Predictable Revenue Webinar by Aaron Ross

Written by on March 7, 2018

Freshsales CRM partnered with Aaron Ross (Author, Predictable Revenue) for a webinar on “Creating Predictable, Scalable Sales Revenue” on February 13, 2018. In this webinar Aaron talks about:

  • 3 fatal mistakes CEOs and revenue leaders make all the time
  • How to build a sales machine that can triple your growth rate
  • Why salespeople shouldn’t prospect
  • How to hire and grow the best kinds of salespeople
  • How to build an “outbound” sales team

Predictable Revenue: Webinar Transcript

Introduction:

Simon: Thank you for joining us from across the globe for this exciting webinar today. My name is Simon Johnson, and I am the UK director of Sales Operations at Freshworks. For those of you who are not aware, Freshworks is a high-growth, SaaS-based software development company specializing in tools to help improve teams, primarily we work with organizations of all sizes, be it customer service, IT service management, or of course, CRM, which is why we’re here today.

This webinar is brought to you in conjunction with our CRM platform, Freshsales, which is an intuitive and easy-to-use Velocity sales CRM product. Within just a year of its inception, we have garnered a loyal customer base of around 10,000 from more than 50 countries.

As the director of sales, I’m super excited about today’s webinar, titled “Create Predictable, Scalable Sales Revenue.” And we have an author with us today, the one and only Aaron Ross. I’m sure you are all aware that Aaron is the bestselling author of “Predictable Revenue,” otherwise known as the “Sales Bible of the Silicon Valley.” He’s also the co-founder of Predictable Revenue—the outbound success company and the founder of  PredictableUniversity.com, which provides the world’s most effective outbound sales training.

I too happened to pick up Aaron Ross’ book “The Predictable Revenue” a few years ago and have based my sales organizations on his theories. And not only that, I’ve had my sales teams read up the book and practice the theories as well, and we’ve been successful. Aaron’s ideas have helped thousands of organizations of all kinds around the world to grow into significant establishments.

Aaron graduated from Stanford and now lives in LA as you’ve probably heard, with his wife and children. He has also completed a new book along with Jason Lemkin, titled From Impossible to Inevitable, which was out in stores in 2016. Thank you, Aaron, for joining us today. We are looking forward to learning a lot from you over the next hour or so.

Before we begin, I’d like to let everyone know that this session is being recorded, so that the webinar can be listened to on a later date through the link that we shall be sending out at the end. We will be taking in questions throughout the webinar, some of which shall be answered by Aaron at the end of the webinar; so please feel free to send out your questions into the questions tab within the panel.

Aaron Ross: Thank you, Simon, for the introduction. Hello, to everyone from around the world! We’ve got a lot of people from India, the US and Europe, and a lot of other countries. So, we were talking about creating predictable, scalable revenue today.

Today we’re going to go through a bunch of ideas quickly. Some of you may have heard about me, some of you may have not. Essentially, I created the outbound prospecting team, outbound sales team at Salesforce back in the mid-early 2000s when Salesforce had only about 150 people. I started there. If I’d be the CEO of a venture-funded company that failed, I need to learn sales; if I’m going to be successful, I need to learn what to say to sell Salesforce. Funny enough, I took the only job they had, which was the lowest level sales-person. There, the starter role was of answering 800 or so lines.

But I wanted to learn. So, I chucked my ego out the door and got there, built the outbound prospecting team from scratch. We saw the revenue climb up the ladder, almost double up. It was successful at 100 Million dollars in a few years, and by now, more than about a billion plus in revenue. That’s what my book “Predictable Revenue” is about. I left Salesforce in 2006 and have been consulting ever since, helping companies do successful outbound prospecting programs, whether they’re outsourcing it or building their internal teams. So, as a predictable revenue outbound success company, we see it all in as part of that.

I shall be sharing some ideas with you today, that I have learned over time from all sorts of companies – big, small, international, domestic; when things worked out and when they didn’t work, so that you get a few key ideas that will help you grow your revenue this year in a more predictable way.

Some of the companies my co-author for the book “From Impossible to Inevitable”, Mr. Jason Lemkin, or I have worked with are Salesforce, EchoSign, founded by Mr. Lemkin and later sold to Adobe, Zenefits, which had some problems, but didn’t have that initial hyper-growth (it was crazy), and Acquia, which was the fastest growing software company a couple of years back. It’s interesting to observe that there are these companies with their new stories that are hyper-successful. Most companies do not do this. What’s the difference?

Predictable Revenue: Aaron Ross Family

Here, I’d like to tell you a story about my family, which is of course entirely relevant to the current topic of discussion. We are a big family of eleven members. Me, the wife and nine kids. I spend most of my time with my family, and it’s almost impossible for me to work for more than 15 hours a week, give or take. But it is important and a great motivator because that is the reason I’m here today.

Predictable Revenue Aaron Ross

Although I have nine kids today, about seven years ago I had none. I was single, got married, there are two kids to start from there for early marriage, we adopted four along the way and had three together, so, hyper-scaling and family from zero to nine kids in seven years might be another book someday. And we’ve been fostering some other kids. So there are more than nine of them. I remember the time when I got married. I had this moment of “Shit, I need to make more money in more predictable ways.” And I had to before because as a single man, I could get by, I didn’t have to make a lot of money, I could make some here and there. That changed when I had responsibilities, and then I ended up growing my income 11 times, almost a million dollars a year.

Predictable Revenue Patten

When I worked with companies, whether their clients or their friends or whomever, I’ve just seen this pattern time and again, where they had something they wanted to grow it. Some take off like Acquia, some flounder. What was the difference? That’s what we’re going to talk about today. There are three key ideas that we will cover. Again, just picking up some highlights from both books. Now, this first one is the most important, especially for companies who are in their early stages, under a million or a couple of million or at ten million.

Painful Truth 1: You’re not ready to grow

The most common reason you’re struggling to grow is that you’re not ready to grow. A quick story about this whole section that’s coming. Predictable Revenue, the book came out in 2011. After five or six years, then I did the new book with Jason Lemkin, and the thing that I’ve learned along the way is, that when people try to do Predictable Revenue and they try to make sales, with outbound sales, it turned out that the most common problem they struggle with is that they’re not ready to grow.

You’re not ready to grow until you nail a niche.

When most companies start off in the yellow, you get referrals, friends, family, getting customers through relationships. People you know, customer referrals, etc. At some point, maybe because you take investment, perhaps because you just decide it’s time to grow, you say we need to grow faster, right? This was my moment when I got married; I needed to grow more quickly. And you start investing in different areas of the business. Could be inbound, outbound, all bound, whatever, and it’s not working. And you’re like, how do we get to the green or have some predictable way to drive the growth?

Predictable Revenue Graph

There can be a lot of reasons people struggle to grow; the most common is because you haven’t nailed a niche. And there’s this issue called the trust gap. We call this the arc of attention. When you’re starting out, you’re getting customers through word of mouth, through relationships, referrals, etc. You have all this trust you rely on because you’re going to your friends or those referrals and people are willing to give you like an hour of their time just to say, I’ll sit down, I’ll explore what you do. Let’s see if there’s a fit. They have this huge advantage, which as it should be, but at some point when you say, we need to do outbound prospecting or lead generation to people who don’t know us.

Predictable Revenue: Arc of Attention

And on the left side, there’s no trust and so the consequences, people aren’t willing to give you this tiny slice of attention. And if you don’t click with them in some way that’s fast, they move on. They’re not going to give you ten minutes; they’re not going to provide you with an hour. In the early days, relationship-based business development is excellent, and you need to do it, but at some point, it becomes a crutch, and you need to learn how to cross this trust gap, how to connect with the market and sell to people who have not heard of you or your brand. And this is harder than it seems.

For example, most of us have these websites, especially if you’re a services company where like we can do 20 different things. And again, if you’re sitting down with a friend, they’re willing to sit down for an hour and go through this to understand you, and someone who doesn’t know you is not willing to do that. They’re not willing to invest the mental energy. So unless you make it simple for them, cut the clutter, tell them what you are going to focus on, they’re not interested.

Predictable Revenue: Nail your niche

This is part of the challenge; how do you zoom in on the type of customers who need you the most, where you can clearly spell out how you can help them? When you’re talking about nailing a niche, we don’t mean having small drainage and thinking small or small markets. It’s not trying to do everything for everyone. It’s having the discipline to focus on where you can be most successful. Because it’s easier to win anywhere. You need to be a big fish in a small pond. It’s easier to make the pond smaller than making the fish bigger.

Predictable Revenue: Be a big fish in a small pond

In other words, it’s easier to be more focused on who you can help, the right situation where you’re needed. That is trying to like changing your product or value proposition. So, you could just serve everybody.

So, all successful companies start with an initial niche. They all had big dreams. Amazon started through with books, Facebook only with Ivy League schools. Salesforce was sales force automation. They focused on one area. They focused in some areas where they could win, before trying to expand and do more and more and more types of markets, so it’s the simplest place, to begin with.

Predictable Revenue: Nail your niche

There are two places the struggle shows up. If you’re struggling to generate leads, or if you’re generating leads and struggling to close them. This could still be a problem. What situations are nice to have versus what situations we need to have? How are those different? That’s a simple place to start because most companies spend way too much energy, time and money trying to market and sell to people who are in nice to have, they could use us, and you just chase your tail round and round, and nothing happens.

Predictable Revenue Nice to have vs Need to have

One clue that you’re a nice to have is when you see people who say ‘you do a demo’, and ‘that was so cool’, and you don’t hear from them again. That’s an example of how you know you’re a nice to have. There’s a book called, ‘He’s just not that into you’. How do you know when they’re not that into you?

Consumers make impulsive decisions, like, do I spend money on a Porsche versus Broccoli? I want that Porsche. And they can do that. But in businesses, because there are multiple people involved, they remove a lot of emotion and impulse. So, if you’re not a need to have, it takes a lot of energy to find, evaluate, buy and implement something. If they don’t need you at some point, they will have other priorities, and you get kicked off the list.

There are a couple of exercises in the ‘From the Impossible’ book. The first matrix is about prioritizing, the second matrix exercises around messaging. So, I’ll share these briefly here because you can get the details separately. When you’re trying to think about a ball of opportunities, which opportunities do we focus on, which countries do we focus on or which industries do we focus on? Are you a big company versus a small company, old product versus new product? We have all these opportunities. Where do we put our energy? How popular and how painful is the problem you’re solving? Can you demonstrate tangible results? How believable is your solution, because anyone can make claims? How can you back it up? Can you build a list of targets? Do you have an extra advantage or the X-factor?

Predictable Revenue: Prioritize

You can turn this into a matrix to help you prioritize. So instead of trying to go after ten different markets or opportunities, you’d go after one or two at a time. You’re not saying no to opportunities; you’re just saying we’re going to go through them in order. The next step is for you to you pick one. Let’s say that it’s a country. You’re saying, England versus the USA versus Australia versus India. Or, it could be a financial service versus healthcare. You pick one of those – healthcare is our number one priority in the United States. The next step is that you want to get to that point where you have a detailed sense of what a single person in that situation is interested in.

Predictable Revenue: Messaging

In this case, if you are going after retail chains and the general pain is slowing stores’ annual growth, one of the people we want to talk to is the VP of Retail Operations. You could have more than one power person, influencers or decision makers, but also one to pick. What’s that business pain slowing growth? What’s that one person’s pain? What’s that one person dealing with? So, they have anxiety over deals, sales turnover tracking. What’s the solution for them? What kinds of role results do they care about? How do we have proof to back it up and How do we validate it? This exercise helps you get into the nitty-gritty of getting inside the head of your target buyers – person by person – because most companies are too general and too vague. When you write vague copy or vague campaigns in general, nothing sticks with people. As I mentioned, you could get these for free in the free chapter from Fromimpossible.com. It’s about nailing a niche and goes into detail about these exercises.

Painful Truth 2: Speeding up growth creates more problems than it solves.

The second issue is we think that if we’re growing faster, that’s going to solve all our problems. True. But, it doesn’t mean that it’s going to be easy because you will have different problems. Different problems mean that changing the growth rate often involves changing the business, which is sometimes easy and sometimes not.

One of the issues that companies struggle with is the four types of VP sales. The person we have at different stages. Sometimes, we need different responsibilities. In the early stages, under a million, you might have more of an evangelist who can sell because you don’t have many customers as proof. You get your first few customers, and then you need someone who can help make it repeatable, and you get to 10 Million, and then you’re trying to scale it. At some point, when it is big enough, where you’re using someone who knows the numbers.

Predictable Revenue: 4 types of VP Sales

Now few people can go from zero to a hundred. It’s just being aware of, do I have someone who is a good fit for this stage as my sales leader and if not, how do I deal with the situation? Do I compliment them with someone else who has the skills? Do I need to change their role? Do they need to leave? What do I do?

Now, if you’re an entrepreneur looking to hire a sales leader, whether it’s a VP or not, some of the indicators you’re looking for are, you should learn a lot from them. You should not be teaching them. If they’re going to be a leader, you should not be teaching them how to do it. When they join, they should upgrade the talent. You should see results within a sales cycle. It should be revenue, but tangible progress, whether there’s revenue or leading indicators.

Predictable Revenue: For CEOs hiring a VP Sales

Again, a common mistake that people make is that they think, they’ve worked at Oracle, they’ve worked at Salesforce, there’s a fancy resume, and it’s like awesome, and you hire them. But what you didn’t know is that they benefited from the rising tide at that company. They got a lot of benefit from being in a big logo. How much of it was them versus how much of it was because of being at Salesforce? Let’s just be careful there.

Even more important is the idea of sales specialization and focus. This is an idea from predictable revenue. We updated it and expanded on it From Impossible to Inevitable book, but if there’s only one thing, if you have salespeople already, and you’re not doing this, it’s like the one thing you can do that will change everything. I drew this picture. The idea is on the left side of this, when one person is doing everything, they get scattered in the focus, right? I’m a salesperson, and the four roles are if I’m doing the outbound prospecting, and I’m getting inbound leads and I’m closing new customers and managing customers’ accounts, that’s too much. I do a bunch of things poorly, or maybe they’ll do one thing well and everything else kind of poorly, right?

Predictable Revenue: Specialisation = Focus

So, there are these four core sales roles that we identified. And again, this is the idea’s focus. You are meant to have four roles you may undertake; if you don’t have inbound leads, you don’t need someone to respond to them. And of course, you can break each section down to a lot more roles where you can have many kinds of salespeople closing business or many kinds of post-sales services. But, essentially you need to have a dedicated team of inbound lead responders or market response Reps if you have inbound leads, and we think it’s about 400 leads a month. One human goes through about 400 leads a month that need to be reviewed by a human.

Predictable Revenue: 4 core sales roles

If you have 800 leads coming in that need to be reviewed by humans you need two people if you have less than 400, do you get my son doing a part-time, but they need to be dedicated to that at least 80%. An outbound prospecting, which is the bottom left for sure. Prospectors need to be doing that 100% of the time or 95% of the time. They get thrown off so easily by distracting tasks and responsibilities –  whether that includes marketing, trying to get them to get people to a trade show, in ways that aren’t aligned with their current territory and goals. There’s a lot of ways you can distract outbound prospectors from what they need to be doing, which is finding incremental business, new accounts, new opportunities that we wouldn’t have found otherwise. That’s what the outbound prospectors are for.

You can call a typical term now is SDR – sales development rep, which could be inbound SDRs or outbound SDRs. Salespeople who are signing up new customers and post-sales could include customer success, account management, services like anything after they’ve signed up. So, you need to specialize your teams; this is a requirement. This will lead you to predictability and scalability.

Predictable Revenue: Specialization = Predictability

When you do this, you have much better insights into the team, what’s working and what’s not. If something’s not working, it’s tough to figure out what the problem is. It’s more scalable. You can hire people in different roles, like Lego blocks, and more importantly, the best thing about the long-term value is a talent and farm team system. You can hire junior people who have grown up the ranks, so you ideally should have a sales team. For those of you who have more than 5 or 10 salespeople, you should have less. You shouldn’t be losing many people per year. You could have like one out of ten a year, less than ten percent attrition. The industry average is 30%. So, when you do this through a specialization, your attrition in your team should go way down because it’s so much easier for people to be successful.

If you don’t specialize, you’re going to struggle.

Your team could have one inbound lead responder per 400 inbound leads a month that needs human review. A rule of thumb, there are so many different types of inbound leads. If you’re getting thousands of webinar leads, that’s different than thousands of referrals. One prospector can support; sometimes if you have big deals, you might even have prospectors for one closure, but you shouldn’t have a prospector and outbound prospector supporting more than like four, maybe five salespeople. That’s about the max.

A few common questions we get. How long does it take to create a new role? I think it’s important to understand that when you’re creating new sales roles of any kind, it often seems to take about six months, not to define it, but staff it and get a lot of things worked out. You can create a role in 30 days, but it doesn’t mean it’s going to be working smoothly and synced up with the other teams.

What if we’re too small? Maybe the most common issue is, I’m only one person in sales. I can’t specialize. Well, if you have two people in sales, you should probably have one as a junior, either inbound or outbound, and the other is a closer. But if you’re even one person, you can apply this by focusing your time having blocks of time on your calendar so that you, like prospecting takes, need an hour or two hours in chunks at least to do that. Well, we can’t do it five minutes here, five minutes there. It just doesn’t work. So, block out time on your calendar to get done the things you need to do. That’s how you apply a unit as one person.

If you only have two people, one is usually the closer or the other might be doing inbound, outbound, but as soon as you can, you need to keep the inbound lead response job separate from outbound prospecting. Outbound prospectors are so easily distracted by other roles.

One last point, will relationships and service suffer? No, not if you do this well and you have simple hand-off protocols. In fact, customers develop better relationships and better service because at every step of their process that they’re coming to you or you’re talking to them and the lead side, they’re buying their customer, they’re getting people who are dedicated to them. When one salesperson is doing everything – prospecting, closing, managing counts. Sometimes they’re giving great service and a lot of times they’re not.

We’re here to the third main topic and going to spend some extra time on this. If you have read predictable revenue in this, seems like a review, well, we’re going to have some extra details for you so you will want to stay until the end of this section.

Painful truth 3: Overnight success is a fairytale.

There’s this common idea or vision that if I brought up the right blog posts or if I do the right video or we do the right eBook, then we’re going to have all these leads come in and we’re going to be a viral success. That doesn’t happen. You’re not going to be able to create predictable revenue until you have a predictable way to generate leads over time. Lead generation is your big lever to grow. You have a great product and great people, but you’ll struggle as you have a way to generate leads regularly. Via great leads, you can still get a lot wrong and still do pretty well.

Predictable Revenue: Leadgen is your big lever

There are three types of leads because there are pros and cons to each. They’re seeds, nets, and spears. For those of you read the book, you should remember this. This is one of the big ideas people love to take away. Again, updated this and expanded in the new book.

Predictable Revenue: 3 Types of Leads

Seeds Word of mouth, Customer referrals, friends, family, any relationship based sale or lead. These are the best. Pros – These are the best. They have the fastest sales cycles, highest conversion rates. Con – Difficulty in growing and the best way to grow is through a customer success management program.

Nets are marketing. We’re broadcasting one-many, and we’re getting lots of leads of which, a small number might be a fit.

Spears – Outbound business development would be the spears. We have a human, they’ve got a target list of partners or customers they’re calling, emailing, going to meet them in person, whatever they’re doing to develop business with them. Pros – This is more of a quality over quantity.

So all three are great but depending on your business in your stage, you might focus on building one at a time. Someday you’ll have all three. You don’t want to try to do them together; each one can take quite a bit of time to get right – six months or more.

Predictable Revenue: Seeds: Turn your funnel into an hourglass

A significant change in the US in Silicon Valley is this appreciation in customer success after the sale. It’s not about customer satisfaction. Customer success is about revenue growth. What that means is whether you have customer support, it’s about fixing problems, whether they have customer success, which is about preventing problems from being created in the first place. When you spend money with people who are dedicated to making your customers successful, they may or may not have quotas. Either way, your customers should stay longer, you should get better testimonials and case studies, and they should upsell, cross-sell more and more referrals. So, it’s investing in revenue growth. Most companies spend too heavy in sales early, and they don’t invest enough in customer success. Most companies are too obsessed with new companies rather than how do we spend money to make sure our current companies are happy. Our value is when we have our foundation is solid

Predictable Revenue: #1 Customer Success Tip

Nets – I think everyone hopefully has seen the classic marketing funnel, so that’s another difference between seeds, nets, and spears. Different funnels, different metrics. The idea came from, thinking about board meetings, there might be this decision, OK, we did $10 Million last year with a thousand leads. So, if we want to double to 20 Million we’d need two thousand leads and that is not true because a lead is not a lead, a hundred referrals might be the equivalent of 2000 marketing leads. You know your metrics. You might say, Hey, to double next year, we might need five times as many leads because it’s different type of leads.  

Predictable Revenue: Nets: Example Marketing Funnel

So, probably the main idea of marketing to leave you with is that why doesn’t marketing have a quota, they should, and that helps focus them on what the business cares about, which is generating pipeline. You could invest in branding, but branding too soon just to feel good. It should also at some point turn into results. There are hard results like leads; they’re soft results like people who remember you better. But, we don’t want marketing to be there just to make you look pretty. They’re there to help you generate pipeline, so let’s measure them on that.

And lastly here, our outbound prospecting or spears, whether you’re prospecting for customers, whether you’re prospecting for partners depends on your market and your company, but again, different funnel which should be recognizable from predictable revenue wherein outbound prospecting you’re building a database, you’re sending emails or making calls which are going to be a social activity and ideally, you’d get some kinds of response rates and some kinds of call rates, many demos per month.

Predictable Revenue: Spears

This is what started at Salesforce, and we help companies do today, is, if you can get a gain through outsourcing sometimes, but outsourcing is usually an interim bridge like six and 12 months until you can build your own team anyway. But let’s see, two prospectors, and they can generate you through a couple of hundred conversations a month. They can do 20 demos, of which in three quarters turn into sales pipeline of which 20% close. It’s a predictable way to generate revenue when this works well. Acquia, it’s been a few years. We helped them.

They start with three prospectors and after six months they have some data. They’re like, all right, we’re expecting one prospector to add 720,000 in revenue a year, so let’s hire 40 of them. It took them a couple of years to up build a team up because, you still have to, there’s still like management and culture and processes and each different issue as you scale, but they’re able to add extra 30 Million in revenue within a couple of years to help them break that hundred million dollar revenue run rate.

Predictable Revenue: Spears - Outbound Funnel

So, the pros and cons of outbound. Pros – There’s a lot of you who are already fans of outbound sales. It can be predictable, drive fast growth, gets you into bigger companies. Because you’re picking out who you want to talk to. You’re not waiting for them to call you. You should have bigger deals than inbound or even 3 to 10 times the size as because again, you’re targeting bigger opportunities on purpose.

Predictable Revenue: Outbound Pros & Cons

Outbound is a great complement to inbound; there’s a lot of synergies and say, it’s like peanut butter and chocolate. It’s not inbound or outbound; it’s both. You need to build one first before the other. The problem is, it’s not for everyone. It can be challenging for companies, for example, on a scale of 1 to 10, some companies get a 10 out of 10 in results and some companies get a 1 out of 10, probably like anything else, like marketing. If you have a more crowded market, you’re not differentiated, you have small deals like under lifetime value of $10,000 in the US at least, in other countries it might be a lot less because you have fewer expenses.

If you are in a services company where a lot of services companies tend to have more vague offerings. There are all these different reasons why it can be harder to make money with outbound, not impossible, just harder. It’s great to have expectations where you read stories around some company that in three months we have made an extra million dollars and after 18 months you’re struggling. You might be doing something wrong, but it doesn’t mean you are if you’re struggling compared to all these success stories you see.

Outbound prospecting growth pains

Predictable Revenue: Outbound Prospecting Growth Pains

We get a lot of questions about what do you need to do if you are a service company? Some of these service companies have an outbound prospecting team, bound SDR team, or dedicated salespeople. These problems are associated with companies having a prospecting team, and the problems arise when you look to grow that team. The first main problem is executive trusts because it’s very hard to develop an outbound dashboard that is accurate. One of the main reasons for this inaccuracy is a lot of the leads that people find may not be outbound. These leads can be more of an inbound. To get on with that, you need to have strict attribution rules and audit every single opportunity that your outbound prospectors throw up for credit.

For example, as a salesperson, I put my trust into my prospector, their efforts, and hard work. But if they accept an opportunity that they shouldn’t and later for some reasons, either the deal goes somewhere, or somehow damages the trust of the program, and sends the message that it does not help the prospect, perhaps we gain short-term win by getting an extra quota point but in long-term, if the executives don’t trust the program, everything is lost. That’s the most important principle.

The second problem is the disorganized CRM. A lot of people struggle with CRM. It can be fixed easily, but it needs to be organized in some way. Sales leaders or the leader of the SDR team, mostly look to manage through dashboards. The problem with this approach is that we’re using a lot of charts and metrics that don’t get used and checked. Initially, they look fancy, but a lot of them don’t make sense and clutters your dashboard.

The last thing is about developing people, and not resources. Your success is made up of individual people who feel appreciated; people who are trained and get support whenever needed. If you start to look at your team, and it seems like a bunch of robots, it’s not a good sign for your organization.

One example I mentioned is that probably the maximum number you need is five. If they’re good salespeople that will be supported per prospect or if they have more than that to support, they get scattered. That relationship between prospector and salesperson is important. It’s a fewer, better ones.

Managers shouldn’t have more than ten reporters, and the number depends on how many are new versus how many are veterans. If it’s a team of 15 veterans and they’d been around for a while and are aware of the systems. Yeah, a manager could have more than ten, but it’s hard to spend that amount of time in the coaching, relationship building that managers and employees need if there’s more than that.

Healthy Prospector – AE Relationship

So, here’s the last one. I want to get into little more detail on this healthy prospector relationship development. I think a lot of people miss this and get into lesser important details such as email template and phone script. Yes, these are important, but at the same time, it’s about the people. When the people have the tools, they feel supportive; they have mentoring, have focus, a lot of those other issues will go away.

Predictable Revenue: Healthy Prospector

Avoid pooling. Let’s understand it with an example – let’s say you’ve got ten salespeople and two prospectors, and they help everyone. I’m supporting Bob, Jane, and Sarah, and that’s it. No more than 4 or 5 prospectors per salesperson. Prospectors need to think about the salesperson as the customer. How can I help my customer? How can I give them great opportunities? How can I make it easy for them to pick up the opportunity and run with it? But, the SDR sets healthy boundaries. They’re not the slave of the salesperson. At some point, the SDR needs to know when to say no. What if a salesperson asks them, hey, can you build me this list that they need? They either don’t know how to do it, they’re too lazy or too busy. There’s this balance between I want to help my salesperson, but I need to set boundaries, I need to help myself stay focused on generating opportunities for that salesperson and maybe others.

And lastly, lots of joint sales calls is probably the number one thing you could do to make sure that new employees ran faster and things get figured out faster, whether it’s on initial outbound prospecting calls the SDR is doing, whether it’s on a later stage closing calls, discovery calls. The SDR, the prospectors, and the salespeople are doing a lot of calls together in the beginning couple of months while they get to know each other, and then as their systems and processes have the understanding and teamwork falls into place, they do a lot fewer joint calls. But that might be the number one tip for new prospectors or new teams. Just make sure everyone’s jumping on the same calls a lot as much as possible.

Summary – To keep up the growth

Predictable Revenue: Summary

So, at the company level, the most common reason people struggle is they haven’t nailed a niche. It’s not just picking off the target industry, it’s about your message to them and focuses you might even apply to at a salesperson level if you have different salespeople targeting different types of customers, training the salesperson: How do you think like your customer? How do you get into their shoes so you can think like them so that you can write like them, so you can talk like them?

Number two: Is Customer Success team fully funded? Are you investing in it? In some way that makes sense for your business? Huge return on investment if you don’t have it and you put some focus around that.

Further, specialize your sales roles. However you have it today, I find companies don’t take it far enough. Make sure inbound lead response and outbound prospecting are separate. If you’re one person, block out time. If you already have your prospectors, inbound leads, etc. how can you create internship roles or junior roles? Even with younger people to create feeder systems for your SDR team.

Lastly, with your outbound team, double down on people, how do you get the right people, invest in the people, train them, make sure they’re equipped, makes sure they’re talking to each other, accurate metrics that we can trust, because we don’t have accurate metrics and we don’t know what’s working, what’s not, and we can make sure people are organized. There are probably several number of important skills for the organization that are so essential, so you need your Sales CRM set, people need to have daily MVP structures and metrics in order to not able to make it work, but able to scale it in a trustworthy way.

Predictable Revenue: Questions for you today

So, I’m going to thank everyone to have you think about this and we’ll see about questions. All right, so if there’s one major sales strategy change for you this year in 2018, what would that be? As you think about that, take the next step of OK, it’s so easy to put that idea off. What’s one thing you could do in the next 24 hours to move that forward? It could be as simple as making a list of ideas, it could be as simple as scheduling a call with your key person.

For those in India, we have From Impossible to Inevitable on Amazon India. And here’s my information, so I’m going to open it up to questions.

From Impossible to Inevitable: Amazon India

Question & Answers

Simon: Perfect. Well, firstly, thank you. That was a brilliant insight. I’m going through some of that stuff again. It makes you look at yourself in the mirror and think that they’ll build this sales organization and am I focussing in some of these areas? So, sort of certainly a lot of notes that I’ve been making and as a result have a lot of questions. So, let me sort of kick off with a brief summary and then head into some of these questions which I love to have answered, if possible.

Firstly, I liked that idea of the painful truth. So, what you’re essentially saying is if you’re not quite ready for it, don’t invest too heavily if you haven’t researched to understand if you’re ready to start growing.

Second thing I noted down, as you grow and scale as an organization, sales managers need to change. I think that’s a very true observation there. Certainly, we’ve seen a similar thing at Freshworks. If we’ve grown significantly over the past few years, our structure and our sales management have certainly changed over that time. And then as you start growing, specialized roles become more and more necessary.

So, I think what I’ve experienced personally is you start off with an account exec and a 360° role; essentially, you’re asking them to make the calls, close the calls, take some inbound, even customer success and probably account manager trying to expand on the account they have landed. What I’m keen to understand from you is what is the kind of ideal structure, how have you seen this work well and this kind of trigger point where you say, no longer can this poor guy do these 360 roles we need to bring in some prospectors or SDRs.

Aaron Ross: There’s always these transition points that you’re going from one person to two or four people, four people to six or like when do we hire next? When do we create this next role? So one of the rules of thumb is, I think if you have people who are juggling, you have two people you’re going to juggle. When 20% of some other job is trying to take up their day, it’s time to start considering a new change.

So for example, if three salespeople, 20% of their time is being taken out by prospecting, or 20% is being taken up by customer success or account management. Now, that’s probably where we need to take a hard look at creating a new role to handle this. This might be a distraction to them. So, part of this is that you’re trying to figure out, at what point does something become a distraction versus it’s important for them to handle it and it’s important to their job to handle it. Salespeople should prospect, but only the closure, like a small number of accounts 5 or 10 or 20, some manageable number of accounts. That’s important. So, prospects should be part of the time but should be done in a way which is complementary to the job and not a distraction.

So, what you don’t want them to be doing is calling on 100 accounts and doing lots of cold calls, or lots of cold emails. Why are you having your most expensive person doing this work? It’s valuable work, but they shouldn’t be doing that, and they’re not going to be any good at it. So, you’re trying to make sure your people in the sales team are doing fewer things better, so the customers are happier, salespeople are happier. It’s easier for people to be successful because when you have prospectors, you’re prospecting in the amount of the responders who are doing that, and you got account managers. When you hire a salesperson, they don’t need to learn everything. They don’t need to ramp their pipeline. They can step into hopefully some leads and pipeline, and they can step into only having to learn a much smaller topic of a set of information to be successful. One out of four modules, not four out of four. I always find that specialization is popular but not nearly popular enough, and people don’t take it far enough.

Simon: Only recently, we’ve reintroduced the inbound into the account exec team. I think what I’m noticing is it’s distracting. They must focus on outbound because we’re trying to get a message into let’s say vertical or geo, we must try and keep them from being distracted. Do you have any advice on how we avoid that kind of distraction of inbound? Because at the point inbound comes in, you could say the job comes a lot easier, but you’re becoming much less effective as a sales organization.

Aaron Ross: So, unless you’re selling to small businesses where it’s like one or two calls to close, inbound leads should not go to salespeople or prospectors. Inbound leads need to be handled by someone else. Because they become distracting to salespeople and they become distracting to prospectors. If you have someone else reviewing them, they can then go to an inbound lead responder or maybe a manager. If you only have a few leads, it might be a manager. They can then get deep, review them, be like, OK, here’s the lead that should go to a salesperson because they’re already talking to this company.

Otherwise, what happens, let me give an example.

We have this a manager coaching group called masterminds, and the question last week was, I have three prospectors. 5% of their time is inbound leads, but it’s creating a huge problem. Why? Well, because the inbound leads are hot or easy to close and sell, so everyone fights over them and argues over them. So, the problem there is they’re compensating the inbound lead same as an outbound lead. In other words, someone else should have handled the inbound leads; they shouldn’t be paid the same because if you have a prospector and their goal is to hit 8 or 10 accepted opportunities a month, and they get one or two inbound layups, it distorts the entire program. So, there are lots of ways inbound-outbound can work together and can partner, but that’s not one of them.

I’ll give you an example – inbound leads come in, and someone in the outbound team doesn’t take the inbound lead, but they find the companies who are coming in and they go to the top. If you have some junior engineer like lower level people coming in inbound who aren’t going to be buying, the outbound team can say, Nestle’s interested. Let’s go to the top and see if there’s a project there, that that’s a healthy example of cooperation.

Simon: I couldn’t agree more! It’s very much that as I’ve experienced exactly that same thing. And I’m experiencing it right now. So, let’s change track a little bit. Some of the questions that I get, and it’s a difficult question to answer, but what I’m interested to know in is your views on numbers of touch points. So, is it four, is it forty-four? How do we know how much is too much?

Aaron Ross: Well I get lots of questions around sequence or touchpoints. So, let me start off with a little bit of a silly one, but people will ask, Do I email-email-call-call-email or do I email-call-email-call-email-email? It doesn’t matter. The point is you’re doing enough follow-up. So, yeah! I mean the techniques do matter, but it’s more important that you do enough follow-up.

Now there’s no magic number. You see stats like an average of 12 and 15 touches. I would say is it’s important to differentiate your A, B, and C targets or if there’s an A account and you need to talk to them, you might do hundreds of touches across the company with different people. If it’s a C company where I am, I’ll talk to them, but I don’t know. You might touch them a few times, but then they don’t respond back, you leave it alone. So that’s more important.

It is the prospectors who understand the market, they know the product, they know it’s a fit or not a fit, and they can judge which companies to spend more of their time on, and which companies to pass up sooner. I would say, 8 to 12 to 15 touches; you should be prepared to go that long for people you care about, like don’t give up after 3 or 4 or 5, because, most of the opportunities these days come from follow-up. A lot of people are afraid to follow-up on their calls. The only way you’re going to be annoying is if you’re annoying.

Simon: I don’t think if you’re sending relevant collateral and information that’s very appealing then it should work.

Aaron Ross: Just in a friendly way, like a familiar voice. It sounds a bit personal. It’s not just robotic or stiff.

Simon: Yeah, exactly. Which leads very nicely into my next question which is about this tussle which we always get, which is scripts versus finding the best path. What is the point where it may change?

Aaron Ross: Scripts are incredibly useful in training, but once they know the basics around what they’re doing, you’ve got to throw the scripts away and use something like a cheat sheet. So, I think we’re talking about phone calls, but know that templates and scripts are the same things. Great for training, but after six weeks or a month or two months or three months, at some point, they need to find their voice and find their own way and make it their own. Whether it’s on email, social or a phone to be more natural sounding. Because, especially these days when everything’s busy, there’s so many emails, so many calls when you sound like a human, when you sound like a person, whether they’re getting your voice or your email, people will respond to that more than when it comes off as like a script or template. Just for training and then, I would switch it and call them cheat sheets. There are reminders on, like oh, I need to get these few things.

Simon: I think just, maybe just finish on one area around reporting and one point that I picked off on, which is quite topical, which is around a disorganized CRM or CRM not fit for practice. Any trust that you might have in your organization or any visibility that you need as a manager and certainly your effectiveness as a manager. Do you advice to not stop projects like this without having reports and CRM’s in place or is there a case of building as you go? Kind of an experimental and agile manner.

Aaron Ross: You for sure should build as you go because it’s impractical to get the reports built before you start. Everyone does the reports a little differently, and some people use salesforce. Almost everyone, at least in the United States, where you have a team of multiple people, wherever your sales system is always a little bit different or if you use more than one sales app: it’s better to build as you go. It takes people weeks or months to get the dashboards tuned the right way.

You start with something to track it and then there’s nothing wrong with using excel to start and like get your metrics down and then you sort of know what to build in your system if that’s the way you need to start. The hard part is, you need to have your reports that are accurate, which in your system are set up that way. But also, people are entering the data the right way. And in outbound, the more nefarious or tricky part is there’s a lot of subjectivity. There’s a judgment call, Should I pass this opportunity over to sales? Or, should I accept this? Should I approve this? So, those quality standards regarding what is going to be approved for quota, what are we going to claim as the outbound credit, or they take time like qualification criteria are all the soft stuff takes a lot of time to get it right and consistent proven.

Simon: There’s nothing worse than presenting to a CEO the data that he doesn’t believe.

Aaron Ross: We’ll say one tip on CRM, which is if you use a CRM that has a Leads area separate from accounts and contacts, then not all of them do. Some are pipeline management but if you use one that has leads area separate from contacts. Then, the leads areas are for inbound leads to be filtered and sorted, you shouldn’t be prospecting with leads. Usually, there are lots of systems. Because in Freshsales, prospecting unless you’re calling on small businesses with one person, prospecting is done to companies where there’s one company with multiple people. So, you need that to happen in your accounts, companies and contacts area where you can have account based prospecting and account with multiple people. So, that’s a common mistake I see. Especially if a marketing person is doing it and they’re so used to leads that they do prospecting through leads and then the prospectors don’t have visibility into what’s happening because it’s all scattered across all these different leads.

Simon: Exactly. And again, that’s a scaling issue. Start with excel and you can sort of get away with it but it’s that sales team grows, and the number of counts increases, as an interim step.

Aaron Ross: It’s like outsourcing. I mean, we do most of our businesses probably outsourcing, but I’ll be the first to tell people. For most companies is not your long-term solution, it’s an interim step, 6 and 12 months until you’re ready to build your own internal team, which, we do too. So, it can be neutral that way. So, it’s hard for outsourcing to be done well, whether it’s software or outbound this case. There’s sometimes an interim solution, Excel, sometimes outsourcing some kinds of people, contractors to get you going to a point where OK! Now we can do the long-term solution that we know we should have done, but we weren’t quite ready for it yet.

Simon: Yeah, exactly. That’s a perfect place to end. So, quickly as we finish up and we did run a giveaway contest for the Webinar. We’ll be announcing all the winners tomorrow. I believe that’s a copy of the new book. And any additional questions, you can see Aaron’s details on the screen. So, please ping him and ask him whatever you need. Equally, please do contact me or contact Freshworks and we would love to show you a demo of our first sales product, and hopefully, it hits the spot with many of the things that we have been discussing. I think that’s everything for me to address then.

Aaron Ross: Before we go, I want to thank Meena, Simon, and Freshsales here. You guys are doing some exciting things and some impressive growth. Especially with such an international presence, do expect to see great things from you guys in the coming years.

Simon: Thank you again. Enjoy Scotland, if I don’t speak to you before then, and thanks everybody for joining today. Hopefully, you have learned a lot. I certainly have, best of luck with your outbound sales. Thank you, everyone.


 

This webinar was brought to you by Freshsales CRM. Freshsales is a sales CRM built to help you stop juggling multiple tools. It’s ideal for small businesses and refreshing for enterprises.

 

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