For years, SaaS companies thrived on a “growth at all costs” mentality, where spray and pray marketing ruled. The maniacal focus on customer acquisition was fueled by cheap, readily available venture capital and a tolerance for high customer acquisition costs (CAC). The times have changed. Private equity (PE) and venture capital (VC) investors have grown impatient with companies prioritizing growth over profitability, and are looking for returns. The market has shifted its focus to valuing EBITDA, profitability, and efficiency over unbridled growth at any cost. In addition, the well-documented, but sadly poorly-heeded shift in buyer behavior is forcing a critical overhaul of traditional go-to-market (GTM) strategies.
Say Goodbye to Spray and Pray
Gone are the days of “spray and pray” marketing, where generic campaigns generated a flood of unqualified leads that burdened BDRs and frustrated sellers, and in turned into dissatisfied customers that churn. Random acts of marketing, a curse I’ve spent the latter half of my career trying to eradicate are one symptom of growth at all costs. Moreover, the start-up rally cry “get s**t done”, is garbage unless the stuff we’re “doing” is actually making an impact. Otherwise, it’s just “shit” (Pardon my French).
Once the traditional lead nurturing model, popularized in the early 2000s, by the much missed SiriusDecisions, relied on a linear progression of prospect to marketing qualified lead (MQL) to sales qualified lead (SQL) to closed deal. This framework, referred to as the “Demand Waterfall,” has been increasingly criticized for its oversimplification of the modern buyer’s journey.
Why the “Spray and Pray” Model Fails Today’s SaaS Market
Limited Buyer Agency
The Demand Waterfall assumes a passive buyer who waits to be nurtured by marketing and sold to by a seller. Today’s buyers are well-informed and conduct extensive research online, and offline with their networks before ever reaching out to a vendor. Of course, when they do, they don’t want to be “marketed” or “sold” to, they have specific questions, needs to be addressed, and resist being put through a “sales process”. The number of Gong calls I’ve listened to where the buyer clearly just wants to push a “buy” button but the seller insists on executing the process is to frustrating to count.
Misaligned Stages
MQLs and SQLs often represent arbitrary qualification criteria that don’t reflect the complex buying committees and multi-stakeholder decision-making processes prevalent in B2B sales. We’ve discussed this for years. B2B is not B2C. Decisions are complex and involve teams, stakeholders, users, and third parties (integrations anyone?). And, surprise, the same applies whether we’re selling to F100 Multinational corporations, or as in my most recent client, mid-market businesses. Selling software is a complex business.
Inefficient Resource Allocation
Focusing on unqualified leads diverts resources away from engaging promising prospects further down the funnel, and most importantly from existing customers. It’s marketing folklore, and proven in the data in every business I’ve ever dealt with: Customer Acquisition Cost (CAC) of new customers always outstrips expansion, and cross-sell, upsell costs.
Misaligned and inefficient
Generating a massive number of low-quality leads consumes marketing resources and clogs the sales pipeline with dead ends. Just think through the math of a “good” conversion rate of 4%. That’s 96% of marketing activity, that supposedly resulted in a “qualified” lead resulting in no positive outcome. Bummer. Subsequently, there are many reasons that underpin this; poor qualification, lack of alignment on lead definition, timeliness, hand-off between marketing and sales is clunky, often resulting in unqualified leads passed on to frustrated sellers.
The Answer: Targeted Accounts and Hyper-Focused Ideal Customer Definition (ICD)
The key to unlocking efficient, scalable growth lies in a disciplined approach to pipeline management. This means transitioning from a broad-brush strategy to laser-focused on target accounts. Combined with a disciplined ideal customer profile initiative that results in an actionable set of criteria.
Here’s why this approach resonates with today’s business leaders:
- Focus on High-Value Customers: Specifically targeting accounts with a high propensity to purchase maximizes the return on marketing and sales investment. It’s that simple. e.g. At ADP, I led the identification of 1400 “Must win” accounts. We shifted from a spray and pray sales motion to a focused, Challenger Sales methodology that delivered 40% YoY revenue growth after flatlining for 5 years.
- Increased Win Rates: In reality, a deep understanding of your ICP enables of highly personalized messaging, leading to improved conversion rates.
- Shorter Sales Cycles: By aligning efforts around well-defined ideal customer profiles, you can identify and engage qualified accounts faster. e.g. At Secureworks, a cross-functional ICP approach took a new business from zero to $55M in its first year.
“The single biggest mistake companies make in their go-to-market strategy is not having a laser focus. You need to define exactly who your ideal customer is, why they buy, and what their journey looks like.”
Brent Adamson, Co-Author of “Flip the Funnel”
Instilling Pipeline Discipline in a Target Account GTM Motion
Building a predictable pipeline around targeted accounts requires a cohesive effort from all revenue-generating teams:
1. Aligned Sales & Marketing:
- Joint Planning: Sales and Marketing collaborate to identify high-value accounts and develop a strategic approach for each one.
- Content Marketing: Marketing creates targeted content tailored to the needs and challenges of specific accounts.
- Demand Generation: Marketing focuses on activities that identify and nurture high-potential leads within those accounts.
2. Collaborative Sales & Customer Success:
- Collaborate early: Ensuring post-sale time to value is critically important, having Customer Success involved into the sales process early helps align delivery with customer expectations.
- Customer Insights: Customer Success provides valuable insights into account health and identifies potential upsell and cross-sell opportunities.
- Advocacy Programs: Leverage satisfied customers to champion your solution within targeted accounts.
3. Product Development:
- Customer Feedback Integration: Customer insights gleaned from targeted accounts inform product roadmap decisions.
- Targeted Features: Develop product features that address the specific needs of your ideal customer profile.
- Account-Specific Pilots: Run pilot programs with key accounts to gather feedback and showcase the product’s value proposition.
5 Practical Tips for Instilling Pipeline Discipline
At this time, let’s explore five practical ways you can implement to quickly get started and make a positive impact:
1. Build a Rock-Solid Ideal Customer Profile (ICP)
A well-defined ICP forms the foundation of your targeted account strategy. This detailed profile outlines the characteristics, needs, and challenges of your perfect customer.
2. Embrace a Reverse Waterfall Plan.
In order to move beyond a spray-and-pray approach, requires the adoption of a reverse waterfall plan, sometimes called a backward sales plan. This approach defines goals by stage, segment, channel, and customer by period. Create an annual plan reviewed quarterly to ensure alignment with market dynamics. Want a sample reverse waterfall plan? Click here to request my Free Reverse Waterfall Worksheet
3. Foster Collaboration with Weekly Pipeline Calls: Break down silos between teams by establishing regular cross-functional pipeline calls. These weekly meetings provide a platform for all teams (Sales, Marketing, Customer Success) to share progress, plans, and any roadblocks hindering progress against the reverse waterfall plan.
4. Assemble Pursuit Teams for Targeted Accounts: For example, create small, agile teams dedicated to specific target accounts. Specifically, these “Pursuit Teams” consist of Sales reps, Marketing specialists, and Account Development Representatives (ADRs) working collaboratively towards a common goal – securing the account.
5. Aligned Leadership: Above all, ensure that C-suite executives (CEO, CRO, CMO, CCO, CMO) are aligned with the targeted account strategy and the reverse waterfall plan. Their buy-in is essential for securing the resources and fostering the collaborative environment necessary for success. Open communication and regular updates keep leadership informed and engaged in the process.
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The Benefits of Pipeline Discipline – Unlocking Sustainable Growth
By focusing on pipeline discipline and targeted accounts, you can expect to see:
- Increased Sales Efficiency: Sales reps spend less time chasing unqualified leads and more time engaging high-potential prospects.
- Improved Win Rates: A deeper understanding of targets allows for tailored messaging and value propositions, leading to higher conversion rates.
- Shorter Sales Cycles: Streamlined processes and alignment between teams expedite the sales process.
- Reduced Customer Acquisition Costs (CAC): Targeting the right customers eliminates wasted resources and reduces CAC.
- Predictable Revenue Growth: Lastly, a well-managed pipeline with qualified leads provides clear visibility into future revenue streams.
“Pipeline management is not just about filling the funnel with leads; it’s about filling it with the right leads and managing their progress efficiently.”
Matthew Dixon and Brent Kleiman, Authors of “The Challenger Sale”
Accelerate Your Go-to-Market Strategy
Finally, are you ready to unlock the power of Ideal Customer Profiles for your SaaS business?
Steve Hardy, founder of Noroton Growth, is a 4x CMO with a proven track record of scaling businesses. With his expertise, you can develop a laser-focused ICP that fuels your sales and marketing efforts.
Contact Noroton Growth today for a free consultation and learn how we can help your SaaS business achieve explosive growth.
