At Primary we put a lot of energy into working to provide our portfolio companies with the operational support they need as they get up and running. We know we don’t know all the answers, but we almost always know people who do. That’s the thinking behind our Primary Expert Network (PEN), and we leverage this growing network (now 200-plus strong) to offer deep operational expertise where our portfolio companies need it most. Our companies often come to us asking for specific advice on a broad range of topics - be it an upcoming rebrand, a customer success team build-out, or devising a social media marketing strategy. To best answer these questions, we organize 3:1 advisory sessions with the portfolio company and a group of relevant PEN members. These workshops provide a comfortable, collaborative and private environment (food and beer included) in which open discussion, brainstorming and healthy debate help guide the portfolio company to relevant best practices and truly tangible action items. These events have proven so successful that many of our portfolio companies have forged ongoing advisory relationships with PEN members they met in these sessions.
Last week we had the pleasure of holding an advisory session for a portfolio company that has found definitive product-market fit and is now looking to expand its outbound sales efforts.
The scenario: Currently, sales are conducted completely by the founders, who are running out of bandwidth. Most sales come via referrals and inbound, and there has been no effort to this point in developing an outbound sales engine. It’s a B2B company with large, enterprise clients, and the product requires a lot of context on the industry to sell effectively. The main priority right now is to increase leads at the top of the funnel.
The questions: The founders walked in with a range of questions, among them: Is an SDR the best first hire, versus an actual account exec? How do you assess quality of an SDR? How should we approach compensation? What future hires should the company consider? What’s the best way to increase leads at the top of the funnel? How do you qualify leads? What are the best ways to approach pricing?
The team: To tackle these questions, we brought in experienced sales advisors Kiva Kolstein, CRO @ Handshake, Marc Jacobs, VP Sales @ Greenhouse, and Liz Young, VP Sales @ Reonomy. These experienced selling stars led a lively and very insightful conversation. While there were some differing viewpoints on best practices as companies get larger, for very young startups just beginning to grow their sales team, the three agreed on the following points.
Hiring two SDRs is the best way to start. The best SDRs will be tenacious and good communicators, and able to tee you up for meetings with higher-ups at enterprise prospects. By hiring two at once, they’ll learn from each other, push each other and one will likely be the victor who can rise up in the sales ranks. Compensate them initially with a small base salary (~$45K) and a small bonus for number of opportunities created. Down the line, you can build in additional spiffs and quotas.
A sales ops person and a strong, trustworthy player coach will round out the team as your sales pipeline grows. The sales ops person will analyze your funnel, help with forecasting, understand churn and set up smart processes on which the sales team can execute. A warning when it comes to the player coach: Just because someone can sell a lot doesn’t make them a great fit for a managerial role. Good player coaches are extremely hard to find.
Undertake marketing-led campaigns to increase your sales funnel. Invest in creating (or outsourcing) compelling content to send to enterprise customers. Develop a cadence for reaching out to contacts with content, emails, calls, etc., which can be carried out by SDRs and marketing automation.
In qualifying customers, it’s important to understand their challenges, and address those specifically during the sales process. Create a plan letter to be sent to a prospect after discovery. It should outline their challenges, mutually-agreed-upon solution, timeline, participants, cost and impact of next steps. In your CRM, you should track if prospects are with a competitor (and when their contract is up); fiscal cycle (people typically buy in Q4); reasons they say no; and expected close date vs. actual close date.
Increase your negotiation power by creating additional levers, like monetizing platform cost, training, implementation and additional features. Price is always the last lever you want to touch.
Thank you Kiva, Marc and Liz for all of your helpful insights!