You are the founder and CEO of a startup. Your investors are pressing you to hire a Vice President of Sales to drive revenue growth.
What kind of person should you hire?
You need a ‘deal-closer’, someone who is ‘aggressive’, ‘focused on the transaction’, and ‘motivated by a commission check’. And you want someone with years of experience in sales and sales leadership.
If that is your prescription for a good sales leader, then you would certainly not hire Mark Roberge (before he became the VP of Sales at HubSpot).
Before joining HubSpot, the successful Boston-based startup, Roberge was an engineer at the consulting firm, Accenture. He had no formal experience in sales and describes himself as a ‘quant’.
But during his tenure as VP of Sales, Roberge grew HubSpot’s revenue run rate from zero to $100M .
His new book, The Sales Acceleration Formula, documents how he made it happen. The book is a must read for anyone interested in sales (and marketing) in today’s startup environment.
Death (and Rebirth) of a Salesman
Roberge makes a case that sales has changed because the selling environment has undergone dramatic changes.
Today, the consumer is more informed and knowledgeable. Information about your product (and the one your competitor offers) is freely and instantly available, anywhere and at anytime, with a Google search.
New smartphone apps and SaaS-based services have introduced a wide range of new, innovative products for consumers and businesses. However, the novelty and complexity of these products and services means that consumers have to learn about their benefits and applications to their lives.
As a result, Roberge believes that the landscape for sales has changed from a transaction-driven to more of a consultative profession. The new sales professional needs to invest time understanding the customer’s problems and learning the new technologies and solutions.
In his 2003 book, Moneyball: The Art of Winning and Unfair Game, Michael Lewis describes how Billy Beane, the General Manager of the Oakland Athletics baseball club, followed an ‘analytical, evidence-based, sabermatric approach to building a competitive baseball team’ on a limited budget.
Roberge also takes a formulaic approach to building a world-class sales organization for HubSpot. In fact, Roberge organizes his book around the following four formulae:
- The Sales Hiring Formula
- The Sales Training Formula
- The Sales Management Formula
- The Demand Generation Formula
1. The Sales Hiring Formula
According to Roberge, ‘world-class sales hiring is the most important driver of sales success.’ Without the right team and mixture of skills, a sales organization will not succeed. As a result, the sales leader needs to implement a process to attract and acquire the right talent.
But Roberge cautions that every startup deals with its unique circumstances largely driven by the nature of the sales transaction (what Roberge refers to as the ‘buyer context’), the dynamics of the market, and the fact that today’s buyer is, in Roberge’s words, ‘empowered’.
As a result, ‘the ideal sales hiring formula is different for every company but the process to engineer the formula is the same.’
In this section of the book Roberge walks through a systematic process he developed to evaluate candidates. Like all good quants, he revisits the data several months after people have been hired to see what qualities the best performing salespeople possessed.
He kept refining his evaluation and interview process until it was almost automated around selecting the best candidates that fit the needs of HubSpot.
Roberge points out that although the evaluation process is critical to get right, the hard part was sourcing good candidates. In Sales Acceleration Formula, Roberge talks about recruiting firms, how he managed them, and how he used LinkedIn to source the best candidates.
I will give Roberge credit. Even though he is, by nature, a quant, he sure can hustle and won’t stop at anything to achieve his goal once he know what he wants. This quality shows when he tries to build his candidate funnel.
Finally, he covers an interesting case study: who should be the first sales hire for a startup?
He describes four candidates: an industry veteran Senior Sales VP, the Senior VP’s best salesperson, a salesperson who is a ‘failed’ startup CEO, and a recently promoted sales manager.
I will leave it to the reader to discover the answer in Roberge’s book. There were a few surprising comments from Roberge on the sales profession during the case analysis.
2. The Sales Training Formula
Sadly, many organizations (and likely, startups in particular) do not take sales training seriously.
He instituted a rigorous training process for the HubSpot sales organization based, not surprisingly, on a structured, measurable, and quantified approach.
Roberge takes issue with the common training practice of having a new recruit ‘ride-along’ with an experienced salesperson. His concerns are, first, that the techniques (or ‘superpowers’) an individual sales person has might not work for another person, and second, this training approach does not scale when you need to grow a sales organization.
Roberge’s approach is the Sales Training Formula which creates a common sales workflow for everyone to follow, and allows the organization to scale.
Roberge identifies three aspects of a well-defined sales methodology:
- Buyer Journey: The steps the buyer progresses through to make the purchase decision. Understanding this keeps the buyer’s needs front and center.
- Sales Process: This is the process sales follows to support the buyer through his Buyer Journey. Success happens when each of the ‘stages’ of the Sales Process need to align with the Buyer Journey. Misalignment leads to failure.
- Qualifying Matrix: This defines the ‘information needed from a potential buyer in order to understand whether we can help the prospective buyer and whether the buyer wants help’.
Once these aspects are defined and understood, Roberge recommends that the training curriculum be built around this sales methodology.
Finally, Roberge is big on having his salespeople empathize with the customer, and understand his challenges and frustrations.
How did he do this for HubSpot — a provider of online marketing tools?
He made his salespeople set up their own blogs, apply search engine optimization, content management, and use social media.
This allowed the salespeople to probe deeper, be more consultative with the customer, and build trust. Eventually, with practice and commitment, the salesperson will evolve into an authority and attract clients to HubSpot.
3. The Sales Management Formula
Roberge maintains that ‘effective coaching by sales managers is the most effective lever to drive sales productivity’. His book defines a Sales Management Formula that takes a structured approach to implementing a coaching culture in a sales organization.
Roberge points out that the recruiting process (the Sales Hiring Formula described above), when done well, should identify people whose skills align closely with those needed for the job.
There will be skill deficiencies, of course, but they should be the exceptions rather than the rule. The sales coaching process should hone in on these deficiencies and shore them up.
Taking on too many skill modifications at the same time will lead to failure. The best sales managers ‘can identify the one skill that will have the biggest impact on a salesperson’s performance, and then customize a coaching plan around developing that skill.’
“A common sales management mistake is to overwhelm the salesperson with coaching too many skills simultaneously. Pick one skill and focus.”
Roberge’s formula is to implement regular reviews throughout the organization and focus on measurable sales performance indicators. Managers should work closely with their reports to identify one skill to focus on during the reporting period, understand why the salesperson is falling short on that one skill metric, and develop a plan to correct the shortcoming.
4. The Demand Generation Formula
The final formula in the sales acceleration strategy is the Demand Generation Formula.
Roberge believes the days of cold calling are dead (or should be). He advocates that in today’s world where the buyer uses the internet to find and research the solution, a company should focus on a strategy that allows the buyer ‘to find you’.
His inbound marketing strategy relies upon ‘continual quality content production’ and ‘frequent online participation in social media where your target buyers are already conversing’.
He goes through a structured process to generate content and elevate your online presence.
When done well, this strategy should generate an abundance of sales leads.
That is good. But that is also potentially bad.
The problem: the sales leads generated from inbound marketing are frequently not qualified and forwarding all of the leads to the sales organization will overwhelm the sales team and cause animosity between sales and marketing.
The solution: the marketing team needs to apply a filter to the leads and only forward the qualified prospects to sales.
How to do this? Roberge, again, follows a methodical approach to analyzing the incoming leads and triages them. In the book he uses a ‘Buyer Persona/Buyer Journey’ matrix to categorize the leads.
The three buyer personas he uses (these can vary from startup to startup) are ‘enterprise, ‘mid market’, ‘small business’. The three stages of the buyer journey are ‘problem education’, ‘solution research’, and ‘solution selection’.
He then maps a lead against the Buyer Persona/Buyer Journey matrix to see where it lands. A lead that is from enterprise and is at the problem education stage is worthy of a sales inquiry because the size of the deal is probably large and the enterprise is usually serious about the purchase.
A lead from a small business that maps to the solution selection is also worthy of followup but not before this part of the Buyer Journey.
This system can be measured and, over time, improved as data comes in and is evaluated.
Finally, Roberge advocates that the best way to align sales and marketing organizations in any startup is to establish a Service Level Agreement (SLA) between the two groups. It should specify, among many things, key deliverables such as lead management and lead quality by the marketing team, and a clear statement on how quickly sales will followup on leads.
Be a Quant
The availability of information on the internet has lead to marketing to become a realtime, data-intensive process, and has put more power in the hands of the buyer.
Roberge shows how sales, like marketing, has to change and embrace measurable ways to improve performance and become more consultative.
This article is part of my Digital Marketing guide.