Man, turning potential customers into actual customers is like raising kids.

You can't just feed 'em once and expect them to grow. It's a daily grind, people!

How to Convert Potential Customers to Actual Customers 

• Why Read:

  • This article provides actionable tactics for nurturing and converting prospects who are not immediately "in market," maximizing the sales pipeline.

• Featuring:

  • Jason M. Lemkin (@jasonlk), Founder at SaaStr

• Link: 

  • “You’re Lucky if Even 10% of Your Potential Customers are “In Market” At Any Given Time”

Key Concepts and Tactics:

• Understanding the Small Percentage of "In Market" Customers:

  • Point: Recognize that typically only 10% or less of your total potential customer base is actually "in market" and ready to buy at any given time.

  • "You're lucky if even 10% of your potential, total customer base is "in market" right now. It's often much less, often 5% or less. With maybe another 5% doing some "shopping"."

• Accounting for Reasons Prospects Are Not Ready to Buy:

  • Point: There are many potential reasons why prospects may not be ready to become customers right now, even if they express initial interest.

  • "Many prospects are happy with their current vendor. Many prospects are "meh" on their current vendor, but would need a huge reason to change. Many prospects are locked into longer contracts already. Many prospects don't have time to switch vendors, even if they wanted to. Many prospects don't have any resources right now to switch vendors, even if they wanted to."

• Implementing Realistic Lead Scoring:

  • Point: Ensure your lead scoring accurately reflects prospects' readiness to buy, and have a process to nurture those not immediately ready.

  • "Make Sure Your Lead Scoring is Realistic. A prospect that sounded interested but has no budget or time now probably should be handed over to marketing for nurturing, and then followed up with by sales each quarter following."

• Qualifying for Budgeted Funds:

  • Point: Directly ask prospects if they have budget allocated, especially for larger deals, to gauge their true buying timeline.

  • "Ask if It's Budgeted, Especially for $20k+ Deals. Too many founders are scared to ask this, thinking it's a smarmy sales question. But it's a critical one to ask. "Is this budgeted for the current year / quarter?""

• Implementing Drip Marketing:

  • Point: Use drip marketing campaigns to keep prospects engaged and top-of-mind until they are ready to buy.

  • "Upgrade or Start Drip Marketing to Keep Them in the Fold. Many startups aren't even doing drip marketing to their prospects. Many founders ignore what drip marketing there is. Don't. This is one critical way to keep prospects in the loop until … they are ready to buy."

• Offering Weekly Webinars:

  • Point: Host a weekly webinar that prospects can attend when they are closer to being purchase-ready.

  • "Do a Weekly Webinar Every Week. We've been writing this again and again at SaaStr for over a decade, and it's as true today as it was then. Inviting all your prospects and everyone in your funnel every week to a new, live webinar is a great way to let them drop in when they are closer to being ready."

• Creating Valuable Content:

  • Point: Produce high-quality, value-add content regularly that improves your prospects' work lives as you nurture them.

  • "Create One Channel of Truly High Value Add Content. A podcast, a blog, a YouTube channel, even on LinkedIn. But do something every week you can push out to your prospects and database that adds a lot of value. Not lame outsourced or GPT'd articles. But something every week that makes your prospect's work lives better. Keep adding value until they are ready to buy."

• Offering Competitive Buy-Outs:

  • Point: Consider providing incentives to help prospects break existing contracts to become customers sooner.

  • "Think About Buy-Out Contracts. Zoom did them in the beginning, to get customers out of multi-year WebEx deals. You should consider it, too. Don't wait until competitive contracts expire to close customers. That's a missed opportunity."

• Hosting Customer Events:

  • Point: Have a customer conference or events where prospects can hear directly from your existing customers.

  • "Do a Customer Conference And Invite All Your Key Prospects. This just always works. Your existing customers will sell your prospects on coming onboard. This also works on a smaller scale with customer + prospect dinners."

• Streamlining Migration:

  • Point: Make it as easy as possible for prospects to switch from a competitor by minimizing migration costs and effort.

  • "Make Migration Much, Much Easier. Almost no sales execs think about the true costs of migrating from one vendor to another, both soft and hard costs. As founders and leaders, think more here. How can you make it as close to one-click easy to switch as possible?"

Sales is Your R&D Department

Why Read: 

• This article highlights the importance of leveraging sales conversations as a valuable source of customer insights to inform product development.

Featuring:

• Kevin Yien (@kevinyien), Advisor at Mutiny

Link: 

• “SALES IS RESEARCH“

Key Concepts and Tactics:

1. Recognizing Sales as a Research Function:

• Point: Understand that the sales team's conversations with customers provide valuable insights into their lives and problems, beyond just closing deals.

• "But take a step back and you'll see that sales is a research function [1]. They are literally talking to your ideal customers every day. They are getting more exposure to their lives and problems than any product manager or designer [2]. Ignoring those conversations because they are "just sales calls" is like ignoring technical engineering conversations because they are "just about code". How it's built and how it's perceived is the product."

2. Processing Raw Information into Insights:

   • Point: Develop methods to process the raw information from sales calls into actionable insights, similar to user research.

   • "Similar to user research, you can't take what you hear at face value. That's why we've developed methods over the years to process raw information into insights [3]. With the advent of call recording tools (e.g. Gong), we can now build highly automated systems to handle a lot of the operational load (e.g. alerts for keywords like use cases, features, or competitors that feed into Notion databases with links to timestamped snippets). But we can't stop there. We still need exposure to the raw goods."

3. Encouraging Product Managers to Co-Sell:

   • Point: Involve product managers in sales calls to gain firsthand experience pitching the product and understanding customer perspectives.

   • "Product managers need to be excited to co-sell. You can read all the docs and watch all the recordings you want. Nothing will compare to trying to pitch your own product and get someone to pay for it. I'm not saying to send product managers cold into a qualification call by themselves. Instead create ride along programs or touch points where customers have the freedom to speak in an open-ended fashion (i.e. not usability testing)."

4. Hiring Sales Leaders Who Understand the Value of Customer Conversations:

   • Point: When interviewing sales leaders, look for those who recognize the importance of customer conversations in informing product development.

   • "This is one of the primary attributes I look for when interviewing sales leaders. How do they view their job? Do they only see the money machine? Or do they understand the value of the conversations their team is having and how that feeds into product development [4]?"

5. Actively Engaging with Sales Feedback:

   • Point: When the sales team provides product feedback, take it seriously and dig deeper by asking about the conversations that led to the feedback and speaking directly with the customers.

   • "So the next time someone on sales says they have some product feedback, listen. But then take it further. Ask what conversations made them think of it. Ask to talk to the customers who mentioned it. Ask to join their next call. Use sales as a research function."

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