By Pau Alcalá - Co-founder of Palabra
While finding product-market fit for Palabra, our marketing strategy was exclusively organic and our first sales came from 1-1 conversations with potential users. After a month of difficult conversations and failed demos, I learned a very new and innovative approach to direct sales: actually listening to what people are saying. In this post I'll share my experience and some tips to listen to users, in the hopes of saving founders & early startup teams some time and energy.
As the name suggest, direct sales means you talk directly to your prospect and try to sell them your solution via a 1-1 conversation. This conversation usually starts by reaching the prospect you think your product would work for, and sharing why you think your solution would be good for them.
Taking a direct approach is more common for B2B businesses, because the decision to purchase is strategical and the price is higher, which means you get a bigger return for each user you convert. But I think it's a good strategy to follow for any early stage SaaS, because it's an easy and direct way of learning about your users and implementing solutions that work for them.
The biggest challenges to direct sales is finding the right prospects and knowing how to show them value as quickly as possible. With direct conversations you'll probably get a higher conversion rate than self-served sales, but at a much slower rate.
When we launched Palabra we had no audience and not enough user data to understand who we should be targeting or how to convert them into paying users. We had two possible paths to follow:
The first path was the riskier for us. First, because we had little experience with paid acquisition, and wouldn't know if our misses would be due to lack of experience or just wrong channels.
Second, we wanted to engage in deep conversations with users as soon as possible. We didn't really care about general trends, we wanted to actually understand what people were struggling with in email automation, and where to take our product so that it worked for them. That's why we decided to take the second path.
Our initial strategy was to ask a bunch of questions about people's current email automation strategies and try to turn the initial conversation into a sales pitch. We'd learn fast and get a few sales in the meantime.
Sounds easy, right? Well, it was not.
After my first couple of calls I knew I was doing something wrong, but didn't know what it was. Sign ups were rarely because of my "sales" 1-1s, and every conversation left me with a sour feeling.
What usually happened was that I got to a call, asked the person a couple of questions about their strategies, and at some point I'd get nervous and start talking a lot. People are usually nice and would listen to what I had to say, but I could feel they weren't really interested, and felt like I was wasting time.
So what was I doing wrong?
After talking with my co-founder and a couple of friends in the SaaS industry, I found that I wasn't really paying attention to what prospects were saying. My team would ask questions about our prospects that I didn't know how to answer.
That meant I wasn't really selling, but I also wasn't learning about our users. I found I had to learn how to listen first, and sell later.
Listening to prospects is not at easy as it sounds when you are worried about selling them your solution. Specially if you're in early stage and don't have much experience selling software, it'll be hard to keep a clear mind and letting the user take the conversation where they want to.
But here's the thing: selling isn't about convincing people to try your product, it's about identifying how your product can solve a problem for them.
In a direct sales conversation, you should have two take outs:
If you fail at #1, you'll end up trying to convince people who don't actually have a problem you could help them with. Those are not your users, and there's nothing you can do today to make their life easier. Even if you somehow convince them to sign up, they'll probably cancel their subscription, making your churn go up.
Failing at #2 is usually connected to #1, because the only way of communicating a solution clearly is to understand the problem perfectly. You have to listen really carefully to understand what those problems are.
Most of your conversations with prospects should be about #1. Make a lot of questions. Listen closely and follow up on what isn't clear. Make the other person feel listened to. Worst case scenario, you end up with valuable insights about what problems people have. As an early stage startup, this information is crucial to find product-market fit.
Here are some lessons I learned while taking a direct sales approach to SaaS. Most of them came from reading The Mom Test, talking to awesome people and experimenting on my own.
This list should be really short. My initial conversation guide had 15+ questions to get to understand the problem, and then a short demo. It worked kinda fine, but I usually got lost by question 5, and then started thinking about what to ask next instead of listening to the answer.
The Mom Test suggests you should "prepare your list of 3". Three things you want to get from each conversation, depending on who you'll be talking to. And that was magic.
In early Palabra demos, when I asked to have a quick chat to someone in a startup, I usually had three different scenarios:
I prepared three different notes to look at before each conversation, one for each "buyer" persona, and wrote down my list of three.
I started asking questions that came to mind from listening to what people were saying, and spend almost no time looking at my notes. If I ever felt I was starting to get lost, I just glanced to my list of three for that particular person to check if I was missing something. Freedom.
This advice came from a great friend and the best UX designer I've met. She knows all about user interviews, and since I was also trying to learn from our prospects, I knew it would help. Her advice was to divide my questions into chunks or topics I wanted to know about.
Having differentiated topics gives you flexibility to follow the conversation and not worry about what to ask after each answer. If you ask a question from the first topic and your user's answer goes to a slightly different topic, you can go to that part of your guide and then come back after that's done.
As an example, this was the structure I ended up using for each guide:
What usually happened is that my email questions got answers related to tools. So I just moved over to the "tools" set of questions and then looked to see if I was missing something important at the end.
A smart move was to leave questions about pains for last. By then I usually had enough information about their problem and could offer a clear solution with Palabra.
If we had a solution, I'd briefly tell people why I thought this would work, and offered to show them in a demo. By focusing on their specific solution in the demo, I only showed one feature and not the whole product, which was a much better use of everyone's time.
You can't go into a sales pitch without knowing who you're talking to. For B2B sales you need to know about the company and the person you're actually going to talk to. The key here is to use that information wisely.
I used to start conversations on what I'd learned from their landing page, to let people know I had done my homework. But his was actually making me start with the wrong foot -by talking too much.
Asking about their company and what they do there gives you inside information you wouldn't get from LinkedIn or a landing page. And it also helps break the ice, since it's an easy answer for anyone.
My solution was full transparency. I started each conversation by saying I had done a bit of research about them but still wanted to hear from themselves. Then I would ask what they usually do.
This was incredibly effective. Being honest took away all of my nervousness and allowed me to relax into the conversation. I felt like I had no secrets, I was just telling the truth and asking questions. And I think this works both ways: the person you're talking to will probably trust you more if you're honest about what you're doing.
Just keep in mind the introduction should be short, and they should be doing all the talking. Trust that your research was enough to make people know they matter to you, and then focus on listening.
What I enjoy most about working in startups is doing a bit of everything and learning a lot. As a co-founder in an early stage startup, this means learning even more and having almost no time to prepare for stuff.
But worrying so much about my lack of time made me actually waste it, because I wasn't paying full attention to what I was doing.
Learning to have better sales conversations, for me, was learning to create a process I could trust. That got me to stop overthinking everything and paying closer attention to what was actually happening. It gave me much more room to learn, not only about sales but also to improve our product.
I also think learning to listen makes us better people to talk to, and that's a benefit on it's own.
Would love to hear your thoughts, you can find us at Twitter to continue this conversation. Promise I'll listen!
Hope you enjoyed this post! If you are curious about what you can do with Palabra or would just like to try it go ahead an create an account here.