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A Path to Predictability at Scale - Sales Workshop for Foundation Capital
The document outlines a comprehensive framework aimed at achieving predictable revenue growth by focusing on repeatability, scalability, and predictability in sales processes. It details best practices for sales organization, customer profiling, sales technology, and performance management, while emphasizing the importance of structured methodologies and continuous learning. Additionally, it discusses the roles of sales development representatives and marketing in generating leads and driving sales success.
A Path to Predictability at Scale - Sales Workshop for Foundation Capital
- 1. A Path toPredictability at Scale Michael Ingram, SalesOps.io March 2019
- 2. Our Plan Today GrowthFramework Repeatability Scalability Predictability Case Study
- 3. Our Goal: Predictable Revenueat Scale
- 4. 3 Phases ofSales Maturation Repeatability Scalability Predictability = $$$
- 5. Qualitative and Anecdotal Quantitativeand Data Driven
- 6. Apply Product DesignPrinciples Establish customer-defined value to separate value-add from waste Build in learning and continuous process improvement Build a culture to support excellence and relentless improvement Utilize rigorous standardization to reduce variation and create flexibility and predictable outcomes Adapt technologies to fit your people and process Use tools to enable standardization and organizational learning
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- 8. The Scientific Methodto Repeatability Hypothesis Test Design Measurement Validation Process Definition Iteration
- 9. As you applya structured approach, you’ll begin to collect insights on what does and doesn’t work
- 10. These learnings shouldbe codified into a central repository of knowledge and best practices
- 11. Your First SalesPlaybook
- 12. Your First SalesPlaybook: 9 Chapters 1. Organization Overview and Vision 2. Roles and Responsibilities 3. Ideal Customer Profiles and Buyer Personas 4. Products and Pricing 5. Sales Process and Planning 6. Sales Technology 7. Time Management & Structuring Your Week 8. Measuring Sales Activities and Results 9. Performance Expectations and Commissions
- 13. 1. Organizational Overviewand Vision Our mission is to change the world through… - Value 1 - Value 2 - Value 3 Our Values SAMPLE TEMPLATE
- 14. Josh, CEO Sales Jeremy JakeMax Success Kate Risk, Legal, Finance Operations Daniel, CTO Product Engineering SAMPLE TEMPLATE 1. Organizational Overview and Vision
- 15. 2. Revenue Rolesand Responsibilities • New client acquisition Account Executive • New customer onboarding • Account management and upsell Customer Success • New opportunity creation Sales Development Rep SAMPLE TEMPLATE
- 16. 3. Ideal CustomerProfiles and Buyer Personas SAMPLE TEMPLATE • Head of X • Head of Y • CFO • CEO Our Ideal Customer Profile (ICP) is an xyz merchant, on a platform we currently support, doing between $25M and $100M in U.S. revenue… Buyer Personas
- 17. 4. Products andPricing SAMPLE TEMPLATE
- 18. SAMPLE TEMPLATE 5. SalesProcess and Planning – Buyer Journey Prospect • Inbound: prospect actively engages with us (downloads content, fills out a lead form, requests a demo) • Outbound: C-level, marketing, or ecommerce contacts that fit our buyer personas and have a minimum of… Qualified Lead • Criteria 1 • Criteria 2 • Criteria 3 Sales Opportunity • Meets lead qualification criteria • Agrees to a 15 minute intro call Customer • Closed Won result from the sales process (signed contract)
- 19. SAMPLE TEMPLATE 5. SalesProcess and Planning – Stage Criteria and Key Milestones Stage 1 Stage 2 Stage 3 Stage 4 Closed Probability 10% 20% 40% 75% 100% Entry Criteria Description Milestones
- 20. SAMPLE TEMPLATE 5. SalesProcess and Planning – Discovery Call Best Practices ► Pre-Call Checklist – What are the things the salesperson should do before this call to prepare? o Item 1: take note where lead came from (web request, trade show, phone call). o Item 2: search CRM to see if the prospect exists. Review historical conversations we might have had with them that could give context. Note previous point of contact. o Item 3: If we have firm website, Review & document key pieces of information. ► Initial Call Objectives – What are our goals for this discussion? o Goal 1: Determine pain points. Why have they contacted us? What issues do they hope our solution will solve for them? o Goal 2: Learn more about the business and current details on our solution’s area of focus. o Responses to key discovery questions below. o Goal 3: Determine the proper solution to pitch ► Ideal Call Structure –Discovery phone call to gather info to develop and schedule presentation o 30 Minute Call o Phase 1: Introduction and outline of objectives: Ask some questions so that we can tailor a presentation for their firm. o Phase 2: Current state discovery: o Practice Areas- what type of law do they practice? o What are they using now? Is it a competitor product or Homemade solution o How do they manage documents? o What do they use for Accounting? o What is current intake process? o Do they use Mac’s or PC’s? o How many total users? o Phase 3: Solution overview: Based on discovery responses, Share high level of how the solution might provide value given their current issues with case management. o Phase 4: Select and schedule the date and time of the product demonstration. o Phase 5: Confirm team members to attend web/onsite demo. Confirm job roles of attendees and contact info for invite. ► Schedule & Document–Schedule meeting on group calendar, include dial/login instructions. Document conversation in CRM.
- 21. SAMPLE TEMPLATE 5. SalesProcess and Planning – Core Value Propositions Value Proposition Detail #1 Abc #2 Def #3 Ghi The Elevator Pitch Our solution enables…
- 22. SAMPLE TEMPLATE 5. SalesProcess and Planning – Objection Handling Objection Best Response Too expensive Xyz
- 23. SAMPLE TEMPLATE 5. SalesProcess and Planning – Competitive Overview Competitor Where they win Where we win 1 2 3
- 24. SAMPLE TEMPLATE 5. SalesProcess and Planning – Sales Collateral Content Link to Current Version Demo deck Docs.google.com/xyz Case studies One pager ROI calculator
- 25. SAMPLE TEMPLATE 6. SalesTechnology • Sales intelligence – industry, revenue, Alexa rank, ecommerce platforms, etc. • Lead generation – contacts by role, email addresses • Up to 1,600 email addresses per month • Customer relationship management system • Track prospect and customer activity • Manage the sales pipeline • Gain transparency on customer-related KPIs • Sales engagement • Outbound cadence enablement • Inbound lead response automation
- 26. SAMPLE TEMPLATE 7. TimeManagement and Weekly Cadence Monday Tuesday Wednesday Thursday Friday Team Daily standup All hands meeting Sales goals and trends Daily standup Sales+CS (bi- weekly) Daily standup Business standup Daily standup Sales+prod. (bi-weekly) Daily standup Individual Weekly planning Pipeline review As needed: Individual to CS transition discussion
- 27. SAMPLE TEMPLATE 8. MeasuringSales Activities and Results – Key Metrics Activities • Calls • Emails Pipeline • New opps • Demos • Pipeline size Revenue • New logos • New customer revenue
- 28. SAMPLE TEMPLATE 9. PerformanceExpectations and Commissions – Performance Management Activities (/week) Pipeline (/week) Revenue (/quarter) Outreach Emails 75 Calls 15 New Opportunities 5 Demos 4 Pipeline Size (# of Opps) 30 New Clients 5 New Bookings $250,000
- 29. SAMPLE TEMPLATE 9. PerformanceExpectations and Commissions – Comp Plans Component Measurement Period % of Plan Goal Target Payout Revenue Quarterly 100% $250K $25K Account Executive Component Measurement Period % of Plan Goal Target Payout New Opportunities Quarterly 80% 62 $5K New Clients Quarterly 20% 10 $1.25K SDR
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- 32. The Right Peopleto Support Your Motion Inbound Leads Outbound Activities New Opportunities / Intros Held Stage 1 Stage 2 Stage 3 Marketing AEs and/or Sales Development Reps AEs New Business
- 33. 5 Levers forLead Generation • Specialized in new opportunity creation and enable quicker refinement of engagement strategies. Typically generate lower volume but more highly qualified leads than marketing. SDR Outbound • Enables a broader, higher-volume engagement strategy. Should be a powerful growth engine, particularly in SMB and MM segments and with more transactional sales. Marketing Demand Gen • Provides capacity on sales execution in addition to lead generation, but TOF results are often mixed due to a focus on managing existing pipeline. Often higher impact on lead gen in the Enterprise. AE Outbound • Often a distraction if done too early, as the product and positioning are still being developed. Also more difficult to build partnerships when the business is nascent. Partnerships • Requires a large customer base before providing meaningful impact.Upsell Key Takeaway: It is VERY difficult to create enough pipeline without the support of SDRs and/or Marketing (except for very high ACV).
- 34. Who Should DriveLead Gen? Transactional Enterprise Marketing SDRs AEs • Large addressable market • Very low ACV • Short sales cycles • Small addressable market • Very high ACV • Long, complex sales cycles • Anything in- between
- 35. Foundational Tools toConsider CRM Target Prospect Data Sales Engagement Marketing Automation Sales Telephony • A single system where you manage all key prospect and customer interactions and track and report on ongoing performance. • Ex: Salesforce | HubSpot Sales | Pipedrive • Allows you to filter potential prospects based on key firmographic and behavioral characteristics tailored to your ICP/BP. • Ex: LinkedIn SN | DiscoverOrg | ZoomInfo • Enables the management of ongoing touch points with prospects across multiple channels (email, phone, social, etc). • Ex: Outreach | SalesLoft | MixMax • Supports the design, automation, and tracking of key marketing initiatives and prospect engagement. • Ex: HubSpot | Pardot | Marketo • Enables efficient and trackable phone communication with prospects, often integrated with other systems like the CRM. • Ex: Truly | RingCentral | Vonage Don’t Over-Engineer
- 36. A Growth Timeline PEOPLE Founderled sales PROCESS Hire 2 SDRs+ Demand Gen TOOLS Hire 2 Sales Reps Hire VP of Sales First sales playbook Refine ICP/BP Iterate on Positioning Test New Marketing Channels CRM Prospect Data Sales Engagement Marketing Automation Key Takeaway: Hire Sales in 2s!
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- 38. How Data DrivesDecisions at
- 39. Better Subject Lines: DirectAsk vs. Hard Data Source: SalesLoft, 2018 41% -68% -80% -60% -40% -20% 0% 20% 40% 60% Direct Ask Hard Data Response Rate vs. Average
- 40. Subject Line Length: 1word vs. 4 words Source: SalesLoft, 2018 35% 17% 0% 5% 10% 15% 20% 25% 30% 35% 40% 1 word 4 words Response Rate vs. Average
- 41. Salutation: “Hi Jane,” vs.“Hi Jane:” Source: SalesLoft, 2018 0% 35% 0% 5% 10% 15% 20% 25% 30% 35% 40% Comma Colon Response Rate vs. Average
- 42. Links: With vs. Without Source:SalesLoft, 2018 -2% 30% -5% 0% 5% 10% 15% 20% 25% 30% 35% With Without Response Rate vs. Average
- 43. Source: SalesLoft, 2018 SubjectLine Insights
- 44. The Day Beforethe Board Meeting
- 45. The Day Beforethe Board Meeting
- 46. Quantification of theSales System Inbound Leads Outbound Activities New Opportunities / Intros Held Stage 1 Stage 2 Stage 3 New Business • # of Inbounds • Lead to Opp % • Response Time • # of Activities • # of Prospects Engaged • Activity to Opp % • Total Pipeline • Pipeline by Stage • Stage Conversion % • Discounted Pipeline • Forecasted Revenue • # of New Logos • Booked ARR and 1x Fees • Win Rates • Average Deal Size • Sales Cycle Length • Loss Reasons • Revenue per Lead System Wide: • CAC • LTV • Payback Period
- 47. Valuable Insights OftenCome Through Segmentation Lead Source Geo ICP Type Vertical TeamRep
- 48. CRM as YourSource of Truth
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- 50. Organize into Groupsof 2-3
- 51. The Scenario • Whatlevers can we pull to drive revenue growth? • How should we think about the tradeoffs between levers? • What additional information might inform the decision? • What is acquisition cost by channel, and what would happen with an incremental $75K investment in each? Situation Overview SaaS $1M in new ARR last year 80% of ARR sourced via Marketing 20% of ARR sourced via SDRs ACV = $25K Win Rates = 20% Cost Data $200K in Marketing spend $300K in Marketing headcount 1 Outbound SDR, Cost = $75K 2 AEs, Cost = $250K Assumptions: Win rates and ACV are consistent across channels. Only sources of pipeline today are SDR and Marketing. Questions
- 52. Levers to Pull •Hire new SDRs or enable existing to be more productive through data sources and/or sales engagement tools.SDR • Increase spend in existing channels that are performing or new channels and/or identify higher ROI channels. Marketing Spend • Sales people begin initiating their own outbound efforts, provided they have capacity to do so. AE Outbound • Better targeting and positioning, improved sales execution, reduction in average pipeline size. Increase Win Rates • Delivering a product that creates more value, better positioning of value and ROI, better targeting of segments that are willing to pay more. Increase Prices
- 53. Additional Considerations • SalesRep Capacity – are reps at capacity for managing pipeline or can we give them additional opportunities? • Sales Cycle Times – what is the average sales cycle length, and how is that distributed by channel? • Ramp Time – how long does it take to get a new hire (SDRs or AEs) ramped up? How long does it take for Marketing spend to make an impact? • Quota Attainment – what % of reps should hit quota? Can they be more effective? • Market and Channel Saturation – what % of the market have we contacted already? Do we have the potential for diminishing marginal returns on sales engagement or marketing spend? • Marketing Cost – isn’t linear like sales. Much of the cost is in headcount, but we can keep it relatively constant while increasing spend. • Risk – If we double down on one channel, we are creating much more risk as we have fewer options if we realize mid-year that our big bet isn’t working as expected.
- 54. CAC by Channel MarketingSDR $800K in ARR sourced ÷ $25K ACV = 32 new clients $200K in ARR sourced ÷ $25K ACV = 8 new clients AE Cost: $250K * 80% = $200K + Marketing Cost: $500K = $700K total cost AE Cost: $250K * 20% = $50K + SDR Cost: $75K = $125K total cost CAC = $21,875 CAC = $15,625
- 55. What Does a$75K Investment Get Us? Marketing SDR Marketing Cost: $500K ($200K in variable spend) = $800K in ARR SDR Cost: $75K = $200K in ARR $800K in ARR ÷ $200K in Spend x $75K in Spend = 4x ROI: $300K in New ARR $200K in ARR ÷ $75K in Spend x $75K in Spend = 2.7x ROI: $200K in New ARR
- 56. A Recap Art Isn’tPredictable at Scale. Science is. Apply product design principles as you develop your sales motion. Repeatability: Document learnings into a sales playbook. Scalability: Thoughtfully sequence people and tools. Predictability: Begin capturing key data points to transition from qualitative to quantitative.
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- 59. First Head ofSales Hire Potential Profiles Pros Cons The Entrepreneur/ Evangelist • Will provide feedback from customers that accelerate product-market fit • Has leadership experience • Comfortable as an evangelist for the product • Lacks sales management fundamentals • Inexperience scaling and systemizing sales org • May not have industry knowledge The Sales Manager • Recent front line experience and still willing to get into details • Can build out sales methodology and process • Likely promoted to manager after being a top performer • Doesn’t necessarily have instinct to ask questions that drive product-market fit • May not have industry knowledge The Industry Top Performer • Knows the buyer you’re targeting and can speak their language • World class sales fundamentals • May be uncomfortable in an unstructured environment • Accustomed to receiving formal sales training, pitch decks, tools, etc. not building it The Industry SVP of Sales • Well connected with executives in the industry • Can build go-to-market strategy, sales methodology, hiring roadmap, etc. • May not be willing to roll up sleeves; accustomed to more manpower and bigger budgets • Likely hasn’t personally sold a deal in a long time • May have to adjust to faster paced environment ProfileStrengthatCurrentStage
- 60. First Head ofSales Priorities Market Testing and Iterating a. Develop and refine the go to market strategy b. Test hypotheses around buyer personas and ideal customer profiles c. Engage customers to understand what they value and how they buy d. Deliver feedback to team to help obtain and improve product-market fit Refining the Sales Methodology a. Map the buyer journey i. What steps does your customer progress through when they purchase your product? b. Establish the sales process i. What does the seller need to do to support the customer along their buying journey? c. Define a qualified prospect i. What information do we need from prospects to determine if our product helps them and if they will buy from us? Building a Great Team a. Develops the right candidate profile and recruits top talent b. Onboards new reps and holds recurring training sessions to improve execution of the sales process c. Coaches and supports reps in closing deals where needed Establishing the Foundation for Growth a. Rolls out processes that are repeatable and scalable b. Understands what metrics need to be measured from the beginning c. Builds reports and dashboards that promote data driven decision making d. Co-creates demand generation strategy with marketing