STORY INLINE POST
An excellent B2B SaaS solution with poor distribution will fail regardless of the market where it operates. B2B sales is hard. Sales rock stars are constantly poached. Sales tech stacks are regularly upgraded as new innovative tools quickly become best-in-breed. Even top-performing teams are not fully satisfied with their hiring and training processes. Sales enablement efforts to optimize tools and methodologies never end.
On top of this, Latin America has its unique set of cultural and market-stage challenges. As a result, fast-growing US B2B companies with well-oiled and tested sales machines find their sales stalling upon expansion into the region. At minu, a B2B SaaS employee wellness platform, we 5XED our annual recurring revenue (ARR) in Mexico in 2022 with several key lessons along the way.
Due to the non-confrontational nature of most Latin Americans, you will rarely hear “no, I am not interested in your solution,” or receive straight-up answers on where your product comes short. The feedback loop breaks. Highly valuable information to improve the value proposition and the sales process is lost. The pipeline category of “lost deals” remains almost empty while prospects accumulate in “pending decisions.” Besides distorting the pipeline’s true quality, your salespeople waste countless hours chasing uninterested leads. Culture-specific expressions, such as “let’s find each other next month,” incorporate unnecessary inefficiency into the follow-up process. To solve this, the pitch and its related enforcing mechanisms, such as checklists for audits of call recordings, must demand clarification of the purchasing-decision process, and avoid at all costs closing a call without a compelling event: a specified date and time for the next-step discussion. This will push uninterested leads to be forthcoming and reduce the time spent chasing deals for follow-up calls. In the sales call, the discovery process toward the validation of pain points that your product solves needs to be bold and incisive to force whether a match truly exists.
Latin American markets, except Chile, are at an earlier evolution stage than the US, where buyers regularly review the latest B2B software options in the market and decide whether to continue with or replace their tools. It is hard to replace existing systems, as evidenced by the slow growth among SaaS players that have tried. You commonly encounter unexplained inertia from past decisions and an “if it ain’t broke, don’t fix it” mentality. Functions in HR or finance in many organizations are reactive. They are not used to proactively search for value creation through innovation. Low labor costs lead to a high level of manual work, often with low productivity levels, with teams wary about any additional work to implement or maintain new tools. The B2B sales pitch should be emphatic about the solution’s low switching costs, its operation on top of or along existing systems (rather than replacing these) and its lack of additional work, or preferably, its ability to reduce existing manual tasks.
The Latin American B2B sales culture is not highly evolved. It continues to be deeply relationship-driven. It was not that long ago that entire industries were concentrated among a few corporations, which in turn, were controlled by a few families that did business deals among themselves. Putting aside the occasional corporate corruption that you find in most emerging markets, this results in a sales culture that favors salespeople with long rolodexes, who belong to certain social circles or have certain last names, or are good “winers and diners,” rather than hard-working, naturally gifted and hungry, rising stars.
Moreover, there is a small high-quality candidate pool and adequate training for salespeople. In more traditional societies, there is still a belief that becoming a salesperson is the catch-all for those who could not succeed in other fields. In most Latin American countries, universities seldom offer sales courses and employers lack sophisticated sales training. As a result, sales hiring becomes very difficult. Few companies are known as good sales schools to hire from. At times, candidates come from large, multinational corporations where they piggy-back on existing brand and relationship networks but then struggle with outbound sales. Other times, they come from organizations without quotas, sales tools and KPIs. Such a context increases the chance of mis-hiring salespeople.
Given this, it is recommended that companies test all salespeople during a three-month trial period. Sales onboarding should include intensive training (and enforcing) in the use of tools and metrics. This should be followed by continued sales methodology training through coaching, constant audits of sales call recordings, role playing, pitch contests and hands-on mentorship. Relationship networks can be accessed through success-based ambassadors and partners, while sales capabilities and performance need to be built and constantly improved internally. Sales enablement needs to play a more prescriptive role in the early stages of the sales machine.
The macro opportunity in Latin America for SaaS is huge. Company pain points, frictions and low satisfaction levels exist everywhere you look. As in most emerging markets, the biggest issue to solve in Latin America is trust. No one wants to be the first client, and the most common starting question is, “Who are your other clients?”. But once you get over this initial sales hump and sign several large accounts and iconic logos, you will see the objection list quickly dwindle down and the sales motion accelerate, making the challenging path so very worth it.