We've worked with some of the fastest growing SaaS companies in the world but we also get to speak with those that are struggling to scale despite lots of interest.
There are lots of reasons that some SaaS businesses don't scale (more of those in future articles) but I've yet to have a conversation with any of those that are struggling that haven't had the following characteristic:
Their sales process revolves around a demo and they rush to that demo without an effective questioning strategy.
An effective questioning strategy doesn't mean understanding needs. Most leaders of SaaS businesses I talk to explain that their people ask questions before they demo but what they mean is that they ask questions that receive a response from the prospect that provides a 'symptom'. It might simply sound like "I need to reduce the time it takes me to compete this task". The sales person then believes that they've understood the need and jumps into explaining how their platform can reduce the time to complete the task by X%, going on to explain the features that make that possible. That might sound OK but its an intellectual exchange and people don't buy intellectually - they buy emotionally.
The need or 'symptom' should be the start of the questioning route for the salesperson. We call that first symptom the 'pain indicator' and it's usually preceded by emotional words. You might hear someone say "I'm frustrated by" or "I'm struggling with" or "1'm concerned about". You wouldn't expect a doctor to prescribe a course of action without thoroughly investigating your symptoms and identifying the root cause so why would you run straight to the answer with a prospect? Continuing the conversation with some further questions that understand the reasons why this is happening and what the impact on the business and the person is, we connect emotionally and we understand the real problem that needs to be addressed.
The demo is no longer the vanilla demo and focuses ONLY on the things that will address the root cause. We can still make references to the symptoms, confirming with the prospect that they can see how we can help and the value that this can provide to the business and to their personal circumstances, quantifying the cost of the problem and the opportunity value going forward.
It sounds easy but it's difficult. The short time slots, the need to have these questioning strategies all front of mind, and the confidence and conviction required to execute means that most people do a poor job.
There are lots of other areas that successful SaaS businesses do better and I'll discuss these in future articles. If you'd like to discuss how we've helped companies like Splunk go from $70m to $1bn in 5 years then drop me a line.
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