7 Things Investors Need To See in Sales

Automated Transcript

Alastair Cole 0:00

Hello, good afternoon and welcome to The Sales Scoop. This is a weekly live show for technology founders who want to accelerate how they sell. My name is Alastair Cole. I'm your host for today. I have a computer science degree and one in artificial intelligence, and two decades experience in sales and marketing. And I'm delighted to say I'm joined today by Kiran Gill B to B sales expert. Hi, Kiran.

Kiran Gill 0:34

Good afternoon. Alastair, good afternoon, everybody. My name is Kiran, and I have 20 years of experience in sales operations, in front line sales and also in sales operations.

Alastair Cole 0:48

Thank you, my friend. A really exciting topic we've got today. We're diving into seven things that in our experience investors expect to see, irrespective of what kinds of funding you're going for. Obviously it does differ the amount of money and the different series, but the things that investors need to see, we've in recent work with some of our clients, we've had great feedback about the discipline that is required in order to get that funding. But it is still tough out there, isn't it, isn't it? My friend, you know, in the investor landscape, it's hard for businesses, even technology businesses, who seem to be landing that investment. But it is hard out there. In the investment world, what are you hearing from people you're working with about how they're going about raising and what investors expect to see.

Kiran Gill 1:42

Well, it's similar to most investment times when things are quite kind of difficult and the environment out there at the moment isn't great , especially for startups or technology companies or any companies that are looking for investment. So whether you're going down the traditional routes or going to your bank or going to, you know, a VC or a private equity, what all of these institutions, and let's call them institutions, because that's what they're doing. They're funding you. What they're looking for is a track record that your product, your service, has been able to sell, because that will help support them funding you going forward. So realistically, your bootstrap years, your early funding years, have now got you to a position where you have got traction, and that's what these companies are looking for.

Alastair Cole 2:32

Yeah, and we've, we've covered it on previous shows where we've dived into the different stages of funding. You know, whether you're pre seed or seed or series A investors are going to be looking in fine detail at your business. We pulled out previously five key metrics they're looking at from annual recurring revenue all the way through to churn rate. We've had a previous show. We've dived into those and unpacked them. If you've got a comment about what you think investors should see or something that comes up on the show, fire into the questions in LinkedIn, and we can pull that through automatically. You know, it is hard out there, and I think discipline is really important. And the seven things we are going to bring today come from our experience in the B to B sales world, and we've grouped them into seven core areas of sales that we see, sales strategy, team, structure, tech stack, lead generation, deal closing and customer success, and the last one is continuous improvement. And underneath that, we see there are 52 metrics that really support that, 52 measures that support those seven areas of sales. So we're just going to dive straight in, my friend, because that first area is a real Biggie, right? Investors want to know the details around your sales strategy, right? How are you going to be generating the revenue to support the plans you're putting forward so they will see a decent return on their investment. Lots of areas there that we could touch on in sales strategy, what, what are, what are favorites for you, Kiran, or areas that discipline needs to be better before investment can be landed. If I

Kiran Gill 4:20

I was looking to invest in your company. I want to know that your ideal customer profile has been robustly tested, and also an understanding that your target market has an actual addressable market that we can go after. And that would be key to investment. Simple as that, if you don't have an addressable market and your ideal customer profile looks like it's been written on the back of a packet of, you know, crisps. It just gets to the point that I'm going to have no confidence in investing into your company. So by this point, if you're going to go to an investor, you have under. Do it, what the pain points are for your ideal customer and their buying personas, and what you can then do is go to that market now. That should be tested. If you haven't got this at this moment in time, the chances are that you're going to fail when it comes to trying to get some investment.

Alastair Cole 5:18

So two biggies there from you are the ideal customer profile, target market analysis and starting to get into those buyer personas that, for me, are absolutely critical. But, you know, we see businesses we work with startups scale up and they tend to score pretty well. They're doing okay on sales strategy, largely because the founders tend to be, you know, ambitious, hard, working, smart. So there tends to be some sales strategy in place, but it's that rigor that is required to unlock investment. So sales strategy is really important. The most important one of the seven, the second is team structure. It's no good having a strategy if you don't have the right people with the right skills in place to develop it. Kiran, if you were going to pick something off that list, in that team structure, in terms of B to B selling, what would you be looking at? Or would you want to demonstrate to investors that you've got sorted and are robust? What

Kiran Gill 6:18

I want to understand is, what's your hiring, hiring strategy, if I give you the money that you want from me, what is the you know, if I if you're asking for a million pounds from me, and you're going to be expanding your sales organization, what's your hiring strategy going forward, who you're going to be bringing into your organization? And then that brings it into onboarding and understanding how these people are going to be brought up to skill and put into that place. So normally, at this point, if you're looking for investment, and this is what your investors will be looking to do, they're going to be giving you money to help you gain traction with your sales and marketing. How are you going to sell a set, spend that money, and how are you going to make sure that that money is implemented correctly as quickly as possible. Now, where companies tend to fall is that they don't understand how they're going to find they have an understanding that they're going to hire someone. First of all, how long is that going to take, and where are you going to find this person, and how long is that person going to be taking to actually be onboarded, for them to actually be revenue generating? So if you've done your business plan, and suddenly that's where I would start finding gaps or problems with your strategy. As soon as I hear people telling me that they're going to have somebody hired and they're going to be fully running within three months, I already know I've got a problem here, and the chances are, there's, chances are that the rest of the business plan is probably going to fall to bits as well once I start digging into it,

Alastair Cole 7:41

yeah. I mean, it's often underestimated. We see in businesses how long it takes for people to be revenue generating, absolutely critical team structure. The third area that investors are going to want to see is your overall tech stack, right? Absolutely paramount now, especially with the arrival a couple of years ago, this new wave of AI power. But it's not just about artificial intelligence. There's some cornerstones of tech stack that are required. What would you pick out, my friend from here, that investors would be looking at?

Kiran Gill 8:16

I think this comes back. You start bringing it back into your sales strategy and understanding that your sales metrics are going to have something to do on how your tech stack is going to be developed. So understanding your customer acquisition costs and understanding how much it's going to cost you to bring a client in makes you really understand what your tech stack needs to be doing. What I find is when I speak to some founders, they don't really have a strategy on what this tech stack is going to be doing. So if you are going self service, that means your website needs to be absolutely stellar in the way it brings customers in, and the way it basically converts people, because you're going to be bringing your cost of sales down to a point that you're selling something at a very low rate. The problem again, I have when I look at certain business plans, is when I can't see marrying up, where I've got a product that has been so cheaply sold, but I've got a sales operation that is using expensive tech in the background to try to win those clients. So again, red flag, if you don't know your customer acquisition costs, and you don't understand how much it's going to cost you to bring a client in and how much they're going to change. How much they're going to generate for you. Again, you're probably not investor ready.

Alastair Cole 9:27

Yeah, and you make a great point there, that actually the tech stack supports the overall sales strategy, right? And websites absolutely core here as the kind of owned media area, and a lot of businesses we work with struggle with research and development. Certainly as artificial intelligence has come along, the question that we get asked is, well, how can I be what I should be using? That's the latest tools and technology, and how do I have it? Strategy, right? How do I have an overall technology strategy for sales? And, you know, our response really, is that you need to be looking at having a kind of two track strategy. You've got your ongoing, you know, 24 months, this is where we need to get to. These are the kind of building blocks of technology we need to have in place. And the second track is where you're experimenting and looking at new technology that's coming out. It's not necessarily going live, but you're playing with it in a sandbox. You're starting to experiment with it, and when that works, you're dropping it into the main technology strategy roadmap there. So you need to have that twin approach in order to make sure that you're not missing out on the latest and greatest stuff, and you're not being distracted by that either. So let's move on from tech stack into the fourth area investors are going to look for, and that is lead generation, right? They want to know that you're able to bring people to the front door to start conversations and either through humans, if you're in a more complex enterprise sales process, or through self service, like the website and other tools and functions and features that to bring people in. So lead generation, you know, one of the biggest things that we get asked for help with my clients. Kiran, what would you pick off this list as important for investors to see the rigor behind

Kiran Gill 11:30

Having a look at any process is quite important to understand how you're actually bringing leads into the company, and how you're then processing those through your pro through the actual funnel itself. So there's a load there we got in the sense of funnel mix. What is the funnel mix that you've got there, in the sense of how you're bringing you know which different generation of lead generation tools are you using, or methods are you using to bring those leads into the top end of your funnel? Now, most companies will have sophisticated, complex kinds of ways of doing this. And again, it comes down to on whether you're going to have a high touch sales process and you need an SDR, or whether you've got a low touch sales process and you're expecting it to be more, you know, from a marketing collateral point of view, bringing people in, when I start looking at those numbers, I will be able to kind of understand quite quickly whether we've got a company that understands its lead generation and understands the metrics behind it, or whether we've got a company that actually doesn't understand what they're doing. And potentially this could be a problem. Again, this links back to your sales strategy, because if your total addressable market isn't there, and you're churning through your leads as quickly as possible, and it's taking you maybe five or six, maybe 10 times the amount of leads to close one lead, how long is it going to be before you run out the whole market before? What do we do next? Again, red flag to an investor, make sure that you understand what your lead generation process is before you go and start asking for money.

Alastair Cole 13:07

Yeah, you know that burning through leads is a dangerous one that we see quite a lot of people driving too hard with. For me, from this list, that reporting and monitoring like you talked about is, is, you know, absolutely paramount. You too much too too often we see kind of an ad hoc, informal approach. And actually it's the discipline that is required, because if you don't have a clear process written down, and you're not following it, it's very hard to improve when, if things aren't going well, if things are going well, then it's fine. But when they're not going well, you need to rely back on the data to work out where it's broken in the approach and where you need to where you need to change it. So lead generation is absolutely crucial. Once those leads have arrived, whether that's enterprise or self service world, the next thing investors are going to know is, are you able to close them? Are you able to convert the traffic that comes to your website for a self service, SaaS product, and are you able to land those bigger deals that are part of the complex enterprise world? So a really important area, right? Jobs not done. When leads come in, what are investors really most keen on on this list, Kiran,

Kiran Gill 14:29

they want to understand that you have a clear process to actually close the deal that you have in question. So if you're looking at a SaaS model business, you need to understand that potentially, there will be clients that are self-service, and they are being closed at a very low cost of acquisition. However, on the other end of the spectrum, you might be chasing after enterprise deals because also investors want to know that you're able to service the higher. Of the market, because that's where the potential is. Because if you close one major deal for 100,000 it really does look good for an investor to see what's going on. So again, understanding your sales process and understanding how you go through a qualification process where people on the self service side probably low qualification, it's a lot of work done at the top end of the funnel, where they're qualifying themselves, however, the people on the enterprise side, and this is what I would want to know, if I was an investor into a company, how robust are your qualification metrics when it comes to closing large clients? Or are you going to say we don't want large clients again? That potentially could be a red flag for me, because I might be thinking, well, if you're not going to be chasing after the big bucks, I might go and invest in somebody who is actually going to be investing into the big bucks.

Alastair Cole 15:51

Yeah, and you know, we've touched a couple of times on the difference between self service and enterprise deals, and you know, you've got a traditional sales team here in blue at the bottom, and how that will grow, and at the top in purple, how your self service capability will grow. And, you know, some of the biggest businesses on the planet have both of these. You know, they're, they're high volume, SaaS platforms like, you know, MailChimp, where it is predominantly self service, but they do also have traditional sales teams. So it's a very clear journey here about how to build that self-service SaaS capability, if that's what you need. At the same time, it's essential that for those larger deals, you're able to, you know, understand enterprise selling, build that human sales capacity and ensure that those customers are kept satisfied. So there's both ends of the spectrum there, and you know that that's there, that's all in the service of closing a higher percentage of your deals. So deal closing is number five. Our sixth area that investors are going to look at is customer success, right? Given how expensive it is to land new clients, new paying customers, it's absolutely essential for technology businesses and all businesses that they retain as many of their customers as possible. Where would you pick Kiran on this list of customer success areas that investors are going to be most interested in?

Kiran Gill 17:35

Again, it's going to come back, and I'm diving back into our metrics. It's going to come down to churn. So we've spent all this money, and we best spent all this time to get you all the way to the point that you're now a paying client. Now we want to understand is, as an investor, how many of these are you losing, and how quickly do you lose these people? And it all comes back to the rest of the metrics, understanding your addressable market, and how many leads you generate, and all these things, but now you've got them. What's your churn rate? And then that churn rate comes down to have you got a dedicated person in customer success? How do you hold on to your customers? How do you make sure that this dedicated person is reaching out to your clients, that you've spent so much time and effort to bring them in, and it is so hard to sell, isn't it? It is. It basically hurts so much to try to get someone over the line, and then suddenly, poof, they're gone, and you've got to do it all over again. So this customer is a successful person, and that's one of the reasons I go into companies, and I'll say, ask them. I say, give me a process. Let me understand who makes your customer successful. And that's when they tell me, you know, we actually share that role between four or five people. And you're thinking, Do you think that's interesting? Again, potentially a red flag for an investor.

Alastair Cole 18:52

Now, I think that's, that's, it's a great shout. You know, so often overlooked. Certainly the businesses that we work with are more embryonic in the startup world. They're not too worried about our custom success, right? They know that their focus is on new things but obviously you've got to keep the back door shut. That was, you know, an agency mantra of ours at Saatchi, and Saatchi when I worked there, which was, you know, it's great having the front door open, but you've got to have the back door closed. You can't be letting them out the door. And the role definition that you just talked about. You know, we hear that all the time about it's shared, or some people spend some time on it and actually investors are looking for robust discipline with a dedicated individual to go and do that. You know, for me that process is absolutely critical. You know, once they've crossed the line and they've become a paying customer, that isn't the end of it. The next, you know, months worth of steps need to be mapped out. They need to be looked after early on, so there's still that regular touch point. The next two or three months of them as a new customer should be mapped out. That process should be known. And then they can be nudged along it and guided into being a proper customer. And it's one of the metrics that we've talked about before, which is activation rate, right? It's fine bringing people to the front door. It's fine for them to sign up, even to pay. But in terms of activation, there are going to be one or two absolutely key actions and metrics that you're going to want to observe in them over the first, you know, the first few days, the first couple of weeks, in order that you can say they have become a fully activated customer, that's just one step on the journey to them and being being a success. So mapping out those next few weeks and months is critical. And then the final area, the seventh area, we believe investors are looking to understand about your business, is continuous improvement, right? Are you keeping abreast of the latest changes? Are you looking to improve, learn on the job and drive your business to the next level? And we see most of the founders that we work with tend to be open to this kind of new thinking and new learning. Obviously, it doesn't get as much traction as some of the earlier areas that it's not as important, but it is a key area that investors are going to look at, that you're not stagnant. You're looking to improve, you're looking to grow. You're looking for intelligent new ways, and smart technological new ways to get new customers and generate additional revenue. So, you know, continuous improvement. It's as much a state of mind for me as it is. You know, stepping stones and and and things to tick off. What are your thoughts on continuous improvement? Kiran, and what would you pick out as an investor that's important?

Kiran Gill 22:00

It's probably one that over, over arches, all of these. What I would probably want to know and probably want to see is what you've done in the last few years, and then understanding, from your point of view, what were those processes and methodologies that you put in place to show continuous improvement? If you've got to this position where you're asking for funding now, that means you must have had year on year growth. Now that doesn't mean that you're profitable in those years, because you might be spending more than you got. However, what you've been showing is that you're growing the business. That means there is continuous improvement there. When it comes to the annual revenue, or the monthly revenue, whatever it is you are improving. I want to know, what did you do? How did you do that, and was that by pure luck, or was that a methodical way of understanding how you did that? Because if you don't, if you're not able to converse to me on how you got there and what you did, that makes me understand that you probably don't have a process in place for continuous improvement. And if I'm going to give you 1.5 million of my money, what are you going to do with it, and how are you going to spend it? And again, I'll use that same phrase that I've done all the way through, red flag, because when I'm thinking to myself, these people are probably going, Yeah, and founders do make it up as they go along. But if you can show me that we have been continuously improving all the way through, we've got processes in place. They're not robust, they're not amazing. However, we're improving these continuously. We're looking at new kinds of ways of bringing leads in. We're using new technology occasionally. We're constantly in the market, looking at new ways of doing this. However, we're not implementing things on a whim. We're looking at these things. This is what gives me comfort as an investor, to think to myself, actually, you're going to be careful with my money that I give you. You're not going to spend it on the first new thing that turns up, but at the same time, you're not going to keep on doing the old thing continuously thinking that that's the way it's going to be working.

Alastair Cole 23:54

Yeah, you talked about reporting it back, right? And it's that kind of data driven decision making. It's being able to show what you did and the outcome that it had. And, you know, like I said, it's as much a kind of state of mind for me as continuous improvement. And I think, you know, it's an area that may be more of a soft area for investors than some of the more hard hitting things like sales strategy and the definitions that required, but still, still an important area, and demonstrative of, you know, forward thinking, progressive thinking founders, so, so those are the that's it. Those are the seven areas. So we believe investors are looking to expect to see your sales strategies robust in terms of your ideal customer profile definitions, target market analysis, buyer personas, they're also going to be looking in detail at your your people, your hiring plan for the coming months, about how you're going to spend the money, the technology stack that you've lined up, that you believe is going to require to make you so. Successful, how you're generating leads, how you are able to close business, close those leads into opportunities, your customer success, which is absolutely critical at the end of the day, and continuous improvement. So those are the seven areas. And actually, off the back of our kind of framework around the seven we have a product called the 360 sales diagnostic, where you businesses that work with us get a full score and breakdown bespoke recommendations about how to improve and a revenue roadmap of the incremental income they could be generating. You can read more about that product at the uplift partnership.com forward slash 360 and this product of ours sits within an easy to use platform where you can get your scores, your recommendations and your revenue roadmap. So lots there at forward slash 360 at our website, also just out recently, our new white paper, the Empowered founder, seller. It is just 12 pages short, and it's packed with 62 practical actions that you can go and take in order to build your confidence as a founder seller. And you can zap the QR code there if you've got your mobile out. So a couple of interesting things are there at our website to support that. You know, we've spoken to clients in the last couple of days, really, who've been successful raising Kiran, those we've worked with on a longer term basis, and it's great to hear positive feedback that they are able to land funding. Is there a common theme that you've seen with certainly with our clients or other other people you're talking to, there's one thing that somebody listening or watching could take away in terms of appealing to investors and lending that funding, any any thoughts, any one or two takeaways.

Kiran Gill 27:16

The biggest thing I want to know is that you've got a repeatable sales cycle, and you understand who you're selling to, that is simple as that, as long as you know who you're selling to, and I can see the metrics behind it, and then I can see a clear process on how you're going to address that market that gives me the understanding as an investor, that there's potential here. Now those other metrics I'll look into, and there will be other things, but they're the two major ones. If you're earlier than that, and you don't know your addressable market yet, and you're still trying to figure out what your technology is going to do, it's a different kind of investment that you're looking for. You're looking for a pre seed. You're looking at them early. Chances are you're probably giving you a lot of your money away, and you're one of those. You know your early stage. However, if you're further along the line, you're more bootstrapped. At this point, I want to know that I'm investing to somebody that understands what they're doing, and if I've got that kind of confidence behind that person, and also that brand and everything they're doing, that gives me the the safety net to think you know what, it's worth us going in, getting in partnership with this client.

Alastair Cole 28:27

Great. Take out. Thank you very much. It's just time for us to wrap up a week. Today on the show, we're going to have a dynamic. Diana Maturia, co-founder of the clean which is a property management platform. It's taking the US by storm. Looking forward to seeing Diana a week today. Tune in if you'd like to hear my conversation with her, and if you're interested in catching previous recordings of this live show, you can head over to the sales scoop.com where you can see last week's and all the previous 37 shows, or however many we've done. Perfect timing comes in at 1229 that doesn't happen very often, but it's delightful when it does. Kiran, thanks very much for your time today, my friend.

Kiran Gill 29:17

Thank you very much. Alastair,

Alastair Cole 29:20

Okay, until next time, bye, bye, see you soon. Bye, bye, bye.