Start-ups Have a Growth Opportunity Advantage
Despite a challenging economic climate, startups are well-positioned to accelerate efficient growth this year. Even the slightest performance improvements amplify growth, fueling already motivated employees and stakeholders. Speed and agility are powerful when building an efficient revenue machine.
Structurally, start-ups are agile, with fewer constraints to move quickly. Mobilizing the go-to-market effort is less of an issue than finding a fit. At the same time, many established SaaS companies are struggling with go-to-market fit. They need change management to optimize for success, often with the help of outside consultants.
This adds cost, management overhead, and time away from execution.
In the short term, the opportunity window is open for start-ups to accelerate past larger, less nimble competitors. To leapfrog as a start-up is bold. The only way to be in a position to execute this play is to pay close attention to building the foundation of an efficient sales organization.
What does “sales efficiency” mean?
Sales efficiency is a time-based metric to measure how effectively a company’s sales team can convert sales and marketing investment into revenue. This metric is also known as The Magic Number.
If a company burns cash that doesn’t convert to revenues, it has low-efficiency scores. Lower sales efficiency often means a lack of well-defined processes, wasted or inefficient resources, and a longer sales cycle.
BenchSights publishes benchmarks that show that a go-to-market fit problem persists. SaaS growth declined to 18% year-over-year, and customer acquisition costs are 1.5 times higher. Much of that increase is driven by unexpected spending on inefficient go-to-market motions. These execution challenges include:
Unpredictable and inefficient revenue growth.
A sales playbook is hard to define.
The sales and marketing teams working on this are small, focused, and fully engaged, often with help from consultants.
Go-to-market spending is higher than expected to fund consultants and experiments.
Board scrutiny and expectations about efficiency will increase.
Not surprisingly, SaaS business model changes and cost-cutting produced an army of available experts who became entrepreneurs, consultants, advisors, and fractional executives. The concept of a fractional executive was not well-known. Last year, many start-up Founders and CEOs welcomed the much-appreciated expertise to help in a crisis. For this reason, 2023 is known as “The Year of the Fractional Executive.”
What is a “Fractional Sales Leader”?
A Fractional Sales Leader is embedded within your executive team as your sales leader, retained, and part-time for as long as you need them. It could be interim or permanent. They bring the expertise and leadership of a senior executive without the exorbitant cost and time associated with hiring one. Responsibilities and term vary depending on your unique plan and requirements.
This model is becoming popular because it is flexible and start-up-friendly. When you add a seasoned Fractional Sales Leader to your team, you intentionally reinforce the importance of revenue success to your board, employees, and customers.
For example, as a start-up Executive Sales Leader who transitioned to fractional work, I continue to build high-performing start-up sales teams. I work with founders and CEOs doing similar work. This flexibility puts tier-one executive talent within reach of start-up Founders and CEOs with the benefit of an ownership mindset in a flexible model. It’s a win/win.
What Does a Fractional Sales Leader Do?
A Fractional Sales Leader leverages speed to efficiency, which positions your company for choices on the growth path. Here are a few examples:
Bringing a sales leadership perspective to the organization and the board.
Clarifying strategic direction by aligning with the CEO.
Coaching and mentoring the sales team.
Driving sales forecasts and deal management
Developing operational efficiency and reporting metrics.
Professionalizing sales recruiting, hiring, onboarding, and training.
Identifying new sources of revenue
Where can I find a Fractional Sales Leader?
Fractional Sales Leaders can be sourced through networking within member-based professional organizations like Pavilion and Fractionals United, or through specialty professional organizations like Vendux, which match founders and CEOs with fractional executives.
In summary, I offer some practical advice for start-up founders and CEOs seeking an accelerated journey to efficiency.
Return to sales fundamentals. Start by deconstructing your sales process and rebuild it from your buyer’s perspective.
Keep an open mind about “your sale.” Reinvention is part of successful transformation.
Don’t confuse Sales Efficiency with Sales Effectiveness. These terms are used interchangeably, but they are different. You have to work through Sales Effectiveness to earn Sales Efficiency.
I encourage you to get Executive Sales Leadership help this year. You will execute faster, and speed is your ally for competitive advantage.
Please connect with me on Linkedin to keep the conversation going.