Sales is a tough business. It is easy to get someone interested in your product, but that doesn’t always translate to sale, does it? You would come across hundreds of founder interviews where they were able to gather hundreds and thousands of emails from a pre-launch landing page, but when they emailed these prospects (or prospective customers) on launching their product - crickets!
Selling is tough. It is not solely about the value of your product. How easy that transition is going to be, and what would life look like after the change - questions like that also determine the buying decision or indecision of your prospective customers.
Take a CRM system, for example. Let’s consider Salesforce. Now, you may be having a CRM product that’s much better than Salesforce. It is smooth, it is aligned to the workflow of the salespeople, and it is effortless to use. All of them are great indicators of product success and if you approach a business that isn’t currently using a CRM tool, you would have good success rate in converting them into customers. But what happens when you approach a business that is already using a CRM product, in this case, Salesforce?
While they may be intrigued by the product they see in front of them, and excited by the possibilities of it, they would also be intimidated by the time, energy and resources they would need to dedicate to navigating the whole process. The buying process would be long and tedious since they will need to co-ordinate with multiple stakeholders within the company, and then there would be age-old question of how much of an effort would it be to incorporate your product into their system and business processes. Not to mention, a smooth transition of the workflow, data, reporting etc. from their existing system (Salesforce) to this new system (yours).
So, unless this prospect of yours is already discontent and unhappy with the experience they are having with their current system, and/or has been looking for alternatives to replace it, you would find them being reluctant to this change most of the time. The result? You ended up wasting a lot of time in a sales process where the odds were stacked against you, and the prospect knew that in all likelihood, he would not be signing off on this change.
This is why segmenting prospective customers based on their buying intent becomes quite crucial for the growth of your business. Prospects who are actively looking to buy become your most promising sales targets, and those who are merely interested in the capabilities of the product become the leads you need to nurture to make any headway with them.
Here are some questions you would need to figure out the answers to, if you are looking to effectively segment your customers, and determine if they are ready to buy your product:
1. Have they attempted to overcome the pain-point you are solving?
There is a specific pain-point you are focused on solving for your customers. If that pain-point is actually a pain-point, in all likelihood, some attempts would have been made to solve it.
The wrong way to look at it is to limit your discovery to a competing product they are (or may be) using. Businesses often try internal measures before looking for external tools or solutions - even if the internal measure is just a hack or a workaround.
The correct way to understand the answer to this question is to just understand if they have tried addressing this problem. If so, how. And most importantly, what were the results of that attempt? What was the experience like? What were the wins? Where did the solution fall short on expectations out of it?
Getting an understanding here will help you realise how much of a painpoint it really is, and how urgent is the need to address it. If what they tried crashed and burned, it is a good indicator of the situation ripe enough for you to swoop in to save the day. If the current tool, or even the workaround is holding the ship together, the appetite for trying out something new will largely depend on the incremental value your product can offer, and at what cost - both in terms of money and effort required.
2. What is it that makes addressing this pain-point a priority now?
External factors, deadlines, unforeseen sudden changes usually gives buyers a nudge into actively looking for a change, or a new solution. Whether it is a new company initiative, or an industry shift.
Take GDPR, for example. Though it was outlined in 2016, it went into effect in 2018. So, as the dates of its implementation got closer, products that were helping businesses get GDPR compliant were witnessing phenomenal conversion rates in their sales pitches and marketing initiatives.
Another example you could look at would be the current pandemic we have been going through. As it started gripping the world, any product that was helping businesses navigate this new situation they were faced with would have been well received.
3. Is your product aligned with their workflow, or would it require a complete revamp?
Change isn’t easy. For anyone.
I recently became customer of a new hosting provider, and 48 hours later, I had decided on just accepting the payment I had made for the year as a loss and get back to an old hosting provider I had once used. The reason? The new one’s dashboard was just way too different and unfamiliar, so everything I wanted to do was taking me 3x-5x more time.
The easiest products for someone to consider are always ones where there is little to none learning curve. Something that is intuitive, or at the very least, aligned to their existing way of working.
If that isn’t the case, you would need to work five times as hard to get someone to use your product. I am using the term “use your product” and not “pay for your product” because you can still get someone to transact with you once (just as I did with the new hosting provider), but unless it is effortless to use, your customer will churn out.
So, if your product is aligned to their workflow, that’s great. But if it isn’t, then there are challenges on multiple levels:
You need to put in additional effort into making the sale, by convincing the prospect that the change is worth it.
You need to be involved post-sales to guide the customers through the product, and show them how they can get the most value out of the product. But, most importantly, you’ll need to show how the value your product is adding to their business far outweighs any change it necessitated.
Your customer needs to be committed to putting in the time and effort into making this change. After all, you can show them the way, but they need to make the journey themselves.
What is important to realise here is that there are multiple factors at play here. The first factor being a willingness of customer to change. Not necessarily to your product/solution, but just to the idea of changing to a new product. That willingness on its own helps you win half the battle. Because once that willingness exists, you just need to sell them on why your product is the best fit to make that change for.
4. How are they engaging with your content in general, and your sales content in particular
Your existing customers will give you a sense of what made them convert in the first place. That is a good starting point for this analysis.
When you look at how you acquire customers, you will find that your existing customers went through several touch-points before they came onboard. The content that most aides in this process is classified as sales-enabling content.They play a crucial role in pushing your prospect towards decision making point.
At the same time, there is content that generates a lot of interest and engagement, and offers enough value for your brand to establish some recall value. This segment of your content keeps bringing back your prospects to engage again and again with your brand, improving your odds of converting them into transacting customers.
Both these categories of content are important, and play a role in helping you move more prospects to customers.
For every new prospect engaging with your brand and your content, understanding how they are engaging with your content with respect to the trends established by your existing customers will help you predict the likelihood of a prospect turning into a customer. The more likely a prospect is to convert, the more conversion focused your marketing communication to him can be.
Rate and score your leads and prospects to establish the propensity of their purchase intent. Most marketing automation tools help you score your leads based on the actions they take while on your site. Use that to your advantage.
5. What does their implementation plan look like? Which part of the workflow is your product most likely to improve for them?
If a customer is subscribing to your SaaS product, they already have a usecase in mind. Understanding that will not only help you improve your product further, but also access purchase intent of future prospects.
What is the solution type your customers are most going for?
What was it about your product that made them choose it over competitors’?
What workflow processes is your product most beneficial in?
Customers from which domains are most using your products? For what usecase?
Are they using your product along with other tools/products as a part of their workflow? Which tools are most common in such usages?
When you understand how your existing customers are implementing your product in their workflow, you would be able to segment your prospects better, identifying the segment that is most likely to follow the same implementation route. It becomes easier to convert them since you know what their implementation process and flow is going to look like.
6. Is your prospect the decision maker? Are all stakeholders involved in the decision making process?
This is one of the hardest things to do. You can show the value of your product to the person you are interfacing with as much as you want, but unless that person, or you are able to convince the decision maker, it is not going to make a difference.
And it is the toughest challenge to overcome.
The only thing you can do here is provide content that helps not just the decision maker into making a decision in the favor of your product, but at the same time that helps a member of his team have enough information to present in front of the decision maker.
Online demos, product walkthroughs, and usecase scenarios prove to be the most helpful in this process.
Sales is complicated. While in-person and 1-1 demos may help you better understand your customers in the early stages, they are not the most scalable route of finding new customers. That becomes even more difficult when you are running a SaaS business where the average ticket size is not sizeable enough to make 1-1 demos a sustainable strategy.
In such cases, you need to have a process to filter out your most promising prospects and buyers so as to keep the growth trajectory moving in the right direction. Understanding and classifying your leads and prospects in a methodical way helps you do that.
I am always interested in knowing more about how different people are leveraging non-scalable sales methodology, specially in the early days of their startup. Hit me up if you have a story to tell. Who doesn’t like a good story!
That’s it for today, see you tomorrow.
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