309: Four Sales Formulas, with Mark Roberge
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There are four sales formulas, one for hiring, training, managing, and demand generation for a scalable and repeatable revenue growth model.
Mark Roberge, Advisor to HubSpot and former Chief Revenue Officer of HubSpot’s Sales Division, is our guest this week on the Conquer Local Podcast. Roberge and George Leith dive deep into his book, The Sales Acceleration Formula. There are four sales formulas, the sales hiring formula, the sales training formula, the sales management formula, and the demand generation formula. One important golden nugget from this week is for salespeople and sales leaders to get away from doing everything the same old way just because that’s how their organization has been doing it. We need to apply data and be able to come up with ways to make it better. The most overused word is scalable, but that’s what we’re all aiming for. It’s to find repeatable models that are scalable to help meet the ever-growing goals in sales organizations.
Mark Roberge is the bestselling author of the award-winning book, “The Sales Acceleration Formula: Using Data, Technology, and Inbound Selling to Go from $0 to $100 Million”. Mark is one of the instructors for HubSpot Academy’s Inbound Sales Certification and also a Senior Lecturer in the Entrepreneurial Management Unit at the Harvard Business School, where he teaches Entrepreneurial Sales and Marketing in the second-year MBA program. Prior to his role as CRO, Mark served as SVP of Worldwide Sales and Services at HubSpot, increasing revenue over 6,000% and expanding the team from 1 to 450 employees. As a result, HubSpot placed #33 on the INC 500 Fastest Growing Companies list in 2011.
George: Today on the Conquer Local Podcast, we’ve got a special treat for you. I’ve been teasing this over the last few months. Mark Roberge will be joining us today. Mark’s the former CRO of HubSpot for nine years from their infancy. Listen, this guy is a revenue juggernaut, and we’re excited to have him on the podcast. He’s also the senior lecturer at Harvard. You probably have seen him on YouTube or read his book. I also found out that he’s on the board of over 20 different companies as he’s now leading an investment fund. We’re so ecstatic to have Mark joining us.
George: He’s going to be digging deeper into his book on the Sales Acceleration Formulas, and we’re going to go through those four formulas that he mentions in the book in detail. I want to be honest with you, producer Colleen and I decided we wanted Mark on the podcast, and what I did was I just reached out to him on LinkedIn. So if you’re ever questioning the power of LinkedIn and making a connection, he got right back to me and said, “I’d love to be on the podcast.” Now, unfortunately because my travel schedule is unbelievable, something that I really need to fix in my new year’s resolutions next year, we had to record the call with Mark on the road. He’s super busy as well.
George: So my apologies if the sound levels aren’t quite as magnificent as when we record with Mr. TBone in the sound lounge, but we wanted to make sure that we got Mark Roberge on the show. We’ll reach out to him and get him back in the future as well. Mr. Mark Roberge coming up next on the Conquer Local Podcast. Well, I’m very excited to bring on Mark Roberge, former CRO of HubSpot and a lecturer at Harvard and author of the Sales Acceleration Formula. When I’m talking to people in SaaS sales, a lot of them hold up this bookmark as the Bible. We’re excited to have you on the show to talk about some of the things that you’ve brought forward inside the Sales Acceleration Formula, so thanks for joining me today.
Mark: Yeah. Thank you for those kind words, George. Great to be here.
George: Your path into sales when you arrived at HubSpot, and HubSpot’s success has been well documented, I noticed when I was reading through the book, you didn’t have experience in sales when you arrived at HubSpot.
Mark: Yeah, that’s right. I was an engineer by training, started my career coding, studied at MIT. The first decade of my career was littered with a very quant process-oriented viewpoint, and then through the entrepreneur ecosystem found myself in sales.
Sales Hiring Should Focus on Coachability
George: It’s interesting. I started in sales 30 years ago, career salesperson, and I say a lot when I’m working with sales teams that you have to take a more metrics-driven approach. I find myself sometimes almost more of a chemist than I am as a sales leader. It’s interesting when I look at these formulas that you’ve developed, we’ve got the sales hiring formula, the sales training formula, the sales management formula and the demand gen formula, bringing that experience as an engineer and the data-driven approach is really to the root of these. Can we talk a little bit about each one of these? And I’d like to start with the sales hiring formula because I was really interested in the way that you studied the data and you really looked at what makes up an ideal salesperson in the book.
Mark: Yeah, absolutely. And just to take a step back, I was a bit lucky to have stumbled into sales at the time I did. George, you’ve had a long career here, you can appreciate both sides of the turning point that’s happened in sort of the last decade or even more due to the rise of the internet, cloud, inside sales. Prior to that, all these sales teams were outside of the field. CRM adoption was abysmal, and the access to any sort of sales data was next to none. And then as the internet became more adopted, we moved on to cloud computing and cloud software, to SaaS, and we started moving a lot of these teams inside. These teams were just dependent on the CRM to run their day, and all of a sudden we shifted from a world where we had no data to a world where we had so much data, we didn’t know what to do with it.
Mark: And now, the big thing is we’re over data analyzing our businesses. It’s interesting, this shift, but at the time when I entered in ’06, I didn’t know this, but the world of sales and sales leadership was ripe for a new viewpoint that was very data-driven. And so yeah, the machine that I set out to build was, hire the same successful salesperson, train him against the same process, coach him in a predictable way against that process and feed him with the same quantity and quality of demand. And that’s the machine that I envisioned and tried to make a foundation for each one of those components of the machine in a very quantitative manner. And so starting with the hiring, there is a lot of, “I just know a good salesperson when I see one,” out there, and there’s a lot of research that says we suck at hiring.
Mark: I mean, the average turnover in sales annually is 40%. Research shows that the interview in any sort of function has very little impact, and yet this is a huge turning point for an organization. I mean, if you go out and hire 40 reps in a year and get it right half the time versus 90% of the time, that’s the difference between a unicorn and bankruptcy, right? So it’s just like that one thing is so critical. I just took a step back, and as I looked across various organizations, I realized that there was no universal answer to a great salesperson. I mean, there are salespeople that sell custom suits, there are salespeople that sell jets. The ideal salesperson for those two contexts is very different, and then all these nuances in between.
Mark: So I started to really reflect on what our context was, which was basically, what was the product we were selling? To which market? And what were the stages of the business? Those are the drivers of my context. And based on that context, what are the five or 10 criteria that I thought would correlate in our environment? I was very disciplined around documenting and defining each one of those criteria. Documenting and defining what a low, medium and high score, like what a three versus a five or a seven versus a 10 might sound like, and then went out and just executed that hiring approach. It was interesting after the first year having hired eight reps to see some of them fail and ask why, and what did I miss back in the scoring model and iterate it. And also to see a bunch of them succeed and ask why and challenge myself as to whether or not I truly uncovered that in the interview and iterate it accordingly.
Mark: And it wasn’t long, 30, 40 hires, because we’re going fast, that I could actually run a statistical correlation or aggression analysis of my quantified observations of the interview with long-term success. I mean, that’s the great thing about sales is success and failure is quantifiable, and so let’s leverage that in the formula.
George: I think it’s important that our listeners understand that this wasn’t something that happened over a short period of time. The feeling I got from reading a book and watching other presentations that you’ve done is that iteration, it continued to be ongoing over a long period of time.
Mark: And it still is. It changes as we expand to Europe and Asia, as we introduce new products, as the landscape changes because it goes from an, “What is this category?” To a very competitive category. All these things cause the ideal hiring profile to shift. And so I would look at it every quarter, and I still do as advisor and board member and investor to many companies, this is just an ongoing flywheel function that we need to understand.
George: There’s so much talk in SaaS around culture and having the right culture. It was interesting when I was reading the book that you talked about that culture fit, and finding not just great salespeople but great salespeople that would fit within… the culture you were building.
Mark: Yeah. So culture, I still scratch my head on culture. It’s a big opportunity and dangerous at the same time because I think sometimes we interpret culture like, “Will this person fit in? Will I grab a beer with them?” And that causes us to create some of the diversity issues we have across different industries, especially tech because we tend to hire people that are like us. And it also causes us to hire friendly, charismatic people as opposed to people who actually would really be good at the task at hand. So for me, culture meant … We were doing something pretty new at the time. Inside sales was still relatively new. The concept of marketing in general indeed was very new. The discipline process that we were taking people through is pretty new.
Mark: And so instead of going out and finding people that have been there, done that and just put them in a funnel, which actually didn’t exist, I wanted a culture of highly coachable people and a culture of coaching excellence. So if I could prove a process that will work against our lead flow, if I can enable a frontline management team to be exceptional coaches, and if I can hire coachable people, that again is a mini machine that works beautifully. So that was a big part of the culture that is separate from, “Will I grab a beer with this person?” And what we were trying to-
Training: Time to Leave the Ride-Along Behind
George: I appreciate you taking my lead on that, because I think it leads into the fact that you’re hiring as the first step, and you have these things that you’re looking for and you iterated and you found out, and now we move into the training portion and getting them up to speed and then the coaching portion of it. So let’s talk about those two formulas.
Mark: Yeah. So with training, when I went out and just asked 25 VPs of sales about their training program, at the beginning of HubSpot, most of what I found was what I call a ride-along. Most of them said, “Yeah, new person … Hi Bob, welcome to the company. Do you remember Susan from the interview process, she’s our best rep. Your training is going to be ride with her for 60 days, or sit next to her for 60 days.” And that just rubbed me the wrong way because as I continue to grow the team and look at my reps, some of the best reps, do they all have unique superpowers? I mean, you hire them around certain elements, but there are some who are just amazing at activity, mediocre at the demo, and some were amazing at rapport building and mediocre at the discovery call. But if they lean into their strengths, they find a way to win.
Mark: When you rely on a ride-along, you don’t give them the opportunity to lean into those strengths. And furthermore, you run the risk of a lot of bad habits being passed around, and run the risk that this person, this top seller that you’re having them ride next to, they may not be a very good coach. A lot of times they’re not. There’s a lot of research that shows most teams promote their bestseller to manager. The top seller doesn’t necessarily correlate with top manager. So there’s a lot of weaknesses there. I just sat back and tried to create a process around when you get a lead, how do you prospect against it? What’s a discovery call guide look like? What’s a tailored pitch look like? And really customize all those attributes to our system.
Mark: And most importantly, one thing that we leaned into heavily with most of the training was about the buyer and not the product. And I ask a lot entrepreneurs, I ask a lot of business owners about their sales training, and they admit that most of their training is about the product. And that just almost trains our sellers to talk a lot about the product. We’ll just show up and throw up, and it’s statistically proven to not really work exceptionally well. And so if you sit back and ask how much of our training is about our buyer, and get our seller to appreciate our buyer’s job, that’s when lots of light bulbs go off.
Mark: So we had all of our sellers create a blog, social media presence, landing pages, lead nurturing campaigns, email campaigns, set up a CRM system, rank in Google, using our product just like our buyers will. So they get to experience everything and all the worries and all the tactics that our buyer would have to go through as they bought the product.
George: Yeah, I like to say, fall in love with your customers’ problems and not in love with your product, really understand where the customer’s coming from.
Mark: Well said.
George: It’s interesting that the ride-along and four-legged call, I’ve done lots of them over the years. The listeners to this podcast are all about selling in local markets. We believe in local economies. I think that it’s the lifeblood of the economies of entire countries if you’ve got a really good, strong local business ecosystem. So what I like about some of these things you’re talking about is the formulas. You talked a lot about inside sales, but these formulas work even if you’re face to face with the customer as well. Now, what about when it comes to the coachability of these salespeople and the type of person that you put into that coaching role, I’d love to get some of your insights on that.
Mark: Yeah. Well said about the applicability. This is not unique to inside. I’ve worked with companies of all sizes and industries inside and outside through channel, et cetera. You see more resistance from the old school field salespeople, but the newer school field salespeople are used to great tech adoption, you get access to data, and they’re used to this stuff. On the coachability front, first and foremost, uncovering it. I would basically role play with them in the interview. I’ve never seen a sales context where you shouldn’t be role-playing as part of your interview. I’ll role play right from the opening phone screen, role play on our product. Have them role-play for five or 10 minutes, let them give feedback, give them feedback, but with positive and need for improvement, and have them redo it. And then if I’m going to the next level, I’m going to give them my sales playbook and I’m going to tell them we’re going to role play again.
Mark: And so part of the thread that I’m doing through the interview process is I’m actually coaching them, and I’m observing how they absorb the coaching and I’m observing how they apply the coaching. Because if I go through two or three levels or even a 20-minute meeting, and I can actually move the needle on them, that’s a pretty exciting salesperson. And then now I’ve got to enable my managers and force them to do the coaching. And so what I would do is on the first day of every month, I would meet with my managers and go through each rep and have my manager tell me, what’s the skill you’re coaching them on, how are you going to do it, and how are you going to measure success of their coaching. Those diagnoses was deeply embedded in the funnel shape of each rep.
Mark: Are they struggling on the connect, or opportunity or close rate? And I can compare it to everybody else to know where deficiencies exist and route the diagnosis in that analysis.
George: Break down the revenue motion and say, “Here’s where I believe this rep is getting caught up, and here’s the coaching plan that I’m going to put in place.” I think that’s what I hear you saying.
Mark: Exactly. I mean, if you don’t have the data, most managers will say they just need to make more calls or they just need to hold more meetings, but that’s not usually or always the case. If we start measuring even across four or five stages from outreach to connect to first meeting to opportunity to pipeline to close, whatever your stages might be, we measure them every month, every quarter. We see six-month trends on a given rep, and we also see comparative trends rep to rep. You start to really get a sense of what kind of conversion rates are achievable, and where certain reps are falling off. And that quickly leads to a diagnosis and a particular coaching approach.
Mark: Now obviously, I’m going to coach a rep very differently if their pipeline to close rate is well below the benchmark versus a rep who has a lot of first meetings but they don’t go anywhere. Those are very different coaching outcomes.
Stringing Together Sales and Marketing to Achieve Success
George: So out of the gate, we’ve got this very structured hiring process where we’re trying to find the right people. I like to say long to hire, long to fire. If you do a good job on the front end, finding the right people, you’re not having uncomfortable conversations in a short period of time. We then put in place a very structured training plan that isn’t just the ride-along or the, “Go sit over there and absorb from the top rep,” because we all know that sucks. And then we get into the coaching, which is an ongoing piece. Now, we get down to the age-old battle of the marketing and sales battle. You’ve talked about having that, getting them great leads because the reps need leads. Can we talk a little bit about that formula that you came up with?
Mark: Yeah. I mean, that’s another place that’s disrupted quite a bit. When you go back in your career 30 years, I imagine most of marketing was just putting up billboards and running trade show booths. There wasn’t a lot of accountability on getting you to your number, and that’s just changed so much. We’re bombarded with all the research that shows that by the time a buyer speaks to a seller, they’re 60% of the way through their process, whatever. I mean, the bottom line is most buying journeys today start in a domain that’s owned by marketing, like the website or email or social, and they progress to a domain that’s owned by sales, and that’s very different than what it used to be. We don’t appreciate as much.
Mark: And so stringing these two organizations together, tying at the hip is really critical. And unfortunately, historically, these organizations hate each other. Marketing thinks that salespeople are overpaid, spoiled brats, and salespeople think that marketers do arts and crafts all day. Most organizations are still running that way, and it’s a huge competitive threat.
George: Mark, can I ask one question on that? Because I’ve heard you say that quote before. You said something there that I think … I don’t want our listeners to want to go jump off a building or something when they go, “Well, our marketing department isn’t working that way.” You said something very poignant there, that most organizations still don’t get it. Did I hear you correctly?
Mark: Totally. Yeah, and most organizations see marketing as, it’s hard to measure the ROI on what they do, versus like high-performance organizations have really quantified the output of marketing almost down to like a revenue figure. Now, attribution can be difficult depending on certain contacts, but it needs to be attempted to start to understand these things. So that’s essentially what we got to, George, was applying the SLA framework, service level agreement, which was often used in sort of uptime and servers, et cetera, to a sales and marketing arrangement where marketing signs up to, “If you’re going to give me $1 million a year or 250,000 a quarter, this is how many qualified leads will come from that, and this is the contribution, the pipeline that would come from that.” And sales has to follow up with them in a professional manner.
Mark: The research shows that if a good lead flows through the site, if you follow up with that within five minutes, you’re a hundred times more likely to connect and succeed with that lead than if you wait a day, and 10 times more if you even wait an hour or two. I rarely find teams with that level of discipline, right? So this is a bi-directional change that both organizations are accountable to. You’re giving capital to marketing who’s signing up to essentially a revenue and contribution goal. And sales, when that happens, is going to call those leads quickly, call those leads professionally and call those these deeply in terms of how often they’re going to follow up with them before they give up.
George: We hear this statement, burning leads and boiling the ocean, and there’s a whole bunch of different phrases that have been used, but a sales job, we gave you a great lead, now do your sales stuff and continue to contact that lead and discover if there’s really going to be a fit. I saw a stat the other day that says 50% of all leads passed from marketing to sales are never contacted, just blew me away, when salespeople are saying, “Hey, give me some leads.”
Mark: That’s part of the SLA is let’s sit down, sales and marketing, usually at the leadership level and maybe probably get the CEOs involved too. What is a good lead? What vertical? What size? What geographic location? What role to some degree, counts? Because honestly, it depends on how expansive your addressable market is, but if you’re running a good inbound marketing program and generating a hundred leads a month, a thousand leads a month, if 30% are qualified for your sales team to call, that’s actually quite good. You know what I mean? When you go out and write-
Mark: This is where things are flick. When you go out and buy a list of IT departments, or in your customer’s case, you buy a list of small businesses in the Chicago area that have between a hundred and a thousand employees and you want the president, everyone on that list is qualified, right? It’s just very few are actually interested in what you’re talking about, versus if you get a thousand people to download an ebook about the pain that your business solves, only 10% might be in your addressable market, but all of them have something going on that made them interested. So you do have to filter up top, but you only hold the sales team accountable to call in the ones that are good.
Service and Customer Success – an Invaluable Asset to Pinpoint Issues
George: So we’ve got those four different formulas that Mark covers in his book. I had one last item, because I know we’re on the clock here and I really appreciate you taking some time to join us, but I wanted to ask this one question. I saw this great YouTube video of you talking about, if you’re trying to figure out where the funnel might be broken, why don’t you start with service and customer success, and ask those customers where the challenges are. Can you expand on that a little bit? Because when I first saw that, I was actually working with a sales organization and I took that approach. I didn’t go to the sales floor, I went to the service floor and started there and I was like, “Holy, here’s the problem.”
Mark: Yeah. A lot of my work recently has been, as we’ve moved to the cloud and we’ve moved to a world where every customer has a big megaphone called social media, customer success has become a lot more important. We’ve moved away from these shelfware days of jamming bad software into customers’ accounts, deploying on servers and they’re stuck with you. They can onboard quickly, they can off-board quickly. And so there’s been a rising concern around the leaky bucket of like churn and retention. And what’s been surprising is what you saw there George, most people’s instincts, when they have churn issues, is to go look at the product or the onboarding process, however, I find that most issues are rooted in sales.
Mark: They’re rooted in a disconnect between what the company built the service for, and who the seller’s selling, and also just poor expectation setting by the seller in terms of like what needs to be involved from their end, on the buyer’s end, to make this successful, and appropriate expectations that they should expect from an ROI perspective. And oftentimes, the best way to solve a customer retention funnel issue is to actually align the sales compensation plan with long-term retention, or the early indicators of long-term retention, even though the seller may not even be involved post-sale. So yeah, that’s been a surprising pattern I’ve seen, but I see it consistently throughout the market.
George: Well, we really appreciate making some time, Mark. We’ve got some listeners from all over different organizations, and I was wondering if you could leave them with one Mark Roberge nugget that they could take out over the next week when they’re out selling or they’re out leading sales teams, just in their day-to-day that you think that a professional salesperson or a sales manager should be considering here as we approach 2020.
Mark: Yeah. Just keep in mind, selling is not buying, right? We’re littered with inappropriate cuts and pastes of looking at one success story and copying their comp plan and how they sell and their org structure, and put it into our business. And all the decisions need to start with your buyer, and how they think about the problems they have and how they want to solve those problems and design to go to market. Whether you’re a frontline seller, thinking about the next meeting or whether you’re a CRO making all these org structure or compensation decisions, selling is about buying, you’ve got to root it all on the buyer journey.
George: Mr. Mark Roberge joining us on the Conquer Local Podcast this week. Mark, thanks very much for your time. I’ll let you get back to it in Cambridge, Massachusetts, actually one of my favorite cities on the planet. So thanks again for joining us.
Mark: Yeah, you bet George. Thank you.
George: Well there they were, the four formulas that Mark figured out were needed to build a high performing sales organization, the sales hiring formula, the sales trading formula, the sales management formula, and the demand gen formula. And all of those things have been tweaked for 2020 in mind. I think that that’s the most important piece to it, especially for you career sellers and sales leaders that are out there, we can’t keep doing things the same way that we’ve been doing them. We need to apply data to be able to come up with ways to make this thing better. The most overused word is scalable, but really that’s what we’re all shooting for here is to find repeatable models that are scalable to help meet the ever-growing goals that we have in running sales organizations.
George: When it comes to hiring, Mark dropped the stat on us, and this was the one thing that really jumped out, the average turnover of sales annually is 40%, and I’ve found this as well. I like to always say that I’ve hired and fired more people backwards than you folks will ever do forwards, but what I’m saying is I’ve made a lot of mistakes in my hiring strategies. When I read this book a couple of years back, I was like, “This is what I’m doing wrong. There is a formulaic way to hire.” And I started to apply that. I went to a number of different sources to come up with ways that I could start to find that right person, because I don’t have time to make mistakes. I need to have a higher degree of success in hiring, and that’s what Mark talked about in general around each one of these formulas, the hiring formula, the training formula, the management formula, and then the demand gen formula to get those leads.
George: There are ways that we can optimize, and we can’t be afraid to experiment. Producer Colleen has been doing a fantastic job of educating our members of the Conquer Local community on how this thing is really going to get legs and become an organic machine for sharing, and it really is you, the conquerors around the world that are listening to the podcast. We’ve made it even easier for you to join the community by going to conquerlocal.com, and you can join the community there. But once inside the community that has been developed on Slack, we’re really counting on you to drive topics of conversation. I belong to a number of other Slack communities, and what I find is when we get to daily active users, where they go there and they ask a question and they get a great response from other people that are conquering, that’s when this thing is really going to take off.
George: We appreciate our users. Gilsi, our friend in Iceland from CrankWheel has been on there. We’ve got Mike Giamprini from G Partners has been sharing some things with us. David Little, the SVP of Enterprise Sales Comporium in South Carolina, just among some of the conquerors that have been leaving either great topics that they have found that have helped them in their career, or asking questions and looking for feedback from the various people on the Conquer Local community. It’s something that I’m very passionate about, and producer Colleen has been doing a great job of making sure that it’s top of mind for the people that are a part of the Conquer Local community. So please try it out. When you’re looking for advice on something that has happened, ask the conquerors and see what you’re getting for feedback from that group.
George: We’ll be back again next week, right here, wherever you listen to podcasts with another edition of the Conquer Local Podcast. My name is George Leith. I’ll see you when I see you.