9 Steps to Repeatable, Scalable and
Profitable Growth + the Key SaaS Metrics
to Track
David Skok
General Partner, Matrix Partners
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9 Step B2B Startup Roadmap
Three Topics
Fixing Broken Funnels
SaaS Business Model & Metrics
B2B STARTUP ROADMAP
9 STEPS TO SCALABLE GROWTH
Conventional Wisdom
Search for Product
/ Market Fit
Scaling the Business
Works for B2C
BUT B2B FOUNDERS
USUALLY DISCOVER…
Turn up the spend on sales & marketing,
but no consistent results, and a lot of
cash burn
There’s an important missing
step that’s essential for B2B
The Missing Step
Search for Product
/ Market Fit
Scaling the
Business
Search for Repeatable, Scalable
& Profitable Growth Model
Startup Valuations
TIME
VALUATION
Startup Valuations – The Reality
MILESTONES
TIME
VALUATION
Startup Value Creation Happens
as Key Elements are De-risked
“Have we found
a problem that
the customer
really cares
about?”
“Will many
people pay?”
TIME
VALUATION“Does it
actually
work?”
“Will
someone
pay?”
Credit Pete Kazanjy
Key Startup Inflection Points
TIME
VALUATIONCan we scale
profitably?
Does our growth
process scale?
Can we scale without
excessive churn?
Can non-founders
sell this?
Will many
people pay?
Does it actually work?
Will someone pay?
Have we found a
problem that the
customer really
cares about?
Credit Pete Kazanjy
Not Only is Risk Reduced…
but Focus and Business Motion also Change
TIME
VALUATIONInflection Points
THESE LEAD TO
THE SUB-PHASES
9 Steps to Repeatable Scalable & Profitable Growth
Search for
Product/Market Fit
Search for Repeatable & Scalable
& Profitable Growth Model
Test
Hypothesis
Prove the
Value
Prove it can
be sold
Find
Repeatable
Sales Motion
Prove non-
Founders
can sell
Make it
Scalable
Ensure
Customer
Success
Make it
Profitable
Hit the Gas
and Scale
Scale the
org & its
processes
Etc.
1
2
3
4
5
6
7
8
9
10
11
Scaling the
Business
THE SCALING PHASE:
Startup Value Increases Rapidly
Can we scale
profitably?
Does our growth
process scale?
Can we scale without
excessive churn?
Will many people pay?
Does it actually work?
Will someone pay?
Do we know
what problem
we are solving?
SCALING
TIME
VALUATIONCan non-
founders sell this?
WHY?
PROFITABLE
SCALABLE
REPEATABLE
THREE CAREFULLY CHOSEN WORDS
Easy to say, but hard to achieve
Implies a
CASH
GENERATING
MACHINE
…which GROWTH STAGE
INVESTORS LOVE

Trying to force progress by jumping ahead
before completing the current phase
#1 mistake
Common Variations
• Building product before meeting enough buyers
to validate the hypothesis
• Hiring salespeople before founders have proven
they can sell the product
• Scaling sales before growth process is repeatable
• Scaling sales before solving churn problem
BURN CASH
& shorten the runway
What We’ve Learned
NOT PREDICTABLE HOW
LONG THIS WILL TAKE
Search for Product
/ Market Fit
Scaling the
Business
Search for Repeatable & Scalable
& Profitable Growth Model
Conserve Cash until the Scaling Phase
Search for Product
/ Market Fit
Scaling the
Business
Search for Repeatable & Scalable
& Profitable Growth Model
CASH BURN
A Common Mistake…
Search for Product
/ Market Fit
Scaling the
Business
Search for Repeatable & Scalable
& Profitable Growth Model
Founders
remain in
burn avoidance
mode
Fail to invest for
fast growth
Scaling the Business
Search for Product/Market Fit
Search for Repeatable & Scalable
& Profitable Growth Model
Our Focus Today:
The key sign that you’re getting there:
Bookings - (NOT Revenue or ARR!)
For SaaS:
Bookings = Net New ARR
(New + Expansion – Churned)
Q1
Q2
Q3
Q4
Q5 Q6
Q7
ARR with Flat Bookings
ARR with Growing Bookings
Q1
Q2
Q3
Q4
Q5 Q6
Q7
Q1
Q2
Q3
Q4
Q5 Q6
Q7
At the beginning: No clear sales path
By the end: Well understood path
What are we trying to learn?
• Which target market?
• Who are our ideal prospects (ICP) and what defines a bad prospect?
• Who in the organization to sell to?
• What pain / use case to target?
• How can we reach these people, and fill the top of the funnel?
• What messaging?
• What sales motion?
• What pricing?
• What new product features are needed?
• What is the right organization in sales, marketing and customer success (inc. people specs)
• What enablement do they need? (Training, on-boarding, materials, etc.)
• Etc.
Where do you start?
Phase 4 - Find Repeatable Sales Motion
Find repeatable Sales Motion
“Will many people pay?”
Search for Repeatable & Scalable
& Profitable Growth Model
Ideal Sales Staffing = Founder Led Selling
Founders
Pathfinder/Trailblazer Sales Director/Rep
Find repeatable Sales
motion
Pathfinder/Trailblazer Sales People
• Not like ordinary sales people – who follow a playbook
• They have to create and evolve the playbook
• Which target market and use case?
• Who in the organization to sell to?
• What Message?
• What Pricing?
• What Sales Motion?
• Key missing product features?
Fire Up an Initial Lead Source
Customer Discovery
Somewhere north of 50 real buyer conversations
Patterns will emerge
Goal: Pick one target market
… with a clear Use Case
Use Case
Benefit
Brian Halligan, CEO - HubSpot
“In the early days of HubSpot, we couldn’t decide which
target persona to go after. We argued about it for years.
By not deciding:
- our marketing team had to serve multiple personas
- our product team had to serve multiple personas
- our services team had to create multiple offerings
Once we finally got focused on one
persona, everyone could focus on
attracting and delighting that persona.”
Find Repeatable Sales Motion – Exit Criteria
• Sales to multiple customers
• Who fit the Ideal Customer Profile
• Happy and realizing the promised business benefits
• Using a repeatable sales motion that can be taught to a Sales rep
• One target market, one use case
• How leads are generated
• Who to call
• What messages to use
• How to engage
• Pricing
• Etc.
Biggest Mistake
• Hiring normal (non-pathfinder) sales reps before this step is complete
Phase 5 - Prove non-Founders can sell
Find repeatable Sales Motion
“Will many people pay?”
Prove non-founders can sell
“Can non-founders sell this?”
Search for Repeatable & Scalable
& Profitable Growth Model
Ideal Sales Staffing
Founders
Pathfinder/Trailblazer Sales (Rep/Director)
Find repeatable Sales
motion
Prove non-founders can
sell
2 Standard Sales Reps
Prove that an ordinary sales rep can sell
• Founders must step back and take a different role:
• Hiring
• Onboarding & Training
• Managing
• Coaching
• Building sales tools
Can Non-Founders Sell – Exit Criteria
• At least one “ordinary” Sales rep selling effectively
• Ideally both of the reps
• Productivity at > 4x their OTE
• Customers remain happy
• Realizing the promised business benefits
Common Mistake
• Founders don’t hand over selling to the reps
• Hard to do, as the reps are so much less capable
• It’s OK for founders to keep doing a few deals
• But that should NOT be their top priority
Phase 6: Make it Scalable
Find repeatable Sales Motion
“Will many people pay?”
Prove non-founders can sell
“Can non-founders sell this?”
Make it Scalable
“Does this scale?”
Search for Repeatable & Scalable
& Profitable Growth Model
Ideal Sales Staffing
Founders
Pathfinder/Trailblazer Sales (Rep/Director)
2 Reps
2 Reps
2 Reps
Find repeatable Sales
motion
Prove non-founders can
sell
Make it Scalable
2 Reps
2 Reps
2 Standard Sales Reps
SUMMARY
Prioritize Focus & Actions based on Stage
Scaling the Business
Search for Product/Market Fit
Search for Repeatable & Scalable
& Profitable Growth Model
1
2
3
4
5
6
7
8
9
Test
Hypothesis
Prove the
Value
Prove it can
be sold
Find
Repeatable
Sales Motion
Prove non-
Founders can
sell
Make it
Scalable
Ensure
Customer
Success
Make it
Profitable
Hit the Gas
and Scale
Scale the org &
its processes
10
Etc.
11
Scaling the Business
Search for Product/Market Fit
Search for Repeatable & Scalable
& Profitable Growth Model
Don’t Jump Ahead!
• E.g.:
• Hiring too many sales people before the sales process is repeatable
• Expand internationally before you have nailed scaling profitably in the US
• Etc.
Scaling the Business
Search for Product/Market Fit
Search for Repeatable & Scalable
& Profitable Growth Model
Manage Cash Burn According to Stage
Cash Burn
[ ]
FIXING BROKEN FUNNELS
GET INSIDE YOUR BUYER’S HEAD
Studying Funnel Blockage Points
Suspects Suspects
Suspects
Suspects
Suspects
Suspects
Suspects Suspects
Suspects
Suspects
Suspects
Suspects
The Source of most Problems
Vendor
Centric
NOT MOTIVATED TO DO
THAT THEY ARE
CUSTOMERS WILL DO
SOMETHING
YOU ARE HOPING YOUR
Fixing broken funnels
by getting inside
your buyer’s head
FRICTION
CONCERNS
Find the worst blockage point in your funnel
MOTIVATIONS
FRICTION
CONCERNS
Re-design, or try to use what motivates them
CLEARBIT LEADS + DATA ENRICHMENT
New Leads
Enrich Existing
Leads
CLEARBIT
• Data Quality
• Highly skeptical
• Seen lots of products like this before
• Enrichment data wasn’t good
• Data Coverage
• Skeptical
• What % of our leads would be covered in this database?
Buyer’s Key Concerns
I have to go through IT to
get Salesforce connected
FREE TRIAL BLOCKAGE POINT
Connect to
Salesforce
SOLUTION: CHROME EXTENSION
Browser
connection to
Salesforce
See enriched
data in
Salesforce UI
Judge quality
of data
Report shows
data coverage
%
Chrome
Extension
CHROME EXTENSION
• Easy to install
• Low buyer concern
• Re-write the page’s HTML
CLEARBIT CHROME EXTENSION - ENLARGED
Freemium, Free Trials, Open Source
The Product is
your sales person
WHAT IS YOUR TIME TO
WOW! ?
Thanks to Gail Goodman of Constant Contact
DEFINING WOW!
Thanks to Gail Goodman of Constant Contact
A moment where your buyer sees
something cool and exciting
• Motivates them to continue exploring
The moment when your buyer
gets excited enough to want to buy
Mini Wow!
Full Wow!
TIME TO WOW!
• How many steps?
• How much time does it take?
• How much FRICTION is involved
REMOVE STEPS
& REMOVE FRICTION
EXAMPLE
Salsify: Product Experience Management for Brands
• Buyer searches for products on Amazon, Google, Walmart, Target, etc.
• Make sure your product shows up at the top of those searches
• Make sure your product detail page converts at the highest rate
Photos
Feature Summary
Recommended Accessories
Rich description
Video
Reviews
Detailed Specifications
Key to Success: Rich Product Content
Salsify – Product Content Supply Chain Automation
Brands
Photos
Videos
Text
Specs
Etc.
Retailer
Portal
Retailer
Portal
Retailer
Portal
Retailer
Portal
Salsify’s Original Trial Experience
Sign up
Wait for
email with
Account
Open the
App
Learn the
UI
Import
Content
Locate &
Export
Content
Export to
new
Retailer
Sign up
with new
Retailer
Landing Page
Lots of Fields
Next,
Wait for Email…
Sign In… Now What?
•
Lots of work still required
Get Inside your Buyers Head and Analyze for Problems
Sign up
Wait for
email with
Account
Open the
App
Learn the
UI
Import
Content
Locate &
Export
Content
Export to
new
Retailer
Sign up
with new
Retailer
Redesign Trial Steps for Problems (Friction, Concerns, &
Motivations)
Sign up
Wait for
email with
Account
Open the
App
Learn the
UI
Import
Content
Locate &
Export
Content
Export to
new
Retailer
Sign up
with new
Retailer
Delay causing
major drop off
First Step in the Redesign
Import
Content
Locate &
Export
Content
Export to
new
Retailer
Sign up
with new
Retailer
Sign up
Learn the
UI
New Landing Page: JUST YOUR
EMAIL
Motivation: “If these guys are
using it, it must be pretty good…”
Still leaves a problem:
•
Locate & Export Content
• Then import to Salsify to have
something to play with
Then:
Land directly in App
Major Friction + Other people involved = Long Delays
Import
Content
Locate &
Export
Content
Export to
new
Retailer
Sign up
with new
Retailer
Sign up
Learn the
UI
Offer a chance to
start with Sample
Data
Sign up
Import
Content
Locate &
Export
Content
Export to
new
Retailer
Sign up
with new
Retailer
They now have the
MOTIVATION to
import their own data
Play with
Sample
Data
Mini Wow!
Learn the
UI
Eliminate the risk that they won’t find the path to Wow!
Learn the
UI
Import
Content
Locate &
Export
Content
Export to
new
Retailer
Sign up
with new
Retailer
• High friction
• Too much risk they
won’t find the path
to Wow!
Sign up
Guided Navigation
Human Help available
0
10
20
30
40
50
60
70
80
90
100
Before
After
Trial Request ->
Logged into App
Trial Request ->
Product Page
Trial Request ->
Taking action
3x Overall Improvement
Uplift - % Conversion, Before and After
Next Problem Area…
Sign up
Import
Content
Locate &
Export
Content
Export to
new
Retailer
Sign up
with new
Retailer
Play with
Sample
Data
• High Friction
• Long Delay
Google Shopping
Problem Solved – Export to Google Manufacturer
Center
Sign up
Import
Content
Locate &
Export
Content
Play with
Sample
Data
Export to
Google
Last Remaining Problem Area…
Sign up
Import
Content
Locate &
Export
Content
Play with
Sample
Data
Export to
Google
• Huge Friction & Delay
• Other People involved
Scrape publicly available data from existing retailer’s
pages
Sign up
Play with
Sample
Data
Export to
Google
No import
needed
Scrape
Content
for them
• They have my content in here already
• They’re showing me all the issues
Mini Wow!
Eliminates Need for Sample Data
Sign up
Play with
Sample
Data
Export to
Google
See their
own Data
Scrape
Content
for them
Final Redesigned Process
• Fast Time to Wow!
• High conversion rates
Sign up
Export to
Google
See and solve
problems with
their own Data
Scrape
Content
for them
Funnel Optimization Meeting
Suspects Suspects
Suspects
Suspects
Suspects
Suspects
Suspects Suspects
Suspects
Suspects
Suspects
Suspects
Funnel Whack-a-Mole
• Solve for blockage points
• As you fix one, the problem will move elsewhere
SILOED THINKING
MARKETING
SALES
CUSTOMER
SUCCESS
PRODUCT
THE NEW GROWTH TEAM
MARKETING
SALES
CUSTOMER
SUCCESS
PRODUCT
USE FUNNEL FLOW CHARTS
Website
Free Trial
Handle
other
questions
Proposal
High Level Overview
xx
xx
xxx
xx
xx
xxx
MicroFunnels where needed
Design a funnel that
Delights
Entices and
Motivates
[ ]
THE SAAS BUSINESS MODEL AND METRICS
Why is this topic so important?
SaaS businesses: highly sensitive
to small changes in a few key metrics
Understanding these unlocks the Levers for Growth
The old way of measuring bookings:
Size of the order
Customer One: 1 month commitment, $1k per month
Customer Two: 6 months commitment, $1k per month
But what if…
Customer One: stays on the platform and doesn’t churn
Customer Two: churns at the end of their 6 months
Net New
ARR
Expansion ARR
(Existing Customers)
Churned ARR
(Lost Customers)
New ARR
(New Customers)
The right way to measure SaaS Bookings
Key SaaS chart: 4 components of bookings
$(15.0)
$(10.0)
$(5.0)
$-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
Jan
Feb
Mar
Apr
May
Jun
ARR Bookings
New ARR
Net New ARR
Expansion ARR
Churned ARR
Always look at a
chart that shows the
trendlines to see if
there is growth
Funnel Metrics are Essential
"IF YOU CAN NOT MEASURE IT,
YOU CAN NOT IMPROVE IT."
- LORD KELVIN
The Key Metrics
VISITORS
CAMPAIGNS
TO DRIVE
TRAFFIC
TRIALS
CLOSED DEALS
CONVERSION
%
CONVERSION
%
OVERALL
CONVERSION %
Computing Funnel Conversions
requires Cohort Analysis
January
February
March
Conversion Rates
Visitors
100
Free Trials
40
40%
Closed Deals
1
4
5
12.5%
Tracking the January Cohort
Not all deals will close in the same month they started in the funnel
GAAP ACCOUNTING
The primary way that businesses are evaluated
GAAP Accounting doesn’t work for SaaS
• Point in time snapshot
• Doesn’t take into account the value of future recurring revenue
What’s so different about SaaS?
$(7,000)
$(6,000)
$(5,000)
$(4,000)
$(3,000)
$(2,000)
$(1,000)
$-
$1,000
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month
10
Month
11
Month
12
Cash Flow for a Single Deal
CAC (Cost to acquire the customer)
Subscription payments * GM%
Cash Impact of a typical deal
$(7,000)
$(6,000)
$(5,000)
$(4,000)
$(3,000)
$(2,000)
$(1,000)
$-
$1,000
$2,000
$3,000
Month
1
Month
2
Month
3
Month
4
Month
5
Month
6
Month
7
Month
8
Month
9
Month
10
Month
11
Month
12
Month
13
Month
14
Month
15
Month
16
Month
17
Month
18
Negative Cash Flow
If cash flow is bad for one
customer, what happens
when we grow, and add
many more customers?
Cumulative Cash Flow
$(3,000,000)
$(2,000,000)
$(1,000,000)
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
Month 1Month 3Month 5Month 7Month 9Month 11Month 13Month 15Month 17Month 19Month 21Month 23Month 25Month 27Month 29Month 31Month 33Month 35Month 37Month 39Month 41Month 43Month 45Month 47Month 49Month 51Month 53Month 55Month 57Month 59Modeling a slow increase in the number of customers added every month
The SaaS Cash Flow Trough
$(3,000,000)
$(2,000,000)
$(1,000,000)
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
Month 1Month 3Month 5Month 7Month 9Month 11Month 13Month 15Month 17Month 19Month 21Month 23Month 25Month 27Month 29Month 31Month 33Month 35Month 37Month 39Month 41Month 43Month 45Month 47Month 49Month 51Month 53Month 55Month 57Month 59
“The thing that surprises many investors &
boards of directors about the SaaS model is
that, even with perfect execution, an
acceleration of growth will often be
accompanied by a squeeze on profitability and
cash flow.”
Ron Gill, CFO at Netsuite
What’s the impact of faster growth?
$(10,000,000)
$(5,000,000)
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
2 more
Customers/Month
5 more
Customers/Month
10 more
Customers/Month
Cash Flow Trough
gets deeper
When your SaaS business is
losing money at an
increasing rate, how can you
tell if the business is going
to work eventually?
UNIT ECONOMICS
A Powerful Tool
Unit Economics
Can I make more profit from my
customers than it costs me to
acquire them?
Unit Economics
Cost to Acquire a Customer
Lifetime Value of a Customer
CAC
LTV
A Viable Business Model
CA
C
CAC
LTV
<
But surprising how many
Entrepreneurs underestimate CAC
Guidelines for SaaS success
LTV
CAC
> 3x
Months to
recover CAC < 12-18 months
Required for Capital Efficiency
The Power of Unit Economics applied to Segments
Brad Coffey, HubSpot
“When we started this analysis, we had 12 reps selling directly into the VSB market and 4 reps selling through Value Added Resellers (VARs). When we
looked at the math we realized we had a LTV:CAC ratio of 1.5 selling direct, and a LTV:CAC ratio of 5 selling through the channel.
0
1
2
3
4
5
VSB
VARs
LTV:CAC
0
3
6
9
12
VSB
VARs
No of Reps
12 Months Later
Brad Coffey, HubSpot
The solution was obvious. Twelve months later we had flipped our approach – keeping just 2 reps selling direct and 25 reps selling through the channel. This
dramatically improved our overall economics in the segment and allowed us to continue growing.”
0
3
6
9
12
VSB
VARs
No of Reps
5
10
15
20
25
0
5
10
15
20
25
VSB
VARs
No of Reps
Churn – the number one SaaS Killer
Revenue Lost with
2.5% monthly Churn
Renewals
Lost due
to Churn
YEAR 3
$3m
$7m
Becomes harder
& harder to
replace this with
new bookings
Renewals
Lost due
to Churn
YEAR 6
$30m
$70m
Net Revenue Retention versus Customer Retention
Customer
Retention
Net Revenue
Retention (NRR)
Customer Churn vs $Dollar Churn
Customer 2
$50k ARR
Customer 1
$10k ARR
Customer Churn vs $Dollar Churn
Customer 2
$50k ARR
Customer 1
$10k ARR
Customer 2
$50k ARR
Customer 1 Churned
50% Customer Churn
17% $Dollar Churn
Customer Churn vs $Dollar Churn
Customer 2
$50k ARR
Customer 1
$10k ARR
Customer 1
$10k ARR
Customer 2 Churned
50% Customer Churn
83% $Dollar Churn
Negative $Dollar Churn
Customer 2
$50k ARR
Customer 1
$10k ARR
Customer 2
$70k ARR
Customer 1 Churned
50% Customer Churn
-16% $Dollar Churn
Negative Churn
Expansion Revenue
from Existing
Customers
Revenue Lost
from Churning
Customers
>
Net Revenue
Retention (NRR) >
100%
Leads to:
Basic
Edition
Features
Requires Variable
Pricing Axes
Users
Basic
Edition
Features
Requires Variable
Pricing Axes
Users
Depth of
Usage
Examples:
- Mailing list size
- Database size
- Amount of storage used
Basic
Edition
Features
Requires Variable
Pricing Axes
Impact of Negative Churn
$400k vs $150k
ending ARR
Top 2 Factors affecting Renewals
On-boarded
successfully?
Champion still at
the company?
Annual up-front payment
Instead of Monthly
What happens if we collect a year’s payment in
advance?
$(5,000,000)
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
Month 1Month 3Month 5Month 7Month 9Month 11Month 13Month 15Month 17Month 19Month 21Month 23Month 25Month 27Month 29Month 31Month 33Month 35Cumulative Cashflow comparision -
monthly payments vs year in advance
Eliminates the
cash flow trough,
and means $35m
more cash in this
scenario
CONCLUSION
So much more to this topic. See my blog.
[ ]
FOR MORE INFORMATION
WWW.FORENTREPRENEURS.COM
[ ]
APPENDIX
Goal: Pick one target market
… with a clear Use Case
Use Case
Benefit
Recommended Starting Point
Make a list of your best ideas
for potential target markets
Score Them
Examples of
Target Market Choices
TAM
Pain level / Urgency
and
Willingness & Ability
to pay
Amount of work
required to satisfy
their needs
Enterprises
High score here means
low amount of work
Mid-market
SMB
Venture Backed HiTech
companies
Financial Vertical
Note these target markets are just examples. Your own list of possible targets will vary.
Hair on Fire Urgency is key to success
• Buyers resist change
• Without urgency you will have:
many good conversations
but long sales cycles
and few closed deals
Ideal Customer Profile - ICP
Ideal Prospect Characteristics
• Industry
• Use case
• Company Size
• Job function
• Key characteristics
Negative Characteristics
Messaging
• Business benefits, not product features
• Clear
• Simple
• Short
• Explains differentiation from competition
Credit: Harvard marketing professor Theodore Levitt:
“People don’t want to buy a quarter-inch drill. They want a quarter-inch
hole.”
Define our Growth Process/Sales Motion
XXX
YYY
Covered in the second topic: ‘Fixing Broken Funnels’
Sales Motion
Strangers
Customers
Sales Motion
Promoters
Customer
Success
Playbook
Funnel Design
Customer Success
Sales
Middle of Funnel
Top of Funnel
Strangers
Visitors
Attract
Customers
Close
Leads
Convert
Promoters
Delight
A better way to approach to Funnel Design
Buyer
Centric
Buyer-Centric
THE BUYERS JOURNEY
THE BUYERS JOURNEY
Awareness
Consideration
Purchase
Mismatch:
Sales often handle every lead as though they were in the Purchasing phase
I’m paid to sell. I better be selling.
Likely Distribution of Web Site Visitors
Vendor
Web Site
80%
Awareness
15%
Consideration
5%
Purchase
Different Dialog and Content for each stage
Awareness
Consideration
Purchase
• Create Problem & Pain
awareness
• Discuss how people are
solving
• Discuss benefits people are
seeing
• Don’t mention your product
• Don’t sell!
• Help in choosing a particular
solution
• Explain how your Product
can solve their pain
• Free Trial / Demo
• Customer stories
• Nurture with regular content
(Newsletter)
• Case studies
• Results achieved
• How you helped achieve
them
• Other proof points
• Customer references
• ROI data
• Just lost my data in hard drive crash
• Backup software/service
• Starting a new software project
• Dev Tools, etc.
• Performance issues with existing app
• APM tools
• Difficulties tracking bugs across multi-tier apps
• Bug tracking software
TRIGGERS
Buyer Personae
Who is involved in the buying process?
Champion
Economic Buyer
/ Decision Maker
IT required for sign off
Getting to know your Buyer Personae
• Identifying Characteristics
• Company Profile (your ICP)
• Any special characteristics relevant to this purchase
• E.g. Developers:
• Don't have a budget
• Prefer Open Source, and don't like to pay for software
• Professional Role
• What does a day in their life look like?
• Key business goals?
• What does their Boss expect of them?
• How does our product help them achieve those?
• Motivations / Aspirations?
• What would make their job easier?
Getting to know your Buyer Personae
• What pain do they have that we address?
• Is it latent pain, or obvious pain?
• How do they describe the pain and what they are looking for?
• (Helpful for messaging)
• Is solving this pain a high priority for them?
• If not, what features would make it a higher priority?
• What are the triggers that cause them to buy?
Getting to know your Buyer Personae
• Are they searching for a solution?
• If yes, how do they go about doing that?
• Who influences them? (Sites, organizations, and people)
• (Helps us figure out how to market to them)
• Most important features? Decision criteria?
• What are their reactions to our product/company?
• What will they like?
• What will they not like?
• What are the main questions and concerns they have?
• What competitors will they also evaluate?
• What will they like or dislike about each of those?
Designing a Growth Process to match Buyer’s Journey
Strangers
Visitors
Attract
Customers
Close
Leads
Convert
Promoters
Delight
Awareness
Purchase
Interest
Post
Purchase
Top of Funnel
Drive the right traffic
that matches your
ICP and convert to
raw leads
Middle of Funnel
Convert raw leads
into MQLs
Sales
Convert MQLs into
closed deals
Customer Success
Onboard, support and
ensure customer
success as measured by
a customer KPI
Designing a Growth Process to match Buyer’s Journey
Strangers
Visitors
Attract
Customers
Close
Leads
Convert
Promoters
Delight
Credit: HubSpot
Awareness
Purchase
Interest
Post
Purchase
Top of Funnel
Inbound Marketing
Paid Marketing
Website
Strangers
Conversion
Event
Raw
Lead
Outbound
SDR’s
Account-based Mktg
Targeted
Strangers
Mktg
Qualified
Lead
Qualify?
Account Based Marketing
• ICP powers all marketing
• Ideal Customer Profile
• Build lists of matching accounts
• Discover.org, Lead Fox, ZoomInfo, LinkedIn Sales Navigator, etc.
• Track who is in buying cycles
• Visiting G2 Crowd, Bombora
• Track which companies are on your website
• Targeted outreach
• Aircover from Ads
Thanks to Eric Spett, Terminus
Middle of Funnel
• Most of the raw leads you have captured are not ready to buy
• But they may be ready to buy at some point in the future when a trigger happens
• Some will never buy
• Avoid sending the wrong leads through to Sales, as Sales touch is very expensive
• Requires that we score and qualify leads somehow
• Pass the right leads to Sales
• Nurture the rest of them
Middle of Funnel
Raw
Lead
Lead
Scoring
Lead
Nurturing
Database
High
Low
Nurture
Webinars, events,
newsletters, etc.
Enrich
Use software like
ClearBit to enrich
the email address
to identify company,
job title, etc.
Segment
Identify interesting
segments based on
attributes (verticals,
job functions, etc.)
or actions
Mktg
Qualified
Lead
Yes
No
Qualify?
Mktg
Qualified
Lead
Sales – Lead Stages
Qualify
Sales
Qualified
Lead
Customer
Close
Discovery
Call
Opportunity
Ready to
buy?
Sales
interaction
Note: Your process will likely be different, and there will be more Opportunity stages in your CRM pipeline
[ ]
FUNNEL DESIGN
GET INSIDE YOUR BUYER’S HEAD
Initial Guess at Growth Process
Website
Free Trial
Map Buyers Process to Your Steps
Research
Shortlist
Vendors
Check
Review Sites
Evaluation
Website
Free Trial
BUYER
VENDOR
ROI &
Justification
GET INSIDE YOUR BUYERS HEAD
How are they
reacting as they
go through our
funnel steps?
What are they
thinking as they
go through their
process?
Research
Shortlist
Vendors
Check
Review Sites
Evaluation
Website
Free Trial
BUYER
VENDOR
ROI &
Justification
Optimize Your Steps to Fit
Research
Shortlist
Vendors
Check
Review Sites
Evaluation
Website
BUYER
VENDOR
ROI &
Justification
Free Trial
ROI
Calculator
Competitive
Features
Matrix
Optimize Your growth process to Fit
Research
Shortlist
Vendors
Check
Review Sites
Evaluation
Website
BUYER
VENDOR
ROI &
Justification
Free Trial
ROI
Calculator
Competitive
Features
Matrix
Incent
customers to
do reviews
ADDRESS ALL DECISION CRITERIA
Address
Security Concerns
3rd Party
Security Audit &
Whitepaper
BUYER
Is this a safe vendor
to choose?
• Customer Stories
• Safe Channel
Partners
Treat your Buyer like a Bank Account
Make a
deposit
before you
try to make a
withdrawal
Selling can be the worst way to sell
Build
Trust
Consult
Sell
First Contact
First Contact
Build
Relationship
Bookings
Top of Funnel Lead Flow
Conversion
Rate
Average
Deal Size
Example: Touchless Self Serve
Visitors to
Web Site
Sign up for
Free Trial
Closed
Deals
Funnel Metrics are Essential
"IF YOU CAN NOT MEASURE IT,
YOU CAN NOT IMPROVE IT."
- LORD KELVIN
The Key Metrics
VISITORS
CAMPAIGNS
TO DRIVE
TRAFFIC
TRIALS
CLOSED DEALS
CONVERSION
%
CONVERSION
%
OVERALL
CONVERSION %
Computing Funnel Conversions
requires Cohort Analysis
January
February
March
Conversion Rates
Visitors
100
Free Trials
40
40%
Closed Deals
1
4
5
12.5%
Tracking the January Cohort
Not all deals will close in the same month they started in the funnel
Not all Lead Sources are Equal
Visitors
Trial
5%
10%
$5,000
Customer
Google Ad Words
FaceBook Ads
Visitors
Trial
2%
20%
$8,000
Customer
OVERALL
CONVERSION %
(BY LEAD SOURCE)
Cost per lead
LTV
ROI by Lead Source
A quick reminder of what we
discussed earlier…
Bookings without Sales people
Leads
Simple linear relationship
Conversion
Rate
Average
Deal Size
x
x
But when you add in Sales People…
Ramp
Time
Sales
Capacity
Limit
Growth comes in discontinuous units
Bookings
No of
Sales People
Productivity per Rep
(Average)
x
PPR
Remember this?
One of the most common reasons for missing plan
Didn’t hire sales people fast enough
Two Graphs
0
2
4
6
8
10
12
14
16
18
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Number of Reps versus Plan
Reps
Plan
$0
$500
$1,000
$1,500
$2,000
$2,500
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Assigned Quota vs Plan
Assigned Quota
Plan
$k
$0
$500
$1,000
$1,500
$2,000
$2,500
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Assigned Quota vs Plan
Assigned Quota
Plan
$k
$500k
Lost Bookings
potential due to
slow hiring
Compare Actual Bookings to Assigned Quota
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Assigned Quota
Bookings
$k
85%
Over Assignment
of Quota
needed to
hit plan
=1/85%
Monitoring PPR
Charts
3
PPR over time
$100
$110
$120
$130
$140
$150
$160
$170
Q1
Q2
Q3
Q4
Average Productivity Per Rep
New ARR booked -$k / quarter
Productivity Per Rep (PPR)
Rep
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
John
120
165
180
145
80
110
195
Mary
80
110
135
155
150
145
Fred
60
35
75
40
55
Alice
85
145
160
180
145
Joe
60
110
85
130
145
Mike
155
170
145
190
Sarah
35
45
70
45
Sue
80
145
175
165
% of Reps at Quota
30%
40%
50%
60%
70%
80%
90%
100%
Q1-16
Q2-16
Q3-16
Q4-16
% of Reps above
75% of Quota
30%
40%
50%
60%
70%
80%
90%
100%
Q1-16
Q2-16
Q3-16
Q4-16
% of Reps above
100% of Quota
The other thing that drives PPR
Adequate Lead Flow
THE
MAGIC OF
FUNNEL
MATH
Raw Lead
Marketing
Qualified Lead
Sales Accepted
Lead
Opportunity
Closed Deal
20%
80%
25%
20%
Funnel Math
Raw Lead
Marketing
Qualified Lead
Sales Accepted
Lead
Opportunity
Closed Deal
20%
80%
25%
20%
Closed Deal
1
Opportunity
5
Sales Accepted
Lead
20
Marketing
Qualified Lead
25
Raw Lead
125
Reverse Funnel Math
Compute Leads Required per Rep
x
No of
Closed Deals
=
Reverse Funnel
Conversion Rate
Marketing Qualified
Leads Required
This becomes the Contract between Sales & Marketing
Marketing Qualified
Leads Required
Sales
Marketing
SDR’s
LTV - Importance of Gross Margins
LTV =
ARPA Gross Margin %
$ Churn
Improving Gross Margins
• Greatest cost is usually people costs in implementation and on-boarding
• Solve by:
• Simplifying the product
• On-line training courses
• Provide in-product training videos and walk-throughs
• Charge a one time fee for implementation