At SaaStr Europa a few months ago, we had Aaron Ross join us in Paris to educate the evergrowing European SaaS landscape. In his session, he talks about growing and building a thriving outbound sales team. To build this team, there are three areas you need to focus on. Check out the session below to see what you could be doing to improve your sales team.
Also, if you didn’t join SaaStr Europa, we’re having it again in 2019. Check out ticket prices and keep your eye diversity and inclusion ticket updates. Seriously, who doesn’t want a good FREE reason to fly over to Paris?
Aaron Ross: I’m happy to be here in Paris. It’s been seven or eight years since I was here last with my little family trip. Interestingly enough, my wife was supposed to come here last night with me, but we have a baby who’s sick at home. Luckily, she got a later flight so she’s coming in tonight. But it’ll be the first time in seven years or so, so maybe since our honeymoon, that we’ve been away for two nights together, and you’ll probably see why in a second. Let’s see if this works. It does. It’s like magic.
Now, as the CEO mentioned, there’s a couple books, I’ve actually done four books, but the one book that people first heard about was Predictable Revenue, and that, if you haven’t read it, went into how I … Salesforce.com created an outbound sales and prospecting process and team that helped them create 100 billion dollars in a few years, but a lot more since then. And then a couple of years ago, Jason and I wrote this book, From Impossible to Inevitable. Predictable Revenue was the sales Bible, the Silicon Valley, From Impossible, we want to make the growth Bible. We’re actually going to update that. That’s the latest book. And just fan fact, if anyone is, I’m going to China next month, it should be out in China next month. It’s going to be called From One to N, but I like the cover.
Now, a fun fact that you may not know is I have a big family. So we have nine kids, and I only got married seven years ago, so went zero to nine kids, and realized it took us like six years. So I think hyperscaling a family is going to be a future book. Does anyone else here have more than three or four kids? I don’t see any hands, okay. There’s a few brave souls, a couple. Yeah, it’s fun, and a lot, but it’s worth it.
So let me start today. Now, everyone’s here, it has to be because there’s no better place to learn about how to grow a company, and I want to start by going over what is the main problem with growth today that I see. Well, there’s always more than one, there’s never one thing. But if anyone tells you there’s only one thing, they’re lying. But here’s only one of many problems, but the main one that I see, this trend which is getting in the way of sales, marketing and growth, which is this information overload, choice overload. So there are more apps, there are more channels, there are more messages, there’s more email, more social, more stuff to do, and people are just overwhelmed. Your customers are overwhelmed, your salespeople are overwhelmed, right? Is there anyone here who feels like, I’m just not busy enough? Oops, I’m going in the wrong direction.
Here we go. So at home, these are what customers and salespeople generally look like, some confusion, some frustration. Now, they don’t put this face on the outside, this is what they look like in the inside at work, right? Because we’re all at work like, “I got this, I got this,” and inside we’re like, “Oh, I got this.” All right, traveling it’s just, aah. So this is where a lot of people are just overloaded. And you see things like GDPR, which is one consequence of this, right? How to try to reduce the overload. It’s not going to work. It will in some ways, but the overload is going to continue and continue to grow forever, basically. This is an unstoppable trend.
So how do you combat this? And by the way, what does this look like? What’s the big deal. So what this causes, it’s all the same thing around you’re missing your goals, you’re wasting money, you’re wasting time, and really, it’s wasted opportunity. So let me ask you, think about this, last year, if you’d gotten everything right in sales and marketing, how much more would your revenue be this year? That’s a better way to think about it.
So here are some more like tactical day to day issues that you’ll see. Now, this could be caused by many reasons, but, again, this overload, this overwhelm, this confusion causes things like high sales turnover, right? Not enough leads or pipeline, or you’re getting appointments and not closing, it could be your teams are arguing because you’re just confused, or customer churn. So here are three problems that confusion translates into in your day to day business, and what we’re doing wrong, or what I see a lot of companies are doing.
So the first is we’re doing this superficial sales specialization. Now, how many people here have read Predictable Revenue or From Impossible? Oh, wow. Okay, great. So it’s a familiar idea, we’ll get into this, but I’ll get into what people aren’t doing the right way. It’s okay, you can raise your hand, sir, that’s all right. No, no, you. So also, companies haven’t nailed a niche yet. And the third thing is outbound is misunderstood. So I’ll go through what this means, because if you really … Oh, look at that font.
So Predictable Revenue in one word, plus one letter is focu. Oh, no, I’m sorry. That’s focus, because this is how you counteract the overwhelm and the overload. Again, three years ago, there might have been 500 sales apps or 500 marketing apps. Today, there’s 5000, and in five years there’ll be 50,000. Focu. It sounds like we’re back in China. So how do you do this? Again, you focus to cut through that overwhelming complexity. And now remember, this is for your customers, as well as for your sales people, or marketing people, or people people, because everyone is just overwhelmed and confused. That’s just the state of people’s minds these days.
Okay. So now the three steps to making more mon are … Mon, that doesn’t … Okay, why, mon … Okay, money, how to make more money. I told you I wanted the custom font. So three steps to making more money, right? Because I think of Lego blocks, how do you make this repeatable? How to make it predictable? Because whatever you solve today, because the world’s changing, whatever your tactic is today, it’s not going to work next year. So how do you keep evolving this? So here’s the three solutions to the three problems, right? We’re going to go through sales specialization and some tips on how to get it right, how to nail a niche, and how to add outbound to inbound, I would say, the right way.
Now, sales specialization was in both books. If you haven’t read them, the idea is, if you have sales people that are doing too much, if they’re prospecting, and they’re closing, and they’re managing customers, and they might be getting inbound leads, they get overwhelmed. That was the conventional model of sales, they did everything. The new model, which is what works and what you have to do, the way you do it might be different based on your business. So I call these the four core roles, right? So the top left is inbound lead qualification, which your marketing leads go to, junior reps, bottom is outbound prospectors, closers, basically selling new customers, and roles after the customer signs, which could be customer success, it could be account management. The idea is you’re creating more roles so your people can do fewer things better, because when they’re doing too many jobs, they just get overwhelmed, and they do a bunch of things either poorly or okay. This way they can do one thing really, really well. So prospectors, prospect, closers, close. And this is how all the fastest growing companies do it now.
Here’s where people get it wrong. If you’re like, “I know that, that’s what we do.” Okay, just to make sure you’re doing this the right way. So here’s three areas, again, I don’t see people going far enough with this idea. So the first is a lot of companies split list building from the prospecting. So you might have prospectors and they should be doing some of their list building or cleaning, but they probably shouldn’t be doing all of it. Sometimes that looks like marketing building list for them, sometimes you have junior researchers, right? That depends on your market. That’s one area that I think companies should invest more and more specialization.
The second one is that if you have more than one sales development rep, more than one junior salesperson, or SDR or BDR, whatever you call them, you got to split inbound from outbound. So the junior reps that are responding to inbound marketing leads, that job is different than the prospectors. If you only have one person, they do have to juggle. But a common mistake is you might have two, or three, or four SDRs, and if you’re lucky enough to have inbound leads, but then they have the same SDRs doing both, doesn’t work. Split them. And the last is making sure you’re splitting the people who are signing new customers from the people who are managing current customers, whether you call it customer success, account management, doesn’t matter, right? Those are different jobs.
Here’s just a couple common ratios. If you have, for every 400 inbound leads that have to be touched or reviewed by a human, you probably need one full time, inbound lead qualifier. And one outbound prospector should not support more than four sales people. Again, they get too scattered. And that relationship between a prospector and salesperson is really, really important. It’s vital towards making outbound successful in your company.
So there’s a couple quick questions. Well, what if we’re too small? If you’re only one person, or you have one person on the team selling, you apply the principle of focus by specializing their time on your calendar, you block out hours of prospecting time, or whatever you need to do. That’s how you use this idea. And if you’re worried that passing customers from one person to the next is going to be a problem for relationships, just consider if you do it the right way, your customers will get much better service because every step along the way, they have someone who’s an expert at that area who’s dedicated to getting back to them right away. Because when salespeople do everything, they give great service to some customers, and really bad service to others.
So number two, nail a niche. So I’m going to start off with … This is the biggest lesson I’ve learned since Predictable Revenue came out. So let me start with my own personal story. You know, speaking, I didn’t always speak in front of crowds. And funny enough, when I was in investment banking, the main, I guess, feedback or critique was that I wasn’t very good at verbal communication. So that was a long time ago. When I left Salesforce, I didn’t know what I wanted to do. I started off by developing this thing called Unique Genius. I wanted to help people find more passion in their lives, so how to make money through enjoyment. And I also did this thing called CEO Flow, turn your employees into many CEOs to help create more freedom and enjoyment in companies. But when I got married in 2011 and I had kids, I became an Insta father because my wife had two kids already. There was this moment I was like, “Oh, shit. I need [inaudible 00:11:49]. I need to make more money because I’m not a single person.”
And so there was this moment where I had to make more money more predictably, and these were interesting, and if I had more time, they could do something, but they were not going to support the family. So I nailed my niche with outbound prospecting. That’s where people needed me the most. They didn’t really … I found, most people didn’t feel like they really needed fulfillment, or CEOs really needed freedom, right? They really needed to make money. And what I’ve learned is that when you’re working with people who know you, a lot of companies you start out with your relationships as you should, right? There’s this high trust, and then you plateau. And to break that plateau or organic growth, you have to start marketing yourself to people who don’t know you yet, whether that’s through online marketing or outbound prospecting. And this is why through doing outbound prospecting for years, I’ve seen this principle.
So when you start to try to grow and you’re struggling, The most common reason is you haven’t nailed a niche. And what that means really is you’ve learned which kind of customers need you the most, and what they care about, how to intrigue people who don’t know you personally, right? Because when they know you personally, or your company brand, you have a bit of a crutch. It gets you started, but at some point, it blocks your future growth. And when you’re started out with your company, you can get away with confusing messaging, right? Because you’re relying on your relationships or your investors’ relationships. But as you start to grow towards people who don’t know you, you can’t get away with that. If you use that early messaging, you end up confusing your customers or confusing your salespeople with terms like, we’re the leading network, scalable, social architecture, we do AI list building, or we do AI … insert whatever the AI thing is. I don’t know how many people here are doing AI, but probably everybody at this point. It doesn’t mean anything to people. I see some smiles. Yes, AI.
So again, what we want to do here is nail a niche, but it doesn’t mean we’re thinking small, it means we’re being focused, right? This idea of focus. Because when we’re trying to be everything to all our customers, it just confuses them. Because again, you’re not competing against your competitors, you’re competing against all the other things that are on the mind of your prospect. How many people here have customers who will say, “Ah, I just didn’t get to that, I just didn’t look at their proposal yet, I just didn’t get to that thing yet, I have been so busy.”? That’s that overload. So to win and to enable yourself to grow faster, you want to be a big fish in a small pond, and it’s easier to make the pond smaller than the fish bigger. It’s easier to tighten your targeting and to make your messaging more specific to your customers than it is to change your product or your company.
So here’s an example. Amazon started with books. They had big visions of online commerce, Zappos were shoes. Marc Benioff always wanted to create a big company, but Salesforce automation was their strength, and Predictable Revenue we’re starting an outbound. What’s your beachhead market where people need you? Because this is probably, this idea of need versus nice is probably the simplest way to start to figure this out. You are not a nice to have and you are not a need to have. But to which customers are you a nice to have, and to which ones are you in need to have? To my Unique Genius customers, I was a nice to have, or to the market, but I’m a need to have with sales, all right? So this is really where companies spend too much time chasing customers that don’t really need them. Salespeople, if people aren’t buying … Okay, here’s the best example of when you’re in a nice to have. You do a demo, and they’re like, “Wow, that’s so cool.” And you never hear from them again. You’re nice to have in that situation.
So how is that different? Now, Acquia was the fastest growing company in North America a couple years ago. So they serve Drupal customers, websites that use Drupal. And in their mind, they’re like, well, we can target companies that already use Drupal, or we can target companies that are evaluating whether they should use Drupal or not, and try to get them early. But the bottom line is, the companies that needed them are the ones that already use Drupal and they need help with it. They were a nice to have to companies that didn’t use Drupal yet, but was evaluating Drupal versus their other options, right? They went from zero to 15 million per quarter with outbound within like three years because they nailed that niche.
So what do customers want, right? They don’t care what you do, okay, they don’t care about AI, or whatever the current buzz word is. They care about what’s the result you create for them and what do you do for them. So this is my daughter, Aurora, and she’d say, “Hey, dad, I love donuts. Hey, can you take me to donuts?” And I’d say, “Ah, no.” At some point, you know, learning from me as smart kids do, she said she started to do this, “Hey, dad. When we would go for donuts, Those are just some of the happiest memories of my life.” Okay, speak to your customer. I keep telling that story forever.
So here’s three ways to improve your messaging today. Okay, today, when someone asked you, what do you do, pretend they asked you instead, how do you help customers, because it automatically reframes in your mind more of an answer based on results. So what, or what’s so great about that? Two versions of the same thing, which is you say, “All right, we do AI based list building.” And I apologize to anyone here who does that because it’s probably a few of you, but hopefully this helps, “We do AI based list building.” Okay, what’s so good about that? Because no one cares about AI based list building. What’s so great about that? Oh, well, you can get better contacts for less money with lower bounce rates. Okay, now I’m listening.
So here’s another example of a company in the States that sells to hospitals. So they started out with this email campaign, asking, hey, who’s in charge of receivables? And there can actually be multiple kinds of receivable … I can’t even say it, receivables at a company. And when they switched to who’s in charge of patient cash collections, their response rates, the positive ones doubled or tripled, right? Because it spoke to the customer. How do you get into the mind of your customer?
Now, Jason is the one who actually started this and I latched onto his idea here, which is the 20 interview rule, or basically just doing interviews and making it an incredibly important part of your process, because people don’t do enough interviews. You’re too busy trying to buy AI based apps and not talking to your customers. So you don’t need to do 20, that’s really if you’re starting a company, but maybe even two, three, one to help speak to the customer and learn how they think. That will be your best investment of … It is kind of a pain in the butt to get an interview scheduled, but invaluable towards improving your messaging and marketing, or an outbound prospecting.
One last example here on nailing a niche, because it can be a struggle to go through this. It’s not you do it in one day, this can take weeks or months to sort of nail a niche. There’s a company called Whiteboard Geeks that we helped with. And after three months, they were still struggling, we were only getting four appointments for them a month. And then we went through another sort of nail a niche exercise. And by switching to the more focused type of company, biotech and medical device companies in different messaging, they were able to triple their appointment rate and actually start to close some revenue much more quickly. So this can work.
So this last bit is more tactical on the outbound side. And if you haven’t … Actually, the state of the art of outbound is a bit going back to basics. Because people get distracted by all the fancy technology, when in reality what’s missing is, do you know your customer? Because most people don’t. Or you have your team set up the right way. Now, when I say adding outbound to inbound, there’s a lot of companies that you have inbound leads, but you can actually be too successful at inbound. So for us, we had some kids, two kids came from my wife first marriage, we’ve had three bio kids together, and then we also, a part of this, we did outbound to get more kids through adoption. Does that work? This is Rosie. I just love that picture because she looks like a … the hair, like a troll, and then this is Maverick. It’s a fake Halloween … It’s fake blood. That wasn’t real. Outbound and inbound go really well together. Now, my wife will say, “You just thought that’s a cute picture to put up there.” I’m like, “Yeah, okay.”
Now, if you think about some of the fastest growing companies in the world that you assume are inbound driven, like Google, or Survey Monkey, Box, Slack, they do outbound. You guys know this? All these companies do outbound, even at Slack. Now, what I hear is the executives don’t know this, but people call us at Slack and like, “We want to build an outbound team. Our executive …” So I don’t know if like the executives know, but people are building outbound teams at all these … or have at companies. Marketo and HubSpot had huge outbound teams. So if you have this fantasy that, oh, just do inbound, and we’re going to … that’s not reality. At some point, inbound plateaus and you need outbound, but they go great together. And if you’re too successful at inbound, you become too dependent on it, then it can be a hard change, right? Because it’s a cultural change, with different process, using roles.
Here’s one example, because you don’t want to wait until your leads plateau before you add outbound. But one of the examples I’ll say is if you have sales people and you’re just used to getting leads, and showing up, and doing demos, and closing, it’s a switch to do outbound because they’re going to get appointments and they show up and the customer Is not ready to buy right there, and like, oh, I have to sell. That was a bad lead because they didn’t want to buy. No, that’s called outbound where you have to work for it. You might actually have to sell, okay? But that’s one cultural change that you see and I see all the time.
So when you add an outbound team, here are just some basic goals that you would like to see. If you have your own team of prospects, which for most of you is the right long term solution, you’d like then each prospector to do five or to 15 qualified opportunities per prospector per month. The range is based on your market, your product, how nichey is it. It could even be less than five, if you’re in a very picky super niche, right? That’s just a range. If you see people getting more than 15 qualified opportunities, I’ve never seen that in reality, it usually means they’re getting more than 15 appointments or demos, but the quality is not there. If you’re using outsourcing, you might want something that’s at least like 10 accepted opportunities a month. But either way, your goal is generally to get these opportunities a quality rate that you get too close 20% of them, or at least of the dollar value.
All right. You know it’s four to 12 months. It takes four to 12 months to get a team or program up and running and successful. Okay? It depends on niche, did you get the right people. In fact, I can go through, here are some of those variables and how long it takes and the upside. It depends on your executive commitment, how crowded the space is, your product, your deal size. I mean, there’s all these factors. But if it takes longer than a year, something is wrong, but it can take up to a year.
But here’s one of the best ways to think about how you start if you don’t have one yet. Actually, how many people here do not have much of an outbound program but wants to start one? Okay, how many people here already have outbound prospectors? A bunch. And how many people here use some kind of outsourcing service? Not as many. Okay. So think about this way. Are you a growth company, or do you want to be a growth company or a simple company? Everybody here with investors is a growth company. That means this growth is the most important thing. You’re going to do whatever it takes to grow. But by simple company I mean, you want to keep it simple, you probably don’t want to hire and manage salespeople, right? It’s worth it. You’re like, I’m okay not growing as fast. I just don’t want to hire more people, I just want a small team, because there’s these four starting models for outbound if you want to grow, to build a team, or to grow it.
The first one is an internal team, you hire your own people, right? And most you, this is the right long-term solution, whether you start with outsourcing or whether you start by hiring. At some point, you need your own internal team. By the way, almost every growth company in here someday will have an outbound team, whether it’s this year or in five years. It’s when, not if. External team means you use outsourcing as a way to get started if you’re not ready to hire someone. If you are a growth company, it might be a way to get started simply. If you’re a small company, sometimes you start with that, maybe you keep it. C is parallel. If you’re really trying to move quickly, sometimes people do both. They do some outsourcing while they’re building their team. And the last one, scrappy, means you really don’t have much time or budget, so you got to do it part-time here and there on the cheap until you get something going.
So really, there’s not a best model, there’s just what model is the right one for you. There’s pros and cons to each. But here’s three tips, avoid remote hires, if you can. It just makes it so much harder, unless you already have a proven process and system, and you have defined it and it’s working, and then you can look at remote hires, but not at the beginning. Another one is, when you start something new, start with two. If you can hire two people, and this is true for any sales role, because not only can they have that buddy system to support each other, but if something goes wrong with one of them, you’re not left high and dry.
The last one, number three, is make more phone calls. People not using the phone enough, there’s a lot of tapping. It’s very quiet in sales rooms. And what we see now … I’m guilty. In Predictable Revenue I wrote cold calling is dead. Okay, it was little bit dramatic, I admit it. Cold calling is not dead, but there’s many ways you can use a phone, you can make cold calls, you can do research calls, mapping calls, follow up calls, there’s ways to use it. And we’ve seen is our clients that use the phone get better results than the ones who don’t, whether it’s to get appointments, or whether it’s for like research based purposes.
So here, the last bit, really, I want to go over what outbound … Outbound is not all about AI. And I’m sorry, I’m just picking on AI because that’s the word of the year. So it’s not about AI, email templates, account based anything apps or lists. That’s not what outbound is about ultimately. Okay, so now if you have a program, if you already have a team, this is where you especially want to listen, it is about the dashboard. Now, I have a family car. If I don’t have a speedometer, or it’s wrong, how am I going to be driving that car? By the way, this is the car. Why is that so funny? Yeah, it’s a sprinter. And so, if your dashboards are wrong, you … I don’t know if I’ve ever met a company that had accurate outbound dashboards, ever. So by the way, if you’re small, you may not need a dashboard, right? If you’re a startup and you don’t have much of a team yet, you don’t need a fancy dashboard, but you do need something, at least something to start.
But here’s where people go wrong on dashboards, when you have your outbound funnel and you’re looking at your activity metrics, and your call, and your email, and your social, and you’re looking at your results metrics, how many quality conversations are we getting, how many meetings or demos are we getting. Okay, so number three is the important one to start. So we need to know how many qualified leads, or whatever you call leads or opportunity, qualified opportunities have the sales people accepted into the pipeline this month, also by per prospector. And every single one of those needs to be audited if you have an outbound team. So how many people have outbound teams? Great. Leave your hand … Hold on, leave your hand up. Now, if you have someone on the team checking every single opportunity for quality, leave your hand up. Okay, there’s a few. Good, excellent, because there’s too much subjectivity and you have to check every single one. Now, pipeline creation rate is just the dollar value of pipeline creative per month. So if you measure that, that’s your best indicator of future revenue.
So here’s some of these mistakes, using leads instead of accounts, tying compensation to the number of meetings, not accepted opportunities, combining inbound and outbound into one dashboard, and not auditing every opportunity. I’ll leave this up for a second. And by the way, I know they’re recording this and they have the slides, so I’m sure you guys can get this in some other way, you don’t to write everything down. These are really common. And I would say, going back to the auditing every opportunity, you cannot trust your outbound dashboard. It will not be accurate unless you’re auditing every single opportunity, because whether you have new hires, or people are always like fudging the numbers, or sales people are trying to do a favor for the SDR, it will be wrong. And if it is wrong, the executives will not be able to trust it. And if they cannot trust your results, at some point, it will fail.
Now, Marc Benioff, the number one thing, he didn’t believe in outbound, because at Oracle he saw everyone fudging it. So for two years, I audited everything until finally he’s like, “Okay, I believe it’s working. Now we’re going to expand it.” And when you get it all right, you can do what Acquia did which was, we had three prospectors with them for six months, they got some data, and like, okay, if we’re going to see $720,000 in revenue per year from each prospector, let’s hire 40 of them. And they added an extra 30 million per year in a couple years to help them break 100 million in revenue.
So to wrap up here, going back to those three things, sales specialization, generally, you want to add more roles, it’s how you take the next step. I rarely have seen companies that have too many roles. This is all about adding more focus to your team and company, how do you cut through the overwhelm? With nail a niche, do one interview, about one. You don’t need to do three, you don’t need 20, unless you have a new company, start with one. And with outbound, if you don’t have one, you need like one person to own it if you’re creating a program, you need one person. If you already have a program, start by fixing the dashboards because I guarantee you they’re wrong.
Now, with that, actually, I’d like to, just for minute here, just to introduce the last slide. She’s our VP of Marketing and Growth, and here, our partner, and she’ll be here. If you have more questions, she’d be the one to find. I’m out.
Speaker 2: Exactly. I’m playing myself and Aaron for the day. So thank you for being here. And in terms of connecting with Predictable Revenue, we’d love to meet as many of you as possible. So if you can’t find Aaron, come and find me. And if you go on to Aaron’s Twitter, which is your first slide, so it’s just @motoceo, the pinned tweet has my Twitter handle on there, and you can ping me if you want to connect with us, if you want to partner on anything, and anyone who’s a subscriber is going to be receiving our slides as well. And another thing that’s coming out soon, as you know, we’re talking about outbound and internally, we work a lot on outbound marketing as well as outbound sales, so we’ll be releasing a new blog post talking about how outbound marketing can support your sales team as well.
So, great being here. If you have any questions at all, you can go on to our website, we have a dedicated page for SaaStr Europa attendees, and you can get a free consultation if you’re interested in getting started with us. Thank you. Thanks, Aaron.
Aaron Ross: Great. Thank you everybody and thank you SaaStr team.