Some industries are considered harder and less suited for the SaaS model than others. One of those industries, which has been my focus since 2017, is the smart cities industry - also known as Urban Tech / Govtech (government technologies). My primary mission, as a VP of Sales in Zencity, and for the last year as a CRO and founder of ‘with’, has been the US municipal market. During my time in this field, I’ve realized just how impactful local governments and municipalities are and how crucial they are to every aspect of our daily lives. However, this field may sound a bit unattractive from a business perspective - it is potentially slow and challenging to penetrate. Nevertheless, there is a silver lining - it is a textbook vertical SaaS.
Business in the smart city field requires a toolkit different from conventional SaaS. A deep understanding of the market, the decision-making processes, and the procurement logistics are more essential than one can imagine as an outsider. Through employing these tools, ‘with’ and Zencity were able to reach SaaS and hyper-growth metrics that were as good as, and sometimes better, than the ‘standard’ benchmarks of the B2B market.
As a sales leader, I’ve always followed the ‘best in class’ B2B metrics: Sale Cycle, conversation rate, and ACV. Over the years, I found that in many cases, selling to cities can become more methodic than many other industries. Cities tend to operate similarly, enabling the creation of an easy-to-duplicate system.
Over the years, I have found the following principles to be a helpful guideline in the field:
- Quality vs. Quantity: North American cities' TAM (Total Addressable Market) is finite. We prefer two great meetings per week to two unqualified meetings a day. We measure qualified opportunities (SQLs) but don’t measure the number of meetings.
- Top-down sales: Since our chances to engage each city are limited, and based on our understanding of the decision-making process in cities, we target the C-levels of the organization exclusively. We pass on a meeting where the relevant persona is unavailable.
- Conferences: Our lead generation is primarily based on conferences. C levels can be very challenging to engage via cold outreach, and conferences allow us to meet them directly and avoid ‘gate-keepers’. Conferences provide a fantastic opportunity to meet hundreds of top prospects during three days. They also facilitate creating personal connections, which are crucial to vertical markets.
- Mastering the bureaucracy: Cities and governments are required to follow purchasing laws that are advertised to the public. Pricing thresholds, purchasing vehicles, etc, are key when selling to a vertical SaaS. Understanding the rules and regulations makes you an expert and allows you to navigate the procurement process.
As the Pirates say, this is more of a guideline than an actual set of rules. Nevertheless, it provides an excellent starting point for approaching institutionalized markets, presenting local governments as an example. These principles are the key to fast sales in ‘slow industries’.
