B2B Sales Basics

Target Markets and Customer Personas

The following aspects are crucial inputs into the sales process and are discussed elsewhere:

🎯Target Markets🧑Customer Personas and Ideal Customer Profile

Sales process

In the initial phases of figuring out your sales strategy, the sales process will be quite fluid and opportunistic. But as you ramp up the sales team and attempt to make sales repeatable, it is essential to define a clear and specific sales process.

Elements that go into the process are:

  1. Organizational structure. It should be clear who in the sales team (and adjacent departments) owns which steps. More here.
  2. Funnel structure. Everybody needs to be on the same page about funnel steps and expected conversion rates between steps.
  3. Activity goals. Sales is a numbers game, and it should be clear how many prospect interaction each team member is expected to have per time unit (example: 40 outbound emails per SDR, 5 demos per day per AE).
  4. Qualification criteria. It needs to be clear which criteria a prospect has to fulfil to move to the next step in the funnel. Chasing unqualified leads is the biggest time-waster in sales.
  5. Expected interactions before disqualifying. A frequent mistake that sales teams make is to give up too quickly. It should therefore be clear how often you reach out to a qualified prospect before marking them as uninterested.
  6. Expected sales cycle steps and length. Everybody needs to be clear about which steps are usually necessary to close a customer (e.g. will there be a free trial?) and how long the process is expected to take.
  7. Tools. The sales team needs to have a common understanding of which tools are mandatory to use (e.g. the CRM, document sharing) and in which way.

Buyer journey

It is important that the sales organization has a common mental model of what the buyer journey looks like. Customer personas will give a first baseline.

On the highest level, a B2B buyer journey is more straightforward and predictable than a B2C purchase since it's supposed to be rational, systematic and professional.

  1. Problem identification: The customer identifies a problem in the business that needs to be solved with a product or service that is not available yet at the company.
  2. Solution exploration: The customer analyzes the market and tries to find potential solutions and product categories that might help.
  3. Requirements building: The customer details which requirements will qualify a solution to be a satisfactory fit for the company.
  4. Supplier selection: The customer compares potential vendors and decides on the best fit.

But in practice the real journey can be much more complicated, as illustrated here by Gartner:



Sellers should be able to at least know about the existence of these and other influence factors and know what to do if a particular situation arises.

Customer decision roles

In B2B sales, buying decisions are rarely made by one single person. Typically several hierarchy levels and departments are involved:

  1. The End User: These will be the people actually using the product. Depending on the context, they can have a very strong influence (such as in a bottom-up sales motion) or nearly no influence at all (in classic top-down enterprise sales).
  2. The Champion: This is often a mid-level person who is the strongest internal promoter of your product.
  3. The Recommender or Detractor: Several people involved in the process don't have the authority to approve or deny the purchase, but they have significant positive or negative influence.
  4. The Economic Buyer: This is the primary decision maker who owns the necessary budget. Depending on the nature of the product, this can be a mid-level manager, up to a C-level executive.
  5. The Procurement Expert: Most large companies have dedicated procurement departments that will negotiate with vendors. They rarely have the authority to kill a deal, but they can squeeze out discounts.

For large target accounts it's typically worth the effort to map out relationship between these different people on the customer side so that the entire account team has a common understanding of how the decision is likely going to be made. This account map can inform sales tactics and where to spend time in the sales process.


Example for an account map (Source)

Over time, the sales team will discover common patterns between different types of customer organizations. It is therefore important to constantly update persona documents, sales playbooks and materials to reflect this information and become more efficient.

Customer Pain Points

Understanding customer pain points is crucial for successful B2B sales. This is not limited to the sales team, but equally important for the other departments sales collaborates with.

A deep understanding of pain points should already be part of customer persona research, but you should expect to constantly learn more about the nuances of pain points.

Furthermore, the situation will differ for each customer, so it is essential to understand the pain points of each customer organization and each individual that is relevant for the sale.

It is also essential to understand that the perception of pain might be very different per customer, and so is the perceived fit of your solution.

As Giese and Hilpert put it:



A frequent mistake in B2B sales is to overestimate how strong a pain might be on the customer side. It might seem obvious to the sales person that a particular customer absolutely needs their solution, but the customer might have other important priorities, budget constraints, or simply a limited understanding of the issue.

Some advanced sales approaches such as Solution Selling therefore spend a lot of effort on educating the customer about their situation and how the company's product might help with them. This high-touch approach is typically only feasible for very high account values.

For cheaper products, sales team should rely on a disciplined lead qualification process to rapidly identify customers who might have a high perceived pain.

A frequently used simple framework is to think in terms of "vitamins" vs. "painkillers": A vitamin is a nice-to-have product. It will certainly have a positive effect, but not having it will not cause immediate problems. On the other hand, a painkiller is something you want to consume immediately if the pain is acute. Sales teams should understand which customers perceive their product as a painkiller. In some cases, you can help customers discover hidden or neglected pains. This should be based in reality, since oversold hypothetical typically don't lead to strong customer relationships.


Finding the right timing for a sales outreach can be as important as finding a good solution fit. There are few aspects of timing that play into B2B sales:

  1. Budget cycles: Most established businesses have very little leeway to make purchases that weren't budgeted in the annual budget. Sometimes sales cycles can get very long for that reason alone. It's still often worth the effort to educate a customer in order to get into next year's budget.
  2. Seasonality: Some industries and geographies have strong seasonality. For example, there are countries where not a lot of business is done during the summer months, and many companies are so busy in October-December with planning for the next year, holiday sales and other events that they can barely make a decision.
  3. Industry events: Some industries have a very structured year that influences their behavior. For example, the car industry times itself around the big car shows, which take place in the spring and fall. Other industries might be influenced by the tax cycle, and so on.
  4. Management changes: It is fairly typical for management to change occasionally, and new leaders often are open for new solutions to existing problems. A few weeks or months after new management was introduced is therefore often a good time to reach out.
  5. Unexpected events and crises: Nothing creates pain points more rapidly than a crisis or other unexpected event. The COVID pandemic is an obvious example — suddenly everybody needed better videoconferencing, digital signatures, collaboration tools and other solutions to continue doing business under these new circumstances. The underlying event doesn't have to be as dramatic, but smaller events such as a competitor's product launch, technological breakthroughs or regulatory changes can often be a trigger for increased interest.


B2B sales rarely take place in a vacuum. Most customers will compare your solution to that of one or several competitors. It is therefore essential that sellers understand how the product lines up against competitors and which particular strengths should be emphasized for any given customer situation.

It is typically the job of the product marketing department to provide salespeople with detailed and current information about competitors, as well as with deliverables that help in competitive situations — such as comparison matrices or battlecards.

See some tools for competitor comparisons here.

Salespeople have a responsibility to feed any new information about competitors back to product marketing. Much of the most relevant information (such as exact messaging and price points) can't be learned from public sources alone, but only from specific competitive sales situations.

Pricing and Discounts

Sales teams rarely have authority over the basic pricing of the products they're selling. The revenue model and pricing approach is typically set by the product department and executive team, but sales and marketing certainly should have input into these decisions.

This is also part of the continuous feedback cycle needed to improve product-market fit: Simply put, if sales constantly loses deals due to high pricing or on the other extreme there is barely ever a customer who complains about pricing, there is probably something wrong.

Sales team should however have authority over discounts they can give. It is fairly common in B2B sales that customers will ask for a discount, and the sales team should have well-defined rules over who can make that decision up to which level.

It is fairly common for example that individual sellers can give smaller "deal sweetener" discounts to close an immediate opportunity. Larger discounts are typically under the authority of the VP of Sales, or in larger organizations a formalized "deal desk". Very large discounts that are required to win a strategic deal can go up to the CEO.

Pilot Projects and Proof of Concept phases

For large-ticket products, most customers want to first conduct a pilot project or proof of concept to verify that your solution really fits their needs.

Some considerations:

  1. Paid or unpaid? It is fairly typical that customer will pay a moderate amount for a pilot project because the effort on the part of the vendor is significant and the customer gets clear value out of it. The price will depend on the nature and price level of the product, but something around 10-30% of the first-year cost of a software product is not untypical. If there is push-back, you can offer that the cost of the pilot will be deducted later from the purchase of the actual product.
  2. Who is ordering the pilot? Press for pilot setups that are owned by the ultimate economic buyer and managed by the ultimate user organizational unit. It is relatively dangerous to do PoCs with "innovation departments" that most large corporations have. They often have a budget for this kind of test, but rarely have the direct impact on ultimate buyers to make a real deal happen.
  3. Define what success looks like. You should define with the customer from the outset which results a successful pilot should provide. This easier said than done because many customers might still be in exploration mode and don't really know what they're looking for. But it is even more important to reach clarity in order to commit the customer to next steps after a successful pilot.
  4. Define what next steps after a successful pilot will look like. Most customers will be reluctant to commit to a very concrete action plan, but you should be able to at least negotiate plausible steps, such a full license purchase, on a good faith basis.

Tender processes

Many large organizations, both private and public, require every major purchase to be run through a formal tender process where several competing vendors are invited to provide competitive bids. This can often be a laborious process, but most typically the awarded contracts from these processes are in the six or seven figures, so it is likely worth the effort.

A few hints for tenders:

  1. Decide if participating is really worth it — can you win this thing? It is not unusual that the likely winner of a tender is already fairly clear. It might be a vendor with the clearly best fit, or one that has an existing relationship with decision makers. Some other vendors are then invited just for comparison and process purposes, but they don't have a real chance. If you don't know what your particular strengths are that could win you this deal, that's probably you and you should consider if it's really worth the effort to hand in an offer.
  2. Ask for transparency. Since tenders are a major effort for vendors, you should ask what the decision criteria will be. Don't be shy to inquire again if things are left unclear.
  3. Ask strategic questions. Most tender processes have a Q&A round where vendors can ask clarifying questions, and often the answers are shared to all other participants. Apart from actual additional information you might need, this is also a time where you can use questions strategically. For example, if the tender requirements don't mention a particularly strong feature of your product, you can ask if functionality X was ever considered to be essential. It might be that the tender writers just forgot about it and that you are able to influence selection criteria.
  4. Consider partnerships. You might be going up against very established vendors in a tender, and as a small startup, you will be at a disadvantage simply due to your lack of a long track record and perceived limited stability. If you think this might the case, consider building a syndicate with a more established company. For example, the implementation and primary support of your software product could be provided by an established consulting firm. This will reduce concerns about reliability and long-term stability.
  5. Jump through the hoops. Tenders often come with all kinds of questionnaires about security, continuity, data protection, etc. While it is laborious, it's important not to take these parts lightly. Big organizations are risk averse, and they will not be able to do a deal with a vendor who doesn't fulfil these requirements at least on a basic level.
  6. "Yes, but" is the right answer. Tenders often come with very long requirements questionnaires that will ask about all kinds of capabilities, in a yes/no form with room for comments. Unless you really have nothing to offer at all in a certain category, you should never answer with "no". Answer "yes" and then qualify in the comment field what you really have to offer. The reason is that these tenders are sometimes rated very mechanically by just counting the "no"s, and you don't want to drop out of consideration because of that.

Proposal documents and contracts

Some B2B companies with a relatively simple pricing model will rarely if ever have to produce proposal documents for a sale. However, more complex transactions often have to be formalized in writing. This can range from a simple one-page offer document and go to multi hundred pages documents for very complex solutions.

In any case, the important thing is to understand what kind of document a customer expects. An overly complex document might signal to the customer that this is a complex and expensive product. On the other hand, a very superficial offer for an expensive product might signal a lack of sophistication.

The source of contract documents will depend largely on the buying organization. Most corporations have standard contract templates that they will want to use, and as a startup there won't be much you can do about that. Smaller customers might ask you for a contract (particularly if they have never bought a product of this kind), which you should be able to produce rapidly.

The typical elements of a contract are:

  1. Scope: This should be a detailed description of the product or service delivered. Make sure to avoid grey areas and try to quantify results whenever possible.
  2. Timeline: This defines when and for how long you will deliver your product or service. More complex contracts might be multi-stage, so be sure to press for realistic deadlines. A crucial element is to include the customer's deliverables, if any, that are necessary for the implementation process, including clear deadlines. If the customer is delayed, it should trigger an extension of your deadlines. It is important not to extend pilots for longer than needed because these projects tend to lose momentum.
  3. Contract duration, renewal and cancellation: Contracts are typically valid for a certain amount of time, and in the case of software subscriptions and the like they usually are renewed automatically. Make sure to push for that and to make cancellation times reasonable.
  4. Pricing and payment terms: This should be a clear definition of what the customer will pay and by what time. It might be dependent on the achievement of milestones specified above.
  5. Liability and special clauses: Many large customers will try to push for a limit to their own liabilities, but unlimited liability on the part of the vendor. This is something to push back on. You should limit your liabilities to a reasonable level (such as the total contract value) in case something goes wrong. There will often also be special clauses about other vendor responsibilites such as data protection, insurance and confidentiality. It is typically not easy to negotiate these, but try if there is something too outrageous.

Sales operations

The importance of a strong sales operations department is often underestimated. A strong sales operations (sales ops) team — or even individual — can be transformative for the effectiveness of a sales team.

Sales ops responsibilities include:

  1. Implement and run the tool stack. Sales ops should be in charge of the CRM (at least the relevant parts), lead enrichment tools, outreach support tools, etc.
  2. Organize information access. Nothing is worse than sellers wasting valuable time hunting for the latest version of a sales deck. Sales ops should organize the necessary deliverables in an easy to access way and make sure everything is current.
  3. Reporting. Sales leadership can't manage the team while flying blind. Sales ops is in charge of setting up the necessary reporting structure and tools and of making sure everybody gets the right information at the right time.
  4. Contract management. Make sure that contracts use the latest templates and that negotiated clauses are compatible with company policy.
  5. Sales comp. For sales teams that use a commission structure, calculating and paying compensation is often complicated. Sales ops should work closely with HR and finance to enable this process.
  6. Training. In some companies, sales ops is also in charge of sales training, making sure that new and existing team members have all the skills they need to be successful.

Sales reporting

While good salespeople are of course masters of persuasion and have excellent interpersonal skills, sales management is to a large extent a very data-driven and analytical discipline. Having a clear grasp on your pipeline and other aspects of the sales process is essential for a number of reasons:

  1. Getting as much visibility as possible on incoming revenue
  2. Maintaining a clear target customer focus
  3. Identifying and fixing weaknesses in the sales process early
  4. Planning ahead for future staffing needs
  5. Identifying high and low performers on the team and act accordingly

The layers of sales reporting are (according to Giese and Hilpert):

  1. Pipeline health: Measure how many contacts with which contract values you have at each stage. Understand what level of activity you are investing at each stage and for each lead moving forward.
  2. Process performance: Measure how successful you are in converting leads from one pipeline stage to the next, and how long that takes on average. Next to average sales stage/complete cycle times it is also important to measure the distribution of times. Averages can strongly be affected by outliers, particularly in smaller companies.
  3. Outcomes: Understand which results the sales teams is generating in terms of ARR growth from new customers, ARR growth from existing customers, churn, and net revenue retention. The latter two metrics are of course also a function of product and customer service performance, but having high churn rates can also point to a sales process that is not bringing in ideal customers.

Next to a company-wide measurement of these metrics, you also need to break them down by sales team members. Account executives (AEs) have different metrics priorities than Sales development representatives (SDRs), but understanding individual performance is crucial for outcomes.

Furthermore, these metrics should also be measured in other relevant dimensions such as geographies and/or product lines.

Most advanced CRM systems provide dashboard functionality that allows sales leaders to analyze key metrics efficiently. For larger sales organizations, there is often a need to add further analytics capabilities with a dedicated business intelligence tool or specialized sales reporting product.

Business-wide metrics

The sales reporting described above is relatively tactical, but sales activity has a direct effect on the overall health of the business. The executive team therefore needs to keep a close eye on some essential metrics, and these should also be transparent for and understood by the whole sales team.

The cost to acquire a new customer is straightforward:

Customer Acquisition Costs (CAC) = sum of all marketing and sales costs (per month) / new customers won (per month)

It is also important to understand how long it takes to "pay back" the cost for a customer by the gross margin they contribute: Payback period = CAC / (MRR * Gross margin)

Smaller companies often see payback periods under 12 months, while enterprise cases can stretch into two to three yeas.

Lifetime value (LTV) = (average revenue per customer per month * gross margin %) / avg. retention time per customer in months)

This measures how much gross margin an average customer will contribute during their tenure. Of course this number is not easy to measure accurately in very young companies and will change quite a bit over time.

A popular rule of thumb says that the ratio of LTV to CAC should be at least 3.

Useful Resources

Software tools: