Customer prospecting is an essential component of your SaaS company’s overall growth strategy. Done right, it can facilitate fast rates of growth. Done wrong, it can drain valuable time and resources, and end up costing your company far more than it generates.
Today I’m looking at how to do smarter customer prospecting, to complement your inbound marketing strategy, and help your SaaS company grow.
When to do Customer Prospecting
It’s vital that you understand whether customer prospecting is worth it for your company. That means understanding the time and financial costs associated with prospecting, and whether that cost is worth it in terms of your customer lifetime value (CLV).
As a rule of thumb, if your CLV is greater than £2-3k, customer prospecting is worth investing the time in. Less than this, and it becomes prohibitively expensive to run a sales process involving the personal touchesneeded for successful customer prospecting. Personalisation is key to successful prospecting, so you need to have the time to invest in research and follow-up, as well as your initial prospecting.
The Prospecting Problem
The responsibility for customer prospecting often falls to sales reps, who have to do prospecting alongside closing deals.
While the task of prospecting may seem like a good fit for the skills of your sales reps, having them do this in addition to their sales work is incredibly inefficient. It leads to conflicting demands on their time and can mean that valuable opportunities get missed.
For example, if your sales reps have a lot of deals to close, that will become their top priority, meaning that prospecting is neglected until they have more time. Alternatively, if your sales reps have prospecting targets to meet, they may end up neglecting deals they need to close if they feel under pressure to spend more time prospecting in order to meet targets.
3 Key Elements of Smarter Prospecting
To get the most out of your sales activity, specialisation within sales is essential. Your sales reps should focus on closing the deals and making the actual sales, and you should invest in sales development reps (SDRs) to do the prospecting work.
Your SDRs should report to Marketing, rather than Sales, as prospecting is a lead generation solution rather than a sales one – which is another reason why getting your sales reps to do the prospecting work is a bad idea.
Employing dedicated SDRs avoids the problem of conflicting priorities and juggling workloads, and allows both types of reps to focus fully on their specialism.
Use the tools you have available to improve your prospecting process. Where possible, leverage automation to take much of the manual effort out of prospecting – but be smart about it.
The higher your LTV, the more you can justify tailoring your prospecting approach to each prospect. In other words, the higher the LTV, the more research your SDRs should be doing on each prospect, and the more personalised your approach should be. This is because each customer is worth more to your company, so you can afford to invest your employees’ time in a personalised approach to generate more leads and prospective customers.
You should also use your marketing automation tools to track and measure the success of your outbound prospecting. You want to understand which approaches are performing best: is one subject line consistently generating more click-throughs than your others? Is one subject matter driving more content engagement than others?
This data can be used to shape future prospecting efforts – personalising wherever you need to, but keeping the value points from the original email.
A Complementary Approach to Inbound
It’s important to remember that outbound customer prospecting isn’t alternative to inbound lead generation, but a complementary approach: the two work together to drive growth.
Prospecting is more expensive than inbound, but is an essential investment to help your SaaS business reach as much of the market as possible, and to directly reach out to key buying decision makers.
Learn more about generating SaaS leads for your business, and download our eGuide, below.