This is the final segment of a three-part interview series with Mark Roberge, Chief Revenue Officer and SVP of Inbound Sales at Hubspot.
For those of you who missed the first two parts of this interview, Mark recently sat down with Base CEO, Uzi Shmilovici during an event by The Forecast Club in Boston. In part 1, Roberge shares his story about how he and his team took Hubspot from a class project at MIT in 2005 to 80 million dollars in revenue in 2013. The second interview focuses on inbound sales, transparency and big data. In this final segment, questioning is opened up to the audience and Roberge shares his biggest challenges in scaling a sales team, the importance of coaching and his biggest mistakes. You can scroll to the end to watch the full video interview.
Audience: Mark, what was the biggest challenge you faced in scaling the team?
Mark: I’m the type of leader that just loves to get to know my people. Kids, pets, hobbies, I enjoy knowing those things and I think it brings a sort of culture to the company and the team and enables a certain motivational style. That was my biggest challenge as a leader; we grew so fast and so large that I literally had to lead people that I barely met.
I made the point to go to lunch with each start class and start classes got to be like 30-35 people. So every time it was like a wedding; it’s 90 minutes and I have 2 minutes to talk to every person. For a lot of people, that was the extent of my personal relationship with them, and figuring out how to lead with that type of relationship was a very new and challenging thing for me.
Audience: You mentioned you had 12 criteria that you used in interview process, and a couple were clear indicators of success. What were those?
Mark: You want the answers? Sure, absolutely. First off, the process of doing that, I think, is important if you ever scale a sales team, because my first point to you – my first point is – appreciate your context. Some hires that didn’t work out for me, might kill it for you. The five that correlated most strongly with us that I think would correlate mostly for everyone, especially in software was coachability. A big part of my interview (technique at Hubspot) is roleplaying. I’ll say for example, “I’m VP marketing locally, you’re a Hubspot sales person, I just got to your website, go.” And we do role-play for 5 or 10 minutes, and I watch their style and how well they know Hubspot and whether they leave with questions. At the end I’m like, “Okay, great, how do you think you did?” If they’re like, “I did awesome,” that’s a big red flag. If they’re analytical and reflective, “I like what I did here, I could have done this better,” I like that.
So, coachability is huge, prior success is big, and that doesn’t just have to be in sales. I’ll ask, “Oh, you’re an account executive at Oracle. How many account executives were there? 70? What was your rank? Two? Fantastic. What is that based on? One quarter or all year? Is it revenue?” So I get really specific there. And prior success doesn’t have to be in sales. We’ve got an Olympic gold medalist on our team from the hockey team from the 90s. We’ve got a guy who’s a professional comic who’s made it to Comedy Central. Like these are people who went after something and achieved it.
That’s what you’re looking for. Work ethic, curiosity and intelligence (along with coachability and prior success) are the big five that we are looking for.
Audience: How much time per week do you spend coaching and developing the reps and managers?
Mark: I’m frustrated when the manager’s job is to walk around with a forecast and push papers around. Automate that! The biggest lever that you’re going to get to drive sales productivity is the effectiveness of your managers in developing and coaching your frontline sales people. So I have spoken of matrix-driven sales coaching as a model that was really the cornerstone of our development methodology at Hubspot. On the second day of every month I would meet with my directors, each of which had a few managers and 40 or so reps under them, and we’d go through three questions with each rep:
- What skill are you going to work on with that rep?
- How are you going to work on them with that?
- How did you decide that you’re going to work on that skill?
And because that occurs, the directors have that same conversation with their managers that morning, and because that occurs, the managers have that same conversation with all their reps (and co-create) the plan that day.
It forces coaching culture to the whole organization. And good coaching, like my mentor instructed me, is really about trying to find out the one thing that’s going to make the biggest difference.
So, coaching is everything to me.
Audience: So a slightly different question. I’m curious given your position leading sales for a company that sells marketing tools, what is it, as a leader in sales, you wish marketing could do to help sales sell more?
Mark: First off, take accountability for the lead generation portion.
I love meeting marketers that are like, “I’m a revenue marketer. That’s what I do. That’s my first and foremost job.”
It’s really important to have a very defined relationship between sales and marketing from that standpoint to try eliminate as much subjectivity as possible. I’ll give you an example of what we did. We knew, for the first year or so, if I gave my mid-market reps a hundred leads, they’ll connect with half, create 30 opportunities, do 15 demos and close 5 customers resulting in $800 monthly recurring revenue (MRR). It’s like clockwork.
I mean, there is obviously deviation by rep, but as you scale, it was easy for me if I had 15 mid-market reps to say, “Hey, I need 1,500 good mid-market leads this month to close business.”
And Mike Volpe (VP of Marketing), my counterpart, stepped up and delivered that. I’d love all companies to get there. But still, there’s a hole in that, and the hole is that some of those leads we got were VP’s of marketing who downloaded a white paper, and we were like, “Great, awesome lead!” Other leads were VP’s of marketing that requested a demo. Better lead. Five times better. They close at 5 times the rate as the white paper download. But guess which one was harder for Mike to get for me? It was the demo request. It’s a lot harder to get someone to your website and request a demo than it is to download a really cool white paper on Twitter marketing. So guess which leads I got most – the Twitter marketing white papers. So as precise as we were, there was a pretty natural misalignment. So we rethought that process and what we did was – we segmented those little leads, and we knew that ebook and white paper leads closed at 1% and demo request close at 5%. So if you multiply the conversion rate of those leads times the average spend of those leads, you reverse engineered a lead value. So, the ebook leads were worth a dollar, and the demo requests leads were worth 5 dollars. Now instead of telling Volpe that I need 1,500 mid-market leads, I told him that I needed $25,000 dollars of lead value, and he can get there through whatever the math is, like 5,000 demo requests or 25,000 ebook downloads – either way I’m getting to my number.
I’ve essentially put marketing on a quota. How cool is that? Instead of just sales, marketing is on a quota too. That level of accountability and focus on the lead generation, not just to conversions and website visits etc. That’s how marketing can help sales.
Audience: So by all accounts, you’ve experienced crazy growth over a short period of time. Any specific tactics that you used to keep your sales team motivated as you continued to grow and potentially shrink their territory?
Mark: Not use territories. And we’re fortunate that we are very inbound, I mean, it took me years to just catch up the hiring to our inbound flow, so we’re able to build a very different and modern sales team.
If you think about territories, they grew out sales teams that knocked on doors. That’s the whole point. Put your people where the doors are. For whatever reason it is still around. Either way you should organize your sales team by the buyer persona.
As you grow your team, would you rather specialize your sales person in New York, or would you rather specialize your sales person in health care? Or small businesses? So this is the better way of thinking about things, and when you do that, you don’t screw people over as much by having cut territories in half every year.
That was another thing that was strange to me. I’d interview these awesome sales people who were like, “I had a great run, but my quota is too big and my territory is too small.” I was like, “Wow. They have an awesome relationship with this person, they just made the job too hard and they just want to leave.”
So, what we did – we set up these promotional tiers that had nothing to do with tenure, that had everything to do with performance, your average productivity, the size of your install base, and your goal from sales person to senior sales person to principal to principal two, and with each level, you would get a bump in your variable.
Now I did mess up and I made a bump in your base and I didn’t raise the quotas so there was some issues there. The way it should work and how it works now is – you keep the base the same, bump the variable amount and bump the quota, bump them in such a way that the amount of money that they’re making per dollar sold is going up a little bit, so they’re all striving to go up, and it has nothing to do with tenure, it has everything to do with performance. We’re thoughtful about that and we’re able to hang on some of our best people because of it.
Uzi: About this region thing, by the way, the previous event we had was in Chicago, it was with Mike Gamson, who is the VP of Sales for LinkedIn. He runs the entire LinkedIn sales team, 1500 people, pretty impressive team. We were talking about regions vs. no regions. How do you divide the sales team? Do you know what they do over there at LinkedIn?
Mark: They do it more by industry, right?
Uzi: Originally they did it by industry but then they have a big play around what they call social selling. So today, they’re using what they call a social proximity index. So how close are you to the person that you’re selling? So they’re pretty much looking at the LinkedIn data, and they’re trying to find the people who are closest to the prospect, that have the highest chance of actually being effective. As you can imagine, very, very powerful. But it’s just another very novel way of selling. Why would you do it by region? Doesn’t make sense.
Mark: What they do is really cool. Imagine getting a new lead and you get it but a sales rep next to you is cousin’s with someone of that company. I mean, just makes sense that you shouldn’t go to the person with a better relationship.
Audience: During your time at Hubspot, what was your biggest mistake?
Mark: Yeah, lots of mistakes, we could be here for a while, but probably the biggest one I made was not specializing the sales team early enough. I’d scale to probably 25 or so sales people and we had leads very coming in, some of them were Fortune 5000 companies, and some were plumbers, and we were just randomly assigning them to whoever. And I had some sales people who were like, “Man, I hate these Fortune 5000 guys, I can never get them on the phone, but I love those plumbers, they pick up. I know they don’t have a lot of money, but I can get them to make a decision in an hour and be done.” And other guys were like, “I hate these plumbers, they don’t have any money. I’m just a more strategic seller and I just want to deal with people who have better business acumen, and who will spend a little bit more.”
So it was pretty logical. It was like, wow, we need to specialize in this. I didn’t do that early enough, and I should have done it earlier. At that time I was two and a half years into it, and I probably should have done it in the first year.
Audience: How did you choose managers? What was your decision process?
Mark: Yeah, definitely, the classic response is – don’t promote your best sales people to manager, it is a big mistake. The challenge though, is that if you promote bad sales people to managers, they’re not going to have any credibility with the team. So, it takes a special person to be that manager. You don’t have to be the best, but what I like to look for is a very well rounded grasp of the entire methodology.
My two best sales people for example, one of them is the best sales person because he does twice as much activity as anybody else. He works longer hours, he has this crazy set up in Salesforce, he just is going crazy, and he is mediocre in everything else.
My number two person is amazing at report building. In an hour demo she talks 45 minutes about the person’s pets or church or kids or whatever, and the last 15 minutes is the product and they all buy. And everything else is kind of mediocre. Now, imagine if one of them became a manager what their team would be like. Imagine if they ran that person’s team. If the report builder joined the activity hound’s team. It would be a complete mess. Like the activity hound would be trying to train her to do crazy activity, which she doesn’t like to do because she’s amazing at report building. I look for someone who is well-rounded, who’s actually doing well, so they will bring the respect to the team, and then I look for all the other stuff we talked about on coachability, empathy, how to motivate a team.
Leadership development at this scale was just critical. We would introduce a 12 week class around these leadership skills, how to deliver negative feedback well, how to build pride in your team, you know, how to manage conflict, big one. Things that aren’t necessarily specific to sales, but were necessary in these leadership roles.
Once they got through that, we actually gave them a hire while they kept their job. So I was like, “Okay, you’re doing great, you’re almost there, this hire here is yours, you’re going to interview for it, you’re going to mentor them through training and you’re going to manage them for two months while you hit quota as an individual contributor. I don’t advocate that dual role for long, but I just want to see how you do. I want to let you make mistakes in a much more controlled environment. I want to see if you actually want to do this thing. And you’re like, “How can I manage someone while I make my quota?” Well guess what, when you have 8 people, you probably have 4 or 5 hours a week to spend with someone tops anyway, so spend those 4 or 5 hours a week with that person, see if you can make that happen. And it is a really great way for us to coach them in sort of a less stressful environment, and see if they actually want the job and see if they’re good for the job, and then we’d kind of promote them up.
You can watch the full interview here. If you’re only interested in the questions addressed in part 3, skip to the 23 minute mark.
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