Best practices for inside sales managers. An interview with Mark Roberge, VP of Sales at HubSpot, discussing how he blends science and process with the art of selling.
HubSpot is a SaaS company selling Inbound Marketing software. HubSpot has grown revenue over 6,000% in the last four years, placing them #33 on the Inc 500 fastest growing companies list. They now employ about 300 people. I have always been very impressed with how Mark has run their inside sales organization, which has now grown to 110 people. In this interview, I talk to Mark about his strategy and tactics for running a successful SaaS sales organization. I believe Mark is at the forefront of using data and science to drive how he hires and manages his organization, and this article should bring out some interesting best practices.
Mark’s background is unusual for a VP of Sales. He trained as an engineer, and started life as a programmer at Accenture, and tried his own startup company before going to MIT’s Sloan School of Business, where he met Brian Halligan and Dharmesh Shah the founders of HubSpot. His engineering roots made him very process and metrics driven, which accounts for a lot of the ideas he has employed in managing the insides sales group at HubSpot.
How did MIT Sloan School influence the way you think about managing?
It taught me to seek out science and data whenever possible to understand the business and make decisions. It also helped teach me how to be an entrepreneurial leader. The key lessons there were to think big, make bold decisions, and constantly challenge the norm.
What are your goals as a sales exec, and what is your strategy for achieving them?
Goals are Predictable, Scalable Revenue Growth
My Strategy is best summed up as:
- Hire the same type of successful sales person
- Train each sales person in the same way
- Provide each sales person with the same quantity and quality of leads
- Ensure sales people work the leads using the same process
Starting with hiring: Tell us a bit about what attributes it takes to sell HubSpot?
HubSpot’s sales context is evangelistic. In the early days, few people had heard of HubSpot and Inbound Marketing. Over the years, market knowledge of both HubSpot and Inbound Marketing has dramatically improved. However, even folks that have heard of Inbound Marketing do not understand how to develop such a channel. In HubSpot sales, we need to educate people over the phone and literally convince them to turn their sales and marketing process on its head. To do so, our sales team needs to earn the prospect’s trust, gain a deep understanding of the prospect’s business goals, understand their sophistication with sales and marketing, and articulate an adoption plan of inbound marketing that aligns with the prospect’s context.
Our product is very broad in its capability. This breadth of functionality is good in one regard, as we can service a wide variety of prospects with a wide variety of business goals. However, this breadth of offering also adds complexity to the sale. A demo of the entire product would take hours and would overwhelm the prospect. Sales reps need to be sophisticated enough to tailor the demo to the prospect’s context.
How do you go about hiring the right kind of sales person?
We started off by writing down a set of attributes that we thought would be important, and used these during interviews to evaluate candidates. Then over time as we collected more data, we were able to go back and measure which of these attributes actually best correlated with success. If you look in the graphic below, you will see us looking at three criteria for the success of a rep:
- Average quota attainment %
- PPR – Productivity Per Rep
- LTV – Life Time Value of the customers that they signed up
The last metric we use to evaluate success, LTV, is interesting as it highlights a unique aspect of SaaS sales: sales reps can close deals by selling to the wrong customers or by using sales pressure tactics. However those deals will usually churn fast. So an important metric for success is whether the customers have a long life time. LTV also takes into consideration the size of the monthly payment, which can indicated how well a rep prioritizes larger deals, and manages their overall funnel to get the best revenue out of a given set of small and large opportunities.
Once we had identified the attributes that mattered most, we set out to build a process around the way we did hiring to ensure we identified these. The process involves each interviewer using the form below to score each candidate:
When I show these slides on the road, the audience obsessively starts writing down the criteria. I would not advise that you do this. The important take away here is the process to get at the answer, not the answer shown above. Every sales context is different. Every buyer persona is different. As a result, the ideal sales person for your company’s context will likely be different than our profile at HubSpot.
Is there anything else interesting in the way you go about interviewing?
Here are three additional tips:
- Have the candidate conduct a number of role plays throughout your interview process. Make the role plays about your company and challenge the candidate to do lots of homework before these exercises.
- Coach the candidate throughout these processes. How the candidate responds to this coaching and adapts is very important to their potential in my opinion.
- If the candidate is interviewing for a phone sales role, be sure at least one of the role plays is done on the phone.
How do you go about On-boarding a new Sales rep?
What I saw going on at other companies is to take a rep and pair them up with a senior sales rep that they shadow for a month. I don’t believe that works, as what I have observed is that our most successful reps succeed in different ways. One might be extremely strong technically, and win over customers because of their ability to use that knowledge to help the customer. Another might have great charm and charisma, and use that to win over the customer. By having a new rep that has one style follow another senior rep that uses a different style, they will not have a successful learning experience.
The HubSpot approach is the following:
- Define the sales playbook (unique value proposition, target customer, competition, common objections, product information, etc.)
- Give sales people hands-on experience with your target persona’s job and all the pain that comes with it.
- Use exams and certification programs to ensure that you have a consistent product coming out of training.
The hands-on training is really important. We want to train our sales people to become consultants or experts that can understand a customer’s business, and use that understanding to become a trusted advisor to the customer. We think that the best way to do this is to have the rep experience the pain a customer feels, and then to use HubSpot to address that pain. So we make them create their own blog, and drive traffic to their blog. This experience is invaluable. They get to understand what it feels like to have to drive traffic to their site, and how they can use HubSpot’s product to help them. It has the benefit of being a real life situation. We think this is really important for their transition to becoming consultants.
What is the approach that you teach for approaching a new lead?
We want them to do extensive research on the customer before making the first call is placed. The rise of social media has made this stage so important. What is the prospect’s professional background? Does the prospect appear to be a decision maker? Who does the prospect report to? Who does the prospect know that I may know? What activities has the prospect been involved with lately? What are the prospect’s professional interests? The answers to these questions can be found before picking up the phone. This is great information to guide the strategy to the initial connect call.
How do you “Ensure sales people work the leads using the same process?”
(Note: HubSpot may be unusual compared to other companies in that their Inbound Marketing techniques generate enough lead flow, that they don’t need to use cold calling.)
I start by defining the process (see below) to make sure that everyone has a common terminology.
Then we use metrics to drive the behaviors that we are looking for. The chart below shows how we measure sales reps through the different stages in the process. (Note that the data has been modified and is not actual HubSpot data.)
In the illustration above, the charts on the left measure the number of activities at each stage; the charts on the right measure the conversion rates from one stage to another; and the graphs at the bottom show the overall conversion rate from two higher level stages to closed deals.
Take a look at the sample data above. If you look closely at the orange rep, you will see that they do a great job of taking a worked lead and turning it into a demo (second chart down on the right hand side). However they do a poor job of converting their demos into closed deals (third chart down on the right hand side). This tells us that this rep does a good job on the phone, but is doing a poor job in their demos. Now look at the green rep. Here you see the opposite: great at converting demos into closed deals.
Peel back the onion on weak areas
When we see a weakness in an area, our first step is to see if we can “peel back the onion” on that metric to get a more detailed view on the specific area that is weak. For example, if a rep has a weak Worked Lead to Demo conversion rate, we can dig deeper (top right chart) to verify whether the rep is struggling to connect with the prospect, or if the rep is getting them on the phone but struggling to get the demo. My coaching strategy is very different depending on the finding.
On-going Coaching and Remedial training
This data can now be used to target the skill set that, if improved, will make the most significant difference in a rep’s success. I am a big believer that it is best to only work on one skill at a time. Determining which skill will move the needle the most is a key ability of great sales managers. A data approach to this diagnosis is very helpful.
Use Science, not Gut, to find the optimal attempts per lead
I believe in sales that both art and science are necessary for success. However, I believe science is under-utilized. There are a number of questions that are often left up to the art of the sales person that we have successfully answered in our funnel with science. How often should you call a lead? When should you give up? What should you say/send on the 1st attempt, the 2nd attempt, etc.? Does this information differ based on the lead attributes? These are all questions that can be answered with science.
The chart below is an example. Here we have used a scientific approach to figure out the optimum number of attempts that a rep should use for trying to contact our small business segment leads.
Note: that the data in the chart above has been modified, and is not the actual HubSpot data.
Hold Sales Reps Accountable to the Behavior You Want
Once the answers to the above questions are found, build them into your process. Train the reps that following these actions is statistically the best way to make the most money. And automate ways to hold the team accountable to these behaviors. For example, daily dashboards like the charts below can be produced to illustrate where reps are against these best practice behaviors. These charts should be mailed daily to the entire team. Managers need to be trained to read these charts and hold reps accountable to the desired behaviors.
How do you work with Marketing to ensure a consistently high quality of leads?
This is often one of the most problematic areas. In HubSpot’s case it works really smoothly. We have great communication between sales and marketing about what is needed to reach the number. The way this works is that there is effectively a “contract” between sales and marketing. That “contract” defines the following things:
- What qualities are needed in a lead before it is ready to hand over from marketing to sales
- How many qualified leads are needed each month
- How long they are allowed to take before attempting to contact a lead
- How many attempts they will make to contact that lead
Use Science, not Gut, to determine which leads are Sales-Ready
Let’s take a deeper look at the marketing side of this equation. The charts below demonstrate correlations between prospect behavior within our marketing program and success in the sales process. Do leads that originate from search engines or email campaigns tend to perform better? Are there specific search terms that make a lead very qualified? When a lead visits the site for the first time, what behavior causes the lead to accelerate through our sales funnel? What is the most influential piece of content on our website that causes leads to close fast and at a high rate?
Once we have the answers to these questions, we can assign an accurate score to each lead. Too many companies build their lead score on the opinions of the sales people or the marketing team. A gut-driven approach is a substantial missed opportunity. The data is available to provide this guidance and is so critical to the efficiency of your funnel.
Hold Marketing Accountable for Lead Quantity and Quality
With a statistically driven lead grade in place, we can now aggregate the results into a target points score for marketing to hit. It is important that the target is not the number of leads but instead a number of points that corresponds to high quality leads. A demo request may be worth 10 points. A white paper download may be worth 1 point. This approach ensures the alignment between marketing and sales to ensure marketing is focused on the leads that perform best in the funnel. Once the point target is established, hold marketing accountable to the target on a daily basis.
How have you adapted the organization as it grew through certain key sizes?
I have listed below a series of changes that happened as our growth continued:
- One of the first changes that happened was the need to add in a layer of sales management between myself and the reps. We have found that each manager can handle approx. 8 to 10 reps.
- Next we split the sales organization to specialize and focus on different types of customers. We had initially two customer types, and later three. It helped to have reps that worked only on the one type of customer as they became more expert at understanding the needs of those customers.
- Next we recognized the need for manager development, and we created programs to address things like leadership training, rep mentoring, etc.
- After that, some of our manages became Directors, and we had to evolve development programs for them
- One aspect that I have enjoyed about rapid scale is the need to constantly re-define my role. When taking a team from 1 to 100 and growing revenues by over 6000%, if you are not re-defining your role as an executive every 6 months, you are probably not planning for the next phase fast enough.
I’d like to thank Mark for taking the time to share his thoughts. What is most striking about Mark’s approach is how he blends science and process with the art of selling.