most likely your talent is creating software or running operations, not defining target personas, developing go to market strategies, or publishing paid placement ads) That’s why it’s a very good idea to understand what mistakes can arise and implement a successful sales and marketing strategy from the start. Doing so can help you save a whole lot of time, money and long term frustration!
