Optimize Your Sales Process for Small Businesses

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hello SPI TV subscribers my name is Greg Alexander and I'm the CEO of SBI a sales and marketing consulting firm dedicated to helping you make your number you are watching SBI TV from our beautiful on location set today this is a monthly Web TV show featuring guests just like you executives trying to grow their revenues by tuning in each month you can peek behind the scenes and watch your peers discuss their strategies for making their numbers on today's show I'm joined by two fantastic guests I have Paul Rosen in our instead Paul as a chief sales officer at on deck capital which provides small business owners access to capital and Aaron is a senior vice president of sales at Infusionsoft which helps small business owners grow their companies by providing sales and marketing software applications get this Paul's company went from 0 to almost 200 million in sales in less than a decade and Aaron's company went from about 10 million to a hundred million little over five years so these two cats know how to make their number so guys welcome to the show welcome thanks for having us all right we ready to go yeah all right so today I'm gonna ask both of you fellows to help your peers make their 2016 number by selling successfully in to the small business segment many of the people that are watching this show are going after that segment cuz they see growth there and both of you are experts at this to do this we're going to use SBI's revenue growth strategy workbook ok titled how to make your number in 2016 if you at home want a copy of this workbook go to salesbenchmarkindex.com forward slash 2016 report if you want to have somebody from SBI teach you how to use it sign up for our workshop and you can do so salesbenchmarkindex.com forward slash 2016 workshop ok so let's go right all right so our first point of view is that there's six steps to revenue growth strategy so today's show is only about 30 minutes and I'm gonna ask you guys to apply these six steps specifically to the small business segment some people call a small business some people call it SMB name it it's it's outside of the enterprise okay if you want to understand the other six steps in detail to the viewers here tune into other episodes of SBI TV where your peers will demo each one of those steps for you but today we're laser focused on the small business segments so let's start with step one which is understanding the market okay so my first question Erin is for you so for the for the audience at home watching this describe the small business owner to this audience your points a great one there's a lot of confusion in the market of what is Small Business the Small Business Association defines it as anything under 500 employees the SMB space is one employee all the way up to 5,000 employees at Infusionsoft we believe that an under a hundred employee business is a true small business and after a hundred employees you know it starts to look more mature like like a an SMB space so what is the small business owner who is the small business owner it's you Greg at SBI and it's a person who is the the janitor the marketer the sales rep the business owner the the CFO who needs to go find in access capital and there's always a competition for the small business owner time and the the small business owners life is their business and and their businesses their life yep okay great so good description of what a small business owner is well let me ask you how many of these small businesses are there well defense it depends how you define a small business technically there's 26 to 28 small small businesses out there that are registered if you look at small businesses that have at least one employee and in my mind by having an employee it's not a hobby it's an actual lifestyle it's an actual business that number is closer to around seven million so it's still a huge opportunity okay so we got seven million of these folks to go after with a variety of different products and services so Erin you've been serving this market for a long time here at Infusionsoft and even the previous tops in your career what's the growth rate of this market segment so today there's approximately a half million new small businesses created every month unfortunate month every month unfortunately only 20% of those will survive and get past the hobby in hire their first employee so the the segment and of itself isn't growing that quickly because 20% of the 500,000 are going to make it and sustain over the long term and let me ask you a question the needs of this market segment are very different than if I was selling to the enterprise segment call at the global 2000 or even the mid market segment which are large companies aspiring to be in the global 2000 the needs of this segment are very different so for the audience describe how it is different well if you're a small business owner you know similar to what what Erin said it's your life you're working 60 80 a hundred hours a week and generally somebody starts a small business either because they're really passionate about something they're really good at something or they see a big market need for it and they think that they can fill it so when you look at a small business owner they should just focus on and they only want to focus on their core competency they want to be really really good at the problem they're trying to solve and they don't want to get rid of everything else so when you're targeting this segment you need something that is simple easy and allows them to focus on their core competency okay so keep it basic make their life easier the whatever you're selling to them it has to be very clear and the goal there is allow them to be a small business owner not have to do all these other things exactly alright great it's probably a good time for a break we're gonna go to a short break here for the audience but when we come back Paul and Erin are gonna tell you how to compete in the small business segments and most importantly how to make your number in this segment so stick around after the break this is not a table it is a stage where your performance is measured in numbers if you reach them you get an encore if you don't it could be curtains that's why you need the well rehearsed proven sales and marketing strategies of SBI welcome back you're watching SBI TV I am Greg Alexander of spie that is Paul Rozin head of sales at on deck capital and that good-looking fellow over there is Erin steadies the head of sales at Infusionsoft today we're trying to help you make it 2016 number by demonstrating how to make a number in the small business segment and these two guys are experts at that when you're using SBI's six step revenue growth methodology in the companion workbook to guide our conversation before the break we've reviewed the first step in this segment we're going to turn our attention to steps two three and four so let's jump into it all right so if you're going to go after this space if you think about it put your CEO hat on for a moment and think about corporate strategy there's some big questions that you have to ask when you're thinking about going after the small business segment particularly in how you compete so let's turn to you so who do you compete with we compete number one with the small business owners time in their capacity to implement sales marketing strategies most of our customers come from point solutions like an email marketing solution or a CRM solution or a shopping cart technology and none of them talk to one another and that's the the multi system chaos challenge of a small business owner you can go get very inexpensive one-off tools but none of them talk to each other and they become a small business owner becomes a victim of their own success trying to implement disparate tools so you compete with your customers we compete with our customers mindset absolutely getting mine share getting them to pay attention to sales and marketing applications software absolutely okay great well let me turn to you in terms of the subject of competition which is our second step here right broadly speaking the academic theory says this you can either compete on price you can compete on product or you can compete on the experience of the customer so at on deck how do you guys compete we're very much a customer intimacy focused where we were very very height object for our space we believe that we offer the best customer experience if you look at it kind of like a college major and minor our major would be customer intimacy if we had a minor it would be product I think in order to compete with the small business segment with price and be the low cost provider you have to be very very low touch I think in terms of sales and in terms of service okay now why did you pick customer intimacy as your form of competitive differentiation because some people watching this might say you know I'm selling to the small business owner I'd better be cheap but you decided not to do that you decided to provide an exceptional experience how come well I think customer into intimacy is probably the most sustainable like if you have a if you have a low input of costs other people can copy that if you have a great product although other people can copy your product I think the customer experiences is out of the three the most difficult to to copy and I think the most long-term sustainable all right so let's go to product okay so the engineering team has to develop a product that is attractive to that small business segment correct and it can't be over engineer because you were talking about make it easy keep it simple you're competing for mine sheriff is a huge learning curve I'm not gonna buy it right so what attributes do the products have to have to be attractive to the small business well knowing that a business owner is working eighty to a hundred hours a week and knowing that they don't like talking with salespeople and they don't like spending a lot of time and it's not that they don't like it they just don't have a whole lot of bandwidth they don't have layers and departments the product has to be simple it has to be easy and and in terms of evaluating the value or benefit of it you you you don't have to be a CPA or an MBA to figure out the benefit it's got to be simple and clear cause all right let me put you in a spot give me the value prop of on deck right now we are the fastest simplest and easiest way for a small business to get funding perfect that was a great value proposition so let's talk about pricing so the small business owner is spending his own money it's not spending that you know some investment money from some giant corporation so you know when you priced it you're competing with not only the mindshare at the time of that small business owner but I can buy your software I can take my family on a great vacation so how do you price your product it's a great question the the thing to focus on if you're out there wanting to serve the small business is the time to value you think about a mid-market business or an enterprise business they may have a year 18 months two years before a project needs to pay off for them a small business owners time to value needs to be tomorrow and that's how they will make a decision is if I can bring value into the business this week this month this quarter that I'm willing to pay for I'm willing to pay for that exchange because just as it comes out of my pocket any profits coming back in go right back in my pocket so time to value stay laser focused on that and as I understand your business do you take in the cost of the solution and broke it down into a monthly subscription fee correct so from a cash flow standpoint which is very important for a small business owner I can digest that correct absolutely we think we think about staying lower than a car payment staying lower than a car payment that's a great answer all right I'm gonna come back to you Paul let's talk about value prop right so I asked you earlier put you on the spot to give me your value prop you gave it to me give it to me one more time we are the fastest simplest and easiest way for small business to have access to capital okay so that's a great value prop right so we have a lot of these companies that might be big companies that sell to the enterprise to sell to the mid market now they're trying to sell to the small business and they're taking this you know academic PhD level value proposition messaging and they're going blah on to the small business owner and it's like I don't want to hear it you guys have simplified you value property you give it to me just like that off the top of your head how'd you come up with that value prop messaging well in our research there's really three pain points for small businesses when it comes to act when it comes to getting capital first is access because traditional banks say no a whole lot more than they say yes and the second is is speed even if a bank is going to say yes it may take you two months to get a loan and third is is time and simplicity if you go to a bank so assuming you can wait eight weeks and assuming the bank is going to say yes you need copies of annual returns you need business plans you need to pitch it so our solution was to solve all three and we're our business has dynamically changed really over the last year or two is that we came up with the name on deck because it was hey go to your bank first and when your bank says no hey we're on deck we're here you know kind of like the batter up you know baseball theme where our business has changed is we actually now have customers that can't go to a bank and are bankable but the value proposition of speed and simplicity is more important than than anything else to them so they're willing to pay a premium okay awesome so you came up with it because you really studied the wants the needs and desires of that small business owner to the point where you came up with the name which is great and it's a great lead-in to what I want to talk about next Aaron which is branding okay so so far we've covered step one which is understanding the market we've started we've studied corporate strategies should I compete on product price or customer experience we've talked about product and what type of product is successful in the small business we're now gonna go to marketing so let's talk about branding so what brand attributes does a company and the product have to have in order to resonate with the small business owner number one it has to connect with the small business owner your messaging and your brand has to convey you understand and it can empathize with what a small business owner is going through every day too often you see the mid market and enterprise companies trying to come down to serve the small business market and they don't tweak any of their experience and so it feels to a small business owner like a brand that's connected to a thousand person organization versus a ten ten employee company like me so that's number one is the connectedness to their experience number two is care you know Paul Paul mentioned this at the beginning there's 22 226 million small businesses in the US alone so it's a huge market opportunity and there are a lot of companies out there that see it and what happens to the small business owners they're getting peppered with sales and queries left and right from from the market and they they're taken advantage of in a lot of ways and as a brand if you can connect to the care and the heart of the small business owner you've got you you know you've got an opportunity there lastly I'll say at Infusionsoft we focus on hiring former small business owners sixty-five percent of our current organization either owns a small business or has owned a small business in the past Wow so what's the brand promise of Infusionsoft the easiest way to grow sales and save time Wow so you're connecting emotionally that's an emotional statement the easiest way not the best way the most sophisticated way the easiest way awesome all right so we're gonna stay in the marketing step okay let's talk about brand awareness in lead generation so there's as you guys said there's millions of these right so you have to be able to generate leads at scale to be successful in this business so how do you do that at on Dec I think a lot of it depends on what your marketing budget is believe it or not we generate a lot of business from Direct Mail in our industry our industry is very conducive to direct mail most companies may not have the budget that we have so for a lot of companies that's really the small business owner is really influenced it really has a lot of center of influences whether it's their accountant whether it's their lawyer whether it's their insurance agent whereas larger businesses the larger business segment where somebody is really focused on that segment of the business and is an expert on that business they're gonna rely on their own expertise whereas a small business owner is really gonna trust outside centers of influence a lot more than trying to pretend like they're an expert in a specific field so let's stay on Direct Mail for a moment right so people that sell to enterprise that you say direct mail they almost laugh at you that doesn't work anymore blah blah blah I think that's crazy because I do think so how many direct mail pieces do you drop a month I'm not sure if my marketing department is gonna want to share the halogen elías I'll just say it's a seven-figure number Wow and it's working for you yes absolutely all right all right let's take another quick break so one more short break but stick around because when we come back Aaron and Paul are gonna answer my questions on which sales channels work best in the small business segment so come right back after the break your finish line is your number and the only way to reach it is to make certain everyone is pulling their weight and headed in the same direction that's why SBI uses proven techniques to bring everyone on your team on board with successful standardized sales programs enabling victory at the turn of every quarter welcome back you're watching SBI TV I am Greg Alexander CEO of SBI and that is Paul Rozin head of sales at on deck capital and over there as air instead head of sales at Infusionsoft today we're trying to help you make it 2016 number by demonstrating how to make your number in the small business segment we're using SBI's six step revenue growth methodology in the companion workbook to guide our conversation and up to this point in our previous two segments we've covered steps one through four in this segment we're to turn our attention to the last two steps five and six all right let's move to sales strategy okay so Erin what is the appropriate sales channel for a company trying to sell to small business segments two things to keep in mind one the cost of your software is going to be lower and so the highly talented highly paid outside sales force doesn't generally work to sell into small business with today's technology is available an inside sales team works really really well you can do everything over the phone via screen share you don't have to do any face-to-face demos or be in the market necessarily to connect with small business owners second small business owners have trusted advisors so think about who the referral sources and the trusted advisors of your target small business is it could be Paul mentioned a lawyer it could be a CPA it could be a meetup group and small business lends itself very well to referral channels and affiliate type partner relationship interesting see both mentioned referral sources you know the people that surround that small business owner and getting introduced to that person so it's a small business owner and I'll stay with you Aaron here they they skeptic 100% yeah 100 percent skeptical primarily be due to large companies serving mid market and enterprise businesses and trying to come down in the small business space and not connecting with the small business owner at all and and Trust is the key word trust you've got to either earn the small business owners trust directly or you've got to go earn the trust of their trusted source yeah so I couldn't help but notice that you talked about you have to match you know what your typical deal size is or in your case the price your software to the sales channel because if you have a very expensive sales channel selling an inexpensive product you're not gonna make any money now when I hear that I immediately go to sales methodology or sales process so Paul let me come to you on that right you know if you think about selling to big businesses you could have a sales methodology a sales process that runs a sales campaign from six months to 12 months it could be multi-step multi-dimensional it's heavy right but that's appropriate when you have a sales cycle length of 12 months in the small business segment that's a nightmare so what does a sales process look like you know small business owners want to make quick decisions as we spoke about they don't have a lot of time so typically the sales cycle is gonna be very short in one or two calls they're absolutely gonna make a decision and I think with business owners you need to develop that emotional link so in addition to the ROI if you're going to purchase a loan and it's gonna cost a thousand dollars of interest what is your return on investment going to be in same thing with you know Aaron's organization if you're gonna you know purchase his marketing capabilities what return on investment are you gonna get you also need to develop that emotional link with how is this really going to help them solve their other business problems as well and you you package and you message that all at once you know compared to a larger company where you have a different message to the CEO a different message the CFO a different message to the CEO oh with a small business owner you the message is all compact and quick and simple yeah awesome so I would advise those watching the show this is a huge point and I would tell you that my experience says this is one of the number one stumbling blocks when you go from enterprise down to small business you try to import that legacy sales process and it doesn't work it's a 1 to 2 called closed you have to run the entire sales campaign on a 30-minute telephone call alright let's come to quotas what type of quota can a salesperson who sells to the small business segment carry it's it's bigger than one would think so our direct inside sales rep produces approximately a million dollars of of annualized bookings revenue by our company so it's a good combination of the speed and the the dollar amount that goes with a complex sale so that's inspiring I mean it's it's when I hear the word Small Business I hear small revenue it's not true I mean if you have a sales person doing a million dollars that adds up quick when you start throwing lots of salespeople at it let's talk about comp let me come over to you so what do you pay a sales person who sells to the small business segment well generally in this small business segment most of the companies have been associated with you have a portion of salary and a portion of incentive for newer salespeople it may be 50/50 as you get experienced or if it's more of a relationship sale where you're building a book it it ends up being more heavier over a period of time with incentive part of it really depends on regionally you know we're similar to Aaron's organization where we're all inside salespeople so half of our team is in Denver half is in New York so part of the compensation is going to be based off of where people live and then part of it is within our organization you have different steps or levels that you can rise up to so generally for a very competent small business sales person you want to be able to give them a career path where they can earn six figures I was gonna ask you so is it above or below six figures starting it sounds like it's below but as you grow you can go over to six figures yeah and you know Aaron mentioned that you know his average sales person is generating you know a million dollars of annual booking ours is pretty comparable to that as well so when you have a sales person generating that kind of revenue you know figure out a system to pay them sec okay so these are high-quality jobs okay fantastic let's come back over to you Aaron hiring profiles so I would imagine that the type of person you hire was gonna sell to that and you mentioned you hire former small business owners it's very different than what you would sell in the enterprise segment so tell me about the hiring profile it's somebody who can build relationship and rapport very quickly somebody who has experience and experience communicating via the phone it's very different face-to-face so for us we think about somebody who's already had a telephone sales job somebody who has some empathy and connectedness to the small business story a former small business owner parents who are small business owners grandparents who were small business owners and when you really extend out in that Network you think about it you know for all of you out there just go one or two levels out in your family I guarantee you know somebody go into small business interesting so since you're hiring somebody that can sell effectively over the phone because that's your sales channel when you interview them are you interviewing them face to face you're either doing them over the phone we do wall yeah we start with the phone and then we do face the face so you want to hear what they say what they're selling on the phone if they if they don't do on the phone they don't get it face to face opportune awesome so Paul I'm assuming you have a fairly similar hiring profile to that so where do you find these people well and on deck we're fortunate where we have a recruiting department but based off of my history always the best way to find really good sales peoples through employee referrals cuz a couple things happen one is if somebody refer somebody they're gonna make sure they don't want to look bad you know they they have a career track if they refer somebody that's poor it's a bad reflection on them and the individual that they're bringing in doesn't want to make their friend look bad so we've always been very very successful with employee referrals but I also think that you need to be sensitive about other things that you haven't in the past you need to create an environment where people enjoy working there because every candidate is going to go to Glassdoor to see what other other team members feel about the organization so I think that we've always hired more for cultural fit than we have for technical fit all right well listen as you can see selling into the small business segment requires a very different sales strategy and if you are carrying a number tied to this market segment apply what Paul and Aaron taught you today and you're gonna increase your chances of success so Paul and Aaron we're out of time we try to keep these shows to 30 minutes but I really wanted to thank you for coming on the show you've increased the chances of our audience making their number from the small segment so thanks a bunch for being on the show I really appreciate it thanks for having us okay great I would also like to thank you our viewers for tuning in if you enjoy this show I suggest you subscribe to SBI TV you can find us at salesbenchmarkindex.com /tv or if it's easier for you just go to youtube and search for sales benchmark index and you'll find our channel we have some outstanding guests people like Erin and Paul confirmed for future episodes and some beautiful locations so you're not gonna want to miss this but until then I wish you nothing but the best of luck as you try to make your number