Monday 21 October 2019

Startup diary: Selling isn't voodoo, but you need to start by generating good leads

 

Strategy: ‘Good’ sales leads still require a lot of work and attention as Alec Baldwin’s character in ‘Glengarry Glen Ross’ demonstrated
Strategy: ‘Good’ sales leads still require a lot of work and attention as Alec Baldwin’s character in ‘Glengarry Glen Ross’ demonstrated

Richard Rodger, Voxgig founder

Let's talk about sales. This is the thing that scares many people the most when it comes to business. Sales people are a breed apart.

But if you plan to found a startup, then you are a sales person, and you'd better learn how to set yourself apart.

It's not voodoo. There is some technique to it - as with most things in business, if you take the time to think about a repeatable process, then you're already halfway there.

You might be tempted to think that a Software-as-a-Service business is different, and you may even be thinking of founding one because you think you won't have to sell. Doesn't the website do the selling?

I made this mistake in my first business 15 years ago. I had a perfectly good product that could have kick-started a decent business, if only I had gone out and sold it.

Instead I obsessed over the minutiae of website design and Google ad optimisation.

This, I discovered to my cost, is not how it works. At least, it is very far from the full story.

The best way to walk you through what has to be done, so you can think about it for your own business, or potential business, is to explain our approach in Voxgig.

As we start to introduce a paid version, and continue to open up our system to a wider audience, we need to start selling.

Here is the process we will use.

First, you need to generate leads. Then you need to convert the leads into users. Then you get the users to pay. Simple. Over the next three articles I'll cover each 'simple' piece.

Let's talk about leads today. Now would be a good time to go back and watch the classic sales movie 'Glengarry Glen Ross'. It follows a day-in-the-life of a bunch of loser holiday time-share salesmen (In Florida, of course).

The entire move is a morality play for startup founders. It's all about the getting the 'good leads' - then the sales will come.

Our heroes in the movie are betrayed by a sister office and get dumped with all the bad leads. Everybody is miserable. The End.

Unlike Season 8 of 'Game of Thrones', you won't be watching it for the plot - we're talking old-school character development here.

Leads are important, but there's a great deal to do even after you get good ones.

But there is a critical question here - how do you get 'good leads'?

Without sales leads, you don't have a business, not matter how good your product.

We are using five tactics to generate leads: our networks, content-marketing, community-building, traditional sales work, and measuring product engagement.

Let's review each in turn.

Voxgig is lucky to have management team with extensive personal networks in the technology events sector.

That means we can call up old friends and colleagues, and get an easy hearing. They are willing to take a risk on us because of personal relationships.

If you are technical by trade, doing a startup, do not underestimate the value of networking. It always pays off.

It does help that we are all forty-something and can draw on many years of working with people in the industry.

If you are a younger founder you'll have more of a challenge here - it's one reason to build a startup career by working a little for others first.

To date we've relied very much on using our networks. We have far more high-quality leads that we can handle from this source, and we will exercise all of them.

But while it is a great start, this won't scale like we need it to, and eventually the well will run dry.

The next strategy is content marketing.

This is a classic SaaS lead-generation tactic. Companies likes HubSpot are built on solving this problem.

It's a huge page of what we will end up doing as a out primary lead-generation mechanism. It will be the biggest cost ultimately to gain new growth.

The famous SaaS metric: LV/CAC comes from the cost of content marketing (in all its forms - I include paid advertising). Lifetime Value (LV) divided by Customer Acquisition Cost (CAC).

That acquisition cost ends up directly proportional to marketing spend as you reach maturity. For now, this is the least-productive lead generator for us, because it is the least immediately productive, and it takes time to build the quality and quantity of content needed.

Community marketing is a different style of lead generation that is becoming more popular. It means supporting the community that works in your industry.

Running and sponsoring meetups and conferences is just the start. You should also provide your service in 'scholarship' form to industry contributors, who often work as a labour of love.

I've written much about this in earlier articles. It was key to making my last company successful.

Since we build software that lets you run community events, we have a nice dovetailing of our product and marketing strategy in this case.

While we don't expect large numbers of leads from this activity, it does generate very high-quality ones, and it does build massive amounts of brand trust.

You can't get away from traditional sales work. It works because it works.

You sit down, and you do you research, and you pick your targets, and you cold call them. This is essential for founders to do. You have to pitch every day. This is a grind, but you must build a process for it.

Leading a sales organisation is tough, and you will struggle to hire somebody to do it effectively - it's one of those big startup challenges everybody has to face. It's all about process.

Finally, product engagement is the secret weapon of SaaS.

Here's how it works in a freemium context (this does not work as well for free trial pricing).

You let people onboard and use your service for free - keeping the premium features for paying customers.

You can observe which users are actively engaging with the system, and follow with them through your traditional sales process.

That's it. There's no rocket science, just the recognition that you have extremely highly qualified leads if your already know somebody finds value in your product.

As we start our growth curve, getting all these tactics working together smoothly, across our teams, and running efficiently, is going to be the big challenge.

Metrics: I'm going to change how we are handling metrics.

I have been publishing some of the marketing statistics that we track for quite some time now, and you should have a good idea of how they are growing.

We need to consolidate this internally ourselves as too much fine-grained data is not useful - you need information, not data. So we're doing a full review of what we'll track and how.

Be assured there'll be some full articles on our new metrics in due course. For now, I'll ask you to bear with us for a few weeks.

Richard Rodger is the founder of Voxgig. He is a former co-founder of Nearform, a technology consultancy firm based in Waterford.

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