You’ve built a killer app—a software product so useful that many of the companies you approach quickly recognize its value and agree to pay for it.
Huge kudos for creating something people need. But to drive velocity and turn your business into something big, you’ll need to scale up an inside sales team that can quickly and efficiently turn thousands of leads into paying customers. The growth trajectory of your company—in other words, your success—will depend on how well you select, train, manage, reward and retain those salespeople.
In this article, three high-growth software companies—Mimecast, AirWatch and New Relic—discuss how their inside sales teams are driving profitable growth.
Each company, with its unique needs and customers, has found its own path to explosive growth, but they share some important characteristics: (i) They all focus keenly on recruiting salespeople who not only have the necessary skills and attitudes but also fit the company’s culture. (ii) All three companies go to great lengths to qualify leads and distribute them fairly. (iii) They track a select set of sales metrics to spot challenges and opportunities, and (iv) they’re extremely deliberate about balancing competition and camaraderie on the sales floor. Taken together, and coupled with a (v) quality product, these approaches have caught lightning in a bottle, producing quarter after quarter of double-digit growth.
(i) Quality in: Recruiting, on boarding and training
Inside sales is a famously high-pressure job, especially when the measure of success is volume, and nobody gets rich doing it. But high-tech companies can’t afford to train salespeople on complex products and then lose them a year or two later. That’s one reason the most successful companies tend to be extremely careful about whom they hire.
Many aspiring salespeople, in fact, never land an interview at these companies. Matt Cooley, VP of Inside Sales at New Relic, has built his sales team from one person to more than 120 in four years, but he’s never hired a cold applicant through the website. “Not once,” he says. “I use one recruiter I’ve known for years or ask the people who are already here to find the best people they know.”
“Our model holds together,” he says, “as long as lead quality and hire quality are constant.”
Recruiting salespeople was easy for AirWatch at the beginning, says president and CEO John Marshall. “But when we went into the growth stage, our hiring profile had to change. We now hire based on customer segments—company size, market segment and industry vertical. We do look for aptitude, attitude and cultural fit, and whether someone’s a hard worker. But we now have a much more rigorous interview process because we know what works and what doesn’t.”
“About 70 percent of our recruitment comes from referrals,” says Hylton Southey, VP of Sales at Mimecast. “There’s a natural vetting process when you bring in someone you know. People say that doesn’t scale, but one person knows five people, and no one wants to bring someone on who’s going to make them look bad. If you bring in a new hire who sticks around for three months, you get a nice bonus.”
Once new salespeople are hired, they need training to get up to speed on the product, customers and sales process. That, too, is crucial to the companies’ success, according to executives.
“The complexity of the sale determines the profile of the successful salesperson,” says Theresa Smith, Inside Sales Advisor for Insight Onsite. “A company might hire recent college graduates, but only if it’s careful about it and gives them the right tools and education. Quality in, quality out.”
All three companies have a one- to three-week onboarding and training regimen for every new sales hire. AirWatch’s Marshall insists that everyone master the product demonstration, for example, since any potential client may ask to see it on a moment’s notice.
After the initial training, sales veterans may get little hand-holding, but newer people get a lot of attention. “Our SMB guys, coming through the ranks, are subject to a far more disciplined, rigorous pipeline and sales management training and mentorship than our seasoned guys,” Mimecast’s Southey explains. That training pays off for the company in the long term. His colleague, Alan Kenny, Chief Performance Officer, refers to it as “the right maturing process.”
“We bring in highly talented people with great DNA who are very bright, very hungry, very ambitious,” Kenny says, “and we use inside sales as a proving ground. As they mature into the business, they help us reduce the risks further up the food chain.”
The care they take in hiring and training also reduces churn. “In year one, we brought in nine Market Development Specialists; four didn’t work out,” Kenny says. “In year two, we had the same intake, and one person didn’t work out. In the last two years, we haven’t lost any new hires.”
(ii) The Tao of leads: Quality and fairness
Since time is an inside salesperson’s scarcest resource, lead quality is the foundation of his or her success— and the company’s. Cold calls and poor leads waste time that could be better spent talking with more promising prospects. Salespeople also have a keen sense of territory. If they believe someone else is getting better leads, attitudes can go downhill quickly, along with results.
New Relic avoids that problem by defining a territory as a set number of leads per quarter per rep. “I had a lot of headaches in my previous job,” Cooley says, because of geographic territories that didn’t seem fair. “I’d end up dealing with that a third of my day sometimes. Here, the headache is gone. Everybody feels they have the same opportunity. We have full accountability and no finger-pointing.”
AirWatch distributes leads in a sales region alphabetically in a round-robin fashion. They also try to put more than one rep in each region. “We used to get burned by having a single rep in a territory,” Marshall says. “All we would hear was excuses about not having the right product, the right collateral and so on. When we put two people in, it creates competition, and we learn more about the market.”
“You can actually get it all the way down to a science,” says Richard Wells, a managing director at Insight. “You know that you need a certain number of leads, your reps will have to make a certain number of calls and generate a certain number of activities per lead, and if you do all of these things, you’ll get a certain close rate. And so you push Marketing to deliver the lead flow that you need to deliver that activity, and then you tightly manage your sales organization to keep their activity levels up to deliver those metrics, and the number should come out at the end.”
Sales management means nothing without high-quality leads, of course. As New Relic’s Cooley explains, “Efficiency is super-important to us, which is why we focus on lead quality. A lot of leads and sign-ups come through the door that we don’t funnel to our sales teams. We use the data we have to filter the top leads to the team; those that we can convert quickly to long-term, larger paying customers.”
“Our model is to drive traffic with marketing,” Cooley says. “We don’t do any cold-calling—no outbound. When someone comes to our website, we drive them to the signup form, the free T-shirt and the install agent. As soon as a trial starts, everything is automated to be put into the round-robin for each rep’s lead queue. We see several thousand trials per month.”
“And as people use our trial software, we can watch leads becoming hotter,” he adds, “which allows our reps to prioritize their days.”
(iii) Choosing metrics and financial incentives to improve performance
To grow quickly, Smith says these companies need a sales process that is predictable, repeatable and scalable. And as the sales organization expands and becomes increasingly complex, managers need metrics to know who is performing well, who isn’t, and why.
Reps who are rewarded only for revenue may waste time hunting elephants and miss the smaller deals that a company needs to maintain momentum. Salespeople who focus only on activities, such as phone calls or product demonstrations, may lose sight of the importance of closing deals.
That’s one reason that choosing the right metrics is so important. Marshall says that AirWatch took two years to develop a compensation model that works for them. A third of their salespeople’s compensation is based on the number of transactions, a third on the revenue they bring in and a third on daily call volume and other activities. “We’ve found that all three behaviors are critical to salespeople’s long-term success,” he explains.
At Mimecast, Southey focuses more on results. “We don’t monitor people based on the time they spend sitting in the seat,” he says. “It’s kind of a cliché, but I don’t care where people are or what they do, as long as they make quota. If they don’t, then I start to care exactly where they are and what they’re doing.”
“We do manage the inputs,” he adds, “but we’re sensitive to people’s different ways of working. I don’t want to spend three hours in a pipeline drill-down with a seasoned veteran—who’s probably a better salesman than I am—when he’s hit his number three quarters in a row. It’s a waste of time.”
Southey believes in offering a rich compensation plan that’s also simple. “One of my philosophies is that on every single sales call, salespeople need to be able to calculate, in their heads, exactly how much money they stand to make when that deal closes.”
Promotional opportunities are another important element in each company’s incentive plans. “Reps need to see the logical steps of their career progression. They need to feel they have somewhere to go in Mimecast,” Kenney says.
At New Relic, where no one joins the sales force without at least five years of experience, Cooley likes to reward people for what they do best. The company has three levels in each “lane”: acquisition, enterprise, and growth.
“Some people acquire customers quickly and well,” he points out. “I like them to stay on the SMB acquisition team and do it for a long time. Some people are very transactional, some are more focused on relationships but still transactional, and some people just want to go after the elephants. They’re more strategic and slowerpaced, not geared for the velocity model in the SMB.” Each quarter, Cooley and his team look at the sales force for opportunities to realign, but nearly all promotions are within lanes.
Early in his tenure at AirWatch, Marshall promoted some people too quickly. “Product knowledge and company knowledge are critical,” he says, “as is experience in qualifying and working deals. I learned that we could take very effective mid-market people and bump them up to large corporate, and they could have three bad quarters and maybe leave the company. Now we’re very, very careful about when we move people around.”
“I don’t want to spend three hours in a pipeline drill-down with a seasoned veteran—who’s probably a better salesman than I am.”
(iv) The unique value of non-financial incentives…
Inside salespeople may be “coin-operated,” but they’re much more complex than any machine. They want to be recognized by management—and by colleagues. They sometimes need a little celebration almost as much as a paycheck.
Southey says he expects performance and measures the results, but the spirit of friendly competition includes prizes. “The person who books the most product demonstrations in one day gets a gift card,” he explains. “The person who books the biggest demo in a week gets a cash prize. If a team books a certain number of demos, they might go on a ski trip or river rafting trip.”
And every year, there are some big plums. “Quota-bearing reps that make 105 percent get to go on an exclusive trip. Last year we did South Africa and Zambia. We went on safari, and I took some guys to Capetown beforehand, so we really made a big deal of it.”
AirWatch takes a more collective view of rewards, sending 500 people across the organization to an Atlanta Braves baseball game, for example, but avoiding any explicit elitism among the salespeople.
At New Relic, Cooley emphasizes camaraderie and fun. “At some places,” he explains, “you might get a lot of email about deals, but there’s no real personal connection and your in-box gets cluttered.”
He relies on Hoopla, an application that presents real-time sales force data on about 20 monitors throughout the office. “All day long,” Cooley says, “it shows who the top performers are and where the top pipeline sits. It looks like a SportsCenter. When a deal closes, there’s a big ‘gong’ and everyone looks up and claps and high-fives each other.”
“We push the team really hard, but we don’t want to burn them out. So in the last week of the quarter, we give them a ‘go-home’ number, which is usually a goal beyond the goal. As soon as we hit that, they’re gone. So if they hit it on Wednesday, they get Thursday and Friday off. Potentially Monday.”
“It sends the right messages to the team,” he says. “We’re sprinting to the line, but once we reach the line we’re going to relax for a few days and come back ready to go for the next quarter.”
…and the importance of environment and culture
Inside sales can be a grind, and these three outperformers use a range of approaches to help spur a sense of teamwork and keep the attitudes upbeat. All the salespeople at Mimecast work on a giant open-plan floor. “Everybody knows what everybody’s doing,” Southey says, “and everyone can collaborate on a daily and hourly basis.”
AirWatch also relies on physical proximity to drive collaboration and speed. “Things are going so quickly that people need to hear the chatter,” Marshall says. “Winning and losing can be the difference between one simple answer, and you need to be able to get that immediately, not wait for email.”
Mimecast also provides a wellness program to show that the company cares about more than quarterly numbers. The office features a yoga room and an instructor twice a week, a nap room, and what Southey calls “super-healthy” catered lunches every day.
“It’s our belief,” he says, “that by creating an environment that facilitates physical health and mental health, we’ll end up with people who are more productive, more eager to perform and more eager to learn. And better equipped to do everything.”
Few high-performing sales teams sing “Kumbaya” all day, of course. “We could’ve had everybody in the AirWatch sales organization love us and have ten-percent sales growth,” Marshall says, “and we wouldn’t be where we are today.”
“If you want to create a warrior,” Southey says, “you don’t bathe him in rosewater and cover him in silk. You need to make sure people are battle-hardened and ready to perform.”
“You have to do some unpleasant things,” he points out. “If you have a non-performer, you need to deal with it. So if somebody doesn’t deliver the goods, you follow the process that’s laid out, and you have to fire people. What that does, besides getting rid of someone who’s a drain on the tribe, is it lets the other members of the tribe know two things: one, that their work is recognized, because no one is going to drain their results; and two, that nobody is untouchable. We’re all smiling and having a good time, but if you don’t perform, there can be tough conversations.”
(v) Sales feedback: evolving quality product to meet customer needs
Mike Triplett, a managing partner at Insight, explains that in today’s business software marketplace, sales growth can depend on seemingly simple elements such as download speed and free trials.
Engineers and software designers can build a great product, but to succeed on the big stage, it has to be easy to understand and use. “Most people simply don’t have the time to learn how to use a complex product,” Triplett says. “It has to be intuitive from the get-go, especially in a ‘try before you buy’ marketplace. If I can’t try it easily, make it work, and experience it quickly, then I’m more likely to abandon it, which makes the sales rep’s job infinitely harder. Ease of use and quality can’t be underestimated in building the smooth inside sales workflow.”
“Fifteen years ago, he says, “we might have focused on relationships and elephant-hunting. Today it’s about volume.” Toward that end, he recommends that Product Management talk to sales constantly to ensure that the product is configured for ease of use. “Salespeople know where the sticking points are in downloading and using the product,” he points out, “and the product needs to be optimized for sale.”
With core strengths, winners find many routes to the finish line
Even in a fast-paced marketplace where inside sales volume is the key to growth, companies that outperform tend to rely on seasoned, highly skilled reps who are chosen with extreme care, trained, managed and promoted according to their strengths, and rewarded for their success—financially and emotionally.
Skill and knowledge are crucial because, as Kenny puts it, “Most prospects will be totally unforgiving if you don’t understand their business or how you’ll deliver value. You have less than a minute to establish credibility. You have to know what will happen after they deploy your technology.”
Each of these three companies offers valuable products and services that prospects can understand and experience in minutes—with a sales team’s help. Indeed, product quality seems to be an important part of keeping salespeople onboard and enthusiastic.
“Our reps are trained to recognize a customer’s pain points,” Cooley says. “When the product provides the solution to the pain, and the rep believes it, you’ve got a powerful sales catalyst.”
Extremely rapid growth, while challenging, makes sales management relatively easy. “At some point you have to stop hiring and build efficiencies,” Southey says. “We haven’t gotten there yet, but there may come a time when we have an increase in churn because there will be a limit to upward mobility.”
“Of course,” he added, “if the business keeps flying on the upward trajectory we’re on now, we may be able to put that off.”