Transcript of Win Rates Down. How to Win?
Speakers: Mark Roberge, Neil Ringers
Neil Ringers: [00:00:04] Hey, everyone, welcome to Revenue Garage. This is Neil Ringers, EVP of Sales for Revenue Grid. And I have the distinct pleasure of having Mark Roberge with us today. Mark is the managing director of Stage 2 Capital. He’s a senior lecturer at Harvard Business School and he’s the former CRO of HubSpot. So absolute stud. We love having him here and giving us advice. Revenue Garage is here for thought leadership and just talking about market industries, what’s happening out there, and just sharing information with our fellow salespeople out in the marketplace. So, Mark, very, very much welcome here.
Mark Roberge: [00:00:47] Jeez, Neil, thanks. I gotta bring you around with me on these webinars. That was quite the intro. Hopefully I can deliver on all that, thank you.
Neil Ringers: [00:00:55] Yeah, absolutely. Absolutely. So, Mark, I’m sure you’re familiar with Revenue Grid and what we’re doing out there in the marketplace in sales enablement.
Neil Ringers: [00:01:07] But before we get there, I wanted to talk about where we are and obviously in your career, growing HubSpot from zero revenue to a hundred million in revenue, going from one salesperson up to almost five hundred salespeople. You understand about growth and hiring and all the things that make you successful. So in this environment that we’re in, things have kind of drastically changed. What do you think of what’s happening out there as far as sales? And we’re in this kind of different paradigm, what are your thoughts about going to market coming out of this pandemic?
Mark Roberge: [00:01:54] Yeah, it’s a good question, Neil. I’ll give you some specifics and I’ll start with a summary. And I’ve been asked, how is it different and what do you see? And I’ve been seeing a lot. So what’s the last, like four months or five months been like for, you know, post-COVID is, I run this VC firm now, so I’m in super deep with our 12 investments on how they respond to COVID. I’ve probably evaluated like one hundred, two hundred businesses very closely to see if we want to invest and I understand what’s happening in their funnel. And then I’ve been raising money for our second fund, so I’ve probably talked to like two to three hundred. We raise money from CROs of public software companies so, I don’t get the inside scoop, but I understand what’s going on there. So those are all the sort of data points that are feeding into my observations.
Mark Roberge: [00:02:45] First off, I think the only thing that’s honestly changed is, I don’t see a lot of new best practices, I just see all the best practices we’ve been talking about, in terms of like getting the power, developing urgency, don’t do show-up-and-throw-up product pitches, but do deep discovery and tailor your pitches to the buyer. Start with education, not product needs. All these things, we’ve been saying them for decades, and I would say if you abided by them well you did exceptionally well, and if you didn’t, you did average. And that’s the difference, is you no longer do average if you don’t. You just have to follow these things to the T to survive. So that’s one observation. I would say, generically speaking, in terms of funnel-shape impact, what I’ve been hearing from a lot of folks is: the top-of-the-funnel demand coming in, measured by, like downloading content and reading blog articles and coming to webinars, has increased. And that makes sense. Like people are around, they’re consuming content, they’re working at home, they’re working on it. Like there’s just a lot more consumption that’s happening. The conversion from an inquiry to a sales qualified lead, meaning we talk to them and they were like, “Yeah, this is an active opportunity.” Is way down. And that makes a ton of sense, just budget freezes, et cetera. But there’s definitely tactics to overcome that that we can talk about. But actually, it was really surprising to me, from what I’m hearing from a lot of folks, the conversion from a true sales opportunity, where we’ve gone through the qualification, like, “Yeah, this is active.” The conversion rate and the speed has gone up. The conversion rate’s gone up, the speed is faster. The sales cycle is lower.
Mark Roberge: [00:04:39] And as I double click in there, what a lot of leaders are saying is, “Listen, we have a complex product. It’s expensive. It’s a complex decision-making unit, and typically we’ve got to get these roles in a room before they buy. And before COVID, that meant getting the person in Hong Kong, London, and San Francisco in the same room, and it took like four months to schedule that. And it had all the complexities of travel around it. Now we get them on a Zoom the next week.” Right. And so we’re still trying to figure out the best practice of adaptation of managing that meeting in Zoom, relative to in-person. One of the biggest shortcomings is, a good enterprise seller appreciates the walk from the room to the parking lot. That’s where so much good stuff happens. And that’s now gone. Or the drink after. You know like if you want to grab a quick coffee, grab a quick drink, that’s now gone. But we have to kind of schedule that. But that’s kind of interesting, the funnel shape. In how that is moving. And we could talk about the best practices on, like, offsetting some of that stuff.
Neil Ringers: [00:05:46] Yeah, that’s a great perspective. You know, it’s hard because we’ve moved from two-hour discovery calls and having dinner, to 30 minutes. And so the question is, how do we sell value in thirty minutes? Right. That’s really hard. So is it more 30-minute calls? Or having couple-hour calls on Zoom. I don’t know what’s feasible. Right. Any thoughts to that?
Mark Roberge: [00:06:16] Yeah, I think you start with a smaller expectation that, if you’ve done your job, grows. You know you’ve done a good job if the buyer is like, “Hold on, let me see if I can move my next meeting.” Or they check and they can’t, but then they’re like, “Oh, bummer.” Because you’re just trying to sell the next time. And that goes, everything from your first cold call, the first ten seconds is key to earn the next minute, and then that next minute is key to earn the next ten minutes, and then that ten minutes is key to earn the thirty-minute discussion. Right. So it depends where you are in that whole sequence. But you know, if I’m cool with outreaching to someone. I might ask for ten to fifteen minutes of their time. If I get someone on a connect and can get through the ten-second ice break to get to the two-minute ice break, I might ask for a thirty to forty-five minute discussion. Right. And so just, you probably want to err on the shorter side, but you’re constantly finding this balance between, how much value have you already communicated, and equate that, how much time you’re asking for. And you’re hoping that in that next timeslot, that the buyers wish and you had more time together because that gets you the next step.
Neil Ringers: [00:07:33] Yeah, absolutely, absolutely. So moving forward, what are your thoughts about this sales enablement space? Right. It’s relatively new. Gartner’s not really covering it right now. They hopefully will in the next couple of years. We’ve got players out there like Salesloft, Outreach, ourselves. Any thoughts to that space?
Mark Roberge: [00:07:54] Big, big opportunity. You know, it’s growing. I think it’s hit a category evolution where it was like, you started out with a category where there’s just not a lot of “pull” in it. There’s a lot of, “What is this thing? I already have this thing. That’s what I use Salesforce for. My reps can just do this. It’s really not a lot of value on top of that.” It’s definitely catapulted toward, “We have to have this.” And now it’s like, “Which one do we go with?” So it’s just really exciting. I also think what often happens is, the line of where that space is and where things like sales training and product marketing and sales onboarding, that whole thing gets blurred. Like, what exactly do you mean by sales enablement? Right. And so, I think that’s an opportunity because I think it means that this is more than a point solution. This is a whole product opportunity. It’s a whole value prop. So I think it’s an exciting time for the space. And, you know, again, it’s one where I think a lot of the listeners have moved from, “Do I need this?” To like, “What aspects am I going to purchase?”
Neil Ringers: [00:09:08] Mm hmm. Yeah, it’s kind of a have-to-have now, it’s just, “How do we fit it into the stack?” Right? “Who do we partner with?” Yeah, absolutely. So so in that vein, Mark, you’ve got, you know, small companies competing in these big spaces that are nipping at the heels of the bigger companies. Where do you start? You’re a data-driven guy. Do you start with SMB and marketing, it’s kind of the typical markets that we go after. Or do we hire a couple of enterprise sales guys to go after the big boys and maybe try and get your quota in one fell swoop? If you’re offering advice for kind of a smaller company in tech or in anything, you know what would spaces are you going after?
Mark Roberge: [00:09:54] Yeah, so great. Every company has this question. I might frame it as customer selection, or target market, what’s the initial target market ICP, ideal customer profile, that’s another way people frame it. And I much prefer the smaller, I’ll tell you why. But there is this debate between small versus big. You know, I think a lot of people go toward the big. And the advantage there obviously is, if you can nail Facebook as a customer or Google as a customer or, you know, General Electric as a customer, it just is such a referencable client, that it should be easy to convince everyone else. So that’s the thinking there. However, I just think. Number one, I don’t know if everyone just buys now because GE is a referencable client, or Facebook’s a referencable client. And number two, the amount of risk and time it takes to land them, you don’t have that time as a startup, an early-stage company. I mean, in the early stages, it’s all about learning fast. And you don’t learn fast when you’re running through 18-month sales cycles. Just the level of compliance and security needs. And procurement is going to put you through the wringer. You’re just not ready for that. So I much prefer, when I’m coaching entrepreneurs is, imagine your addressable market by you know, you got the big folks and the mid-market and the SMB. Go as low as you can where you’re still having value. Right. So, for example, like a BI tool, business intelligence tool, you need a certain amount of data to make that worthwhile. That’s not going to work for a 20-person company. So we have to figure out where. Maybe one hundred fifty, a thousand employee company, I don’t know. But let’s find the lowest segment possible where that value is still possible and or is created and start there and get as many quick wins as we can and then move ourselves up.
Neil Ringers: [00:11:55] Yeah, I would agree. I would agree. So Mark, when we talk, we’re talking about sales enablement and the tools that are in this space and kind of in this stack, there’s lots of different tools, lots of different strategies that’re going on right now. I think there’s a sense for personalization, right? Again, we’re trying to create velocity. We’re trying to create scale. And I can send out three hundred emails where in the past I could send out 10. So this scale and velocity is great. But what does it do to personalization? Like what’s the clickbait for you? Why do you open up an email or an SMS and just delete the rest?
Mark Roberge: [00:12:40] Yeah, it’s a tough one. I mean because we certainly have gone from pretty personalized selling 20 years ago, to with the evolution of sales tech, high volume selling. And now there’s a question mark. Where do you find that balance? And like with so many questions, it’s highly contextual and we can talk about figuring those contexts out. Obviously there’s two extremes here. On one hand, if you’re selling to the biggest telecom companies in the world, there’s only 50 on the list: You are super personalized. OK, so I talked to one of my buddies who used to sell at Adobe, now he sells at Salesforce.com and he’s given a territory. It’s two big accounts.
Neil Ringers: [00:13:35] Right.
Mark Roberge: [00:13:37] And one of them was a major, international toy company, a toy retailer. And we were hanging out and I was like, “So how do you even approach that?”
Mark Roberge: [00:13:50] You know, because he’s like, “They’re not even Salesforce customers and my job in the next year and a half is to get in there.” And he’s like, “Well,” (Not that I’d recommend this for sales leaders or managers, but it’s kind of an extreme scenario) he’s like, “I’m not going to call them for like two months.” I’m like, “Really? What are you going to do?”
Mark Roberge: [00:14:11] He’s like, “I spent all day ordering stuff on their website. I just ordered toys and I took screenshots of the whole experience, I paid attention to whether or not they remember, they know who I am if I move over to the mobile app versus the web app, I look at how they nurture me. Is it tailored to my stuff? And after two months, I built a 50-page binder. And I physically mailed it to the top 50 digital marketing executives at that company. And the next week, I was sitting in a room with 12 of them.”
Neil Ringers: [00:14:54] Wow, that’s awesome.
Mark Roberge: [00:14:57] But then there’s people who sell pencils.
Neil Ringers: [00:14:59] Yeah, exactly.
Mark Roberge: [00:15:02] So it’s contextual. If we take those two extremes, that is the upper echelon. Mass-volume emails do not work there. This is highly personalized. But then, if I’m selling paper and pencils to small businesses, if I run a test, it’s probably a higher volume, lower take-rate approach, is probably going to work. OK, now the only concern I have there is, if I run a test on selling paper and pencils, and I run a personalized test where I can get out 10 emails a day and I get a 20 percent conversion, and I have a high-volume one where I can get one hundred emails a day and I get a five percent conversion rate. So 10 emails a day, 20 percent conversion, I got two meetings. One hundred emails a day at five percent conversion, I got five meetings. Well, which one is better? The five meetings. But! In the first example, I sent 10 emails and I got two meetings, eight people said no after I sent a highly personalized email. In this example, one hundred emails, five people said yes, but ninety-five people got a very impersonal email from me.
Neil Ringers: [00:16:22] Right.
Mark Roberge: [00:16:22] You’re kind of pissing off a big part of the market.
Neil Ringers: [00:16:24] Yeah, big time.
Mark Roberge: [00:16:26] So, that’s kind of the debate is where do you fit into that and how do you solve for it? And the only thing I’ll say is, when I do talk to these SDR teams, I’ll say, “OK, why don’t you, I know you’re doing high-volume today, but just take 10 clients and write a super personalized email to all ten. And then take a step back and look for the patterns, and most of the time you’d be surprised how you can templatize that experience into what is seen as a very personalized experience for the end-user and still get to some pretty high volumes.
Neil Ringers: [00:17:06] Yeah, that’s absolutely right. And I’m doing the same thing. And it’s just it’s almost like you’ve got to pick the right battles, right. And if you can’t personalize it, you’re not picking the right battles. You’re ultimately not going to get in there. And then the fact that technology is out there now, the Facebooks of the world, the LinkedIns in the world, and I can actually do amazing research prior to sending this templated email or this personalized email and really get an understanding of those eight that I want to go after. Right. But you have to do the work right, the upfront work, versus just sending 500 out and following up on those five hundred. Right. So it’s an interesting concept and battle that we have to ultimately choose.
Mark Roberge: [00:17:51] Exactly, exactly.
Neil Ringers: [00:17:55] Can you talk a little bit about sales and marketing, and how important it is for sales and marketing to come together with a similar plan kind of pulling on all oars?
Mark Roberge: [00:18:09] Absolutely. I mean that’s tricky. And it’s something where the sales enablement space has really blurred that line, you know, especially in these SDR-type “pings” that are being made, because who should write that?
Mark Roberge: [00:18:29] Is it the twenty-three-year-old SDR or the ten-years-experience Director of Email Marketing? Where is that line? So that’s a whole piece that I think organizations are still figuring out. And I do think that it is a high priority project because, you know, I think we underappreciate how the buyer behavior in the world has changed. 15 years ago, the way they had to learn about products was talking to salespeople. They go to trade shows. They’d respond to the salesperson. And the salesperson controlled the whole experience from top to bottom. And now the advent of the internet has completely changed that. They all read millions of studies. 70 percent of the sales cycle is done before they even talk to your seller. The buyers are empowered today, they don’t go to trade shows anymore. They don’t call salespeople back. All that information is available online. And all that means is that so many buying journeys start in a domain that’s owned by marketing, the website, social, email, whatever, and they progress to a domain owned by sales. And unfortunately, those two organizations have not gotten along historically. And that’s what we need to do, is get them working together. So a couple of tactics, number one, get your sales and marketing leader in a room together and have them agree on what a qualified prospect is, what a qualified lead is, and have them agree on how they’re going to deliver to one another. So what percent of our revenue is going to come from marketing, and how do we translate that into MQL and what is an MQL. And then for Sales, of those MQLs, how many will they turn into meetings? How quickly will they call those MQLs? How deeply will they call those MQLs? How personalized will they reach out to those MQLs? And now we’ve got an agreed-upon playbook that we can now hold the organizations accountable to.
Mark Roberge: [00:20:46] The other thing I’ve seen work is, as you scale, not having this big marketing team in one room and a big sales team in the other, but instead, create cross-functional teams around buyer personas. So if you sell to the enterprise and mid-market, and in the enterprise you sell to finance, healthcare, and tech, you might be better off having a marketer dedicated to the enterprise finance group that sits with the enterprise salespeople that specialize in that patch. And they’re more apt to create that streamlined opportunity for the buyer and have sales see marketing as an asset and marketing empathize with sales and what they go through than if they were in two different rooms doing separate things. So just rethinking org-design around buyer persona as opposed to functional unit.
Neil Ringers: [00:21:41] Yeah, that’s great. That’s very intuitive. So, Mark, I know we’re running against time. We’ve got one final question for you. So if you could go back and add one more chapter to The Sales Acceleration Formula, your great book, what would that be?
Mark Roberge: [00:21:55] Thank you. Yeah, it would be the order in which to do things, which is my next book. So if you check out Stage 2’s website, my VC fund, right on the home page is The Science of Scaling. And while Sales Acceleration Formula basically talked about how I scaled the HubSpot sales team using data, from hiring people, to providing demand, to training them, to coaching them, because we were one of the first companies that had a big dataset to do that on. It doesn’t speak that much to the order in which you do that. When you’re starting from scratch, two people in a room getting to an IPO. And that’s what I give visibility into with that chapter. And that’s what the Science of Scaling does if you want to check out that free ebook, and that will be my next book in the next year or two when I finish it.
Neil Ringers: [00:22:43] That’s awesome. That’s great. And where do you find the Sales Acceleration Formula today?
Mark Roberge: [00:22:48] Amazon.
Neil Ringers: [00:22:49] There we go, get to Amazon. Hey, Mark, thank you for your leadership. Thank you for your advice. Thank you for coming to Revenue Garage. It’s been great to get your perspective on the world of sales and what we’re trying to do here. And I hope we can have you back.
Mark Roberge: [00:23:07] Absolutely. Thanks, Neil.
Neil Ringers: [00:23:09] OK, Mark. Take care.
Mark Roberge: [00:23:10] Take care.