A 12-Minute summary of “The sales acceleration formula” by mark roberge

Overview

The average contemporary company today deals with double the number of competitors it had in the years past, says Mark Roberge. To compete and to win, companies can either innovate or can sell-out to their rivals. Innovation, however, according to Mark, provides only a limited advantage, because it is just a matter of time before the industry catches up.

Mark joined HubSpot when the marketing software startup had three employees. His job was to create scalable and predictable revenue growth. An engineer by qualification, he set to work by creating an analytical approach to devise a formula for sales and in the process added 450 sales and support personnel, brought onboard 10,000+ customers from 60 countries, and scaled their revenue to $100 million, all in 7 years. He calls this four-part formula for HubSpot’s success as the “Sales Acceleration Formula.”

Part I: the sales hiring formula

Before you can grow your company to millions in revenue a year, you need to hire a sales team. According to Mark, “world-class sales hiring is the biggest driver of sales success.”

Mark joined HubSpot as its fourth employee – and the first salesperson. His first task was to hire salespeople.

Rather than employ a typical process of hiring the top performers from other companies or recruiting an SVP from a competitor, Mark took a different approach. Mark tapped into his metrics-driven background to create a formula for sales hiring success.

Step 1: define the characteristics of a successful salesperson

• Make an educated guess on the characteristics you believe make a good salesperson. This could be different for every company depending on the product/service you are offering and the sales processes you follow.

• Devise a way to test your candidates on these characteristics. How would you interview them? What activities can you get them to do that enables you to highlight these traits?

• Create an interview scorecard to evaluate your candidates against your desired characteristics.

• Learn and iterate on this model. After six months, compare your top performers against their initial interview scorecard.

According to Mark, the characteristics of a successful salesperson include coachability, curiosity, intelligence, a track record of past success, and work ethic.

However, this could differ from company to company.

Step 2: find top-performing salespeople

To help him find top-performing salespeople, Mark initially worked with recruitment agencies. Working with an agency, however, meant having to pay a high rate of commission, which wasn’t always the best idea.

Instead, he proposed building an internal recruitment agency by incentivizing their recruiters based on individual fill rates, timing, and long-term success of the hires they make.

Mark also suggests utilizing LinkedIn to its fullest potential to source qualified candidates. Top sales performers don’t usually need to apply for a job – employers come to them. You need to be one of those employers.

Step 3: determine your ideal first hire

Mark presents a scenario comprised of:

• A former SVP from a competitor with a very different value proposition and structure

• A former salesperson from a competitor with a very different value proposition and structure

• An entrepreneur with sales experience but not in your industry, and

• A sales manager not in your industry.

Mark would choose to hire the entrepreneur first. 

An entrepreneur’s sales fundamentals and entrepreneurial spirit make him/her ideal for helping accelerate the company towards a product/market fit. Without formal sales training or experience in a large corporation with a rigid structure, the entrepreneur would be coachable and have the tenacity to help a young startup reach its ambitious goals.

While hiring, ensure that the candidate you pick aligns with your company goals, the maturity of your business and your set of ideal characteristics of a successful salesperson.

Part II: the sales training formula

The traditional approach to sales training does not necessarily take into account the individual “superpowers” of your salespeople. While some salespeople may be extraordinarily personable and others may be great at volume. Shadowing a salesperson with a different superpower doesn’t allow a salesperson to understand his or her strengths and how they can make the job their own. Plus, it isn’t scalable or predictable.

Instead, Mark proposes a systemized training program around the buyer journey, the sales process, and the qualifying matrix. To constantly iterate and improve upon your training, analyze the criteria of your successful salespeople against your training program. Make sure your training program aligns with the needs of your team by seeking regular feedback.

Part III: the sales management formula

 Sales coaching

Mark believes that sales coaching is the most critical lever to drive sales productivity. Rather than having a laundry list of 15 skills that your sales staff needs to work on, he explains how it’s best to choose one skill each month.

In creating a culture of sales coaching (vs. managing), Mark devised a process in which sales managers can meet with their team members each month for open dialogue around their skills. However, this isn’t a meeting where the manager tells the salesperson everything they are doing is wrong.

Instead, salespeople come to the meeting having already reflected upon what they’d like to improve. The salesperson and the manager then mutually agree on what they’d want to work on and set up a plan to do so. This enables accountability and buy-in with salespeople.

Metrics-driven performance analysis

Create a dashboard to analyze how each salesperson is doing at each stage of the sales funnel. Once you have your data, ‘peel back the onion’ to diagnose any areas of poor performance of each salesperson.

Compensation and incentives

There are many ways you can develop your commission plan, and Mark stresses the importance of evolving it as your business grows.

For example, if you need to grow your new sales as a startup, it makes sense to build commissions based on new sales. However, if customer churn is an issue, you might want to provide half of the commission at the sale and the other half after the customer stays for four months.

It is important to remember that the commission plan correlates with the goals of your business and that this plan is simple, aligned, and immediate.

Mark also suggests creating a culture where salespeople are promoted on the basis of success metrics rather than their tenure. To keep salespeople motivated, Mark suggests running monthly contests as these not only help motivate the entire team, but also instill a sense of camaraderie.

Promote from within

Promoting from within is a great idea, provided you have established sales leadership training. It is difficult to go from the frontlines to management, so supporting the transition is key to a new sales manager’s success.

Instead of only looking at top performers, startups must look for qualities such as leadership and well-roundedness.

Part IV: the demand generation formula

The Demand Generation Formula explains the shift from cold calling to inbound. In making this transition, salespeople need to position themselves as thought leaders via blogs and social media.

Once your leads are coming to you, Mark suggests not sending every single lead to sales. Instead, you need to first create a buyer matrix to understand who is interested in your product and the journey they take before purchasing. The types of content your prospects consume can indicate where they are in their buyer journey.

By understanding where your buyers are in their buyer journey, you can create a customized experience for them on your website, and a plan for sales to follow up.

As in the example above, you must contact Enterprise Elizabeth in the problem education stage because enterprise companies tend to have a much more complex buying decision. You’ll see that SMB Sam has a much shorter and less complicated buyer journey, so sales do not contact him until they are in the solution selection phase.

As with any process, you must periodically revisit it to check if it is working and iterate to make it better.

Marketing and sales service level agreement (SLA)

In the last part of the book, Mark discusses how marketing and sales can measure their performance and hold each other accountable.

Marketing teams should be able to define exactly how many leads in each buyer persona they are passing to sales, and should calculate the implied lead value associated with pre-defined lead goals. Marketing then can be given a revenue quota just like sales.

The sales team must then decide how to follow-up with each lead and work towards the conversion goal. This hand-off between sales and marketing should also be an iterative process.

About mark roberge

Mark Roberge is an Advisor to HubSpot and former Chief Revenue Officer of HubSpot’s Sales Division. He 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”. He is 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.

Named one of Forbes’ Top 30 Social Sellers in the World, Mark has also won the Salesperson of the Year award at the MIT Sales Conference in 2010. He was a semi-finalist in the 2005 MIT $50K Business Plan competition and was awarded the Patrick McGovern award for his contributions to entrepreneurship at MIT. He holds a BS in Mechanical Engineering from Lehigh University and an MBA from the MIT Sloan School of Management.