By Sramana Mitra and guest author Sudhindra Chada
Sramana: Okay. Are there any other process that we should have discussed in understanding how you do your work?
Mark: Let me think. We are just obsessed with analytics, and we measure everything.
Sramana: What do you measure?
Mark: For every single rep, we can break it down by various measures. At the higher level we measure how many new leads they get, how many converted into a qualified opportunity, and how many closed. Then we can break it down further – I always talk about peeling back the onion on metrics. So I look at these front-level metrics basically from a financial perspective, kind of like my income statement. When I see changes, I want to dive into that line item. If I see that a salesperson compared to his or her peers has a low lead worked to qualified opportunities ratio, I can peel back the onion and see, will it be worth it to [look at the Connect step], what was their connect to opportunity schedule, and what was the opportunity schedule to the deliver like if they actually showed up? Then I can see which metric is off. I diagnose and devise my coaching accordingly.
So, I may have a rep who is struggling with his or her opportunity conversion ratio, but there is a huge difference between having a low Connect rate and having a low connect opportunity rate. If the rep has a low Connect rate, we need to sit down and do some joint prospecting, look into what they are sending in their e-mails, what they are saying in their voicemails, how frequently they are sending them, and so on. If they have a problem with their Connect opportunity rate, then I need to do separate coaching. I have to coach them on the Connect. What is their tone in the first ten seconds? How are they engaging people and getting the phone question to happen, and so forth. This is an example of how we are obsessed with every metric we can find that helps us to diagnose accurately and put in place the right coaching to help the rep.
Sramana: I have two questions about what you’ve just described. First is, what is your sales training policy or strategy; how often do you train? It sounds like you have batches of people who need to be trained in different types, different areas, and you have a way of finding out who needs training on what. Are there monthly training sessions on each issue, or do you do individual coaching as you find that people are struggling with certain things? How do you manage training?
Mark: All of the above. We have a full-time sales trainer internally, Andrew Gwynn, who is a great guy who has had an unbelievable impact on our company. There is new hire training. When our folks come in, they are put into a month-long classroom training where they create their blog and learn the HubSpot product and learn inbound marketing. They take three examinations through that process, and they have deliverables on their blogs that they have to hit. They also do sales training on our methodology, they have a number of oral examinations, and so forth. When they come out of that training, there are sales managers who give them a tremendous amount of coaching. So they will do a lot of joint demos, demo shadowing, prospecting shadowing, and so forth to coach people.
As they mature in the process through the combination group training and individual training, certainly we review the matrix every month, every week, and every day. Every night we get dashboards of metrics sent to us to see how people are doing. I hold each voter accountable to diagnose the single development area they have for each rep and what their coaching plan is to move the needle over the next 30 days. There is individual coaching, and we do team stuff every week. We have something called “fill morning” where we listen to live customer demonstrations as a team and critique them, we do exercises in prospecting, and obviously our product is always changing, we get like about a dozen new features every month. So, every month there needs to be new product training on how to position those features, whom to position them to, and so forth.
Sramana: My other question is, what analytics infrastructure are you using? Is it something that is custom built, or is it something that is off the shelf?
Mark: It’s a combination of HubSpot and Salesforce.com. We spend a decent amount of money customizing Salesforce to get us at those numbers, and then their reporting metrics are pretty robust, and we combine that with the in-depth analytics that the HubSpot system captures. The combination of the two is what we use.
Sramana: How many sales managers do you need to manage the 60-person Salesforce to do this process right?
Mark: We have seven. So we try to assign no more than nine per manager. I think that is aggressive; the matrix I have seen is inside sales, and it obviously depends if you are closing or just setting an appointment. If you are just setting an appointment, I’ve seen you can push to 10 to 15 per manager. If you are closing, I think most people are around six or seven. On Salesforce.com it was pushed aggressively and mangers had 12, but most of those folks admit that it was just because they were growing like crazy and it wasn’t optimal. We’ve been doing okay with nine.
Sramana: Nine, okay, and what is the quota for a sales rep? How much is a sales rep able to close in a year or a month?
Mark: It varies a lot depending on which team they are and how tenured they are. It can anywhere from $400,000 annual monthly recurring revenue (MRR) to $800,000 MRR annually.
Sramana: But these are not the salespeople who are doing the renewals, or are they?
Mark: No, the renewal is pretty automated.
Sramana: So, with this process, where have you grown? From what level of revenue to what level of revenue? Was 2007 your starting year?
Mark: We started at hundreds of thousands, and we are north of $20 million run [rate] right now.
Mark: So it’s been more than 125% growth, I think, annually.