Hunting whales at ProfitWell (or how we do business development)
Mar 11 2021
This article is a part of our Protect the Hustle series where we explore the truth behind the strategy and tactics of B2B SaaS growth to make you an outstanding operator.
This week I want to try something a bit different. I'm going to talk through a problem I'm currently working on—essentially a ProfitWell business case—but I haven't completely bridged the framework for or solution quite yet. I'd love your feedback and ultimately any referrals you can send my way for help (or the positions below). As progress or a solution comes into focus, I'll then share the findings with the community.
Sound good? Awesome. Let's jump in.
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The problem we're going to talk about: building out our business development function and team. Are we doing this right? Do you know someone who should join this team?
Definitions can get funky here, so to be more specific, this is what we, internally, call our "Lead to Demo" team. They're responsible for taking inbound or outbound leads and making them into opportunities (ie. getting them on the phone with our Account Executives/Sales team). As a side note, we call them the "ProfitWell Whalers", because they hunt for whales in terms of leads. Below is their team patch, but I'll save explaining the symbolism in the below for another day.
How are we thinking of business development at ProfitWell?
To me, rather than just copy and pasting what Aaron Ross did with Predictable Revenue or Mark Roberge did with HubSpot, I like to think about any function or problem from first principles. Ultimately we want to get someone on a call, which means we have to get them to respond, which means we have to get them to notice and trust we're not going to waste their time.
All business development functions have this aim, but at ProfitWell we have a couple of constraints you may or may not have, as well:
Low logo TAM
Our logo total addressable market (TAM) is low, as there are only 100k-150k subscription companies in the world and that number isn't growing rapidly. Revenue TAM is expanding exponentially though.
All prices going up with channel density
Customer acquisition cost (CAC) is up 70% in the past 6 years. Some channels are better than others, but this trend isn't going to go down.
Exceptionally noisy market
Indirect and direct competitor density has increased substantially. On top of that, there's more noise in the market than ever given the proliferation of channels.
Apart from the logo TAM point above, you're probably facing the reality that it's harder to get attention today, let alone a conversation. This is why we as an industry are accepting higher and higher acquisition costs and ironically focusing on pricing and retention more (which is why we build the products we build at ProfitWell to help subscription companies with those things).
Further, we're seeing more and more content, as well as brand plays, to help companies stand out. We're also reinventing things like mid-market/enterprise software sales of ten years ago and calling it ABM, because it can be more efficient and scaled for less expensive products.
So how is ProfitWell intending to battle these constraints?
Let's align to our constraints and circumstance. We spoke a lot about our top of the funnel strategy a few weeks back when going through ProfitWell's media strategy. To date we have seven video and audio series that are building audiences amongst our target customer verticals. It's getting us the right brand play with plenty of inbound, but we need the right business development team to capitalize on this position.
Here's our current core tenets we're thinking through:
We need high lifetime value (LTV)
Selling into a small logo TAM, means we need products that are priced properly, retain at a higher rate, and open up multiple product lines.
High trust is crucial
We have limited at bats with leads if we're going after a low logo TAM market, meaning we can't afford 'spray and pray" efforts or those that would erode trust with our prospects. The second best result is a lead coming back to us in X months to get moving.
High leverage is crucial
We're still bootstrapped/customer funded and even though we're far from day one, we need to think in a leveraged manner - what are the plays that will bring us outsized impact? This is something of a blind spot, because we tend to focus on being clever, rather than sometimes just doing the obvious play.
ProfitWell stacks up well to these tenets. For high LTV, we're a multi-product company that can sell into multiple constituencies within a subscription company. Our free metrics product can be adopted by mostly any organization and then give us an "in" to show the company they're losing money, as well as in need of one of our products. Our paid products serve teams across the organization - product/customer success (ProfitWell Retain), product/marketing (Price Intelligently), or finance (Recognized). This allows us to sell into one and expand into another or get rejected by one and sell into another (which then lets us to expand back into the rejected part of the org).
Our pricing is a point of pride where we target prices points between $1k and $20k per month. We have a good number of people who spend less, but they're mainly served in a reactive or touchless manner from the free product. Our net retention is over 100%.
For trust and leverage, we have the foundation in place. Our tech stack is finally in place and unified (Drift, Outreach, ZoomInfo, SFDC, HubSpot, Front, etc). We've segmented our market down into three core verticals across the two products, and ensured our messaging and outreach has the right QA to ensure we're not sending crappy emails that erode trust. We also get a ton of leverage out of video, direct mail, ad warming, customized content at the lead and company level, etc. I'm being a bit vague here because some of our tactics work extremely well and we want to protect the work we've done on them. Happy to chat through them via email or voice thought.
This all seems great right? So where's the problem?
In my mind, we're running up against two core issues. First up - we've got the foundation, but scaling the foundation is going to require 100% dedication from someone who's been there before. Given enough time I'm sure I could figure it out after making many mistakes, but that wouldn't be great for the team or our goals. We've gotten this part of the organization from "0 to 1", but we need someone to move it from steps 2 through 10.
The other big issue stems from the first in that there's likely a minefield of unknown unknowns that will lurk beneath the surface and spring up at the worst time. Finding someone to lead who's had those experiences will be ideal, particularly because the foundation and focus is so aligned and strong. Essentially, we need to find someone who wants a challenge, but not a challenge where they're dealing with the bologna of trying to convince someone of importance or of needed resources.
We also need BDRs - who we call "specialists", because no one receives an email from a "BDR" and wants to respond. These folks need to have grit, resilience, and the curiosity to get better. With those traits they'll compound our learnings and end up being perfect candidates to move up or over throughout the organization (ie. promotions to AEs, marketing, ops, etc.)
Here's how we're thinking of initial org structure and then how it expands (although I'd love the person who comes in and leads this to make these decisions). We need the folks in the dotted lines.
Director or VP or both?
On the Director or VP of Business Development front, we're looking for someone to both own the quota of the team, but to also scale this part of the organization, as it'll be needed given our growth rate and multi-product nature. There's a lot of ways they can built out the org, but we'll want to do this in a manner that protects our leverage and builds trust. Intuitively this person will also be on our leadership team.
In terms of traits, we think this person needs to:
Have scaled a B2B business development team beyond the initial foundation.
Be able to critically think from first principles and discuss those ideas in a feedback/direct manner
Embody grit. Our culture is very "roll up your sleeves"
Care deeply about building teams
We also need to stack the team with more Retention and Pricing Specialists (our BDR/SDR roles). Given our products and customer we typically find that we need folks who aren't right out of school (lots of exceptions - BYU, Weber State, Northeastern have phenomenal training programs). These folks also need to embody a learners and workers mindset. We spend a ton of time coaching and developing young talent, but don't want that time spent on deaf ears.
Where are we wrong? Know anyone who can help?
I think that sums the scope and problem up. If there's more information you need to give feedback, then let me know. I think some of the questions I'd love help on are:
Are we thinking about this in the right manner?
How should we think about these roles?
Do you know anyone in Salt Lake City or Boston who can help or even join/lead the team?
What were the biggest pitfalls you saw in building your BD team?
Any and all feedback super appreciated. I'll compile things after some cycles of learning and publish for the whole group. Appreciate you all and let me know if I can be helpful on anything, as well.
This is a ProfitWell Recur production—the first media network dedicated entirely to the SaaS and subscription space.
By Patrick Campbell
Founder & CEO of ProfitWell, the software for helping subscription companies with their monetization and retention strategies, as well as providing free turnkey subscription financial metrics for over 20,000 companies. Prior to ProfitWell Patrick led Strategic Initiatives for Boston-based Gemvara and was an Economist at Google and the US Intelligence community.