Category Archives for Reviews

Sam Mallikarjunan, Hubspot

TSE 1136: How HubSpot Grew From 150-1500 Individuals!

Sam Mallikarjunan, Hubspot

Whether you’re a sales rep or a sales leader, a sales manager or a business owner, we can learn valuable lessons from the study of how Hubspot grew from 50-1500 individuals.

Sam Mallikarjunan has sold for a variety of organizations, from the five-person startup to the Fortune 500 company, so he has seen the sales story at a couple of stages. He’s a fellow at Hubspot and he teaches digital marketing at Harvard University.

New revenue

Sam loves the idea that whoever chases two rabbits catches neither because it’s a reminder to him to focus. He has spent the last year focused on teaching, speaking, and research. He points to doing one thing at a time and doing it really well before moving on.

A weird pivot exists for startups that are growing from “we’ll take anybody’s money” to losing cash faster than you can acquire new cash. The core pivot occurs when you reach the point where you’re struggling for customer retention, because the economics of your model will break down.

It’s a matter of sales reps making time to ensure that they are bringing in new revenue.

One new customer was upset because she couldn’t access her email after signing on with Hubspot. She had cancelled her Internet provider because she thought that’s what Hubspot was.

It cost the company money because they had to service the issue. The problem didn’t arise because the seller was a bad person. He just didn’t verify that the customer was going to be successful.

Healthy revenue

The company implemented clawbacks which withdraw commissions from sellers if the customer cancels their account within a certain window. Sellers are heavily incentivized to ensure that the person they are bringing on will result in healthy revenue.

Because Hubspot is a SAS, a recurring revenue model, the company loses money acquiring customers. The company doesn’t break even for some months. If the customer cancels too quickly, the business loses money.

Cashflow is more important than your mother.

Keeping customers

Many companies miss the core principle, which is that you can’t spend money to get customers unless you’re good at keeping them. If you’re selling iPad covers that are cheap, people will likely only buy from you once. But if you’re really good at keeping customers, it’s not necessarily how much they pay in the first transaction, but rather the lifetime value.

If you’re good at keeping those customers, you can pay your sales reps really well. You can give them lots of collateral to help them close deals. You can also spend a lot of money on marketing to tee them up for good conversations or on training for their reps.

Sales sequence

Sam recalls being a cell phone salesman in a mall. He asked his customers questions about cell phones, but he didn’t listen to their answers because it didn’t matter what they said. He was going to ask the next question in his sequence. Either they would sign on the dotted line or walk away. It didn’t matter to him.

The company had more than 50 percent cancellation rate coming out of the kiosks, but the sellers never missed quota. He got big bonuses for his teams because they always met their quota. It cost the company a lot of money in support costs, lost device costs, and refunds, so they shut down the entire unit and retrained the reps.

The company was designed as a subscription model, which meant they would lose a little bit of money to acquire customers.

Platinum rule

The platinum rule goes a step farther than the golden rule, which only requires that you treat people the way you want to be treated. The platinum mindset demands that you treat people the way they want to be treated.

Trust is core to the sales process, and trust begins by taking the time to ask questions and understand who you’re selling to. People like to be personalized.

Sam points to Netflix’s business model as an ideal one because it has motivated him to rate more than 800 movies. He said he does it because he knows that Netflix will use the information to improve his experience. He points to the fact that prospects will volunteer their information when they know it’s being used to help them make better decisions.

Negative reviews

When Jeff Bezos of Amazon first added negative reviews to the Amazon website, his investors thought he was crazy to include information that would discourage people from buying things. His response was that you don’t make money when you sell things, but rather when you help people make purchase decisions.

He said that sellers often lose sight of the fact that it’s more important to help people make the decision that’s best rather than making the decision the seller wants them to make. It’s sometimes powerful to not sell to a buyer when you can’t find the value proposition. They may figure it out themselves because you’ve built that trust and then buy from you anyway.

You aren’t costing the company money and you’ll improve your retention.

Talking least

He points to the fact that he always thought if he talked the most, he would leave with the most. He discovered, though, that when he asked meaningful questions, he talked the least, and he did well.

Sam discovered that holding his meetings at a cigar lounge helped him monitor how much he talked, because if his cigar went out, it meant he talked too much and didn’t listen enough.

Candle problem

A famous psychology study challenges people to fix a candle to a way in a way that it doesn’t drop any wax when it’s lit. People try melting the candle to the wall but nothing works. The right answer, he said, is to dump out the box of tacks, tack the box to the wall, and then add the candle.

If you give people the right incentive, you fire up the part of your brain that excites them. If you need someone to turn a wheel, the best way to accomplish that is to give them a dollar for every revolution they make.

The hardest thing to do is to convince people to give something a fair shake. When what you’re doing isn’t working, you tend to do more of the same with greater intensity.

When you shift your conversation and slow down your sales cycle and ask more questions and give more answers, you’ll make it easy for people to reach out to you.

“Hubspot Grew” episode resources

Connect with Sam Mallikarjunan on his website or on LinkedIn.

Connect with me at donald@thesalesevangelist.com.

Try the first module of the TSE Certified Sales Training Program for free.

This episode is brought to you by the TSE Certified Sales Training Program. I developed this training course because I struggled early on as a seller. Once I had the chance to go through my own training, I noticed a hockey-stick improvement in my performance.

TSE Certified Sales Training Program can help you out of your slump. If you gave a lot of great presentations and did a lot of hard work, only to watch your prospects choose to work with your competitors, we can help you fix that.

Tools for sellers

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Todd Coponi, Transparency Sale, Sales Podcast

TSE 1109: Leading With Your Flaws

Power Reviews

It seems counterintuitive in sales, but leading with your flaws can shorten the sales cycle and disarm your customers, ultimately leading you to better metrics.

Todd Caponi was the chief revenue officer for a company called Power Reviews which helps retailers and brands collect and display ratings and reviews on their website. His time there caused him to rethink the way he leads sales organizations because he discovered that consumers were more likely to buy a product that had a 4.2 to 4.5 rating than a 5-star rating.

Statistics show that 95 percent of consumers in the B2C world are looking at reviews before they buy. Of those, 82 percent are looking for negative reviews before buying. Todd wondered what might happen if the same notion could be applied to the B2B world.

Pros and cons

Todd embraced the idea of embracing the pros and cons and leading with them. He discovered that his first deal, which previously had a sales cycle of 6 months, closed within 4 weeks.

They discovered that when you lead with your flaws, your sales cycle speeds up dramatically. You’ll qualify deals faster and eliminate those deals that you probably weren’t going to win anyway.

Todd was in New York when his VP of sales called him to say the company had an inbound lead from an apparel brand that wanted to initiate an evaluation. The brand happened to be headquartered in NY, so Todd scheduled coffee with the senior vice president of e-commerce. The coffee meeting became a presentation instead, and the SVP got right to the point.

Competitor is better

He said that his company had been talking to Todd’s competitor, and he wanted to know why Todd’s company was better than the competitor. Todd figured he had nothing to lose, so he asked an unexpected question.

“Do you mind if I tell you why the competitor is better?”

He explained that the competitor had offerings that his own company didn’t, so if he wasn’t going to be able to meet their needs, he wanted to determine that quickly so both parties could move on. The room deflated. The guy clearly thought Todd was crazy, but he agreed to the idea.

Todd talked about an add-on that the other company had but explained that his own company was focused on certain core beliefs. The SVP acknowledged that the add-on the competitor was offering wasn’t a necessity for his company, so they moved on.

Transparency

Within 20 minutes, the SVP kicked everyone else out of the meeting and grabbed a folder that includes the company’s budget for ratings and review software. He pointed to a number inside and asked Todd if he could hit that figure.

The two engaged in a collaborative process that culminated in a deal a few weeks later. The company didn’t initiate an evaluation. It simply chose Todd’s company. He recounted that he had called Todd’s competitor, who quickly went on a rant about the add-on that distinguished the two companies.

Every time they led with their flaws, it completely disarmed their prospects. The company built its sales cycle on a foundation of trust and all of its metrics moved in a dramatically positive direction.

Wired to resist

Todd said that we’re all wired to resist being sold to. As a buyer, he simply wants to be able to predict what his experience with a certain product will be like, and then to get the best deal he can. He said that a salesperson will demonstrate within the first five minutes whether he will be a great resource or push toward a sale even if it isn’t what the buyer wants.

People believe in authenticity and honesty. Many of them believe that there’s a trade-off required so that in order to have authenticity and honesty, you will sacrifice results. But the data suggests otherwise. The data says that when you provide authenticity and honesty to your customers, you’ll maximize your sales results.

Truthfully, the era of hiding your flaws from your prospects is over. The proliferation of ratings and reviews has moved into the B2B area and it has become the way of the world.

B2B buying behavior

A company called Trust Radius just published a study of B2B buying behavior. The data demonstrated that B2B buyers are using reviews 56 percent of the time and analyst ratings only 24 percent of the time.

Every year, reviews are climbing and independent studies are going down. Marketing is becoming less trustworthy and reviews are becoming the core that brings buyers to the table. Sellers must embrace that.

It’s counter-intuitive to most people to show weakness. Many sellers will listen to this and wonder why this works. Todd dug into the neuroscience of this and discovered that buyers make decisions using feeling and then back them up with logic. Logic is the justifying mechanism to emotional decisions.

We are also wired to disbelieve anything that looks perfect. We are taught to seek the negative. A recent study reported that buyers in a typical purchase cycle spend 39 percent of their time talking to sellers and 61 percent of their time doing other homework. This includes research, reviews, and back-channel information.

Utilizing levers

In his book, Transparency Sale, Todd tells the story of a rep who was selling something to an oil company. He explained the concept of levers, which he has become famous for.

If you search Google for tips on negotiating, you’ll find countless pointers that destroy trust. It’s like a Texas Hold ‘Em tournament.

But if you want to build trust through the goal line, you lead with what is important to you as an organization. You create buyers who are actually able to negotiate their own deals.

In the case of the oil company, Todd was pulled into a last-minute negotiation with a group of procurement people. Before they even started, he asked for permission to write four things on the board. He listed four levers on the whiteboard.

  • Volume, or how much they buy
  • Timing of cash, or how fast they pay
  • Length of commitment, or how long they commit
  • Timing of deal, or when they signed

Discount

The people in the meeting immediately asked for 30 percent off. Instead of offering to do 15 percent and initiating that song and dance, he acknowledged that it might be doable and then suggested using the four concepts on the board. These concepts represent four things Todd’s company was willing to pay for in the form of a discount.

The notion immediately disarmed the people in the meeting.

“Commit to more technology and because that’s valuable to us, we’ll pay you in the form of a discount.”

“Since we have a three-year commitment, pay us for years two and three and we’ll pay you in the form of a discount.”

“Extend your deal to five years and we’ll discount an extra 5 percent for years four and five.”

Todd’s company got something in return for every dollar they gave away, and the oil company loved Todd’s company at the end. Remember that you aren’t negotiating hostages. You’re negotiating agreements with products.

Be upfront

Commit to being as transparent as possible. Every person simply wants to feel that they’ve been heard and that they’ve gotten a good deal.

Get rid of one-sidedness. You’ll bring humanity back to the conversation. You’ll have the confidence of interacting with people as human beings. So few companies have a framework for the way they negotiate.

You could implement this concept right now. It doesn’t require a three-day class.

“Leading With Your Flaws” episode resources

You can connect with Todd on LinkedIn or at his website, transparencysale.com. Grab a copy of his book, Transparency Sale. If you haven’t connected with me on LinkedIn already, do that at Donald C. Kelly and watch the things I’m sharing there.

You’ve heard us talk about the TSE Certified Sales Training Program, and we’re offering the first module free as a gift to you. Preview it. Check it out. If it makes sense for you to join, you can be part of our upcoming semester.

You can take it on your own or as part of the semester group.

If you and your team are interested in learning more, we’d love to have you join us. Call (561)578-1729 to speak directly to me or one of our team members about the program.

This episode is also brought to you in part by mailtag.io, a Chrome browser extension for Gmail that allows you to track and schedule your emails. You’ll receive real-time alerts anyone opens an email or clicks a link.

I hope you enjoyed the show today as much as I did. If so, please consider leaving us a rating on Apple Podcast, Google Podcast, Stitcher, or wherever you consume this content and share it with someone else who might benefit from our message. It helps others find our message and improves our visibility.

Audio provided by Free SFX and Bensound.