As Square moves up the value chain with larger restaurants, multi-location franchises and other groups to support, it has gone from a sole focus on inbound, direct marketing sales to a mix of inbound and outbound. Eighty percent of Square’s larger sellers — grossing $250K + — still self-onboard. But a sales team is ready to support those companies that don’t, or can’t.
The old reluctance to hire (and pay for) a sales force has become a running joke in the company. Speaking at The B2SMBi Leaders Forum this week in San Francisco, Head of Global Sales Michael Coscetta, in place for 2 ½ years, shared a sales playbook widely applicable to many SMB companies migrating from their roots in direct marketing. For sales forces, the keys are to “optimize purpose,” “focus on prospect targeting” and “perform at scale.”
“The sales team focus is to deliver dollars fast,” said Coscetta. “The sales team needs to be a massive profit driver.”
There are many reasons for a maturing company to move beyond SMBs, said Coscetta. SMBs are “unstable, flakey, unpredictable, structurally inefficient, and have shallow pockets.” Indeed, Square was once identified exclusively with small SMBs such as coffee shops. While these are good businesses on a volume basis, individually “they are not very profitable for Square,” he said.
It is a reflection of the company’s evolution that one of the company’s current areas of focus is on restaurants. They process a great deal of payments and rely on point of sales: the two sources that account for the majority of Square’s adjusted revenue.
Restaurants also have many “sticky” needs that can be met by Square features, such as its loans and loyalty programs. Other verticals are being approached the same way.
In thinking about prospects, Coscetta said there are several questions that need to be asked, such as: “Is the unit profitable?” “Is (the sale) repeatable?” In going after a vertical sale in a new area, a sales person needs to ask: “Can I do ‘X’ again?” And again?” Lifetime value (LTV) of an account is also a key consideration, as are predictable revenues.