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Startup Sales Strategy

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This was an introductory Sales Strategy session that I presented at the Richard Ivey School of Business. The audience was HBA and MBA classes who were working on their New Venture Project. The objective was to give them a framework for thinking about Sales Strategy at early and growth-stage companies.

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Startup Sales Strategy

  1. 1. 1 Startup Sales Strategy Eric Janssen ejanssen.com
  2. 2. Build or Sell There is nothing else.
  3. 3. 3 1. Ideal Customer Profile. 2. Sales Process. 3.Company Goal and Targets. 4. Demand Generation. 5. Structure of Team. 6. Hiring, Onboarding and Compensation. 7. Performance and Measurement Procedures.
  4. 4. 4 At every step along the way ask yourself if this makes sense.
  5. 5. Ideal Customer Profile (Know your Sally)
  6. 6. 6 She’s a hardass, but in the end she’s pretty great. MEET FESTIVAL SALLY About Her She is passionate about her career and views organizing festivals and events as a mission not a job. She’s wants growth for her team and her events, but needs the certainty that trusted partners bring. Significance Certainty Growth Her Needs
  7. 7. 7 What are her pains/problems? What does she want/need at each step in her buyer’s journey?
  8. 8. Sales Process
  9. 9. 9
  10. 10. 10
  11. 11. Company Target & Goals
  12. 12. 12 Three Ways to Grow GROWTH # of Customers Average Selling Price Purchase Frequency
  13. 13. 13 E-Squared is targeting Year 1 revenue of 1M.
  14. 14. 14 10 # Customers $100,000 Purchase Price 1 Frequency Total 1,000,000 11 $110,000 1.10 1,331,000 10% 10% 10% 33% X X = X X =
  15. 15. 15 10 # Customers $100,000 Purchase Price 1 Frequency Total 1,000,000 20 $125,000 1.25 3,125,000 100% 25% 25% 312.5% X X = X X =
  16. 16. Demand Generation
  17. 17. 17 1.Attract 2.Convert 3.Close
  18. 18. 18 LEAD FLOW GROWTH MACHINE Inbound Qualification Outbound Lead Gen Acquisition Attract Convert Close Close Marketing BDR/SDR AE Activate/ Grow Activate CS
  19. 19. 19 LEAD FLOW GROWTH MACHINE Attract Convert Close Marketing BDR/SDR AE MQL Leads/Opps per Month New BookingsKPIs Target Cost 250-400 leads/month 10-20 opps $40-70k $xxx/month $85-200k Activate/Renew CS Renewal Rate/ Upsell 100% $60-100k
  20. 20. 20 Customer Acquisition Cost CAC Average Revenue/User ARPU = Cost of Sales + Cost of Marketing Number of Customers Acquired Total Annual Revenue Total Number of Customers = Lifetime Value LTV = ARPU x # Purchases in Lifetime Want LTV:CAC of 3:1 or more.
  21. 21. 21 What would you spend to sell this?
  22. 22. 22 Are customers giving us more $ than we’re spending to get them?
  23. 23. 23 2025%802532050640 Cold Calls Discovery Calls Pricing Presentation Closed Deals
  24. 24. Structure of the Team
  25. 25. 25 1. Island: end-to-end - typically early-stage 2. Assembly Line: specialization and efficiency - scale 3. Pod: entire team focused on industry, product or country - growth (new markets/verticals)
  26. 26. 26 Complexity LTV/ CAC Freemium No-Touch Self Serve Low-Touch Inside Sales High-Touch Inside Sales Enterprise Sales
  27. 27. 27 ACQUISITION COST Freemium No Touch Low Touch High Touch Inside Sales Field Sales $0-50 $100-1,000 $1,000- $2,500 $2,500- $10,000 $20,000- $75,000+ CAC 10x’s with increase in complexity.
  28. 28. Hiring, Onboarding, Compensation
  29. 29. 29
  30. 30. 30
  31. 31. Quota Hire Date Ramp Time Annual Potential Attainment Actual Rep 1 1,000,000 Jan 1 6 months 500,000 65% 325,000 Rep 2 1,000,000 Apr 1 “ 250,000 65% 162,500 Rep 3 1,000,000 July 1 “ 0 65% 0 3,000,000 487,500
  32. 32. 32 Base VariableOTE Fixed Salary CommissionOn-Target Earnings G&A Overhead = + $50,000 $75,000$125,000 $25,000 + $150,000 At OTE be prepared to spend 10% of bookings on commissions.
  33. 33. Performance & Measurement
  34. 34. 34 1. Conversion funnel. 2.You can manage activities, not results. 3.Build hiring model around the above.
  35. 35. 35 ejanssen.com

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