Book Club: Mark Roberge on the Blueprint for Predictable Revenue
296 Views | 28 Min Read
Olivia Fuller: Hi and welcome to Book Club, a Sales Enablement PRO podcast. I’m Olivia Fuller. Sales enablement is a constantly evolving space and we’re here to help professionals stay up to date on the latest trends and best practices so they can be more effective in their jobs.
Creating predictable and scalable revenue is any business leader’s dream, but how can that dream actually become reality? Well, as it turns out, there’s a formula for building and sustaining a winning sales team and I’m so excited to have Mark Roberge, who is the author of the Sales Acceleration Formula here to walk us through what that looks like. With that, Mark, I’d love it if you could take a second and introduce yourself to our audience and tell us a little bit more about your background and your book.
Mark Roberge: Thanks for having me. I am an engineer by training, I started my career coding and I did an MBA at MIT. I have close to a decade to start my career in more of a data science-like quant background. At MIT I was classmates with the two co-founders at Hubspot and was recruited to be the fourth employee and first salesperson with the aspiration to build a unicorn. This is in the early part of the century, like 15 years ago, and looking back I’m pretty lucky that I had the background that I had and ended up in that company at that time because little did I know that sales were going through a pretty substantial revolution. We were moving out of this sort of pre-internet age where everything was sold via an outside team and no one used their CRM, sales enablement barely existed and we were moving into an era where CRM adoption was necessary for salespeople to do their job. These tech stacks were becoming pretty advanced, we had a lot of data, and we had internet-empowered buyers who just changed the way that sales had to interact with them. It was sort of like the perfect time for a quant with no sales background to build a sales team from scratch. I was blessed to fall into that role and blessed to be surrounded by the right executive sponsorship and mentorship and investor advice to be successful in it.
That’s my background and I did that for like 10 years. We took an IPO In 2015 or 16. I then rested and joined the faculty at Harvard Business School where I still teach. I joined full-time and helped build out the sales curriculum. I do teach a couple of classes in sales and growth. More recently, after a couple of years of investing and advising and sitting on boards and that kind of stuff, I was approached by a former Bessemer investor to start a venture capital firm called Stage 2 Capital, which I’m happy to speak about at the end. It’s the first VC firm that’s run and backed exclusively by CRO, CMO, and CCOs from a lot of the software unicorns that are out there. We’re back about 400 CROs and CMOs from Snowflake, Salesforce, Zoom, and those types of companies.
OF: Awesome. Well, thank you so much for being here today. I’m really excited to have a chance to learn a little bit more about your book. You mentioned that your background is really unique in the sense that you do have such a quantitative lens that you take and your book really walks through that framework of driving predictable and scalable revenue growth from that lens of being really data-driven. You also talked about how sales have evolved a lot since you started that journey of creating that framework and even since you did write the book. I’d love to hear a little bit more about what are some of the challenges that you’ve seen emerge in the last few years that can make that mission of achieving predictable and scalable revenue a little bit more difficult to achieve in today’s landscape.
MR: When I wrote the book at the end of my Hubspot journey, it was really triggered by the fact that I started to get pretty well known and I would get calls from different sales leaders and entrepreneurs starting out with the same questions like ‘What do you look for in your first sales hire? How do you set up your first sales com plan? How do you enable your sales team?’ I just told them how we’re doing a Hubspot and they wrote back like a month later, saying wow, we did that and it worked really well, thank you so much. I just thought this is working, let me just put it down on paper for people. I give all the proceeds to a nonprofit, so I was just helping out the ecosystem and even to this day it sells almost just as much every year as it did the first year.
I’m very humbled that people still pick it up and still find amazing implementation from it. My own models of it have not changed but evolved a bit because at that time I was like 80 hours a week deep on just Hubspot and wrote about that. Now I’ve applied it to 1000 different data points between my teaching, investing, and consulting. A lot of the principles still apply.
As far as the challenges of implementing, I guess I’ll answer it this way and this is something that the book itself didn’t address, but you can read the book, and then you can read some of my more recent work. The book just talks about the model as it was at that point. It doesn’t talk about the order in which you should implement things. That’s been my most recent work. While the book gives you an aspiration of where you want to go, how you hire, how you enable, and how you coach your sales team, there’s a pretty precise order in which you build that system and in fact the optimal answers for each of the system components. Let’s take hiring for example. That changes as you progress from a five-person company that is mostly a product team, to a 20-person company that is really in sales mode, to a 2000-person company that is a very complex organization with alignment requirements. Your hires obviously change even on just the same frontline account executive role. That’s probably the difficulty in understanding the order in which you build the components of the system and how the individual component’s optimal design changes as you evolve.
OF: That’s very interesting and I think definitely something that goes beyond the scope of the book too, which is fantastic. I would love to dig into the data component of the framework. Tell me a little bit about just the role that you see data really playing today in helping business leaders be able to gather the insights that they need to overcome some of these challenges that they’re facing today.
MR: It’s kind of funny and this is right in the heart of things like sales enablement, rev ops, and just sales leaders in general, which is hopefully a lot of the folks that are out there listening. I always kind of joke and observe that sales are a function, something extraordinarily unique relative to things like product engineering, HR, finance, and marketing, is that success and failure in the role are so quantifiable. It’s really hard to walk into a company and here are our engineers and this is Olivia our number one engineer by 7%. Like it’s really hard to claim that right? But I can definitely walk into a sales floor and say here are our salespeople and this is Olivia and she’s our number one salesperson by 7%. That’s like a feasible statement.
You’ve got this function where success and mediocrity and failure are quantifiable and that opens up tremendous opportunities in the way we run the team. It opens up tremendous opportunities to draw correlations between hiring attributes that we’re looking for and how strongly they correlate to success in the role. It presents opportunities for us to use data in our sales playbooks to understand which approaches to the market lead to the most successful and best outcomes. It presents opportunities for us to measure the effectiveness of our frontline managers and how effective they are in coaching and developing our people. To be able to literally say like Olivia is a rock star, but I really think that she can develop in the area of a sense of urgency development with her prospects. In fact, I can quantify it, like I know what she looks like relative to our best-in-class people where her stage 4 demo stage opportunities are converting to customers at a rate of 27% and I know with the right amount of coaching she should be able to get that the 35% and that’s going to translate into an additional $120,000 of quota attainment on her part and a rise in our productivity. That’s the level of discussion we can be at and that’s difficult to enable in other functions. That gives you a little bit of an overview of the application and usage of data in our world.
OF: Yeah, absolutely. I want to go back to that first tactic that you talked about and you mentioned it and a couple of examples here around sales hiring and really the importance of standardizing what those characteristics are that you’re looking for in your company and making sure that you have a consistent approach to hiring for those criteria. I’d love to hear a little bit more about some of your best practices for really getting buy-in on those characteristics as being the right characteristics to look at and really reinforcing that consistency in the hiring process in particular how can data really help in that aspect?
MR: What I’m going to talk about is not necessarily like the absolute world-class, but I think it’s a step up that’s easy to conceptualize and rarely followed. When it is followed, it translates into a dramatic acceleration in the performance of the team. World-class hiring is studying at the psychological level, psycho graphics and there are some great tools out there like predictive index etcetera. I’ve spoken to world experts on it and sometimes some of them will admit that it might not be worth it to like take, take it to that level, but what we see in the industry is not a very good approach and it comes out in the aggregate numbers. Depending on which study you read, a lot of them tend to center around an average turnover rate and sales annually of 40%. That’s really bad. Every year 40% of salespeople change jobs either because they fail, they’re fired or they fail and they quit or they’re just not happy with their company. It’s really hard to build a business when you’re turning over 40% of your team every year.
We’ve got tremendous quantifiable ROI. There are some trainers out there that claim that the cost of a miss hiring sales is over a million dollars and it’s not that hard to justify that calculation. What I hope we can do is try to move away from the like I’m busy in my day and I’m running all over the place and I have this interview with Olivia and two minutes before I walk in the room I read your resume, I sit down and I’m like hey Olivia, tell me about your career, and then after thinking I liked Olivia let’s hire or I didn’t really like her, let’s not hire. That’s where we’re at. That’s where most people are hiring and all I work on people with and it changes their game is actually just sitting back and thinking about the attributes that we see in our best people and the attributes that we see in the people that don’t work out.
At least, can we translate that into just a quantifiable scorecard, can we identify the 7, 8, 9, or 10 attributes that we’ve seen, correlate with success and failure? Can we take the time to define in two or three sentences what each one means so that we’re very clear about what consultative selling means, what work ethic means, what intelligence means, and what coach ability means? Can we take the time to quantify what a high score of 8 to 10 would be like, what a medium score of 4 to 7 would be like, and what a low score of one of three would be like so that a new sales manager going into their first interview can actually know what the heck they’re doing, like what they’re asking and how they’re scoring this person? Over time we can actually see correlations between our scorecard and success and failure. That’s where we need to get to. It’s not a hard leap. It takes an hour to put together and a little bit of discipline to execute, but that allows you to get closer to a 10-20% annual turnover as opposed to the average of 40%.
OF: Yeah, absolutely. I love that approach and I think you’re so right, it’s about just really defining what success and failure do look like in particular companies and I think a lot of that also nurtures that success a little bit longer terms after a salesperson is hired and is in their career with a company. A lot of that comes down to sales training and that’s an area where enablement can really help. I’d love to hear your thoughts on maybe what some of the common pitfalls are that you’ve seen and how programs are designed and delivered, that may actually prevent that scalability and predictability, and then what are some of the ways that enablement can help to overcome some of those pitfalls?
MR: Yeah, I would say the number 1 thing is we know today something that we’ve talked about anecdotally through the work of Gong.IO and some of these new ai tools that the salespeople that listen more than they talk in the first call or the top performers in the industry and the sales people that talk more than they listen in the first call are performing in the least way. Part of the driver of why certain salespeople decide to speak more than and then lesson on the first call is due to the approach by enablement to training. Some enablement teams look at a new feature product that’s being released, whatever, and take what I’d call an inside-out approach of like, okay, what does this product do, what are its features and benefits, let’s put together a sales deck and then let’s show the sales deck to the sales team. Sounds pretty logical. That’s teaching the sales team to pitch, that’s teaching the sales team to talk a lot, that’s teaching the sales team just like go find 50 prospects in a month and just show the sales presentation and that’s my job and that’s completely wrong.
The job is to start off and build trust and develop open-ended questions with the buyer to understand their perspective, and to see what they perceive as their problems. To see if their problems are something we can help with and if they are to tailor our pitch to those problems so they really resonate with their context. That’s what true selling is and that’s what our job and enablement are. It’s like helping a 25-year-old figure out how to do that. It starts not with what is our product and what are the features and benefits, and let’s build a pitch deck, but it’s more like who is the buyer and what’s the narrative going through their head before they even know what our product is. What are the common problems they have? What are the ones that were good at solving? How do I ask the questions to uncover that? Once I understand their perspective, how do I customize and tailor the description of our product so it resonates with that buyer so they understand how we solve those problems?
A couple of tactics that I’ll throw out there are number one, how much of your enablement and training for new hires is about your product versus your buyer. Most people I talk to are like shoot, you know what now I think about it 90% of our training is how our product works. You are teaching your salespeople how to be bad salespeople. Can you spend more time in your training getting your salespeople to walk in the day in the life of the people they sell to? At Hubspot, for example, most of our sales training was just having our salespeople write blogs and do social media and create landing pages and create automation sequences. Like we turned them into markers so that when they got on the phone with their first marketer or business owner that was trying to do this new-age way of marketing, they could empathize with what that scariness was like and talk them through as a peer. So like can we do that, whether we’re doing network infrastructure or selling lab equipment there are always ways for us to like get our salespeople to understand our buyers.
The second tactic I’ll say is, instead of making the cornerstone of your sales enablement playbook the pitch deck, make the cornerstone of your sales enablement playbook, the buyer’s journey. Like, what’s going through their head at the awareness stage when they’re trying to define the problem. Once they’ve defined their problem, what are the different options they’re looking at to solve it, once they know which option they want to choose, how will they make that decision? Let’s teach our salespeople about that and define it and after every single first call, our managers can ask one question which is like where are they in the buying journey? That will force your salespeople to be top performers be discovery, consultative-oriented sellers that first and foremost, understand the context of the buyer.
OF: That’s fantastic. It goes right into what my next question was going to be, which was about creating that culture of coaching. You mentioned a little bit of the role that sales management can play in helping to reinforce some of those behaviors with reps, but I’d love to dig into that aspect a little bit more and really hear how sales managers can leverage data to really have more effective coaching conversations.
MR: Like most managers, I think do fall into a pitfall, which is the month or quarter is going along, we’re not quite at our goal, we’ve got a couple of reps that are struggling and they’ll say, here’s what we’re going to do Olivia. Invite me to your next five meetings and I’ll do the demos for you. I’ll run the meetings and they become super reps. A lot of things are wrong with that. Number one, you’re not holding your reps accountable for their job. Number two, they get lazy. Number three, they lose confidence because you can do it better than them. A lot of bad things happen and really that’s not our job as a manager. I understand why they do it because that’s how they got successful as a rep, but as a manager, our job is to hire and coach, that’s what it is and it’s up to the rep to succeed.
The thing with coaching is that you can’t coach a rep on like 20 things at the time, it’s just not humanly possible to like absorb that coaching. You can do one, maybe two things at a time, and that’s really what the best coaches do. They get a new rep out of training, and usually, there’s like a pretty sizable list of like improvement areas and a good coach will say, I can’t work on all that at once, but here’s the one thing I’m going to work on and they’ll use the data to diagnose that. Usually, if we have basic data of like how many leads are we creating every month, how many become an opportunity, how many become stage three opportunities, and how many become close, we can get some visibility of what the blueprint is for our top performers in the average and where we’re off and that will help understand where we can at least look to diagnose things and figure out what the issue is.
What I like to do as a leader is I like to review on the first day of the month all of my manager’s coaching plans with the reps. When I do that review, it forces the managers to have one on ones before our meeting, like in the morning or the day of the first day of the month to have that one-on-one coaching plan creation and schedule the coaching into the upcoming month. So Olivia, if you and I were talking and after reviewing your data together and talking qualitatively about your past month, we do determine that sense of urgency development is the thing we want to work on. Then I’d say great, like why don’t we get together on Friday at three, next Tuesday at nine, and the following Wednesday at noon and you show up to that meeting with a recorded first meeting, and we’ll listen to it together and look at it through the lens of sense of urgency development. That’s a beautiful start to the month, where I’m like, I have confidence that my managers have had that discussion with their reps and we have an entire set of coaching calls set based on data that are attacking the skills that represent the biggest improvement for our team.
OF: Absolutely. That’s a fantastic approach as well. I have just one last question for you and it’s really about the last tactic in the formula, which is demand generation. I think a key piece that stood out to me in the formula here was really around the importance of accountability between sales and marketing teams. I’m curious about this in particular because sales enablement can often really be a function that’s kind of in the middle of those two teams, liaison between them, or helping to kind of bridge that gap. I’d love to hear your advice on how enablement leaders can really be that bridge and help sales and marketing teams develop and have that mutual accountability.
MR: There needs to be a service level agreement between the two groups and it’s going take a combination of the CEO plus enablement to create that. We just really need the VP of Marketing and the VP of Sales to agree on their deliverables to each other. We need them to both agree on what is an MQL and how many we need from marketing and we need the sales team to agree to, like if we do get an MQL, how will we act on it, how quickly we call it, how frequently call it, and what kind of conversion rate do we expect out of that. That’s our goal. All of that leads to revenue, so that’s really the role of sales enablement is to work with the CEO and the sales and marketing leader to create that quantitative agreement.
One area that you can start with, there’s a lot of different pieces to this, but usually when we’re putting together annual plans, and this is pretty relevant to today here in Q4, we’re pretty good at like saying all right, we want to go from 20 million to 30 million, which means we need to add 10 million top lines and last year our reps averaged half a million in productivity each. So I do the math and I have 10 of them, well that adds up to $5 million. I need to hire another 10 more and that will give me my 10 million. We’re pretty good at that like bottoms-up analysis from the rep capacity standpoint. Rarely do we do the marketing piece. So it’s like, yeah I get that my reps are producing 500,000, but how are they getting there? Well, if you look back on the year you can be like, oh my gosh, well half of our revenue came from marketing, and marketing had a budget of $1 million. They generated 1000 leads and the cost per lead was $1,000. If I had my math right, 20% of those leads became SQLs and 40% became opportunities, and 40% closed, so just using those numbers, I can figure out if we’re going to have another year where half of our new revenue comes from marketing, I can calculate precisely how many MQLs I need.
Then, similarly, if half of our leads came from our cold calling team, the SDRs, then on average each one set 210 appointments last year the conversion to opportunity was 30% while the conversion of clothes was 20%, so immediately I can figure out like how many SDRs I need each quarter and what those conversion rates need to be. We don’t do that math, it’s simple math and that’s where sales enablement can play a big role. It’s just like let’s go back to the leadership team, the head of sales, the head of marketing, and just say here’s the plan, this is the blueprint to get there from the demand gen side and that helps both sales and marketing to have a quantitative route in what that service level agreement between the two groups can be.
OF: Absolutely. In addition to that, it also helps enablement prove their impact to those executive leaders and be able to get a seat at the table in those conversations as really that strategic liaison between those leaders. So that’s fantastic advice.
MR: It’s such an important seat because everybody else naturally has a little bit of political bias in the equation and sales enablement can be that sort of like an unbiased judge and jury that’s just trying to educate everybody on the truth. They just know that these are semi-scientists that are like helping us understand our business and hit our goals for next year.
OF: Mark, thank you so much for sharing all of this with us. I certainly learned a lot from this conversation so thanks again and I can’t wait for our listeners to hear this.
MR: You bet Olivia. Thanks for having me.
OF: To our audience, thanks for listening. For more insights, tips, and expertise from sales enablement leaders visit salesenablement.pro and if there’s something you’d like to share or a topic that you’d like to learn more about, please let us know. We’d love to hear from you.