Signal-Based Selling: 10 Signals To Hit Your Target
We’ve been told so many times that we need to “do more with less”. During our recent webinar powered by Common Room, we dove into “signal-based selling” — the concept built around identifying specific signals or triggers indicating potential customer interest or need. These signals, which can range from product usage patterns to legislative changes, help sales teams prioritize their efforts toward prospects most likely to convert.
Market Conditions and the Need for New Strategies
Generating sales and closing deals has become harder due to changes in the market. One big reason is that companies, especially the bigger ones, are getting less money than before. In the last year and a half, there’s been a noticeable drop in funding compared to what we saw more than two years ago. This decrease is making it tough for many businesses, including those selling software and tech.
With funding drying up, especially for later-stage companies, and a wave of layoffs, businesses are facing significant challenges. This environment has led to a decrease in software spending and growth opportunities.
The Role of Signals in Today’s Sales Environment
It’s estimated that around 95% of potential customers in your target market aren’t actively looking to buy at any given moment. This means only about 5% are actually considering purchasing software solutions. The key to successful selling is focusing on this small, active segment. These are the buyers who are more likely to make quick decisions and potentially spend more. Identifying this 5% – those who are ready or nearly ready to buy – is crucial.
Signals play a vital role here. They act like a bridge or a spotlight, helping sales teams pinpoint these active buyers. By catching the right signals, you can tell when someone shifts from just looking around to being ready to buy.
Ten Categories of Signals for Effective Selling
Many of us use a product-led approach, which means understanding how customers interact with our products.These data points are vital for identifying potential buyers. For those who don’t have access to this data, it’s essential to collaborate with your data team — product signals are among the strongest indicators of buying intent.
Here are a few examples:
- Consumption Ceilings: Monitor accounts that are nearing the limits of their current plan. This can be a prompt to discuss their usage and potential upgrades.
- Surges in Product Activity: An increase in how much an account uses your product often means they’re finding value in it, whether for new applications or confirming its effectiveness.
- New Integrations: When a user connects new integrations, particularly sophisticated ones like Salesforce or a data warehouse, it often indicates they’re exploring new ways to use your product.
- New Users: Adding new users to an account is another strong signal. It suggests expansion within the account and new use cases emerging.
Expiration dates are another category of signals, similar to product signals, but they’re specifically tied to deadlines related to product usage. A prime example is the timeline of a free trial. Reaching out to potential customers just as their trial period ends gives you a chance to understand their experience with the trial and what they were hoping to achieve. For sales reps, offering an incentive, like extending the trial, can be effective. This approach works well if the prospect needs more time to assess the product.
Another important expiration-related signal is the renewal date of a competitor’s product. Gaining information about when a competitor’s contract is up for renewal offers a strategic opportunity. You can approach these potential customers and suggest they consider your product as an alternative, highlighting what sets your solution apart.
For situations where you don’t have specific expiration dates, creating time-bound offers, like special holiday rates or end-of-year discounts, can also be effective. These offers can act as a motivator for potential customers to engage and make a decision.
Cries for Help
This category is about recognizing when potential customers are actively seeking help. You can find these signals in various online spaces like Stack Overflow, Reddit, or Quora, where users often discuss issues they’re facing with software. Interestingly, even review sites like G2 can be insightful. While you might expect only positive feedback, there’s a section for users to express their dislikes about a product. This information can be invaluable, especially if your product can address those pain points.
Support forums dedicated to specific products or technologies are also rich with signals. They’re filled with bug reports, feature requests, and general user feedback. Tapping into these discussions can lead you to potential buyers who need solutions your product offers.
For those working with software developers, places like GitHub are goldmines for signals. Activities like contributing to open source projects or reporting bugs can indicate a readiness for more professional solutions.
Important to remember
It’s crucial to approach these signals thoughtfully. Not every signal allows for an immediate sales outreach. It’s about understanding the context and acting in a way that’s genuinely helpful. When reaching out, it’s important to be empathetic, offer real support, and avoid being aggressive. This approach ensures that your interactions are well-received and more likely to build positive relationships with potential clients.
Legislation and Policy Changes
Moving on to the fifth signal category, which is often overlooked but highly impactful: changes in legislation or platform usage policies. These changes can create significant opportunities for sales.
For example, GDPR, the data protection regulation, had a profound impact. When GDPR was about to be implemented, it spurred many discussions and led to an increase in purchases of security and compliance software. This shift essentially created a whole new sector within the industry.
Another recent instance is the updates to Gmail’s sender policies. With these changes imminent, there was noticeable concern among those who rely heavily on outbound email campaigns. Such policy updates can prompt businesses to look for alternative solutions or technologies, particularly if their current methods might no longer be effective or compliant.
In essence, when your product or service aligns with new policies or legislative changes, it presents a prime opportunity to initiate conversations with potential customers. These shifts in the legal or policy landscape can act as catalysts, driving demand for specific solutions.
Another important signal to consider is employment activity. While changes like a customer moving to a new company are well-known signals, there are other employment-related actions worth monitoring.
Firstly, promotions within a company can be a significant signal. When someone is promoted, they often look to make a notable impact in their new role, and your product might be just what they need to achieve this.
Layoffs can also be a telling sign — in situations where a company reduces its workforce, there could be an opportunity for your technology to fill some of the gaps left behind. This could be a chance to propose how your product can streamline operations or handle tasks previously managed by a larger team.
Additionally, the presence of open roles can indicate a resource gap within an organization. This presents an opportunity for your product or service to provide a solution, either assisting the new hire or addressing the needs that the open role aims to fill.
One of the key signals we pay close attention to is activity from VIPs. This includes engagement from high-level decision-makers like VPs, directors, and above, who typically are less active but highly influential. Noticing any activity from them, such as being added to a workspace, following a competitor, or engaging with your brand, is significant. These actions indicate a strong interest or consideration for your product.
Another important form of VIP activity comes from roles in security, IT, or procurement. When individuals in these positions show interest, it often signals a serious consideration for your product and potentially indicates a higher contract value. These professionals usually deal with multiple stakeholders and seek comprehensive solutions, preferring structured contracts like MSAs and annual agreements. They are detail-oriented, ensuring all compliance and requirements are met, which usually correlates with substantial deals.
The takeaway here is the importance of who is interacting. The level and role of the person engaging can greatly influence the potential value and intent of the interaction. For example, an intern’s actions might have a different implication than those from an executive. Recognizing the significance of these VIP activities can be crucial in identifying high-value prospects.
Tech Stack Activity
It’s important to monitor changes in a person’s or an account’s technology stack, as these can provide valuable insights.
One key area is complementary technologies. If your product works well alongside another, and you notice a potential customer has started using a compatible integration, it’s a great moment to reach out. You can highlight how your product, in combination with the one they’re using, can create enhanced solutions for them.
Another less obvious but equally significant signal is changes in a website’s technology, like the addition of new advertising or analytics tracking. For instance, adding a tool for advertising tracking might indicate that a company is planning to increase its marketing spend, or perhaps a new marketing professional has joined the team. Similarly, changes in analytics tools, like switching from Google Analytics to another platform, can signal that the company is seeking more in-depth website data analysis. These tech stack changes can open opportunities to present how your product or service can meet their evolving needs.
Moving on to the ninth signal, let’s consider company milestones. While fundraising events are a common focus, as they indicate investment and growth, they also present a challenge in standing out. If you’re reaching out in response to a fundraising event, it’s crucial to add value and differentiate your product.
Beyond the obvious, less apparent milestones can also provide significant signals. For instance, a new product launch might imply a need for enhanced analytics to gauge the product’s performance and effectiveness. This could signify an opportunity for solutions that support analytics and market understanding.
Another notable milestone is company acquisitions. While less common, acquisitions demand substantial integration and adaptation, presenting opportunities for products that facilitate these processes.
Additionally, changes in leadership, like a new board member or C-level executive, often herald shifts in strategy or new initiatives. These changes can open doors for solutions that align with the company’s evolving direction.
The final signal to discuss is good old website activity. While visits to pricing pages are common and certainly valuable, there’s more to be gleaned from deeper engagement on these pages. For example, time spent on the pricing page, interactions with a pricing calculator, or toggling between different plans are all highly indicative of serious intent. These actions represent a much higher level of interest compared to a mere visit to the pricing page.
Another area to pay attention to is visits to integration pages. If someone is exploring how different integrations work with your product, it’s a great opportunity to reach out and discuss how your product can enhance their existing tech stack. This ties back to the importance of understanding tech stack activities and how they can inform your sales approach.
Finally — the documentation pages. When visitors are looking through documentation, they are often seeking solutions or troubleshooting specific issues. Identifying such visitors can be a cue for your team to offer assistance, potentially leading to a meaningful engagement.
Note on the Inverted Signals: Recognizing when a lack of activity or removal of a service might indicate a need.
One of the tools allowing for signal-based selling is Common Room — by aggregating data from various channels, it provides actionable insights, enabling sales teams to approach prospects with precision and relevance.
If you wanna watch the whole webinar, check it out here:
Also, make sure to check out our upcoming events on all-things-GTM!