Moneyball Meets Sales and Marketing: Tips from Two Masters
Moneyball has come to sales and marketing.
I’m trusting you know about the revolution that hit baseball due to the arrival of sophisticated data and analytics—and if you don’t, well, read Moneyball by Michael Lewis.
It shouldn’t be a surprise, in any case, to hear that the same type of data-mining and number-crunching that turned baseball on its head has revolutionized sales and marketing in recent years. And last month in San Francisco, Xconomy teamed with Polaris Partners to host a private dinner that explored this revolution (hat tip to Polaris’s Dave Barrett for the Moneyball analogy and for driving this collaboration, and to Silicon Valley Bank for helping sponsor).
On hand to steer the course were two leaders in the field: Ken Krogue, founder of Inside Sales, and Sean Ellis, founder of Costa Mesa, CA-based GrowthHackers and Qualaroo. This dynamic duo of sales data led our discussion, which was attended by a stupendous group of about 25 other CEOs and sales leaders who asked great questions and added their own lessons from the trenches.
I found the discussion extremely illuminating, and wanted to share some of the insights from the dinner. It was hard to scribble detailed notes while eating and talking, and, yes, drinking—so I focused on the take-homes and highlights (supplemented by some follow up e-mails from Krogue and Ellis).
Everything Can Be Done Better
That was the core guiding (and testing) philosophy espoused by Ellis. Establish baselines and then constantly experiment to find better ways of selling products, segmenting your customers so that you can run smarter tests. “Every single thing you are doing, there’s a better way,” he said. “Keep iterating and measuring improvements against baseline.”
T-e-s-t. That gem courtesy of Krogue (pictured at left). It’s another way of saying what Ellis said: try different approaches with your sales and marketing materials and test them relentlessly.
Passionate Customers Drive Growth
“Look for ways to create more passionate customers, such as refining targeting, highlighting ‘must-have benefits,’ and better onboarding them into a ‘must-have experience,’” Ellis advised. “Passionate customers are the most important growth driver for most businesses.” (I personally couldn’t think of a better example of this than Uber, the car-for-hire service, which rewards customers with ride credits for referrals—constantly bringing in new customers without spending much, if anything, on more traditional advertising and marketing.)
When is a Customer Acquired? Never!
The biggest dread in software-as-a-service sales is churn. “It sucks, but it’s also an opportunity,” Ellis said. “The problem is that it can really create drag on growth. The opportunity is that it forces SaaS businesses to rethink their entire sales process.” The way to realize that opportunity is to understand that a customer is never acquired.
Speed Doesn’t Kill—It Helps You Live
Speed is the single most important factor in responding to leads, Krogue said. If salespeople respond within five minutes of a lead coming in, the odds of reaching the interested party are 100 times greater than … Next Page »