At Cogno AI, we work with some of the leading Financial Institutions to help them improve their Customer Experience using our Product. We offer this solution in a SaaS-based pricing model where our clients pay us on a usage basis.
In this article, I will talk about how we’ve structured our Team for growth. Some of the learnings may also be applicable to SMB-focused SaaS companies as well. Just that, we are Enterprise focused and Sales-led as against marketing-led.
If you don’t have time to read the full article, here is a short summary of how our team is structured:
- Business Development Team: does outbound prospecting and gets leads on the table.
- Sales Team: closes the leads and gets contracts and purchase orders on the table.
- Operations/Delivery Team: makes the project go live.
- Customer Success Team: helps in product adoption so as to get referrals, upsells, and cross-sells.
- Product Team: builds the product roadmap and specifications.
- Engineering Team: develops the product as per the specifications created by the product team.
- HR Team: keeps team members happy, and brings new talent into the team.
Now, let’s dive deeper into the details of each and every team - why do they exist? What value do they create for the company? What’s the structure?
Business Development Team
We recently set up a Business Development Team which is fairly small at the moment (3 members). In the context of SaaS, Business Development Team is also called as Sales Development Team.
In the book Predictable Revenue, the author Aaron Ross mentions that B2B SaaS companies must separate out prospecting from closing. Essentially - there should be a separate team whose only job is to get new leads. This team should not be focused on closing the lead.
The BD team will:
- Make a list of target accounts to reach out to. In our case, we target Financial Institutions. A list of financial institutions is readily available on Wikipedia and many other sources.
- Within each account, make a list of the right people to reach out to. For instance, CEO, COO, CTO, VP of Engineering, etc.
- Use online tools to find contact information. There are a bunch of great tools like EasyLeadz, Lusha, etc.
- Do cold calling, sending emails, LinkedIn messages, etc., to see if these prospects are interested in our offering or not.
- Warm up the prospects who are not interested, by sending regular email updates.
The key metric to track for the BD team is - how many new qualified prospects are they able to get every week?
The keyword here is “qualified”. Once a client replies to an email or shows interest in knowing more about our Product, the BD Team will set up a meeting with the Sales Team for a demo and next steps. The Sales team will then “qualify” the prospect. For instance, we target only large Enterprise clients in Financial Services. So, if the BD team sets up a meeting with a Pharma company, the Sales team will refuse the meeting and disqualify the prospect.
Obviously, this doesn’t happen, because we have a clearly identified customer persona and so, the BD team never reaches out to Pharma companies in the first place. But I guess, you got the idea.
If you are a marketing-led company, as against being sales-led, the equivalent of a BD team would be a marketing team.
Sales Team comprises of quota-carrying Salespeople who are supposed to close $X worth of revenue every quarter. Since we deal with large Enterprises, a typical sales cycle lasts for a quarter and so, that’s our horizon. The Sales team meets the person who the BD Team introduced and takes the discussion from there. Typical responsibilities include:
- Showcasing a demo to various stakeholders.
- Getting the business buy-in.
- Getting approvals from IT, InfoSec, Legal, Compliance, and Procurement.
- Getting the signed contract and purchase order from the client.
Sales folks should be fantastic in terms of communication skills, presentation, stakeholder management, answering client questions, having deep knowledge of the problem statement and how the product can solve it.
Sales folks should be especially good when it comes to outbound prospecting models like in Cogno AI. This is because, in outbound sales, the client needs to be warmed up before they agree to purchase, as against in inbound sales, where the client already is quite convinced.
Operations (Delivery) Team
The Operations Team kicks in as soon as we have the purchase order in place. They will make the project live for the client. If you have a pure product offering that doesn’t need any kind of configuration or one-time setup, then you don’t need an operations team. For us, since we work with large enterprises, we have to do various integrations as a part of the project delivery and so, we have a dedicated team for the same.
The operations team typically comprises Project Managers who coordinate with the client, along with developers whose responsibility is to make the project go live. If you have a pure product offering, you may not need developers.
Customer Success Team
We work with large enterprises and so, there is a huge scope of upselling and cross-selling. So, it is important that we keep our clients happy so that they not only buy more from us but also refer us to other teams within their organization as well as refer us to other companies.
The Customer Success Team typically comprises Customer Success Managers/Associates who meet the clients on a quarterly basis. In this quarterly meeting, the Customer Success Managers show the performance of the solution in the last quarter along with the ROI calculation. These quarterly meetings are a great way to keep in touch with the clients and ask for referrals.
Here are the key metrics to track for the Customer Success Team:
- Revenue Retention
- Upsell Revenue
- Cross-Sell Revenue
Typically, except referral, all the other 4 metrics can be bundled into a single metric - NRR (Net Revenue Retention). You can read more about NRR here. NRR talks about how the MRR (monthly recurring revenue) of a specific client is growing (or reducing) with time.
We at Cogno AI call the above 4 teams (BD, Sales, Operations, and Customer Success) as Business Teams. The business teams are constantly in touch with the customers and so, they have a good understanding of what is there in the market in terms of competition, what is it that the clients are asking which is not there in the product, etc.
So, the Business teams have an ongoing requirement of new features to be added to the product. These requirements are materialized by the Product Team. The Product team prioritizes various features, decides the UX, the user flows, and delivers them via periodic product sprints.
In each sprint, the product team picks up a list of new features to be added to the product and interacts with the Engineering team to deliver them. The Product team, therefore, has Product Managers who are adept at understanding the user problem statement and identifying the right solution for the same. A Product Manager has an important role in a SaaS Company and therefore, you must invest a good amount of time in hiring the right Product Manager.
The Engineering Team comprises Software Engineers who understand the backend and frontend technologies to deliver the product as per the sprint plan built by the Product Team. Our Engineering Team also manages DevOps and Information Security.
I am quite sure that you already know about Engineering Team and so, I am not writing much here.
HR Team contains Internal HR Managers and Recruiters. Like Engineering Team, the concept of an HR Team is also quite well known and so, I am skipping that as well.
So, to summarize, there are 4 Business Teams:
- Business Development
- Operations (Delivery)
- Customer Success
And 3 Internal Teams
Hope that helps you build a great organizational structure for your SaaS startup. We have some more useful content here: