This is part of a series of interviews with B2B revenue leaders. This interview is with Aaron Ross, C0-CEO of Predictable Revenue.
Who are you and what do you do?
My name is Aaron Ross and I do a lot of things, but at heart (business wise), I’m an author. Aside from my family, it’s the work I’m most proud of.
Tell us a little bit more about the book and how working with Jason was?
Working with Jason was great, can't say enough good things about him. He’s a super smart guy who founded a company called EchoSign, sold it to Adobe for a lot, and now runs SaaStr. He's the number one thought leader in the B2B SaaS space.
The book just came out a few months ago, and it subtitles how hyper growth companies create predictable revenue. It's really seven lessons that are split into seven different chapters.
The first of those seven lessons is nailing your niche. Can you describe that idea?
The idea is essential. If you’re struggling to get appointments and generate leads, it's probably a niche issue. Or if you get leads and people say, "Hey, this is a great product. Looks cool." Then they go silent and you don't hear from again, it’s probably a niche issue. If you're spending a lot of money on marketing or any kind of lead generation and you're not seeing much results for it, that's the first place to start.
It has nothing to do with the product, the product is usually fine, it’s about being able to find and market to the companies who haven’t heard of you or your brand before. That involves knowing who the best types of prospects are and what customers need you—need, not want—and understanding what they care about.
What the message is, how to find them, and how to engage them in conversations follows that — if you don't have that, all the money you're spending on sales and marketing is a waste. It's like pushing a wet noodle.
Here are some clues that indicate you haven’t nailed a growth niche yet:
- You’ve grown mostly through word of mouth, and struggle with lead generation (especially outbound prospecting)
- You’re in professional services (consulting, custom development, coaching, etc)
- You’re good at too many things, making it hard to focus on one great thing or your unique genius
- Your solution is a nice-to-have to prospects, not a need-to-have
- You can get appointments, but no one buys after that
Niche doesn't mean a certain kind of industry like financial or transportation, it just means some segment of customer where you know:
- how to find them
- what their pains are
- what they want
- how to deliver
- where find them
- how to engage with them
Ideally, this will lead to some sort of repeatable way to do business over and over again. If you don't get that, outbound prospecting is a waste, marketing is a waste, and hiring salespeople is a waste.
For more resources on nailing your niche, visit here.
How does picking the right niche affect your sales and marketing decisions?
It's not so much about picking the right niche, it's about finding the niche that will buy from you all day long. They’ll just buy, buy, buy.
Sometimes that will happen early, but more often than not it could be six months to a couple years of iterations. Asking questions like:
- who can we sell to?
- why do they need us?
- why would they be interested?
It's not so much picking a segment as finding one that fits you. I mean, you can pick all you want, but it doesn't matter what you pick if they don't buy in a repeatable way. Going through this iteration can take way, way longer than you’d realize or expect, it's almost that the market finds you.
Once you can adapt yourself to the right market, then the focus shifts back to product, messaging, and proof. Sometimes there could be a great market for you, but they won’t buy because it's all mainstream buyers. They're just not going to buy much until you have proof points and case studies. They're like, "Yes, we need this, but we have internal approvals and until you have more proof, we just can't do anything." Again, I think it's more about having the market find you in a way than you picking a niche.
That makes a lot of sense. It’s one of those things that a lot of companies try to force early instead of taking the time to find the right fit.
People have unrealistic expectations of how long it takes to figure this out, even getting a SaaS company off the ground it's probably two years until you even know if you’ve got something or not.
Nailing a niche doesn't happen early. It can be a couple years between product evolution, messaging evolution, and business model… all the pieces that go together to get to you to the place where you can sell in a repeatable way can take way longer than you think. It doesn't mean there's anything wrong, it just means maybe you didn't get as lucky as someone else who just popped into it from day one, which happens, but not very often.
The way that we buy today is dramatically different than say a decade ago thanks in large part to technology, yet the way that we sell hasn't changed all that much. In what ways do we need to alter the way that we approach and sell to prospects?
Well, I think there's lots of things have changed, but lots of things that haven't. Technology has changed a lot, but people haven’t. No matter what you want to buy, there's seems to be a sea of options.
Step one is making sure you've got a team of salespeople that are specialized in the way that fits your business. Pretty typically in a SaaS company, you’ve got prospectors who prospect, closers who close, account management/customer success keeping customers happy, post-sales work, inbound lead responders, the list goes on. They all play their part on the team, just like a sports team.
Maybe you have four roles, maybe you have three, maybe you have eight, but it's people doing fewer things better. That's incredibly powerful.
What kind of effect does that all have on marketing?
One thing that's the same in both cases is this challenging practice of learning how to do or say more in fewer words.
Salespeople are used to writing these voluminous emails or proposals that catch every little thing, but the problem is they become so long they become confusing and boring. On the other hand, marketing is used to creating white papers and all this blah, blah, blah stuff that wasn't necessarily based on the messaging of what readers want to read.
Meet, brainstorm, and iterate on what it is that you need to say. Instead of using ten pages, how can you now say it in one? Instead of ten sentences, how can you say it in two? You see this in sales with shortened e-mails in prospecting for sure. Short e-mails that are between one to five sentences always are received better than long e-mails.
Marketing content, similarly, is saying instead of a fifty-page white paper (nobody is actually going to read all of that), getting it down to ten pages or whatever makes sense. It’s about finding what are the things that our audience is interested in, and how can we package them up in easy, bite size chunks.
Right, I completely agree. People are just so busy nowadays that if you open up an e-mail and it's more than a few sentences, it just seems like a lot of work. And what’s even worse is when there isn’t a clear call-to-action, it’s just too easy to ignore things like that.
The studies show that when you’re outbound prospecting, cold emailing or calling, they'll only going to give you the equivalent of a third grader's IQ. If you don't make it extremely clear right away how you're relevant, they'll just move on
Cold calling is something that I've heard you talk about before. Can you explain cold calling 2.0 and how it fits into outbound prospecting?
This is the system I created at Salesforce years ago back when the company was maybe just a couple hundred people. I suggested to some of the executives to let me figure out how to do prospecting for us in a way that would work.
We’d get a lot of inbound leads for small deals, which was great, but we'd just hired a lot of expensive field salespeople. The problem is that we didn't have a way to go out and generate pipeline for medium and bigger accounts. We were doing outbound projects, but nothing was working. We had hired outsource vendors and had people calling internally, but I saw that we didn't really focus on this. Even though I hadn’t done sales before, I thought I’d give it a shot.
I started by reading a bunch of books, but they didn’t really resonate with me. So I just sat down and started trying stuff. I tried cold calling. I tried sending books. Tried this and that, but 2.0 originated by realizing that the short referral emails that I’d be sending was an amazing way to start conversations. It didn't involve hardcore cold calling.
Cold calling 2.0 is cold calling… without the cold calls. By sending personal emails beforehand to the account asking for the right contact, it actually turns your cold call into a lukewarm call.
Who are some of your favorite people to follow on the topic of outbound prospecting?
That's a great question. I don't follow many people in general at all, but one that I do is Jason Lemkin. I also have to recommend The Predictable Revenue Blog, which is our blog.
Back to your new book, is there any sections of it that people are reacting particularly well to?
A section that people have loved about the new book is around how to embrace employee ownership. I think the reason why people love it so much, is because no one has seen it before.
If your employees aren't on board in helping you create whatever you're trying to create, you're not going to get the growth you want, and it's not going to be sustainable. This chapter exposes the hard truth that employees are renting, not owning their jobs. This is a section for executives, owners, and managers.
Is there any manager or executive who's ever said, "My people, they're actually accomplishing too much. I can't keep up with them. I need them to slow down and do less." No. No one has ever said that.
What every owner, manager, leader says is, "Why don't my people work harder, make more decisions on their own, take the initiative, or figure it out for themselves?" What they say is, "My people don't understand how big the opportunity is in front of them. They don't understand exactly how to take advantage of this opportunity. They're doing the minimum." Maybe it's in hours, or maybe not. Maybe it's just in going for it, confidence, or taking the initiative.
One of the reasons for this is that the employees don't really feel like owners. What does that mean? We're not talking about financial ownership. It's really emotional ownership. Think about it this way. If you own a house, how do you treat that house versus when you rent an apartment or rent a hotel room? If you own a car, how do you treat that car versus a car you rent? Those differences are the differences between renting and owning. When employees are renting they do the minimum.
That sounds like something that may not be a problem when you're a small company because everyone seems to be emotionally invested when it's a small group, but as you grow out and expand I could definitely see that as being a problem.
That’s true, but you don’t have to be that big before you can start to see it happen… eight, ten, or twelve people even. There's people who could contribute a lot more if they had the right environment to help give them a friendly kick in the ass.
This relates well into another chapter of the book called forcing functions.
What's a better way to motivate yourself to get into shape? Buying a gym membership or signing up for a marathon and telling everyone? Singing up for a marathon. That way you own it. There’s a concrete deadline, everyone knows about it, and if something goes wrong there’s only one person to look at. Public shame is a great motivator.
It doesn’t stop there either. Once the marathon is over, you’ve got to sign up for another one. But that’s where a lot of people fall down. They go and work hard, accomplish something, then think maybe I'll just go watch Netflix now for a while instead of getting ready for the next marathon.
There's so much advice out today on how to prospect. You hear cold calling is dead or cold calling needs a diligent process. How do you know what advice is best for you?
Well, there's lots of advice about everything today... diets, cold calling, sales, toenail fungus.
It's finding people that you can follow that you resonate well with. It's also just trying stuff for yourself because whatever works for me is probably not going to work for you in the same way. I think a lot of people still are just looking for someone to tell them what to do. Tell me what these seven steps are and I'll do them. It's the fear of trying things to figure it out and realizing that you have to do your own trial and error to figure out your problem.
That's the only way to know what advice is going to work is to try it and try it in variety. If you're prospecting to enterprise companies versus small business. Again, my process that works perfectly for software companies or for whatever kinds of companies, may work for you, it may not. The only way to know is to try it, so just try it. I think people sell themselves short, they give up too easy.