Jameson Yung, SVP of Sales at Gong, and Sam Blond, Partner at Founders Fund and previous CRO at Brex, share five tactical ways to get back to growing and hitting revenue targets.
The days of working a little for big returns are behind us in the Boom of ‘21, so what can you do to start hitting revenue targets?
#1: The Days of work-LIFE Balance Are Over (Emphasis on Little Work and Big Life)
Mapping back to a period of time known as The Party, 2021 was full of people, in sales especially, who were making twice as much money while working half as hard. When everyone went remote, they worked remotely from the beach while their companies were growing.
Then, in the post-2021 hangover phase, two things happened:
- People stopped making as much commisions on the sales side
- People were still working half as hard
The macro-environment has gotten harder, and the buyer had changed. Previously there was a lot of focus on inputs and ensuring people felt like they were accomplishing something, even though the revenue might not have been there. And now, suddenly, we’re back to looking at revenue, and it’s not about only trying your hardest. Now, it’s “try your hardest doing work and actually impact the numbers you need it to.”
How to Approach the Expectation of Tracking Effort
Gong is unique because they have a lot of visibility. They know what people are doing on a daily basis by using their own product to analysis and listen to output. Working hard is also embedded in the culture. The minute you walk through the door, you’re expected to fight and push. In the early days, it was about setting expectations that startups are hard and you must work hard to succeed. Now, it’s become a matter of resetting of expectations that they’re no longer measuring effort only. Revenue matters, too.
What setting expectations for effort might look like?
- Set and reinforce them early — as early as interviews. “This job isn’t for everyone. We are a tech startup, and in order to be successful, we expect you to put in a lot of hard work. If you can’t or won’t do that, this might not be the right fit.”
2. Categorize people based on performance. Create/ track a leaderboard so if someone is below average in sales, it’s objective. You can see the people falling below 50% . Everyone should understand why they are in that category and what the high-performers are doing that the low-performer isn’t doing.
Often, these bottom-left quadrant people fall into one of two buckets:
- Not putting forth the effort
- Areas of improvement
Some people are doing a lot of work, but they’re not working out. Others are doing little work and not working out. If someone is working hard but isn’t working out, invest in them and see if you can get them into the high-performing category. The underperformers who aren’t putting in the effort get a conversation, and if things don’t change, it’s not a good fit. The takeaway: Hold regular check-ins and where needed use performance plans to try and motivate people. It’s amazing how much someone’s behavior might change if you give them a kick in the behind.
#2: Diagnose the Bottleneck to Growing Faster. Fix It.
If you think about the customer acquisition funnel, you have the top, middle, and bottom. There is likely a constraint to growing faster that’s often misdiagnosed as the middle or bottom of the funnel.
For example: Say it’s early September, and someone’s performance was 90% of their August number. You might ask them why they didn’t reach 100% attainment. They tell you a deal or two and pushed into the next month and that if they had closed, they would be at 110% or 120% of quota. Most leaders might diagnose this as the middle or bottom-of-the-funnel issue but in 4 out of 5 instances, the real diagnosis is the top-of-the-funnel issue. On the whole, every org has a customer funnel on one hand and employee resources on the other. Where are your employees mapped to that customer funnel? Where is the focus? Often, Sam and Jameson see too many companies weighted heavily on the middle and bottom of the funnel, skipping the top of funnel and therefore misaligning resources to where the bottleneck actually is.
If you look at the number of Sales vs. Marketing. vs. CS hires over the last couple of years, you’ll likely also see it weighted away from top-of-the-funnel pipeline generation. To solve the bottleneck created during times of faster growth, you have to either start hiring into those roles or shift the focus of existing roles back to pipeline generation.
Jameson’s advice for getting your existing workforce to pay attention to a problem that they may not think directly affects them is to take your existing resources and re-focus them with the right incentives. In his case, he got the CS team at Gong to re-engage in pipeline generation by 1) helping them better understand where the bottleneck was for the org and 2) creating incentives for CS to drive more top-of-funnel activities such as referrals and case studies.
Jameson and Sam also recommend that across the org: sales, marketing and CS — the early and sooner you can get the entire team re-focused on creating their own pipeline, the better. With teams being especially a bit more complacent in the hangover days to wait for inbound leads, they’re finding out the hard way too late that it’s not that simple anymore. So the sooner you can shift the mindset and coach everyone on how to create and control their own pipeline, whether it’s customer referrals, outbound (for everyone, not just SDRs), etc, the better.
#3: Be Creative and Stand Out
Anytime you think of a campaign or channel focused on demand gen, it’s through the lens of thinking outside the box, getting creative, and standing out. As we recently wrote, every marketing initiative and every channel plateaus. Jameson and Sam agree. And you have to plan for it.
We live in a world where it’s too easy to send messages to people. It’s become way too commonplace to generate demand by using an email sequencing tool or purchasing a contact list to blast everyone with a five-step email sequence where 99.9% of the messages go directly to promotions.
One tactic that worked well at Gong and at Brex was direct mail campaigns. If you’ve followed SaaStr for a while, you’ve likely heard of Sam’s champagne campaign, where they sent bottles of champagne to businesses and received crazy high replies. Jameson at Gong recently received a coconut in the mail with some pun about “being nuts if you don’t want to talk to me” from someone wanting an interview to be on his team.
Guess what? Jameson called that guy.
Jameson also has his team use data from Gong if they are using a more “traditional” format like email or Linkedin so that their messages still “look different” from the others. Tactically, you want to go where your customers are (they’re not going to come to you) and grab their attention in a way they maybe aren’t used to, or haven’t seen yet.
For instance, instead of paying for LinkedIn ads based on their ICP, at Rippling, Sam used a tactic where they take the people in their expanded customer base to drive organic word-of-mouth.
Here’s how they did it:
- Rippling has an onboarding tool, so when an existing customer onboarded a new hire, Rippling sends them a new hire NPS survey asking them about their experience with their onboarding tool
- Whenever Rippling received a survey marked with a 9 or 10, they would ask them to share a post on LinkedIn about the experience to receive a $25 gift card
- They generated hundreds of “organic” LinkedIn posts from new hire employees about their awesome experiences
That $25 was far more effective for seemingly organic posts than paying LinkedIn directly to surface ads. The tactical takeaway: Find ways to differentiate. Be contrarian, get creative, and continually iterate. But do so in a way that also makes sense to what your company’s objectives, mission and goals are to avoid “copy / pasting” campaigns that have worked well for others.
#4: Relationships Matter
When everyone went remote, visiting customers went to zero. Sales teams weren’t meeting prospects or customers in person anymore to develop relationships, close deals or talk about renewals. This practice of visiting prospects and customers in-person still hasn’t fully returned, so one way to get back to hitting revenue targets is to get on a plane and go visit your customers.
Data shows that the customers we visit are worth 40% more than those we don’t.
You can stand out by just returning to something that people used to on a regular basis. When you meet with a customer over a certain size, the win rates are better. It’s a lot of work, but this mindset shift works well because the conversion rates are high. At Brex, they measured the conversion rates when they visited customers in person. The results? When they visited the customers, they 3x’d and went to a 45-60% win rate.
On the flip side, what if your customers or prospects don’t want to meet with you? It actually means you have a massive red flag in your deal because the relationship isn’t there (or doesn’t seem worth it yet.)
The tactical takeaway: When you go out of your way to make someone feel important, it has an impact. If you send a coconut or bottle of champagne in the mail, hop on a plane and have a dinner, or write a handwritten note to someone who gave you advice, they’re more likely to reciprocate. Relationships do matter.
#5: Show Me The Incentive. I’ll Show You The Outcome.
The two most impactful things at Brex and Zenefits were:
- Influencing demand gen or top of funnel
- Getting incentives correct
If you can double the leads going into next month and everything else remains constant, you’ve doubled sales. That’s easier than doubling conversion rates through a more sophisticated discovery process. And if you can get incentives right, people will perform how you need them to perform to achieve those incentives. Most people think of salespeople when they hear the word incentive.
But incentivization should be across the business.
Some things cost customers nothing — case studies and referrals — so tie those things into what your customers want. You have to think about every interaction and ensure you’re incentivizing the behavior you want. The things that cost nothing to someone else could mean a lot to you, so identify those things and make them a part of your process. What about internally?
At Brex, they started incentivizing based on logo acquisition. They believed customers would organically migrate card spend once approved and activated, but that didn’t happen. So, they switched the incentive to top-line revenue and card spend, and people started migrating card spend faster. The negative consequence of this incentive… Brex provided rebates on card spend, and reps were hitting their goals, which hurt gross revenue margins. So, they changed up incentives again to a gross profit-based incentive.
The result? Rebates came way down, and margins went way up. Incentives are evolving, so check in with them from time to time to ensure they’re working how you want them to work. A universally applicable incentive… As employees focus more on the top of the funnel, you see huge returns. Most folks default to an input metric like meetings or sales-qualified opportunities or some metric that’s a precursor to revenue. When you focus on revenue and not precursors to revenue, the result is often more revenue.
- Shift from Work-Life Balance to Revenue Focus: After a period in 2021 known as “The Party”, where salespeople earned more while working less, businesses are shifting focus from measuring effort to emphasizing revenue generation. This shift requires a change in how effort and success are evaluated, with an increased focus on actual impact on revenue.
- Tracking and Managing Effort: It’s important to set clear expectations for effort and performance early, such as during interviews. This involves being upfront about the hard work required in a startup environment and categorizing employees based on performance to identify areas for improvement. Regular check-ins and performance plans are suggested to motivate and potentially improve underperformers.
- Diagnosing Growth Bottlenecks: Identifying and addressing bottlenecks in the customer acquisition funnel is crucial. Often, the issue lies at the top of the funnel (pipeline generation) rather than the middle or bottom. Companies should align employee efforts and resources towards addressing these bottlenecks for faster growth.
- Creative Demand Generation: Standing out in demand generation is key. Techniques like direct mail campaigns and leveraging organic word-of-mouth through customer experiences can be more effective than traditional methods. Differentiation and creativity in outreach strategies are emphasized.
- Importance of Relationships: With the decline in in-person meetings due to remote work environments, the value of face-to-face interaction with customers is highlighted. Data suggests that customers visited in person are worth significantly more. Thus, reinvesting in personal interactions, even in a digital-first world, can be beneficial.
- Aligning Incentives with Desired Outcomes: Incentives should be carefully designed to align with business goals, whether it’s generating top-of-funnel leads or achieving sales targets. The incentives must evolve with the business needs and should be revisited periodically to ensure they remain effective.