SaaS Interviews with CEOs, Startups, Founders
5 Ways to Grow Revenue in 2023 - Lessons from Analyzing 3M+ Deals
13 Jun 2023
Chapter 1: What is the main topic discussed in this episode?
I'm very excited to share this recording with you guys, which happened at our conference, sasopen.com, with over 100 speakers, all founders of B2B SaaS companies. We have a very high bar for what speakers share on stage, so you're going to enjoy this episode where we dive deep into revenue graphs, real tactics, and real growth metrics.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool.
Chapter 2: What are the main challenges in B2B sales today?
It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. What was even scarier is that nearly 20% of reps actually don't even have a quota. Okay, so there's a lot of people out there that really aren't running their business, particularly data-driven.
We also saw a lot of headwinds, so less than 15% of win rates dropped by 15%, average deal values went down by a third, and sales cycles continued to increase by an extra 30%.
So when we look at the data in a bit more detail, rather than focusing on the ones that didn't achieve, what I wanted to do is bring to the table today some of the insights of what the high-performing sales teams were actually doing. Probably one of the key trends we're seeing is that those, certainly in B2B, relationships drive revenue.
So understanding what relationships you have and really double-downing and making sure that those relationships are strong is vital, not just in winning new business, but also retaining and upselling to existing customers. We also saw that you can double your win rates with better sales methodologies.
So introducing a med pick or a medic or a bank type process to do your qualification and really making sure it's being used correctly. It's not just a box ticking exercise. You're really working out whether you should continue to invest in the sales process to move forward or not, rather than just ticking a set of boxes.
So these are the seven steps we set out that we saw in the information that we were processing to build this high-performing sales team. It starts, I'm going to take you through all seven. So the first one is probably the least sexy, but one of the most important, is this idea of building data, having good quality, consistent data in your CRM.
If in 2023 you're still relying on humans to log their activity, create contacts, or keep them up to date, it's time to rethink. We can see that the CRM itself is missing all sorts of interesting data. So we have been doing this now for a decade, and we've never found a company with more than 70% of their active relationships in CRM. And usually it's less than 50%.
And so we need to stop relying on humans logging their activity And creating contacts and by taking that responsibility Away from them the crm becomes a much more complete and accurate Place to spend time. So automating the logging of Activity, creating contacts, doing all that on their behalf, Making sure that it becomes a system of record that includes All the data that you need is key.
And for what it's worth we have An engine that you can turn on and solve all that in seven days. We also know that of the records, we see a lot of companies still talking about the value of having a large database. But then when we analyze the data, we can see that there really is no relationship with 98% of the contacts they registered in the CRM. So there is no relationship there.
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Chapter 3: How can relationships drive revenue growth?
Now, how expensive is that? How much inefficiency is that in the sales process? So if we can reduce the time spent on deals that aren't going to close, we can have a material impact on the productivity of the sales team. So when you get your pipeline reviews, these are the seven questions you should be asking. And you should be able to do this from a single dashboard inside your CRM.
And if you're not using something like this and you're relying on spreadsheets, it's time to step up to this type of platform. Really getting everything in one place, having a consistent way to digest everything. Consistency is key if you want to run experiments and start to make improvements. Because small incremental improvements lead to exponential results.
To share the deck afterwards if anyone wants to connect with me. And then finally aligning the teams to this data-driven Forecasting approach. What we want to do is make it Super easy for the individual contributors to update their Forecast in real time any time, not once a week as a task they Have to do before they leave for work on a friday afternoon.
And we want it to be consistent and easy for them to digest. And it should be visual. You can see here, for example, a summary of what's happened this week. Where were we at the beginning of the week? What positive things happened? What negative things happened? All of that's easy to digest. And it makes it super easy for the team to submit their own forecast.
And the data will tell you what we think the forecast will be. And then we can see how they deviate from that number. But once the rep's done it, we make it easy for the managers to also make the changes and submit their forecast up to the board, and then it goes to the senior management. So that's it.
Those are the seven steps that I think you should be thinking about when you're trying to build this data-driven sales team. Thank you very much for all of your time. Thank you. Thank you. Thank you. Yeah, happy to answer questions. You've got my email address there if you want to or connect with me on LinkedIn. I'm happy to share the deck.
We've also got a presentation that you can download the report itself on the front page of our website, which is epster.com. Any questions? Thank you very much. So do you get pushback from the sales guys? Everyone wants to win. So the sales guys...
The sales guys will always be defensive in their one-to-ones, and you end up with this combative experience where the sales guys are telling you how great they're doing and the managers are telling you that they don't think the deals are good enough to complete. What we need to do is move away from that into a much more coaching experience where you're showing them graphically.
Frankly, the sales guys and most of the sales managers aren't particularly strategic in their thinking. So what we need to do is make it simple, give them graphics and pictures to understand the influence of different outcomes.
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Chapter 4: What role does data play in building a high-performing sales team?
Yes. Yes. Again, I think it's down to the qualification metrics. So are you qualifying the customer well enough? Are you asking which stakeholders need to be involved in different stages of the sales cycle? Are you being descriptive about what the journey to buy looks like? And so they're able to give you visibility of who needs to be involved in their business from their side. But also...
the prospect, that's great, and they give you the names, and you're creating a relationship. My problem is, well, SDRs have lots of tooling, right? So they'll be on Tripwire, LinkedIn, before you shake a stick. And all of a sudden, they've got a connection request to everybody that's marked up as a decision maker in Sales Navigator, right? And that's where trouble lies.
So I know everyone that makes a decision in this business, John, well done, son, but all you've done is offend the target. Yeah. Yeah. Yeah, look, we're talking about businesses that are still in horse and cart. And we can talk about getting to a Formula One car, but what if we can get you from a horse and cart into a family saloon first, right?
And actually, the impact you can have by being data-driven is huge. And these small incremental improvements as you go have exponential results. I'm not saying that what you're doing isn't very useful, but there will be some class of customers where it's going to backfire. Sure. It's the human bit. Yeah, exactly.
I've taken this SDR off commission, and I've just paid an extra while we run the test, because I want to figure out how much defense we cause in our board by this multi-curriculum thing. Well, I think there's different things about multithreading. So multithreading top of the funnel has a different impact.
But again, what I'd be interested to understand is how many close one deals have you done in the last year or two, for example? 14 since the start of this year. OK. All right. So I can tell you about 2023. Right. And before that, maybe another 30 or 40 deals last year? Yeah, roughly. It's a bit slow. So let's say we can we can analyze 50 deals that close one.
There's probably another hundred and fifty that close lost. Okay. Well, that's good, right? And they are closing the second best outcome. Yes. Understood. Well, the understanding how multithreaded you need to be at different stages is key here. At the top of the funnel is one thing. And knowing which entry point is giving you the best outcome is important.
So let's do the analysis on the 50 deals that have closed one and lost. And the 100 that have lost as well. And if there are, the data will tell us whether being too multi-threaded at the early stages is having a negative effect. But we can also have a look at the positive impact of being multi-threaded at stage two or three or four. When should the CFO get involved?
At what stage gives you the optimal outcome? And how much engagement do you need with the CFO? And who within your business should be engaging with the CFO at that stage? Which is having the best outcome?
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