SaaS founders, stop focusing on sales

0:05Let's do it. Okay, ladies and gentlemen, welcome to the factory floor. Uh, I'm joined today by uh my two uh homies is what I'll call him. Uh, we have Corey Haynes and Zach Stevens. How are you guys doing today? We good? >> Yo, I'm good, homie. What's the word? >> Okay, >> be an essay. >> Yeah. Okay, I'm going to kick both of them off the call. I'll just do it by myself. Um, we today are talking about something that we hear a lot um particularly on our discovery calls when we're meeting with a prospective client. Um, and that is uh the we're focusing on sales objection, I'll call it. Um, so kind of the topic for today is why we're focusing on sales isn't really a good reason to stop marketing. That's kind of

1:00like our our claim that we're staking. So, um, in order to kind of color this question a little bit better, um, maybe we should try to figure out what people mean when they say that. So, what do you guys think people really mean when they're saying we're focusing on sales? Is it a Trojan horse? Is it legit? What is it? I think that they um are limiting themselves on all the things that are getting to what they really want, which is growth in business. Because when you're focusing on sales, what are you trying to do? You're trying to grow the business. The the downside is it's kind of like a it's kind of like saying I am only going to use my right hand to cook this dinner as opposed to saying I will use both hands

1:52and I will uh take advantage of every single uh option and tool that's in my arsenal. Um, so I mean that's the sense that I get when I hear this is what is the why are those mutually exclusive? I feel like they play on each other so much that by siloing them and completely shutting one out that that's a use a nonsensical approach to growth. Cory, what do you think? Yeah. Um, I think from my perspective, it's a little bit different just having talked to a ton of founders in the past and and being on the side of marketing and sales and being a marketer, working with salespeople and um, having heard this a lot. For a long time, I had that same like, "Huh? What do you mean? That's weird." But now,

2:49whenever I hear people say that they're just focusing on sales, they're not so worried about marketing right now. To me, it's just like a the underlying issue is it's an indicator of a lack of understanding of marketing and how marketing and sales play together. And it's sort of just a not a red flag, but we'll just say um it's a dead giveaway that they don't really have a lot of maturity or sophistication in their strategy for getting customers. Um because really, like you said, the two are not mutually exclusive. And the more that we talk about it and the more that people hear this, they'll probably it'll be it'll become and feel more and more obvious. Um, but yeah, to me it's just sort of a fundamental misunderstanding

3:35of what marketing is and how marketing and sales play together. >> Yeah. >> Yeah. I was going to say I feel like uh the like sales and marketing are they're like you they can't it's impossible to disjoint them and be like, "Okay, turn this one off. Turn this one." like they're almost impossible to fully separate and there's some sort of interconnectivity like always a little bit. Um I guess why do we like why are they bucketed together and then like pushed on each other like well if we're doing one maybe we don't do the other like why is that always like those two together and not like oh instead of you know some other department we're going to like stop focusing on that to let sales and marketing work together. Yeah,

4:24>> I think a lot of these companies that come from this perspective, they have pretty high contract values. Um, and they have a like a their belief, let's just say their belief is that their customers aren't hanging out on LinkedIn. They're not searching for things on Google. They're not subscribing to newsletters. They're not um they're not really perusing through social media. you can't reach them online. Um, you know, especially when we get to like, okay, they're selling to VPs at Fortune 1000 companies. Their belief is that marketing does not serve a purpose to reach those type of people because you can't reach those type of people with marketing channels. You have to email them. You have to build a relationship

5:15in person. You have to show up to a conference. you have to do a ABM kind of, you know, triangulation of giving gifts and smooing them at dinners and uh you know, talking them up to their boss or or whatever it is. So that's usually I feel like the the persona of like the type of person type of company that doesn't think that marketing sales can play and that they can play together or that there's no need for marketing that they only need sales in that instance in my experience you know just to like I don't know burst their bubble a little bit and spoiler alert like none of those things are true usually um but their belief is that they can't do any marketing to reach their target customers. So therefore, why should they

6:05do any marketing? >> Yeah. It's like it reminds me of like uh like when semif people find out that super famous people know about them. Like you'll have like some small-time artist and some like actor actress is like, "I love your stuff." And people are like, "Oh my gosh, like you know, George Cluty loves my, you know, music or whatever." And it's like they have phones, they look at Instagram, they look at like they operate just like we do most of the time. And these big VPs of enterprise level companies that you're selling to have phones and they probably watch somebody on YouTube and I'm sure they get a bunch of newsletter style emails to their inbox. Do they read them all? Who knows? I I don't

6:54know. Like it doesn't seem that surprising to me that those people operate a lot like most of us >> and it seems like the the things that you actually do during a sales effort the line between is that sales and is that marketing is very very blurry. You know like if you go to a conference is that sales or is that marketing? Cuz that sounds a lot like a market to me that you are going to which would be marketing. Um, and then while you're there, your sales team, I'm going to assume, has maybe some case studies and some collateral, maybe a interactive presentation. Is that sales or is that marketing? Uh, my my assumption or the way that I think about this, I think that sales is actually a function of

7:39marketing. It's just pure it's the purest form of outbound marketing that you could ever do. and it's uh highly personable and conversation based. It's still marketing. You are you're no different than someone going to the bizaar in, you know, medieval times and advocating for a product. That's marketing there. There is no distinction between those two. And the things you need to do to have successful sales efforts are very similar, if not part of your marketing efforts. Right. Um I was going to ask because like >> okay I'm trying to think like if we're meeting with say we're meeting with someone who's you know a prospective client >> and they're like oh yeah we do a little bit of you know paid advertising. We do

8:30a little bit of SEO. We do a little bit of this. We also have a sales team. The sales team does this stuff but we're not focusing on marketing now. Shut all that down. We're focusing on sales. What would that like alloc like like resource allocation even look like if they were gonna do that? Like what the let's say they have, you know, x amount of dollars they're spending here in marketing and x amount they're spending in sales and they're shifting all of that marketing budget into sales. What would they be buying to do that? Or is it just hiring >> more people? Yeah. >> Is that all it is? >> It's seats and butts. It's people, more people to send uh more email addresses to send emails from and uh more names

9:14and faces to circulate around conferences and dinners and cocktail hours and networking events. Um that's always the interesting part about sales in general is it's really not super scalable. It's very inefficient and actually the larger your sales team historically like the less efficient it gets. It's kind of the law of diminishing returns in general, but um like there's a lot of times really really steep drop offs and I mean I remember being at a startup where I worked my marketing team worked pretty closely with the sales team and the sales team was about five times as large as the marketing team. There was like three marketers and like 15 12 to 15 salespeople and half of the sales team would be gone

10:05every four to 6 months because they would turn out because they wouldn't land a single deal. Um, but you're constantly looking for people who can produce something. And it kind of always all goes back to I think the the SAS 1.0 you know, era where it was this predictable revenue era. This is that that's a book written by this guy who kind of made the whole model of like before before performance advertising was an option and before SEO was something that was like well known like really what were your options for getting customers on the internet? You had to email them. you had to just like blast their inboxes. Um, you'd be scraping lists and leads from anything and anywhere. And so there was basically it came down to a

10:59bunch of math and arithmetic of, okay, for every salesperson you hire, you pay them this much with this much commission, they need to be generating this much business per year. Otherwise, you cut them and you put them in with someone else who can produce those numbers. And it's pretty ruthless. So you if you want, you know, $1 million in new ARR per quarter, that means you need to have 10 sales reps producing, you know, at least 100K ARR and and new business per quarter. Kind of backs into that math pretty easily, but a lot of people have stuck to that idea and that model of, well, that's all you need in order to grow a SAS business. >> That's crazy. I feel like the there's like an efficient efficiency feedback

11:42loop that like happens between marketing and sales that like you know we we talk about like uh paid advertising. We're pretty like uh bearish on using paid advertising until your foundation is set and you have a lot of things in place before you start dumping money into advertising. Okay. Um, the same kind of feels similar to me with just like general marketing versus general sales where it's like, well, I I'm not going to go don't go hire a bazillion people over here like until the the quality of what's coming in through your marketing channels is making sense and making their job easy. We're trying to make sales more efficient by making our marketing better. And then vice versa, like I I don't know. I feel like with

12:29the right salespeople and you just have a select few that are good, it's going to feel more um uh like the marketing is cohesive with that. Like it's more of a exclusive experience, I guess, if that makes sense. I don't know, maybe it's a weird way of describing it. But um I did want to ask about like the idea of pausing marketing and how sometimes we we might read that as like we just don't know what we're doing. Um and do you think that's usually the case when someone says, "Yeah, we're going to just focus on sales. Like none of that marketing stuff ever worked and so we're just pausing on all that and we're just going to focus on sales." Um, how often do you think that's actually just someone saying that they don't really

13:19know what they're doing? >> Uh, pretty much 100% of the time. Like there's so many basic things you can do that are just obvious lowhanging fruit that if you didn't do it, you would look back on yourself and look and and realize that you've been shooting yourself in the foot for very unnecessarily for a long period of time. um even really basic things related to SEO to website CRO, basic email marketing. Um I mean all the stuff in our like phase one phase 2 process is like honestly the the foundation. It's like the fundamentals of marketing. If you if you can't even do that or know how that works or understand the value of that, then you're not going to get the value of anything in our phase

14:09three, which is about expansion, where it's like SEO, advertising, um, social media, more sophisticated, brand marketing, performance marketing types of plays. >> Uh, and so if someone's like, "Yeah, we have a website, but doesn't really do anything." They're like, "Whoa, okay, we need to catch up, mister." >> Uh, I mean, we had a call like this just the other day, candidly, where someone was like, "Yeah, we have a website, but like it doesn't really there's no real like purpose to it. We just we have all of our deals come through trade shows and conferences." It's like, well, yeah, imagine if you did have a functioning website that could actually get you some deals. Like, imagine how that could

14:51change everything for you. But people just have no understanding or or faith in in the value of that or it's just too hard to do. I think that people have a hard time making a codified effort into putting because everything that happens on a in a marketing funnel and your marketing efforts should reflect exactly what happens during a a good sales cycle. You know, it starts with a problem. What is the problem? And then you diagnose, you empathize, and hopefully state the problem in a way that the person uh providing it to you uh in in a articulation better than they could. And the same thing happens in marketing. You know, that's why we're so such big advocates of look, you need to list out this problem so that somebody has

15:51assurance that you understand it just as well, if not better than they do. And then you provide solutions. You provide steps on, you know, this is how it works. This is how easy it is to get into our product and start using it. So, it's almost like I mean the the phrase your website is the salesperson that never sleeps I think rings true where it is the salesperson that never sleeps and it always has that it should have the same phraseology and uh structure that a good salesperson does where it can answer the same questions. The only difference is is that it might not cover as much nuance, but if you're really good at your marketing, you can cover all that nuance and make it easy for people to find so

16:42that when they get on that sales call, it's really just an opportunity for them to be assured that what they had read at 11:30 p.m. when they were looking for a solution to their problem that you are saying the exact same things and it's reinforcing the value and process that your product stands behind. Mhm. Mhm. I think a lot of people who are more salesoriented too don't really realize uh the collaboration the value of collaboration between marketing and sales teams and specifically like a marketer with a salesperson. I think a really good like a really exceptional salesperson is great at understanding kind of dissecting okay these are the types of problems that I hear from these types of people and these are the things that I

17:37say they really resonate with them and they can start to pattern match to build a really good sales pitch and they can turn that sales pitch into a sales deck and then there's a a philosophy to it and a structure and something that is repeated for other saleserson other sales people to to use and to follow. But most sales people are not that good especially I think in tech because they've been spoiled to be honest and they just think well if I'm a good conversationalist and kind of charming and I can follow someone else's playbook or just make it up as I go then we'll figure it out. And that is just not the case. I think a lot of the value of where um the marketing team can come in is to help bring a lot

18:24of that structure, bring a lot of the market research of problems, solutions, nomenclature, the types of phrases and things that seem to resonate in the market. And even something as simple as like, hey sales dude, I know that you're not a designer. Why are you making a sales deck? Like get that in the hands of a copywriter and a designer. like stop around in Google Slides and like let a professional do this. Um I've seen some really really atrocious sales decks from very successful companies and I'm like how is this even allowed? It's actually kind of a problem because I've seen it talked about in other circles where it's like you have to do kind of like quality assurance and quality control of what sales people are

19:14showing on their demos because a lot of it gets really bastardized where they're just they're kind of just going rogue and they're saying their own stuff. They're showing stuff, >> you know, there's no like consistency in the layouts or even the colors or branding. Um and so imagine that and then for any other sales medium you know cold emails uh marketing material and one pagers um presentations and demos uh and everyone's talking using different phrases using different slides emphasizing different things it gets very very messy like you need to have that close >> collaboration I remember even this was when I was still an intern at my first startup job at Cordial and uh one of my last projects before I got hired on

20:04full-time was to do some market research and to figure out like what are some of the common firmographics and problems that our target customers were experiencing just so that the sales people kind of know. So, I just went through and like asked around, started doing some pattern matching, looked through some call recordings and like did a really basic job of like, okay, here's kind of the outline and here's the bullet points. And then I presented it to the sales team and they were blown away. Some of them are like, "I never thought of of that angle." Or like, "Oh my gosh, that's so true that like every company that's using this tech stack experiences this problem." I'm I'm like, "Holy mackerel, the bar is low."

20:56Dude, that's hilarious. I When I was um first out of college, I worked for a large university. Um it's Grand Canyon University. it's probably fine to say. Um, and GCU had, I think, in my opinion, a great marketing engine, tons of brand recognition, specifically in my area and, you know, in the communities that I was uh, working towards as a salesperson. So, I'm a sales guy or admissions rep. It's sales and there's tons of like marketing dollars and engines and they give us like presentation decks for when we'd meet with parents or when we would go present at a school. And I remember in training I was shadowing someone. They're presenting at this school and they have this like sales deck that they got for

21:41marketing that they added a bunch of stuff to. They put some different like numbers in there. They basically like made it their own and it looked like garbage and it looked so bad. It had a bunch of like figures and metrics that were not true. And I just was like I had just come from the school. I knew all these like things cuz I worked in the marketing department as a as a student. And I was just like, "Dude, none of that stuff's true." Like that that's just not true. And he's like, "No, yeah, it was true." And it was true like 5 years ago when you changed the sales deck for some reason. And it's crazy that you can have this huge marketing machine and then still have all these people that are

22:22just like, I know what they need. And just totally do their own thing. Um it's I don't know. you could see the value and if they all just worked more cohesively. >> Mhm. Yeah. Well, I mean that's a that's a common trope as well, which is the sales team promising something that doesn't yet exist. And you know, even that I could I'd say that's marketing. It's just marketing head of the product and in a bad way >> where you're not even doing it to build anticipation, but instead doing it to close a >> commission. That's a little bit more of a a nuance topic that I don't think we should go into, but I I think that there is a parallel or it's a good segue into um some of the other stuff that we want

23:10to speak about which is like I think just the efficacy of sales. It's 100% augmented by marketing and by having everybody on the same page and saying the same things. It's, you know, you're beating the same drum in rhythm and that makes it a lot louder and expands your reach and makes it more powerful. So, it's I I the the phrasing of this topic of why we're stopping on it, it still baffles me when I hear people say it. It's like I I have a hard time understanding why people completely bifurcate these and uh stop one. I I'm still trying to wrap my head around that initial idea >> of why I was going to ask like let's say someone genuinely is like no we can't you know we have to pair some things

24:16down like what what are the things that it's like okay you can pair you know you can stop spending your advertising dollars or you can like kind of slow down in these areas but like what's the can you give me like the bit like here's what you have to have over here in marketing you have to have this stuff and then fine you can focus on sales like can you give me like maybe like some of the things that are non-negotiables or things you would tell people who want to pair down on marketing. >> Sure. Well, I mean, honestly, it's funny because I didn't plan this and we definitely come from a biased viewpoint, but honestly, if you just had like one marketing function or one marketing title, like one marketer on your team,

25:00if you just had one, the only marketer you would need to help with your sales team is a product marketer because that is those are the types of things that a product marketer can do. And well, the things that a product marketer can do is what you need in order to help your sales teams. things like positioning, messaging, um consistency across the website with the sales material. Um a lot of the lead nurturing and just a fundamental understanding of why are people buying this product and how can we use those learnings to improve the efficiency of our funnel and all the different entry points and ways that we convert leads into customers. And one of the things I wanted to mention too, which which goes off of

25:46that, is that I also think that there's a ton of learnings stuck inside sales that can be relayed over to marketing that would drastically help improve the efficiency of marketing as well. Um, again, this is something I did at Cordial was then we started digging into and really asking the sales people, okay, like, hey, why did why did this deal close? What were the objections that you heard? Um, what are the common kind of steps you have to get through? Who are the people? What are the what are the titles of the people that you're talking to? Where did you meet them? How much do they know about you? Like there's so much knowledge and good insight that's really sometimes it's even better and richer than doing like

26:32customer research because you know they're >> it's the real real. >> Yeah. >> Yeah. They're they're skeptical of you. Like they're giving you like the real honest truth because they're not sold yet. And so they're they're telling you like exactly what's on their mind. They're not really biased in favor of you quite yet. And so if you can unlock all those insights, I mean, there's so many things on the website in funnels in lead nurturing and positioning. Um there's a lot of like competitive intelligence that was just stuck in salespeople's heads. There was a lot of um phrasing and you know the the good sales people have a way of kind of describing things and they kind of just find it along the way where man like

27:16those are those are H1's and H2s those are those are those should be on like ad creative those should be like plastered on the on the conference signage um that it's it's there for the taking you just have to go and mine it >> I love that idea like the best your top sales guy opens every call with these couple phrases and one of those is basically your headline. probably >> like that idea is so good that I love that cuz I mean I did a bunch of sales in my time before we all worked together >> and I remember listening to like some of the you know whoever the top rep was some of the calls and how they would open them and just the like you kind of just get this like really connected strong sense whenever they did it and

28:02they said it was such confidence and that's a really interesting awesome point. Um, we've been talking for a while. Anything you think is left unsaid or I don't know any like last little tidbits of advice you'd give to people that have maybe said this and are now rethinking whether they should focus on sales. I think that um we say it a lot that you know everyone is looking for a silver bullet like the one thing that will take them from point A to point B. And the more and more I get into working with other entrepreneurs, there's still a lot to do. And this is what you sign up for. Uh so yes, there is ranking and ordering of your objectives and the things that you have to do. You can't completely ever

28:59discard them in in business and let them go by the wayside. We're marketers and we do sales, we do outreach, we get on sales calls and um you know we it's you wouldn't say this about finances like oh yeah you know we're we're going to start doing sales so we're going to uh you know stop accounting you know this this is not going to be a thing anymore or customer service but for some reason marketing gets stalled and maybe it's speaking to the tr how truly intertwined they are that when you are still doing sales, you're still doing marketing and you're just probably not doing all the things that you should be doing alongside it that would help those sales efforts be even better.

29:47Mhm. I think my final remark would be that I've seen and heard this many many times where it's a curse of success if a company or a founder does have a lot of success with kind of that pure sales approach. I've kind of done quote unquote no marketing even though it's impossible to actually do zero marketing. Um, but even if they do have success and they end up getting past, you know, a major revenue milestone, they're doing half a million dollars in sales a year or $5 million in sales a year, and then they're like, "Okay, I think it's time for us to start looking at this marketing thing." It's not that it's too late, but it's always like, "Man, now you have to play some serious catch-up." like, "Hey, your domain

30:33authority is like really really low and like your website sucks. Like, we got to redo this thing. That's going to take a while. Um, you have zero uh newsletter subscribers. What are we supposed to do with that?" I I pretty much always see it that people who end up being successful with building a sales engine then realize and get scared about how reliant they are on that sales engine that they want to start to diversify in marketing. And it's not as simple as just turning it on or hiring people the same way that it is with sales. So, you have to start it earlier than you think. even just making small investments um it might not seem like you're doing much but everyone who I know who's been successful with sales ends up wishing

31:20that they did marketing earlier specifically things core around to uh product marketing and inbound marketing like SEO and uh you know building a newsletter subscription list and kind of this more like brand recognition within the market >> there are always trying to play catch-up on those ends of things like oh man I wish we did this two years ago or three years ago. I wish we started doing little things from the beginning just you know some sometimes they don't even set up a company um social media profile or like a profile on a startup directory or they don't do anything and then they're like oh what could we have been getting this whole time through inbound leads if we had just done the basics. It

32:05kind of reminds me of if you like you you should not choose between hunting and farming. You should be doing both >> because at some point you like those will have seasons where they aren't great. The ground will um go barren for a season and that's when you're relying on all of your hunting efforts and at some point the herds are just going to completely evade you. you're going to miss your shots and that's when you're thankful that you have that sack of potatoes in your cold cellar. >> Yeah. Yeah. >> Yeah. Very true. >> Love it. >> Um, okay team, great episode. It's really great topic. I love digging into that, especially because we hear that from people sometimes. Um, but yeah, thank you everybody for listening and we

32:55will see you on the next round of the factory floor. Goodbye. [Music]