Jorge: Congrats on the official announcement on TechCrunch about Pattern! Why do you tell the audience a bit about your professional background, how you got into sales, and what you love about it?
Derek: I’m an experienced Sales leader with a strong operational skill set. I started my career in sales as an SDR making 200 cold calls a day for an investment management company called Fisher Investments in the Bay Area.
I love sales because it’s so hard yet rewarding at the same time. Also, I kinda secretly like that while many people think of salespeople as a necessary evil, there are many others that believe we’re the secret sauce to the success of some organizations.
I was the 4th employee and first salesperson at Wildfire. During my time there, I lead the group to over 300 people in my organization, nearly $50m in revenue in year 3 and an acquisition by Google. Currently, I’m Founder and CEO at Pattern, a sales productivity tools company currently in stealth mode (see screenshots below).
Jorge: What factors should a sales leader consider when identifying their ideal customer profile? What attributes should this ideal customer possess?
Derek: Developing your ICP is a bit of art and science mixed together with some good old determination to iterate quickly.
In the early stages post Product/Market Fit, I’m a firm believer in talking to anyone that will listen. You probably have an intuitive sense of the types of industries and organizations that might have an interest in your product but you’re also likely missing out on lots of really good potential customers if you’re not testing the message outside of your perceived target.
Once you’ve had 6 months to a year of customer relationships under your belt, you should begin to be able to identify trends in industries or types of organizations that aren’t great mutual fits.
Either they’re not really using the product or require a ton of support, etc. Those are the trends you want to identify and then circle back to the front end of your sales and marketing process to try and weed out either those industries, types of companies or behaviors. It’s always fun to close deals but if you’re selling to lots customers that won’t stick around, your business is in trouble.
Regarding attributes, I think ideal customers should possess a true understanding of your product’s value proposition as well as a clear vision of how your solution will help solve their problem. Also, it helps quite a bit if your customer champion is someone in the organization that has significant authority.
Jorge: Like we discussed today. What factors should a sales leader consider when determining what customer segments to pursue as a business? – For example, many companies like to have a self-service product that serves the SMB, Mid-market, and Enterprise tiers. How do you know where to focus your sales resources?
Derek: I think the answer to this question really should stem from the product you’re selling. In the old days, crappy products with good sales team could win. The product quality bar for enterprise software has increased dramatically in the past few years. I believe that in order to build a great product, you have to start with a clear definition of the user(s) for whom you’re building.
If you’re building for SMBs, sell to SMBs. If you’re building for Enterprises, sell to Enterprises. I have been guilty of this myself in previous roles but it’s easy to convince yourself that your product is more broadly applicable than it really is. Before spreading your resources across different tiers, be smart and do small tests to try and prove to yourself that your product will sell in a new tier / industry, etc.
Moving too quickly into a new category that you’re not familiar with compounded with having a product that doesn’t have market fit, is a recipe for struggle.
Jorge: What technology tools do you use to discover and help verify your ideal customers?
Derek: I’m not familiar with any tools that help determine a given company’s ICP. Perhaps I’m either behind the times or old school but to me there’s no substitute to running a bunch of experiments (eg talking to whoever will listen), tracking everything in CRM and then analyzing the data and making some decisions based on what you’re seeing.
Also, I’ve worked with Sales Ops people in the past that have deep consulting experience and they are very familiar with this type of exercise so it’s really nice to have someone like that around if you’re trying to get really sophisticated here.
Jorge: How do you typically onboard and train your sales organization on what your ideal customers are, why they are ideal, and the variables they must keep an eye out on in the marketplace?
Derek: To be honest, I think we could have been much better about doing this at Wildfire. We were fortunate enough to be one of the first to market at the beginning of the social media marketing wave and it seemed like everyone was interested so it took time for things to shake out enough to really understand who would end up being “good” customers that stuck around and got material value from our product.
Once you do have a good sense of what ideal customers look like, I would task my Sales Ops team with going out and acquiring as many of those company names as possible to feed to my reps. If you can save reps’ time by pre-selecting most of their accounts, then their chances of closing deals in your target market is much higher.
For inbound leads (and all leads really), I think it’s critical to train your salespeople to truly understand the pain points of the customers they’re selling to and to try and align incentives as well as possible to ensure they don’t sell your product to customers that aren’t going to get material value from your product.
Jorge: What differences in sales process did you find when selling to mid-market prospects versus enterprises? What do the typical mid-market sales cycles look like versus enterprise versus SMB?
Derek: I learned quite a bit about this during my time at Wildfire and then at Google. Our sweet spot at Wildfire was what I could call a corporate / departmental sale. We could sell very well into medium-sized companies and also into departments of larger enterprises. Sales cycles weren’t incredibly short (3-6mo) but deals could be won with a single inside sales resource that talked with 1-3 buyers on the client side.
As our market grew and we looked to expand into the “Enterprise” we thought we could apply the same resource infrastructure to find success but that didn’t work. It was until later when we brought on some people with deep enterprise selling knowledge that we learned that true “Enterprise” sales are much more complex and need to be run by a well-oiled team with different roles.
In the corporate / departmental sale, the AE is the one and only resource. He/she has to do everything to get the deal across the line (once it’s been qualified). In comparison with an enterprise sale, the AE is the coordinator, managing his/her resources (Sales Engineer, Customer Success Person, Account Manager, Value Solutions, etc) to ensure the company is putting it’s best foot forward. It’s hard to explain in a couple paragraphs but I can tell you the people and process that work for corporate sales don’t scale well into the enterprise space.
SMB selling is a combination of really smart performance marketing and higher velocity corporate selling. The sales talent is different and needs to be managed fairly strictly around output of activities, etc.
Typically, the unit economics for selling in this space are tough and you really need your reps to become and remain productive as quickly as possible.