Categories: Sales Messaging | Customer Success | Scaling Sales
A recent piece by McKinsey notes that 80% of startups who landed Series A funding failed within eight years (n=3164). Using interviews with B2B SaaS leaders who beat those odds by scaling from startup to over $100MM in ARR, McKinsey's recent playbook examines how these companies set up their organizations, common challenges they overcame and the actions leaders can use to emulate these pathways to success.
The following takeaways come from McKinsey’s From Startup to Centaur: Leadership Lessons on Scaling. The research outlines the top priorities through growth phases and multiple “booster” strategies leaders can use to accelerate growth.
The Difference-Maker: Your Go-To-Market (GTM) Strategy
Having a solid product is a prerequisite. Startups won’t leave the launchpad without a great product, but the GTM strategy becomes the top priority after product-market fit is achieved. The authors break down what GTM strategy looks like in the companies that beat the odds by scaling past $100MM:
“The most successful startups invested heavily in building a repeatable sales model, establishing a sales force and sales management function with clear roles and responsibilities, and incorporating tools to support processes and track progress.” (McKinsey)
Building a repeatable sales model anchors on sales messaging that captures value - a common language that customer-facing teams can flex up and down to influence key decision-makers. Organizations can grow and scale quickly when teams align on (and new hires can onboard with) a value messaging framework that navigates talking points and differentiation in ways that map to desired buyer outcomes.
Knowing when and where to focus that value message depends on a robust approach to qualification. In the B2B SaaS market, MEDDICC (or MEDDPICC) is the time-tested and proven method for qualifying deals. MEDDICC provides the structure that facilitates manager coaching and helps new reps get up to speed quickly. It’s a crucial component of a repeatable sales model that can evolve as companies advance through stages of growth and maturity.
Establishing a sales force and management function with clear roles and responsibilities means having an effective management cadence. The Management Operating Rhythm (MOR) is a set of activities, guidelines, tools, and success measures that helps sales leaders and managers focus on the most critical aspects of their jobs: hiring the right team, driving consistent sales planning, coaching deal execution and providing visibility. Read more on the benefits of an MOR and how to implement one in this article.
Your GTM strategy is the bedrock for growth. With the foundation in place, McKinsey identified multiple “boosters” leaders can leverage to propel growth to the next level.
> Booster: Expanding to Multi Product Offerings
Adding product lines is an effective way to attract new customers and penetrate new markets. The McKinsey playbook references the successful approach of a “startup within a startup” supported by dedicated marketing campaigns and reconsiderations for talent acquisition.
Adding a product means updating how your teams articulate value to reflect the expanded functionality. Donnelly Financial Solutions (DFIN) is an example of a Fintech company that refined its messaging framework and sales motion to align with an expanded product line. Results for DFIN included an expanded customer base and double-digit increases across sales metrics.
> Booster: Customer Success as a Differentiator
McKinsey refers to Customer Success as the “most underused booster” for B2B SaaS leaders and likely to be an afterthought… until the churn rate swells.
In today’s B2B SaaS market, the buying process has evolved into a more collective effort, and selling organizations have adapted to instill value at each stage of the customer lifecycle. Continuity in your team’s ability to convey value throughout the post-sale stages of customer engagement is often the difference between renewals and a high churn rate that hinders growth. Drive outcomes by navigating these handoffs, leveraging the post-sale relationship, and culminating the success into a great value story. This pathway builds healthy, long-term client relationships.
Leverage this Customer Success Playbook to turn the post-sale relationship into a competitive advantage for your company, and read the Case Study for how a SaaS firm capitalized on Customer Success team training for skyrocketed gross and net retention revenue.
> Booster: Expanding into New Markets
McKinsey describes geographical expansion as a GTM booster with the highest potential for growing pains. Entering new markets is complex, includes significant costs, and should only be done when the timing is right. But when the time comes, seizing the moment can lead to land grabs and revenue windfalls.
Being successful in a new country or region boils down to the fundamental goal of any young business: alignment. Execution hinges on the new team’s ability to be consistent with how they operate, sell and communicate. For Skillsoft, aligning the worldwide teams led to increased average deal sizes on new accounts and shortened sales cycles. Learn about how its enablement leaders led successful worldwide expansion here.
Strengthen Your GTM Strategy with a Powerful Value Message
Whether your organization is a startup, scaling centaur or unicorn, your team’s performance in the competitive marketplace comes down to communicating value. Just like internal changes mentioned in McKinsey’s “boosters” require adjusting your message, the external market demands that your approach to sales messaging is iterative. How has the competitive playing field changed in the last eighteen months? What new problems are your customers trying to solve?
Get ahead of the pack by investing in the cornerstone of your GTM strategy: your message. Unleash your company’s ability to grow and scale with this free eBook: The ROI of Sales Messaging.
