I have a B2B enterprise SAAS solution for the Salesforce.com ecosystem. The software is targeted at large companies.
Last year (from feb to Dec), I built more features in the software and sold the software single-handedly for $350K. This year, I want to grow the revenue to $4M.
Our deal size varies from $20K - $80K.
It takes 3months to 6 months to close a deal.
What steps do I need to take to grow to that amount?
The biggest thing you can do is spend time prospecting. If you're deal cycle is 6 months, you need to be filling up a +$10 million pipeline in order to close $4 million over the course of the next 10 months.
That means lots of prospecting, keeping prospects engaged while they make their decision and handle internal processes (typically a marketing automation system handles this) and ideally partnering with companies that can bring you leads through referral to drop down that deal cycle from 6 months.
If you look at it as a funnel, it would look something like this:
Cold call/email/traffic >> lead >> prospect >> segment >> sales process >> deal cycle >> close/re-segment
Typically this would look something like this in a well oiled company:
Cold call/email/traffic >>10%>> lead >>20%>> prospect >> segment >>15% qualified>> sales process >>20%>> deal cycle >>30%>> close/re-segment (this close could take 3 months or up to 12 months)
If you reverse calculate it, to get 1 closed deal in this funnel, you'd need 555 leads.
Assuming your average deal size is $50k, you can spend $90 to acquire a lead in that scenario or $9 per click/hit on a lead capture page.
To scale to $4 million in that funnel, you'd need to drive 44,400 leads, assuming the $50k average deal size is an annual license.
Your numbers will be different, but based on the initial scenario, the key for you will be having sales people out there prospecting and driving some serious lead volume through marketing.
So you'll need:
- A solid cold sales process (script/email/funnel)
- A REALLY good qualification process for prospect to sales process
- Some good lead gen focused marketing setup (Facebook/Linkedin/Google ads are your best bet in conjunction with software directories like Capterra)
- A good lead capture landing page to convert people into leads that you can try to prospect
Your target is overly ambitious but there's nothing wrong with that. To be able to properly help I need to have more information about your business, but I'll provide you here with a few generic thoughts that could help.
- Build a referral program that your current customers can use to refer clients to you, and gain a commission or a discount on their next purchase.
- Look closely at your sales funnel and see what parts can be better optimized and automated. 3-6 months per deal is way too much time to spend, I'm sure it can be tweaked to involve less time and effort from your end.
- Find a company that offers a complimentary but not competitive service, and package your services together into a single package, this could actually be SalesForce itself.
- Look for the markets with the best potential, and focus most of your efforts there.
Best of luck :)
First, it helps to understand what I call the profit formula:
Leads * conversion rate = customers * average $ sale * # of transactions = revenue
In other words you've got 4 levers you can apply to increase your revenue:
- Leads - someone already mentioned prospecting (more on this shortly)
- Conversion rates - what are your closing ratios? How can you tighten up your process to increase your closing rate?
- Average $ sale - could you make a bigger sale to them?
- Average # of transactions - could you get customers buying from you more often
What I see very often is an over focus on putting new leads into the front end and not enough on optimizing each lead to maximize them.
In terms of actually planning a campaign you need to focus heavily on identifying your target market, understanding how to communicate an irresistible offer to them, and matching their buying process.
It sounds like you might be somewhat resource constrained in terms of your time and might need to expand your sales team or add distribution in the form of additional sales people, or strategic partners (maybe someone is willing to bundle your product with theirs, etc.)
This is all high level of course the specifics require detailed knowledge of your business.
One book I'd recommend on improving the sales process is SPIN Selling.
Hope that helps contact me if you'd like further assistance.
Ask, Ask, Ask, then Ask again.
Do the math. At the low end of $20k you need to 200 units. What was you call/click/hit per sell ratio last year. My guess is that you need to call on at least 2k potential buyers to gross $4M. Figure out how you are going to do that and you probably have your answer.
Here is $10,000 worth of information for free and in a nutshell.
Concentrate on the 3 M's. There are actually 7, but 3 will do for now. These are Market, Message, and Media. They come in that order.
Who is your target market (customer, clients, buyers, users, etc.)?
Tailor your laser focused message for this target market.
What is the best media mix to get your message to that market?
Here's what you do...first, make it an offer that is so incredible that they cannot resist. Secondly, do all the work for them. Make it so easy to make the purchase now that they can do it virtually without effort. Thirdly, give them an incentive to act right now. Fourthly, offer an almost unbelievable guarantee. Fifth, offer a bonus for acting now. There are many other incredible steps, but these steps should help the novice to the professional sell anything.
Whether you are selling B2B or B2C, you have to focus on selling to only one person. You can actually sell to one person at a time while selling to millions at a time. They are one and the same. Don't get off track, what we call digital marketing selling is just selling in print. And that has not changed since Cluade Hopkins wrote "Scientific Advertising." Really long before he wrote the book.
The secret to success: I have had the pleasure of knowing and working with some of the biggest names in business, celebrities, actors, entrepreneurs, business people, and companies from startup to billion dollar operations. The number one reason for their success is doing what they know and love while doing it in new, creative, and innovative ways.
Ask, Ask, Ask. Have thick skin and learn from each "mistake." In a short while, the market will tell you what you need to do and who and what you need to ask. But get started now even if that just means asking a contact on LinkedIn.
While you are thinking, think big and think of something at least 1% better, newer, or different. And being cheaper is not a winning strategy.
Make decisions quickly and change decisions slowly..unless you are actually going off a cliff.
Remember these two 11 letter words...persistence and consistency. They are two of the most important tools ever invented.
Treat everybody you talk to and everybody you meet (including yourself) like each is your number one million dollar customer.
Best of luck,
Take massive action and never give up.
Michael Irvin, MBA, RN