Curse of the ‘Middlers': Why Happiness Officers Can’t Stand In for True Sales Professionals

Screen Shot 2013-10-02 at 10.19.17 AMWe’ve spent a ton of time on SaaStr talking about how to think about sales and sales teams; revenue/demand-focused marketing; and keeping those customers over their lifetime.

A more fundamental question we’ve touched on but mostly bypassed is this:  Do I Even Need Salespeople at All?  I mean, Atlassian doesn’t have any.  Can’t I just do a Basecamp model?  Can’t I just have Customer Happiness Officers?

Well maybe you can.  More power to you.  As long as there is enough momentum in your business to hit your revenue goals without a true sales team, then by definition you don’t need one.

And a lot of founders who haven’t managed the revenue side of a business before are sort of anti-Sales.  They see it as a bit slimy if they haven’t done it themselves or really worked with a great sales team.  Isn’t sales just a bunch of guys in a virtual boiler room, trying to get people to buy stuff they don’t really need?  If my product is so great, shouldn’t it sort of sell itself, so long as I have Happiness Officers answering questions and moving things along?

Again, maybe.

But the “problem” going Just With Happiness Officers is three-fold:

First, what works at the bottom of the market may not work as you tilt just a smidge upmarket.  Self-service and almost-self-service models can work well with Happiness Officers, whose goal in part is to be Customer Support on steroids.  I.e., not just be reactive but also proactive.  Not just respond to tickets but make sure customers are happy with the product and loyal to it.  It’s a great strategy for the bottom of the market.

But while that will still work at slightly higher price points, say $99 or $299/month or even a $5k ACV or so … in many categories, above that, your prospects will be expecting to talk to a true salesperson.  At least some of them.   A Happiness Officer can probably do a decent job here, but ultimately a salesperson is the best fit for someone that wants to talk to sales …

Second, and perhaps most importantly — Happiness Officers are Great Middlers.  But Not Openers or Closers.  Smart, engaging people who love a product but have no experience in real sales are Middlers.  They don’t know how to pick up a phone or an email and really initiate a sale.  And they are ill-equipped, or at least highly suboptimized, to ask for the close.   It’s not easy to ask for money.  Professionals are much better at it than amateurs.  “Amateurs” (i.e., those not classically trained in sales) don’t know how to close.  They wait and hope for the close to magically happen on its own.  Sometimes it does.  But you’ll see that once you have someone that knows how to close managing a prospect … a lot more deals close, and close more quickly.

Third, you’ll probably make more money with a true sales team — much more money.  It’s just basic math.  First, as noted above, more deals will both open, and close, when you have a trained sales professional working with your prospects.  And second, and just as importantly — sales professionals know how to maximize the revenue per lead.  How to figure out the maximum number of seats that can be closed now, and later.  How to get a customer to buy a more comprehensive edition, or set of services, than they might buy without guidance.  You may not care so much in the early days.  But you’ll quickly care once you have even $1m or $2m in ARR under your belt.  Because leads are precious.  If a great sales rep can turn a lead into $40 on average … but a Happiness Officer only turns it into $20 on average … and a sales rep can close 50% more often than a Happiness Officer … then, Dude.  Putting true sales professionals on these leads is going to increase your revenue per lead by 300%.  At least in the segment of your customer base where it makes sense (e.g., $99-$299 MRR and above) to have sales professionals.

We also backed into this math when we talked about Tilting Just a Smidge Upmarket.

Screen Shot 2013-10-06 at 2.13.53 PMNow, if you’re still on the fence, because you’re very customer focused … I get it.  Trust me, you don’t want a Used Car-type sales rep leading the charge here.  But a great SaaS rep doesn’t sell Used Cars.   She sells a beautiful, gleaming Tesla Model S.  Or at least, a shiny new Audi A4.   Metaphorically speaking.  What I mean is, the customers already love your product.  The sales rep’s job isn’t to lie, cheat or steal, or convince you that that’s just “surface rust” on the ’05 Impala.   Rather, it’s to be a trusted guide, a consultant, helping them through the product evaluation and purchasing process around a great product with very high ROI.   It’s about learning, bonding, adding true and real value.

And then … asking for the fullest, largest possible check ;)

11 comments

  1. Again, I can see that converting paper-based fax processes to digital eSignature at Adobe would take tremendous direct Sales energy. Kudos for that. But broad stroke applying this model to all SaaS? It just doesn’t seem relevant to apps that assume a digital office to begin with (ie Basecamp, Atlassian, …)

  2. Again, if you can pull off the Atlassian/Basecamp model, more power to you. But most SaaS apps can’t.

  3. Also remember, the customers of Atlassian are engineers – engineers who can trial and use the product themselves, know how to RTFM and are very happy searching the knowledge base, talking to peers on StackOverFlow etc, and will happily learn and decide what tool to use. They also tend to hate phone calls and dislike sales. This is just not true when you are selling CRM to sales people, marketing automation to marketing people, financials management software to finance people, etc. You get the idea.

    So go ahead don’t hire sales people if you are selling a killer product to self-directed motivated buyers who dislike engineers and are self-sufficient buyers at a price point low enough to not be material. But in real world, you need sales people – call them concierge desks, call them happiness closers, but you need sales people.

    Find me one software company selling software to non-engineers for more than $10K a year?!

    • FWIW – Basecamp *is* in the SaaS CRM/PM category and the target audience is not Engineers. An argument can possibly be made around the $10K+ price point requiring some personal touch, but this isn’t related to audience.

  4. Pingback: Does Your SaaS Company Have to Have a Sales Force? « SmoothSpan Blog

  5. Sam Blond

    I definitely agree with all three points outlined here. I would add a fourth as well.

    “Happiness officers” are likely young, inexperienced, “professional” sales reps in training. If they went to an organization that had a real sales org, they would be starting in a sales dev type role to learn how to sell. Several problems will arise from placing them directly in a closing role: they have no experience, they don’t know what they’re doing, and they don’t have anyone to learn from. In turn, the ceo (who is likely not a sales professional) is spending a large amount of time setting up sales processes/goals, training the “happiness officers,” and monitoring their progress, when he/she should be concentrating on other things (and, quite frankly, unless the ceo comes from a SaaS sales background they are not the best person to be teaching how to sell). By hiring true sales professionals (who are well trained and self sufficient without any hand holding), you eliminate the headache of trying to play ceo and VP Sales at the same time.

  6. Jason –
    You can add “Middlers” to the SaaS Dictionary I’m sure you’ll write one day.
    Middler – Smart, engaging people who love a product but have no experience in real sales
    Like it and thanks for the insight.

  7. Your posts (I’ve read at least 5 today) are exactly what I needed to hear/read right now. We’re on the $300-500/MRR and still under 100 customers so I’m doing all the sales myself, but am feeling the tension and the desire for a professional salesperson. I love the deal, and the partnership but am not a huge fan of the the other pieces needed to be successful long term. I agree that a sales person could increase our sales price and close rate at http://greenlightup.com, we are a managed email newsletter provider (we design, write, send and report each month) and each sale is basically the same process, but it is very high touch.

    Thanks for sharing your experience. I should say, we’re not a Software, we’re people performing the service, but our revenue model is similar.

    • Great to hear! You should hire a salesperson as soon as you can afford it, but at your very early stage, it will still seem very expensive. As soon as you see that someone can be accretive, though, make the hire.

  8. Thank you. Any specific tips about traits you’d recommend identify in that person?

  9. Pingback: Eating My Own SaaStr Dogfood: Why I Invested in Algolia Search-as-a-Service | saastr

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 9,600 other followers

%d bloggers like this: