Why we hired inbound sales reps
I’ve talked before about the importance for founders to be the company’s first sales reps. It gives you an in-depth understanding of your sales cycle, your customers, your unique value proposition, and your place in the market. These are all things you need to figure out before you hire your first salesperson. And that’s what my co-founder, Kevin, and I did for the first two years of Proposify.
But as the company grew, other aspects of the business required more of our attention. We also realized that since we don’t sell high-priced enterprise plans, we needed to be hyper cognizant of acquisition cost — will the customers we acquire be worth the cost of a sales reps?
So we concentrated on inbound marketing - SEO, blogging, podcasting, social, and other inbound channels. While not a quick win, this approach worked well for us (and still does!), driving lots of leads. More leads than Kevin and I could ever talk to on our own.
Two factors motivated us to think seriously about hiring a sales team:
In 2016 we launched our “enterprise” plan called “Trenta” to appeal to companies with larger sales teams.
Our support staff were regularly asked by new trial signups for one-on-one demos. We encouraged many of them to watch our videos or webinars, but still the requests came in and they facilitated as many as they could.
So Kevin and I decided to experiment with hiring inbound sales reps to see if they could follow up on our leads, qualify those who might be a fit for the larger plans, and close those deals.
The hiring process
We had a lot of people apply for the sales position - more than 80, in fact. We managed to narrow it down to eight candidates, and after checking their references, we invited them to an interview. But what they didn’t know is that we invited them all to the same interview.
We decided to do a surprise group interview to see how the candidates reacted and adapted under pressure and changing circumstances, all qualities important to sales.
We split the group into two teams and gave them a challenge to work together to come up with a five-minute sales pitch for Proposify. We actually didn’t care about the content; what we were looking for were the people who rose to the top as leaders of each group.
Then we hired those leaders who turned out to be Amy Sears and Ryan MacDougall.
Good things come in twos
We hadn’t originally planned to hire two salespeople, but as the process evolved, it seemed to make sense. We were also inspired by an interview we did on our previous podcast, Agencies Drinking Beer, with sales veteran Chris Kinnard who recommends having two sales reps on your team.
One big reason is that sales professionals are competitive by nature (and ours sure are!) so we thought that by having two, they would play off each other and it might up their game a bit, putting a little extra hustle in their step.
The other reason we hired two people is that they each came with different sales experience. Amy Sears has many years of experience working in a very structured corporate sales environment, where Ryan MacDougall comes from a startup background. We liked the diversity of their experience and felt they each could make a unique contribution to our fledgeling inbound sales process.
We started them off by putting them in Customer Support for the first few weeks. By answering customer support tickets, Amy and Ryan learned all the ins and outs of our product and interacted directly with our customers right away. This gave them a sense of the problems our customers face, what they’re looking for from Proposify, and what kind of solution we can offer them.
How we structured commissions
While Kevin has extensive sales experience, he comes from a more traditional background and SaaS sales are a whole different kettle of fish. So he did some research on the best way to structure compensation.
Most SaaS commission is based on about is 8-12%, but because we charge in US dollars and convert to Canadian, we played with numbers a bit to come up with the right spot that rewards our sales reps appropriately and returns decent revenue to the company.
Amy and Ryan also get rewarded for bringing in recurring revenue as opposed to just making the first month’s commission. This acts as a disincentive to bringing in weak leads that churn after two months since they lose their commission if that happens.
So how do we keep track of all the sales activity so we know who gets what and what money gets paid where? The team started out juggling spreadsheets, but that quickly became inefficient and inaccurate, so we decided to automate the process.
Now we have Hubspot CRM integrated with ChartMogul so that when Amy or Ryan mark a deal as closed in Hubspot, it automatically pushes it to ChartMogul. Then in ChartMogul, we’re able to filter by all the metrics - MRR, LTV, revenue, churn - by sales rep. It gives us everything we need to know what’s happening with our sales.
What we’ve learned
Now that Amy and Ryan have been in their roles for more than six months, there are things we’ve learned, or just didn’t consider before we had a sales team.
Sales contributes to product development and marketing.
Amy and Ryan regularly give us feedback from their demos about how they might have lost a sale because of a feature we don’t have, or how one of our features currently works. Or it might be that they’re getting the same requests over and over again for a particular functionality.
The sales team isn’t dictating product development, but they do provide valuable information for us to consider as we evolve Proposify.
Amy and Ryan also provide great insight for marketing. They hear straight from the customer what they like, what they’re looking for, their pain points. They also give us intel on emerging markets so we can figure out how to target them.
Recently, Amy let us know about a significant increase in inquiries from a particular industry we hadn’t targeted before (TOP SECRET!), so we’re in the process of developing templates and messaging to specifically attract them.
Sales and support are not the same.
We used to have our customer support team handling sales inquiries and demos, and I thought that was fine. But what I’ve learned since Amy and Ryan joined us is that there’s a big difference between a sales mindset and a support mindset.
Salespeople are competitive, as I mentioned earlier. They’re like hunters, sniffing out their leads, and killing the close. Our customer support team, on the other hand, are more like gatherers. They’re nurturing our customer base, keeping them happy and in the fold.
The ability to focus on large customers.
We didn’t really have the bandwidth to focus on bigger companies before. Don’t worry, we’re not giving up on the little guys, but bringing in more customers who subscribe to our higher tier plans helps our business overall. When we look at our numbers, those customers don’t bring in the bulk of our revenue, but they generally have a huge lifetime value with a low churn rate. It makes good business sense.
How to apply this to your business
Your sales team may or may not be the most important part of your company. It depends on the price of your product or service, and how your target market purchases.
The important things to remember are that you, as the founder, need to define your sales process first. Only you can carve out the road ahead. Then hire sales reps to follow in your footsteps and add volume to your revenue.
Look for holes in your funnel where there’s a place for sales to come in and either close new leads, upsell or cross sell existing clients (link), or generate fresh leads all on their own with cold outreach.
Incentivize your sales team with commission based on quality, long term clients, and make them a part of your whole company — they should not be pitted against the marketing or the engineering teams as if they have different goals than everyone else.
Watch our Proposify Biz Chat video above to hear Kevin and me talk about the process, plus a quick chat with the sales stars themselves, Amy and Ryan.