POV: SMB Telesales Don’t Work, Need ‘Product-First’ Approach

One of the highlights of last week’s Tech Adoption Summit in San Francisco was ThriveHive CMO Adam Blake’s thought-provoking discussion of SMB customer acquisition. The presentation was called, “Product First Go to Market Strategy.”

To lead off Blake talked about how, according to third party data, SMB customer acquisition costs have gone up 50% in the past five years. While there are multiple reasons for this, it probably argues for new sales and marketing strategies and tactics.

Customer Acquisition Costs Up Over 50% in the Last 5 Years

Adam Blake

Blake’s argument was that SMB services providers now need a simple but effective freemium product. SMBs that engage and remain engaged with the free offering are the ones that will be the best prospects.

Only at that point, after marketing has driven them to adopt the free product and they’ve indicated they’re a good fit (through engagement), should sales get involved in trying to close. This approach makes lots of sense though it may be counter-intuitive to some.

Many companies seeking to acquire SMB customers still do outbound calling or a slightly more sophisticated version, which involves some limited qualification (e.g., opened an email) before rep outreach. But this approach is likely to fail. Why? Blake presented the following slide showing close rates with different approaches:

Relative Efficiency of Different Sales Approaches 
Adam Blake

In today’s B2B environment, my view — and I’m certainly not an expert in sales — is that you can’t sell anything to someone who hasn’t already decided to buy. This may be slightly different in an SMB context, because many local businesses don’t know what they don’t know.

However there’s so much noise and it’s so challenging to get attention that alternative approaches to outcalling must be pursued. Ironically, in-person sales approaches are going to be more effective but the industry has largely walked away from outside sales over the past decade given their cost.

What’s your view on this? Are your organizations finding any success with inside sales? Do you think Blake is right that a freemium product is a more successful path to SMB acquisition?

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