🏴☠️ ⚡️ 10x 'Gotchas' that will KILL Your Sales Velocity Assumptions (Acquisition Concepts)
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TABLE OF CONTENTS:
CONTEXT
THE 10x GOTCHAS & SUGGESTED DILIGENCE ACTIVITIES
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Imagine you're leading a SaaS company on a mission to double the business in three years. You’ve ramped the team, crafted a data-driven sales strategy, and set aggressive goals.
But as the months tick by, you notice something unsettling—despite hitting activity KPIs, deals aren’t closing at the anticipated pace. Some customers are asking for a ‘proof of concept’ that delays cycle time, while others can’t get the sign-off from an executive for fear of disrupting a critical integration. You feel further and further away from nailing growth forecasts. Everyone is bummed…
This scenario is super common. In SaaS, sales velocity—the speed at which prospects move from lead to closed deal—is the essential physics of growth. It’s what determines how quickly you can add customers, expand revenue, and hit those ambitious targets. New customer acquisition is the most demanding type of growth: every new customer must be convinced of the solution's value, a process that can be fraught with unanticipated hurdles and assumptions that are difficult to validate until you’re in the thick of selling.
With aggressive growth goals, there’s very little margin for error. That’s why it’s vital to stress-test your assumptions with what we call the “10x Gotchas.” These are the hidden frictions—like seasonal buying cycles, deep-rooted incumbents, and complex stakeholder landscapes—that can derail even the best-laid sales plans. By using these hurdles to validate your point of view, you gain confidence in your ability to navigate obstacles and stick forecasts.
Here’s a look at the 10x hurdles that can make—or break—your path to predictable, scalable growth, along with diligence activities to identify and address them early.
Yeehahh!
THE 10x GOTCHAS & SUGGESTED DILIGENCE ACTIVITIES
1. Seasonal Buying Cycles: Many industries align budget allocation and purchasing decisions with specific fiscal or project cycles. This may delay purchasing decisions despite active sales efforts.
Suggested Diligence Activities:
Historical Sales Analysis: Review the historical data for at least the past 3-5 years to identify revenue seasonality or trends in contract signings. This could reveal any specific months or quarters where sales spike or drop, indicating seasonal purchasing patterns.
Pipeline and CRM Review: Analyze current CRM data to identify whether deals are clustered around specific times of the year. Check if sales reps consistently extend follow-up activities into future months due to seasonal delays.
Customer Interviews: Speak with a sample of existing customers across segments to understand their buying cycles. Are budget allocations or decision-making aligned with certain fiscal or seasonal periods?
Incumbent Solution Entrenchment: An incumbent’s integration with core systems (ERP, CRM, HRIS) can make it difficult to displace, as companies may resist the perceived disruption of transitioning to a new solution.
Suggested Diligence Activities:
Customer Feedback Review: Conduct surveys or interviews with both current and recently closed leads to gauge how often the incumbent’s integration with core systems was a factor in the buying decision. Look for mentions of "ease of switching," integration concerns, or the need for special technical support.
Competitive Win/Loss Analysis: Review win/loss records and any notes regarding incumbent competitors, particularly the reasons for losses. This analysis can reveal how often the incumbent's deep integration or switching difficulty hinders new customer acquisitions.
Sales Team Interviews: Interview sales and pre-sales teams to understand perceived barriers in displacing entrenched solutions. Probe for insights on how incumbents might use incentives or features to retain customers.
Complex Stakeholder Landscape: Multiple stakeholders across departments (e.g., IT, finance, compliance) are often involved in purchasing decisions, and it takes time for them to reach a consensus.
Suggested Diligence Activities:
Deal Velocity Analysis: Conduct a detailed analysis of the time-to-close for recent deals to identify the typical duration of stakeholder alignment. Assess the number of meetings, decision-makers, and deal stages involved, as well as any slowdowns.
Stakeholder Mapping on Key Accounts: Map out the typical stakeholders involved in purchasing decisions across a representative sample of accounts. Include IT, finance, operations, compliance, and any other functional stakeholders involved in purchase decisions.
Customer Journey Audit: Evaluate the CRM journey mapping for major accounts, identifying key touchpoints where stakeholders are engaged and any bottlenecks or friction points. Consider if certain stakeholders (e.g., finance) commonly slow the process.
Technical Validation Delays: Prospects requiring technical validation or proof-of-concept (PoC) trials may slow sales as technical feasibility and compatibility are verified.
Suggested Diligence Activities:
Pre-Sales Resource Analysis: Assess how often pre-sales technical resources (e.g., engineering support, custom demo environments) are deployed in current deals. High usage may indicate frequent technical validation requirements.
Proof-of-Concept (PoC) Analysis: Review records of PoCs conducted over the past year, focusing on the average duration and reasons for technical validation delays. Identify any recurring technical requirements or integration challenges that elongate the sales cycle.
Product Management & Engineering Interviews: Interview the product and engineering teams to understand typical technical requests from prospects. Focus on identifying any recurring integration challenges with common systems of record (e.g., ERPs, CRMs).
Budget Constraints and Financial Scrutiny: Budget constraints or scrutiny over SaaS spending can delay decisions as prospects await budget approvals or wait until the next fiscal cycle.
Suggested Diligence Activities:
Pricing Strategy Review: Evaluate how often budget constraints appear in deal negotiation notes and win/loss reasons. Look for any patterns in which deals are either lost or delayed due to budget issues or scrutiny over SaaS expenditures.
Customer Segment Profitability Analysis: Analyze historical customer data to determine whether certain customer segments (e.g., small businesses vs. enterprises) exhibit more budgetary pushback or negotiation friction. This insight can help refine segment targeting or pricing approaches.
Customer & Sales Team Interviews: Interview a selection of customers and sales team members to gauge perceptions of pricing alignment with value delivered. Also, explore whether flexible pricing options would address budget constraints among potential customers.
Customer Education and Awareness Requirements: For products in emerging categories or with complex value propositions, a significant education component is required to help prospects understand the solution's benefits. This can slow down the sales process, as prospects may need more time and resources to see the solution's relevance.
Suggested Diligence Activities:
Sales Content Review: Examine existing educational materials, whitepapers, webinars, and other resources. Determine how frequently they are used in early sales stages, as a higher reliance can indicate awareness barriers.
Win/Loss and Churn Analysis: Identify deals where lack of understanding or awareness of product value was cited as a reason for loss. This can uncover common misconceptions or knowledge gaps.
Sales Cycle Analysis by Product Knowledge Level: Segment the sales cycle length by customer familiarity with similar solutions. If cycles are notably longer for new buyers, this could signal an education requirement.
Dependence on Strategic Partnerships or Channel Sales: If the company relies heavily on strategic partners, VARs, or channel sales for lead generation and deal closure, the speed and quality of these external relationships can influence sales velocity. Dependency on partners may result in delays or inconsistencies in deal flow.
Suggested Diligence Activities:
Partnership Contribution Analysis: Evaluate the contribution of partners to total revenue and identify any significant seasonal or volume-based variances in deal flow.
Channel Conflict Review: Identify any instances of channel conflict (e.g., partners competing for the same deals or clashing on pricing strategies) that may impact deal progress or customer experience.
Partner Sales Training and Support Review: Review the support and training provided to partners. If partners lack adequate training or tools, this could hinder their effectiveness and slow down the sales cycle.
Regulatory or Compliance-Related Sales Barriers: In sectors where customers have stringent regulatory or compliance requirements, additional scrutiny may be required to ensure solutions meet relevant standards. This compliance focus can extend sales timelines due to additional review processes or custom requirements.
Suggested Diligence Activities:
Compliance Audit Documentation: Review documented compliance certifications and how frequently these are requested in deals. Examine past deals for extended procurement times due to compliance needs.
Customer Interviews in Regulated Segments: Speak with a sample of customers from regulated industries to understand any specific compliance or security expectations during the purchasing process.
Legal & Compliance Team Interviews: Interview legal and compliance team to identify commonly encountered compliance hurdles and assess how well the product meets regulatory demands.
Internal Sales Process Complexity: An overly complex internal sales process, whether due to lengthy approval workflows, heavy reliance on manual tasks, or misalignment between sales and other departments (e.g., finance, legal), can create bottlenecks that slow deal progression.
Suggested Diligence Activities:
Sales Process Mapping: Map out the end-to-end sales process, identifying each approval point, resource handoff, and internal coordination step. Look for bottlenecks where the process could be streamlined.
Sales Cycle Duration Analysis by Deal Stage: Assess the average time spent in each sales stage (e.g., lead qualification, proposal, contracting) to identify stages that consistently cause delays.
Interdepartmental Communication Audit: Interview team members across sales, finance, and legal to understand if any internal handoffs or approval requirements routinely delay the sales process.
Customer Resource Constraints for Implementation: If the implementation process requires significant customer resources (e.g., data migration, IT alignment), deals may stall post-signing as customers struggle to allocate the necessary resources. This can delay revenue recognition and obviously can lead to churn out of the gate.
Suggested Diligence Activities:
Implementation Timeline Analysis: Review historical implementation timelines against initial estimates to identify delays. Look for trends where customers routinely face resource constraints.
Customer Success Interviews: Interview customer success and implementation teams to understand common roadblocks customers face during onboarding.
Customer Feedback Survey: Survey recent customers to identify any resource-related challenges they faced during implementation. This feedback can help pinpoint pain points in the onboarding process.
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