Small Fish Big Deals

Category: GTM

  • The Rational Purchase Question in Enterprise Sales and Customer Success

    The Rational Purchase Question in Enterprise Sales and Customer Success

    There’s a tendency for people to believe they are rational actors, but subconsciously believe others aren’t. This shows up a lot in sales and customer success teams and is worth actively fighting against. It’s easy – and fatal – to believe that a deal will happen for irrational reasons.

    Some deals happen for irrational reasons; your champion loves the idea of working with you and can make decisions on their own. Your customer enjoyed being flown across the country to speak at an event (and the dinner and drinks) and is going to bat to make the renewal happen despite the project underperforming – but you cannot count on this.

    It’s more common for a failing platform backed by a great relationship to churn than a thriving platform with a mediocre relationship. You need the decision to spend money with you to be the right rational decision.

    Rational decisions to spend money at large companies

    The rational reason for a new business deal being signed is that the company is confident that a large return will be had on the investment, and that return is important to them. The rational reason for a renewal happening is that the company is seeing a large return on their investment in an important area, and is confident that it will continue.

    If you are selling to a company of over a few thousand people and expecting a decent contract size, it’s likely that 10+ people will be involved in the decision to start or continue working with your company.

    You should expect your champion to need to convince people in their area of the business all the way up to the Economic Buyer, as well as make sure that IT, procurement, legal, and any adjacent business areas that will be impacted by the project or competing for the resource, employee’s attention or IT real estate are on board.

    Meetings will happen to evaluate the deal between this group of people. Arguments for and against will be heard. Evaluation spreadsheets may be filled out. ROI projections and business cases will be dissected. Your champion will be grilled.

    If the company does its job, only rational purchases will happen.

    Are you a rational purchase?

    Ask your sales and customer success teams whether the customer should rationally decide to purchase you. Then ask them to explain. Any ‘fluffy’ answers around positive sentiment, relationships, marketing, feedback etc should be put to one side. You’re looking for explanations of why it makes rational sense for 10 people in a meeting to decide to spend money with you.

    To go further, ask if 10 people in a meeting on the customer side would answer ‘yes’ to these 3 questions after hearing all sides of the argument:

    1. Is this delivering or expected to deliver a large Return on Investment for the customer?
    2. Is the ROI in an area that is a top 3 priority for the Economic Buyer paying for it?
    3. Are we uniquely able to deliver this value?

    Answering ‘yes’ to all 3 of these questions makes you a rational purchase. Answering ‘no’ makes it irrational to spend money on you. Simple, but not easy.

    A ‘no’ to any of these questions isn’t fatal. It’s a problem to fix. It’s some hard work for your CSM or AE to focus on immediately so that they can confidently return to you at a later date with 3 ‘yeses’. Their job is to make the purchase rational.

    The role of the warm and fuzzy

    Taking a customer out for dinner, positive sync calls, and sending birthday gifts have their place – but they’re not enough for a rational purchase. The issue is that they’re usually easier to make happen than the hard work required to make sure value is being delivered.

    Building great relationships should be valued, but only in the context of a rational purchase.

    Conclusion

    The most successful sales and customer success teams understand that good relationships are necessary but not sufficient. By consistently focusing on delivering measurable ROI in priority areas where you have a unique advantage, you go from nice-to-have to must-have.

    Behind every purchase decision is a group of people who need to justify their choice with data, not dinners. Help your champions build an airtight rational case, backed up by evidence.

    Rational Purchase Framework

    You can use the below framework to evaluate your sales and renewals for rationality:

    1. Significant ROI (Q1)

    “Is this delivering or expected to deliver a large Return on Investment for the customer?”

    • Score 1: No clear ROI calculation exists
    • Score 3: Some ROI evidence but not fully quantified or the customer doesn’t fully believe in the calculations
    • Score 5: Documented ROI with metrics the customer agrees with

    Action items if score is below 3:

    • Schedule value assessment workshop
    • Work with customer to establish baseline metrics and document ROI
    • Create ROI calculator specific to their use case

    2. Priority Focus (Q2)

    “Is the ROI in an area that is a top 3 priority for the Economic Buyer paying for it?”

    • Score 1: Unknown priorities or clearly not in top 3 priorities
    • Score 3: Related to a priority but not directly aligned, or in a priority area for the company but not your EB
    • Score 5: Directly addresses a stated top priority for the company and EB with evidence

    Action items if score is below 3:

    • Research company’s annual report/strategic initiatives to pull out priorities
    • Run discovery with champion about Economic Buyer’s priorities
    • Request meeting with Economic Buyer to understand priorities

    3. Uniquely Capable (Q3)

    “Are we uniquely able to deliver this value?”

    • Score 1: Multiple competitors offer similar solutions. Customer purchasing team believes DIY build would suffice.
    • Score 3: Some differentiation but not clearly articulated or valued by the customer
    • Score 5: Clear, defensible unique advantages that customer acknowledges. We’ve set the Required Capabilities in line with our unique capabilities.

    Action items if score is below 3:

    • Conduct competitive analysis specific to customer’s needs
    • Document unique capabilities relevant to this customer. Help customer set Required Capabilities in line with our unique capabilities
    • Create side-by-side comparison focused on customer priorities and show how our solution uniquely delivers the promised ROI.

    Interpreting Your Results

    12-15 points: Strong rational case. Focus on reinforcing evidence and preparing your champion for internal discussions.

    8-11 points: Work needed. Prioritise improving lowest scores before proceeding.

    Below 8 points: Deal at risk. Consider a reset strategy focused on fundamentally changing your approach or value proposition.

  • Why Most Agency Relationships Fail (And How to Ensure Yours Doesn’t)

    Note: I’ve also shared this on my personal blog (WillRead.co), as I think it’s relevant outside of the SaaS world too

    With use of agencies, consultants and freelancers rising due to the economic climate, the AI wave empowering smaller teams, and Naval prophesying the end of the 9-5 and an explosion of freelance and contract arrangements, here are some useful rules of thumb for agency selection.

    I’ve wasted hundreds of thousands of dollars on agencies that produced negligible results. I’ve spent similar amounts on others and seen 10x return. Founder friends tell the same story. So – how do you give yourself the best chance of success?

    For simplicity, ‘agency’ refers to any person or company you outsource a service or project to. Think SEO, PR, recruitment, design, ads, etc.

    Where it all goes wrong

    Let’s start with the inverse of what we want. The nightmare scenario; you pour significant time and money with an agency and they fall way short. This typically happens for one of only a few reasons:

    1. Lack of Prioritization: You aren’t a top concern, meaning you don’t get their best people, effort, or resources.
    2. Incapability (General): They simply lack the skills or experience to deliver the promised results for anyone.
    3. Incapability (Specific): They might be good, but not at delivering results for a company like yours, in your specific niche or situation.
    4. Misaligned Expectations: A gap exists between what you expect and what they plan to deliver (scope, timelines, outcomes).
    5. Client-Side Issues: Your own processes, communication, or ability to collaborate effectively with external partners are lacking.

    Assuming you have a tight brief, can work well with external parties, and they are capable, we’re going to focus on point 1. These rules should help make sure you’re getting a level of attention, service and prioritisation that will lead to great results.

    Rules for working with agencies

    Only work with agencies that will prioritise you and treat you as a top 3 (ideally top 1) client. This usually happens when:

    1. The amount you’re paying them is a significant portion of their revenue: the simplest way to get their attention
    2. A testimonial from you could meaningfully impact the trajectory of their business: if your shared success could create a step-change in the future of their business, it’s more likely to happen
    3. You can build a close relationship with a senior contact (ideally the owner/CEO/MD) you can speak to at any time, about anything. Ideally you want to be on WhatsApp/Text/’Quick Call’ terms
    4. You can incentivise high performance and disincentivise poor performance: this can be through % of upside arrangements, or can be achieved just by avoiding unnecessarily long contracts
    5. You’ve been able to run a reference call on them, ideally with someone you know and definitely with a company that looks like yours (size/need/situation)

    Agencies that get it

    A shoutout to agencies we’ve had great working relationships with:

    • Thrive Accountants who took us from disorganised mess to confidence in our numbers
    • Seene Digital who have helped us with all things SEO
    • James Ker-Reid of Sales For Startups who helped us transition from me doing all sales to a high performing team
    • Canvas Offices who grew with us and always had creative ideas
    • The Animation Guys who delivered some great explainer videos for us and our CMO loved working with

  • MVP Sales Enablement Materials for Enterprise SaaS Startups

    The Minimum Viable set up to ensure success for your sales team

    In this post i’m defining sales enablement materials as internal artefacts that help make sellers more effective. They include decks, one pagers, guides, templates, etc. etc, and are used during onboarding and day-to-day by your sales team. They can be for internal audiences only or may be suitable for external audiences too.

    I’m aiming this list at Enterprise SaaS Startups/Scaleups with under $5m in ARR and less than 10 AEs. There’s a goldilocks zone for sales enablement materials and processes at these companies; too little and sales people will be inefficient at best and fail at worst. Too much and you’re wasting valuable time, effort and resource that could be spent on selling on building things that won’t get used.

    I’ve found the following items to be a solid MVP to keep the whole sales (and wider GTM) teams aligned and make it likely that new hires will be successful. I’ve also played agony aunt to multiple friends and ex-colleagues that have joined companies where most of these are missing – it doesn’t end well!

    The list;

    • Value Proposition, Personas and Pains Explainers; Why do we exist? Who do we serve? What do they care about (whether we exist or not)? What pains are they solving with our platform? What types of pre-existing initiatives do we fit into? How do we guarantee their success?
    • Sales Process Map; How do our sales happen? What is the customer’s typical buying process, and how do we meet it? Ideally this should be customer centric and each stage should have a Customer-Verifiable Outcome to Exit (aka a CVO2E – a complicated way to say that deals move through the process based on what the Customer says and does, not what you do). Example CVO2Es: The customer verbally confirms that they have the pain we solve, or the customer confirms over email we’re the preferred supplier.
    • A Sales or Qualification Methodology; How do you ‘do’ selling? How do you ‘do’ discovery? What makes a deal ‘qualified’? It’s usually easiest to use an off-the-shelf Qualification Methodology here to save you time and let you tap into existing resources/knowledge online. I like MEDDPICC.
    • Sales Deck; A multi-purpose deck outlining what you help customers with and how, how you’ve done it for others. Balancing slides vs product demo vs discussion during sales calls is an art, but i’ve always found it useful to have some visuals to prompt discovery and discussion. Separate post on an MVP sales deck to follow.
    • Business Case (aka Proposal); Used in the later stages. A clear, customer-focused document outlining the Why, What and How of what’s being proposed, along with the expected benefits and links to further reading (e.g. Case Studies, ROI calculations, Product Demos). Use the customer’s language and include the important things you’ve agreed and learned along the way. Nate Nasralla’s writing on Business Cases is excellent
    • Best practice examples inc.
      • Selected call recordings from each stage of the sales process from discovery to negotiation and procurement
      • Emails from successful outreach, first call follow-up, thawing cold deals, multi-threading
      • Successful Business Cases
      • Successful
    • Competitor Info; Without getting obsessed by your competition, your people should have an easy way to understand what makes you different and why that matters to customers. They should understand the types of customer, personas and situations where you’re the best fit (and you should go all in) and the ones where you’re not (and you should qualify out).
    • Clear Case Studies with KPIs; A clear situation before/what happened/situation after (with KPI improvements) structure works best. Avoid narrative-only stories if you can help it. You might need these to be anonymous in the early days until you convince an early adopter to take the leap and back you with their name.

    This list won’t cover everything you need, but is a strong start. As your company matures you’ll add things like ROI/Economic Impact Calculators and Forecasts, InfoSec Whitepapers, Deal Sheets and RFP banks.

    You don’t have to go super fancy with the above. Excel spreadsheets and Word documents are fine to start. Adoption and value delivered are far more important than being the latest tech or being pretty.

    In later posts i’ll dig into each of these more deeply. I’d love to know what you think i’ve missed, or what i’ve overstated the importance of.