SlideShare a Scribd company logo
1 of 22
Download to read offline
Sales Mistakes that Can Kill Your SaaS Business
… and How to Avoid Them
Mark Roberge
Senior Lecturer, HBS
Former CRO, HubSpot
Michele Law
Former CRO, Castlight Health
Former COO, OpenDNS
Mistake #1
Pre-mature focus on growth
Mistake #1: Going into Growth Mode
Too Early
Product Growth
Sales Team
Understand Path to the Growth Phase
Product
Market/Fit
Transition
to Growth
Growth
Where you are in this process impacts these decisions:
When to hit the gas
Who to hire and when
When to use metrics and why
How much money to raise
How much to invest in scaling Sales and Marketing
When and who to hire as your first VP Sales, VP Marketing, VP Customer
Success
Learn/Itera
te
Business
Model/ Go
To Market
Ramp
Customer Success -> Unit Economics -> Growth
#1: Customer Success
[WAU, NPS, Churn]
Learn/Iterate -------> Measure/Monitor
#2: Unit Economics
[Payback, LTV/CAC, Magic #]
Learn/Iterate -------> Measure/Monitor
#3: Growth
[Revenue, Customer Count]
Mistake #2
The first sales hire
Poll: Who should your first sales hire be?
25 years experience in your industry
Currently VP over $200 Million in sales
#1 Sales Rep out of 500 reps
In your industry
5 years sales experience
10 years sales
experience
Outside of your industry
Recently promoted to
Sales Manager
Entrepreneur outside of
your industry
Sales background
Understand Who and When to Hire
Product
Market/Fit
Transition
to Growth
Growth
Founders/Product
Focused CEO
Sales
Manager/Direct
or + Customer
Development
VP Sales
Generalist
Generalist +
Specialist
Specialist
Company
Phase
Who
Profile
For early sales calls, market feedback is
more valuable than revenue and customers
Mistake #3
Ignoring Sales Impact on Customer Success
Churn was Rooted in the Sales Compensation Plan
2007
• $500 per customer
• 2x commission on revenue above quota
• 4 month clawback
* Data has been altered from actual HubSpot data for the purposes of this presentation
Customer Churn by Monthly Cohort
12
0.0%
2.0%
4.0%
6.0%
CumulativeCustomerChurn%
* Data has been altered from actual HubSpot data for the purposes of this presentation
Customer Lifetime Value by Salesperson
*DatahasbeenalteredfromactualHubSpotdataforthepurposesofthispresentation
MonthlyCustomerLTVperSalesperson
Individual Salespeople
2007
• $500 per customer
• 2x commission on revenue above quota
• 4 month clawback
2009
• 1st LTV tier = $1000 per customer
• 2nd LTV tier = $750 per customer
• 3rd LTV tier = $500 per customer
• 4th LTV tier = $250 per customer
2012
• 50% commission on 1st month payment
• 25% commission on 6th month payment
• 25% on 12th month payment
• Bonus on install base growth (New MRR + Upgrades – Churn)
• 6 month clawback
* Data has been altered from actual HubSpot data for the purposes of this presentation
Reducing Churn with the Sales Compensation Plan
The Sales Compensation Plan is a Powerful
Vehicle to Drive Customer Success
https://hbr.org/2015/04/the-right-way-to-use-compensation-2
Mistake #4
Aligning GTM by Function Rather than Buyer
Following Common Practice, We Organized by Function
MARKETING
SALES SERVICES
Generate inbound leads Convert leads to customers Make customers successful
 Campaigns focused on Mary
and Erin
 Weekly Marketing status
meetings
 Targeting company-wide
lead goals
 Persona-specific sales
processes
 Weekly sales status
meetings
 Targeting person-specific
revenue goals
 Product-specific services
process
 Weekly services status
meetings
 Targeting product-specific
customer success goals
Deliver Leads Deliver Customers
… but Transformed to a Buyer-Persona Org Structure
Owner Ollie Team
(1-100 employees)
Marketing Mary Team
(100-2,000 employees)
Enterprise Erin Team
(2,000+ employees)
Group Sales & On-Boarding 1-to-1 Sales & On-Boarding Multi-Level Sales & On Boarding
Ollie
Marketing
Ollie
Sales
Ollie
Services
Mary
Marketing
Mary
Sales
Mary
Services
Erin
Marketing
Erin
Sales
Erin
Services
 Replaced marketing, sales, and services meetings with buyer persona meetings
 Re-organized seating around cross-functional buyer persona teams
 Customized marketing SLA, sales effectiveness, and customer success metrics to persona
… and held each buyer persona unit to our KPIs
Metric Ollie Mary Erin
LTV/CAC 5.2 11.5 19.0
CAC $6,250 $15,500 $28,750
MRR Churn 1.3% 0.7% 0.5%
Avg MRR $425 $1250 $2725
LTV $32,700 $179,000 $545,000
Months to Payback 14.7 12.4 10.6
MRR Growth (Q2Q) 18% 27% 34%
MRR / Rep $4,750 $7,250 $10,500
NPS 47 65 62
Leads per Cust. 540 2,400 6,625
* Data has been altered from actual HubSpot data for the purposes of this presentation
Maximize Customer Success by Organizing
Around the Buyer rather than Function
Thanks!
Mark Roberge
Senior Lecturer, HBS
Former CRO, HubSpot
Michele Law
Former CRO, Castlight Health
Former COO, OpenDNS

More Related Content

What's hot

Outbound prospecting for highly targeted lead flow
Outbound prospecting for highly targeted lead flowOutbound prospecting for highly targeted lead flow
Outbound prospecting for highly targeted lead flowDavid Skok
 
From Startup to IPO: Lessons from the pricing trenches - Brad Coffey of HubSpot
 From Startup to IPO: Lessons from the pricing trenches - Brad Coffey of HubSpot From Startup to IPO: Lessons from the pricing trenches - Brad Coffey of HubSpot
From Startup to IPO: Lessons from the pricing trenches - Brad Coffey of HubSpotPrice Intelligently
 
What Is A Go-To-Customer Strategy?
What Is A Go-To-Customer Strategy?What Is A Go-To-Customer Strategy?
What Is A Go-To-Customer Strategy?Drift
 
Growth Fracking for 2017 - Suneet Bhatt at SaaSFest 2016
Growth Fracking for 2017 - Suneet Bhatt at SaaSFest 2016Growth Fracking for 2017 - Suneet Bhatt at SaaSFest 2016
Growth Fracking for 2017 - Suneet Bhatt at SaaSFest 2016Price Intelligently
 
Building a Repeatable, Scalable & Profitable Growth Process
Building a Repeatable, Scalable & Profitable Growth ProcessBuilding a Repeatable, Scalable & Profitable Growth Process
Building a Repeatable, Scalable & Profitable Growth ProcessDavid Skok
 
Matching Price to Value: 3 Lessons in Monetization from Menlo Ventures
Matching Price to Value: 3 Lessons in Monetization from Menlo VenturesMatching Price to Value: 3 Lessons in Monetization from Menlo Ventures
Matching Price to Value: 3 Lessons in Monetization from Menlo Venturessaastr
 
Mastering SaaS Pricing - SaaStr Annual 2018
Mastering SaaS Pricing - SaaStr Annual 2018Mastering SaaS Pricing - SaaStr Annual 2018
Mastering SaaS Pricing - SaaStr Annual 2018OpenView
 
David Skok's, SMASH Summit NYC
David Skok's,  SMASH Summit NYCDavid Skok's,  SMASH Summit NYC
David Skok's, SMASH Summit NYC500 Startups
 
On Shifting to the Next Gear: Proven Strategies to Accelerate Growth with Int...
On Shifting to the Next Gear: Proven Strategies to Accelerate Growth with Int...On Shifting to the Next Gear: Proven Strategies to Accelerate Growth with Int...
On Shifting to the Next Gear: Proven Strategies to Accelerate Growth with Int...saastr
 
20 Reasons B2B Loves ABM
20 Reasons B2B Loves ABM20 Reasons B2B Loves ABM
20 Reasons B2B Loves ABMDemandbase
 
The RevTech Stack Playbook: Going from $1M to $100M with SalesLoft's CMO
The RevTech Stack Playbook: Going from $1M to $100M with SalesLoft's CMOThe RevTech Stack Playbook: Going from $1M to $100M with SalesLoft's CMO
The RevTech Stack Playbook: Going from $1M to $100M with SalesLoft's CMOsaastr
 
Top 10 Learnings about Free Trials with Tomasz Tunguz
Top 10 Learnings about Free Trials with Tomasz TunguzTop 10 Learnings about Free Trials with Tomasz Tunguz
Top 10 Learnings about Free Trials with Tomasz Tunguzsaastr
 
The Playbook To Re-Igniting Growth with Predictable Revenue Co-Founder and CE...
The Playbook To Re-Igniting Growth with Predictable Revenue Co-Founder and CE...The Playbook To Re-Igniting Growth with Predictable Revenue Co-Founder and CE...
The Playbook To Re-Igniting Growth with Predictable Revenue Co-Founder and CE...saastr
 
ABM - Now What?
ABM - Now What?ABM - Now What?
ABM - Now What?Tenbound
 
The SaaS business model
The SaaS business modelThe SaaS business model
The SaaS business modelDavid Skok
 
Hacking Content Marketing with Predictive Analytics
Hacking Content Marketing with Predictive AnalyticsHacking Content Marketing with Predictive Analytics
Hacking Content Marketing with Predictive AnalyticsInfer
 
SaaS Model & Metrics - How to build a successful software business
SaaS Model & Metrics - How to build a successful software businessSaaS Model & Metrics - How to build a successful software business
SaaS Model & Metrics - How to build a successful software businessBrian Hutchins
 

What's hot (20)

Zero to 50m
Zero to 50m Zero to 50m
Zero to 50m
 
Outbound prospecting for highly targeted lead flow
Outbound prospecting for highly targeted lead flowOutbound prospecting for highly targeted lead flow
Outbound prospecting for highly targeted lead flow
 
From Startup to IPO: Lessons from the pricing trenches - Brad Coffey of HubSpot
 From Startup to IPO: Lessons from the pricing trenches - Brad Coffey of HubSpot From Startup to IPO: Lessons from the pricing trenches - Brad Coffey of HubSpot
From Startup to IPO: Lessons from the pricing trenches - Brad Coffey of HubSpot
 
What Is A Go-To-Customer Strategy?
What Is A Go-To-Customer Strategy?What Is A Go-To-Customer Strategy?
What Is A Go-To-Customer Strategy?
 
Ultimate Guide to SaaS Pricing
Ultimate Guide to SaaS PricingUltimate Guide to SaaS Pricing
Ultimate Guide to SaaS Pricing
 
Growth Fracking for 2017 - Suneet Bhatt at SaaSFest 2016
Growth Fracking for 2017 - Suneet Bhatt at SaaSFest 2016Growth Fracking for 2017 - Suneet Bhatt at SaaSFest 2016
Growth Fracking for 2017 - Suneet Bhatt at SaaSFest 2016
 
Building a Repeatable, Scalable & Profitable Growth Process
Building a Repeatable, Scalable & Profitable Growth ProcessBuilding a Repeatable, Scalable & Profitable Growth Process
Building a Repeatable, Scalable & Profitable Growth Process
 
Matching Price to Value: 3 Lessons in Monetization from Menlo Ventures
Matching Price to Value: 3 Lessons in Monetization from Menlo VenturesMatching Price to Value: 3 Lessons in Monetization from Menlo Ventures
Matching Price to Value: 3 Lessons in Monetization from Menlo Ventures
 
Mastering SaaS Pricing - SaaStr Annual 2018
Mastering SaaS Pricing - SaaStr Annual 2018Mastering SaaS Pricing - SaaStr Annual 2018
Mastering SaaS Pricing - SaaStr Annual 2018
 
David Skok's, SMASH Summit NYC
David Skok's,  SMASH Summit NYCDavid Skok's,  SMASH Summit NYC
David Skok's, SMASH Summit NYC
 
On Shifting to the Next Gear: Proven Strategies to Accelerate Growth with Int...
On Shifting to the Next Gear: Proven Strategies to Accelerate Growth with Int...On Shifting to the Next Gear: Proven Strategies to Accelerate Growth with Int...
On Shifting to the Next Gear: Proven Strategies to Accelerate Growth with Int...
 
20 Reasons B2B Loves ABM
20 Reasons B2B Loves ABM20 Reasons B2B Loves ABM
20 Reasons B2B Loves ABM
 
What is Pipeline Marketing
What is Pipeline Marketing What is Pipeline Marketing
What is Pipeline Marketing
 
The RevTech Stack Playbook: Going from $1M to $100M with SalesLoft's CMO
The RevTech Stack Playbook: Going from $1M to $100M with SalesLoft's CMOThe RevTech Stack Playbook: Going from $1M to $100M with SalesLoft's CMO
The RevTech Stack Playbook: Going from $1M to $100M with SalesLoft's CMO
 
Top 10 Learnings about Free Trials with Tomasz Tunguz
Top 10 Learnings about Free Trials with Tomasz TunguzTop 10 Learnings about Free Trials with Tomasz Tunguz
Top 10 Learnings about Free Trials with Tomasz Tunguz
 
The Playbook To Re-Igniting Growth with Predictable Revenue Co-Founder and CE...
The Playbook To Re-Igniting Growth with Predictable Revenue Co-Founder and CE...The Playbook To Re-Igniting Growth with Predictable Revenue Co-Founder and CE...
The Playbook To Re-Igniting Growth with Predictable Revenue Co-Founder and CE...
 
ABM - Now What?
ABM - Now What?ABM - Now What?
ABM - Now What?
 
The SaaS business model
The SaaS business modelThe SaaS business model
The SaaS business model
 
Hacking Content Marketing with Predictive Analytics
Hacking Content Marketing with Predictive AnalyticsHacking Content Marketing with Predictive Analytics
Hacking Content Marketing with Predictive Analytics
 
SaaS Model & Metrics - How to build a successful software business
SaaS Model & Metrics - How to build a successful software businessSaaS Model & Metrics - How to build a successful software business
SaaS Model & Metrics - How to build a successful software business
 

Viewers also liked

The State of the Cloud Report 2017
The State of the Cloud Report 2017 The State of the Cloud Report 2017
The State of the Cloud Report 2017 Anna Khan
 
Numbers that Actually Matter. Finding Your North Star
Numbers that Actually Matter. Finding Your North Star Numbers that Actually Matter. Finding Your North Star
Numbers that Actually Matter. Finding Your North Star Mamoon Hamid
 
SaaStr 2017: AI–Enabled SaaS - 4 Models for ML as Competitive Advantage
SaaStr 2017: AI–Enabled SaaS - 4 Models for ML as Competitive AdvantageSaaStr 2017: AI–Enabled SaaS - 4 Models for ML as Competitive Advantage
SaaStr 2017: AI–Enabled SaaS - 4 Models for ML as Competitive AdvantageSarah Guo
 
The SaaS business model and metrics
The SaaS business model and metricsThe SaaS business model and metrics
The SaaS business model and metricsDavid Skok
 
3 Things Every Sales Team Needs to Be Thinking About in 2017
3 Things Every Sales Team Needs to Be Thinking About in 20173 Things Every Sales Team Needs to Be Thinking About in 2017
3 Things Every Sales Team Needs to Be Thinking About in 2017Drift
 
The Human Company Playbook, Version 1.0
The Human Company Playbook, Version 1.0The Human Company Playbook, Version 1.0
The Human Company Playbook, Version 1.0Luminary Labs
 
Lab session #2: The Human Company
Lab session #2: The Human CompanyLab session #2: The Human Company
Lab session #2: The Human CompanyLuminary Labs
 
Growing great schools: what has the most impact?
Growing great schools: what has the most impact?Growing great schools: what has the most impact?
Growing great schools: what has the most impact?Ofsted
 
CREATIVITY: Renew Your Thinking, Transform Your Life
CREATIVITY: Renew Your Thinking, Transform Your LifeCREATIVITY: Renew Your Thinking, Transform Your Life
CREATIVITY: Renew Your Thinking, Transform Your LifeEfiong Etuk
 
Hype vs. Reality: The AI Explainer
Hype vs. Reality: The AI ExplainerHype vs. Reality: The AI Explainer
Hype vs. Reality: The AI ExplainerLuminary Labs
 
"State of the Cloud" Report -- Bessemer Venture Partners (June 2015)
"State of the Cloud" Report -- Bessemer Venture Partners (June 2015)"State of the Cloud" Report -- Bessemer Venture Partners (June 2015)
"State of the Cloud" Report -- Bessemer Venture Partners (June 2015)Ian Gertler
 
Visual Design with Data
Visual Design with DataVisual Design with Data
Visual Design with DataSeth Familian
 
DevOps meetup - Ansible and Docker for your VPS
DevOps meetup - Ansible and Docker for your VPSDevOps meetup - Ansible and Docker for your VPS
DevOps meetup - Ansible and Docker for your VPSŁukasz Proszek
 

Viewers also liked (20)

The State of the Cloud Report 2017
The State of the Cloud Report 2017 The State of the Cloud Report 2017
The State of the Cloud Report 2017
 
Numbers that Actually Matter. Finding Your North Star
Numbers that Actually Matter. Finding Your North Star Numbers that Actually Matter. Finding Your North Star
Numbers that Actually Matter. Finding Your North Star
 
SaaStr 2017: AI–Enabled SaaS - 4 Models for ML as Competitive Advantage
SaaStr 2017: AI–Enabled SaaS - 4 Models for ML as Competitive AdvantageSaaStr 2017: AI–Enabled SaaS - 4 Models for ML as Competitive Advantage
SaaStr 2017: AI–Enabled SaaS - 4 Models for ML as Competitive Advantage
 
State of the Cloud 2017
State of the Cloud 2017State of the Cloud 2017
State of the Cloud 2017
 
Bessemer's 10 Laws of Cloud Computing
Bessemer's 10 Laws of Cloud ComputingBessemer's 10 Laws of Cloud Computing
Bessemer's 10 Laws of Cloud Computing
 
The SaaS business model and metrics
The SaaS business model and metricsThe SaaS business model and metrics
The SaaS business model and metrics
 
3 Things Every Sales Team Needs to Be Thinking About in 2017
3 Things Every Sales Team Needs to Be Thinking About in 20173 Things Every Sales Team Needs to Be Thinking About in 2017
3 Things Every Sales Team Needs to Be Thinking About in 2017
 
The Human Company Playbook, Version 1.0
The Human Company Playbook, Version 1.0The Human Company Playbook, Version 1.0
The Human Company Playbook, Version 1.0
 
Lab session #2: The Human Company
Lab session #2: The Human CompanyLab session #2: The Human Company
Lab session #2: The Human Company
 
Growing great schools: what has the most impact?
Growing great schools: what has the most impact?Growing great schools: what has the most impact?
Growing great schools: what has the most impact?
 
CREATIVITY: Renew Your Thinking, Transform Your Life
CREATIVITY: Renew Your Thinking, Transform Your LifeCREATIVITY: Renew Your Thinking, Transform Your Life
CREATIVITY: Renew Your Thinking, Transform Your Life
 
Hype vs. Reality: The AI Explainer
Hype vs. Reality: The AI ExplainerHype vs. Reality: The AI Explainer
Hype vs. Reality: The AI Explainer
 
"State of the Cloud" Report -- Bessemer Venture Partners (June 2015)
"State of the Cloud" Report -- Bessemer Venture Partners (June 2015)"State of the Cloud" Report -- Bessemer Venture Partners (June 2015)
"State of the Cloud" Report -- Bessemer Venture Partners (June 2015)
 
Visual Design with Data
Visual Design with DataVisual Design with Data
Visual Design with Data
 
Chap011
Chap011Chap011
Chap011
 
Aon Vs. Pon
Aon Vs. PonAon Vs. Pon
Aon Vs. Pon
 
Fluent integration-tests
Fluent integration-testsFluent integration-tests
Fluent integration-tests
 
Selenium for-ops
Selenium for-opsSelenium for-ops
Selenium for-ops
 
DevOps meetup - Ansible and Docker for your VPS
DevOps meetup - Ansible and Docker for your VPSDevOps meetup - Ansible and Docker for your VPS
DevOps meetup - Ansible and Docker for your VPS
 
Quantum computing
Quantum computingQuantum computing
Quantum computing
 

Similar to Sales mistakes that can kill your saas business and how to avoid them

Mark Roberge's Forecast 2015 Keynote: The Sales Acceleration Formula
Mark Roberge's Forecast 2015 Keynote: The Sales Acceleration FormulaMark Roberge's Forecast 2015 Keynote: The Sales Acceleration Formula
Mark Roberge's Forecast 2015 Keynote: The Sales Acceleration FormulaBase CRM
 
LOCALOGY ENGAGE 19: The Best Companies and PE Firms are Focused on Engagement...
LOCALOGY ENGAGE 19: The Best Companies and PE Firms are Focused on Engagement...LOCALOGY ENGAGE 19: The Best Companies and PE Firms are Focused on Engagement...
LOCALOGY ENGAGE 19: The Best Companies and PE Firms are Focused on Engagement...Localogy
 
Why It Takes 7-13+ Touches to Generate a Qualified B2B Sales Lead Today
Why It Takes 7-13+ Touches to Generate a Qualified B2B Sales Lead TodayWhy It Takes 7-13+ Touches to Generate a Qualified B2B Sales Lead Today
Why It Takes 7-13+ Touches to Generate a Qualified B2B Sales Lead TodayVivastream
 
HubSpot - Inbound marketing and web 2.0 case study
HubSpot - Inbound marketing and web 2.0 case studyHubSpot - Inbound marketing and web 2.0 case study
HubSpot - Inbound marketing and web 2.0 case studyRonak Shah
 
Revenue Metrics for the Revenue Marketer
Revenue Metrics for the Revenue MarketerRevenue Metrics for the Revenue Marketer
Revenue Metrics for the Revenue Marketeredynamic
 
How to use Customer Success to Prep for and Drive Contract Renewals
How to use Customer Success to Prep for and Drive Contract RenewalsHow to use Customer Success to Prep for and Drive Contract Renewals
How to use Customer Success to Prep for and Drive Contract RenewalsGainsight
 
Building a B2B Demand Gen Engine
Building a B2B Demand Gen EngineBuilding a B2B Demand Gen Engine
Building a B2B Demand Gen EngineTodd Ebert
 
Zerobyte Presentation
Zerobyte PresentationZerobyte Presentation
Zerobyte PresentationRajesh Mondal
 
Close More Deals with Effective Lead Scoring
Close More Deals with Effective Lead ScoringClose More Deals with Effective Lead Scoring
Close More Deals with Effective Lead ScoringMarketo
 
Planning business growth in new year
Planning business growth in new yearPlanning business growth in new year
Planning business growth in new yearKimberly Deas
 
Account Based Marketing - SiriusDecisions - January TCOMCUG
Account Based Marketing - SiriusDecisions - January TCOMCUGAccount Based Marketing - SiriusDecisions - January TCOMCUG
Account Based Marketing - SiriusDecisions - January TCOMCUGRon Corbisier
 
Mark Roberge's The Science of Re-Establishing Growth - Where, When, and How
Mark Roberge's The Science of Re-Establishing Growth - Where, When, and HowMark Roberge's The Science of Re-Establishing Growth - Where, When, and How
Mark Roberge's The Science of Re-Establishing Growth - Where, When, and HowPaul Fifield
 
Mark Roberge's The Science of Re-Establishing Growth - Where, When, and How
Mark Roberge's The Science of Re-Establishing Growth - Where, When, and HowMark Roberge's The Science of Re-Establishing Growth - Where, When, and How
Mark Roberge's The Science of Re-Establishing Growth - Where, When, and HowSales Impact Academy
 
Why It Takes 7-13+ Touches to Generate a Qualified B2B Sales Lead Today
Why It Takes 7-13+ Touches to Generate a Qualified B2B Sales Lead TodayWhy It Takes 7-13+ Touches to Generate a Qualified B2B Sales Lead Today
Why It Takes 7-13+ Touches to Generate a Qualified B2B Sales Lead TodayVivastream
 
10 Secrets to Metrics Driven Coaching
10 Secrets to Metrics Driven Coaching10 Secrets to Metrics Driven Coaching
10 Secrets to Metrics Driven CoachingHubSpot
 
Globaljet Systems & Business Solutions - We make your business work, not you....
Globaljet Systems & Business Solutions - We make your business work, not you....Globaljet Systems & Business Solutions - We make your business work, not you....
Globaljet Systems & Business Solutions - We make your business work, not you....Globaljet Systems & Business Solutions
 
Using KPIs to Manage Business Growth
Using KPIs to Manage Business Growth Using KPIs to Manage Business Growth
Using KPIs to Manage Business Growth Damian Connolly
 
The Integrated Marketing Analytics Guidebook White Paper by BECKON
The Integrated Marketing Analytics Guidebook White Paper by BECKONThe Integrated Marketing Analytics Guidebook White Paper by BECKON
The Integrated Marketing Analytics Guidebook White Paper by BECKONAmanda Roberts
 
Accu agency management tips
Accu agency management tipsAccu agency management tips
Accu agency management tipsEddie Emmett
 

Similar to Sales mistakes that can kill your saas business and how to avoid them (20)

Mark Roberge's Forecast 2015 Keynote: The Sales Acceleration Formula
Mark Roberge's Forecast 2015 Keynote: The Sales Acceleration FormulaMark Roberge's Forecast 2015 Keynote: The Sales Acceleration Formula
Mark Roberge's Forecast 2015 Keynote: The Sales Acceleration Formula
 
LOCALOGY ENGAGE 19: The Best Companies and PE Firms are Focused on Engagement...
LOCALOGY ENGAGE 19: The Best Companies and PE Firms are Focused on Engagement...LOCALOGY ENGAGE 19: The Best Companies and PE Firms are Focused on Engagement...
LOCALOGY ENGAGE 19: The Best Companies and PE Firms are Focused on Engagement...
 
Why It Takes 7-13+ Touches to Generate a Qualified B2B Sales Lead Today
Why It Takes 7-13+ Touches to Generate a Qualified B2B Sales Lead TodayWhy It Takes 7-13+ Touches to Generate a Qualified B2B Sales Lead Today
Why It Takes 7-13+ Touches to Generate a Qualified B2B Sales Lead Today
 
HubSpot - Inbound marketing and web 2.0 case study
HubSpot - Inbound marketing and web 2.0 case studyHubSpot - Inbound marketing and web 2.0 case study
HubSpot - Inbound marketing and web 2.0 case study
 
Revenue Metrics for the Revenue Marketer
Revenue Metrics for the Revenue MarketerRevenue Metrics for the Revenue Marketer
Revenue Metrics for the Revenue Marketer
 
How to use Customer Success to Prep for and Drive Contract Renewals
How to use Customer Success to Prep for and Drive Contract RenewalsHow to use Customer Success to Prep for and Drive Contract Renewals
How to use Customer Success to Prep for and Drive Contract Renewals
 
Building a B2B Demand Gen Engine
Building a B2B Demand Gen EngineBuilding a B2B Demand Gen Engine
Building a B2B Demand Gen Engine
 
Zerobyte Presentation
Zerobyte PresentationZerobyte Presentation
Zerobyte Presentation
 
Close More Deals with Effective Lead Scoring
Close More Deals with Effective Lead ScoringClose More Deals with Effective Lead Scoring
Close More Deals with Effective Lead Scoring
 
Planning business growth in new year
Planning business growth in new yearPlanning business growth in new year
Planning business growth in new year
 
Account Based Marketing - SiriusDecisions - January TCOMCUG
Account Based Marketing - SiriusDecisions - January TCOMCUGAccount Based Marketing - SiriusDecisions - January TCOMCUG
Account Based Marketing - SiriusDecisions - January TCOMCUG
 
Mark Roberge's The Science of Re-Establishing Growth - Where, When, and How
Mark Roberge's The Science of Re-Establishing Growth - Where, When, and HowMark Roberge's The Science of Re-Establishing Growth - Where, When, and How
Mark Roberge's The Science of Re-Establishing Growth - Where, When, and How
 
Mark Roberge's The Science of Re-Establishing Growth - Where, When, and How
Mark Roberge's The Science of Re-Establishing Growth - Where, When, and HowMark Roberge's The Science of Re-Establishing Growth - Where, When, and How
Mark Roberge's The Science of Re-Establishing Growth - Where, When, and How
 
Why It Takes 7-13+ Touches to Generate a Qualified B2B Sales Lead Today
Why It Takes 7-13+ Touches to Generate a Qualified B2B Sales Lead TodayWhy It Takes 7-13+ Touches to Generate a Qualified B2B Sales Lead Today
Why It Takes 7-13+ Touches to Generate a Qualified B2B Sales Lead Today
 
10 Secrets to Metrics Driven Coaching
10 Secrets to Metrics Driven Coaching10 Secrets to Metrics Driven Coaching
10 Secrets to Metrics Driven Coaching
 
Globaljet Systems & Business Solutions - We make your business work, not you....
Globaljet Systems & Business Solutions - We make your business work, not you....Globaljet Systems & Business Solutions - We make your business work, not you....
Globaljet Systems & Business Solutions - We make your business work, not you....
 
Vm sales audit
Vm sales auditVm sales audit
Vm sales audit
 
Using KPIs to Manage Business Growth
Using KPIs to Manage Business Growth Using KPIs to Manage Business Growth
Using KPIs to Manage Business Growth
 
The Integrated Marketing Analytics Guidebook White Paper by BECKON
The Integrated Marketing Analytics Guidebook White Paper by BECKONThe Integrated Marketing Analytics Guidebook White Paper by BECKON
The Integrated Marketing Analytics Guidebook White Paper by BECKON
 
Accu agency management tips
Accu agency management tipsAccu agency management tips
Accu agency management tips
 

Sales mistakes that can kill your saas business and how to avoid them

  • 1. Sales Mistakes that Can Kill Your SaaS Business … and How to Avoid Them Mark Roberge Senior Lecturer, HBS Former CRO, HubSpot Michele Law Former CRO, Castlight Health Former COO, OpenDNS
  • 3. Mistake #1: Going into Growth Mode Too Early Product Growth Sales Team
  • 4. Understand Path to the Growth Phase Product Market/Fit Transition to Growth Growth Where you are in this process impacts these decisions: When to hit the gas Who to hire and when When to use metrics and why How much money to raise How much to invest in scaling Sales and Marketing When and who to hire as your first VP Sales, VP Marketing, VP Customer Success Learn/Itera te Business Model/ Go To Market Ramp
  • 5. Customer Success -> Unit Economics -> Growth #1: Customer Success [WAU, NPS, Churn] Learn/Iterate -------> Measure/Monitor #2: Unit Economics [Payback, LTV/CAC, Magic #] Learn/Iterate -------> Measure/Monitor #3: Growth [Revenue, Customer Count]
  • 6. Mistake #2 The first sales hire
  • 7. Poll: Who should your first sales hire be? 25 years experience in your industry Currently VP over $200 Million in sales #1 Sales Rep out of 500 reps In your industry 5 years sales experience 10 years sales experience Outside of your industry Recently promoted to Sales Manager Entrepreneur outside of your industry Sales background
  • 8. Understand Who and When to Hire Product Market/Fit Transition to Growth Growth Founders/Product Focused CEO Sales Manager/Direct or + Customer Development VP Sales Generalist Generalist + Specialist Specialist Company Phase Who Profile
  • 9. For early sales calls, market feedback is more valuable than revenue and customers
  • 10. Mistake #3 Ignoring Sales Impact on Customer Success
  • 11. Churn was Rooted in the Sales Compensation Plan 2007 • $500 per customer • 2x commission on revenue above quota • 4 month clawback * Data has been altered from actual HubSpot data for the purposes of this presentation
  • 12. Customer Churn by Monthly Cohort 12 0.0% 2.0% 4.0% 6.0% CumulativeCustomerChurn% * Data has been altered from actual HubSpot data for the purposes of this presentation
  • 13. Customer Lifetime Value by Salesperson *DatahasbeenalteredfromactualHubSpotdataforthepurposesofthispresentation MonthlyCustomerLTVperSalesperson Individual Salespeople
  • 14. 2007 • $500 per customer • 2x commission on revenue above quota • 4 month clawback 2009 • 1st LTV tier = $1000 per customer • 2nd LTV tier = $750 per customer • 3rd LTV tier = $500 per customer • 4th LTV tier = $250 per customer 2012 • 50% commission on 1st month payment • 25% commission on 6th month payment • 25% on 12th month payment • Bonus on install base growth (New MRR + Upgrades – Churn) • 6 month clawback * Data has been altered from actual HubSpot data for the purposes of this presentation Reducing Churn with the Sales Compensation Plan
  • 15. The Sales Compensation Plan is a Powerful Vehicle to Drive Customer Success
  • 17. Mistake #4 Aligning GTM by Function Rather than Buyer
  • 18. Following Common Practice, We Organized by Function MARKETING SALES SERVICES Generate inbound leads Convert leads to customers Make customers successful  Campaigns focused on Mary and Erin  Weekly Marketing status meetings  Targeting company-wide lead goals  Persona-specific sales processes  Weekly sales status meetings  Targeting person-specific revenue goals  Product-specific services process  Weekly services status meetings  Targeting product-specific customer success goals Deliver Leads Deliver Customers
  • 19. … but Transformed to a Buyer-Persona Org Structure Owner Ollie Team (1-100 employees) Marketing Mary Team (100-2,000 employees) Enterprise Erin Team (2,000+ employees) Group Sales & On-Boarding 1-to-1 Sales & On-Boarding Multi-Level Sales & On Boarding Ollie Marketing Ollie Sales Ollie Services Mary Marketing Mary Sales Mary Services Erin Marketing Erin Sales Erin Services  Replaced marketing, sales, and services meetings with buyer persona meetings  Re-organized seating around cross-functional buyer persona teams  Customized marketing SLA, sales effectiveness, and customer success metrics to persona
  • 20. … and held each buyer persona unit to our KPIs Metric Ollie Mary Erin LTV/CAC 5.2 11.5 19.0 CAC $6,250 $15,500 $28,750 MRR Churn 1.3% 0.7% 0.5% Avg MRR $425 $1250 $2725 LTV $32,700 $179,000 $545,000 Months to Payback 14.7 12.4 10.6 MRR Growth (Q2Q) 18% 27% 34% MRR / Rep $4,750 $7,250 $10,500 NPS 47 65 62 Leads per Cust. 540 2,400 6,625 * Data has been altered from actual HubSpot data for the purposes of this presentation
  • 21. Maximize Customer Success by Organizing Around the Buyer rather than Function
  • 22. Thanks! Mark Roberge Senior Lecturer, HBS Former CRO, HubSpot Michele Law Former CRO, Castlight Health Former COO, OpenDNS