How to Build a Sales Team with Former Salesforce Sales Director Aaron Ross

Hey guys, just wanted to give you a quick introduction to this video. This interview is with Aaron Ross who is the former VP of Sales at Salesforce and the author of best-selling sales book, Predictable Revenue. And what you're gonna learn from this video is how you can build a scalable sales team. So, you know, why lead generation should be separate from closing teams, right? Also, you know, how you should set goals for a beginning sales team. Should you be using marketing automation or not? Things like that. There's a lot of different gold nuggets that you can take away from this. Personally, my struggle right now, or, you know, my quote unquote problem right now that I'm trying to solve is to build a sales team for Single Grain. So I'm going to be asking a lot of questions that really I find interesting and hopefully you guys find interesting as well. So go ahead and sit back and enjoy the show. Hello everyone, welcome to this week's edition of Growth Everywhere where we introduce or And also interview successful entrepreneurs on how to grow your business and how to grow personally as well. This week we have Aaron Ross who helped Salesforce grow to $100 million in revenue and also wrote the sales book Predictable Revenue. Aaron, how are you doing today?

Great, doing well. It's a little early here.

Yep, thanks for doing this. So yeah, let's go ahead and jump right into it. So what is your background exactly? What's your experience in sales?

Well, I like to say that my sales— I mean, I look at sales as a life skill. And so I was good at selling when I was younger. Started off in small business and so on. But I think the story really begins when I started an internet company back— it's been a while. I think I was late 20s. Raised venture capital. We hired a team, et cetera. The company went out of business. So again, I had sort of those natural entrepreneur's ability to sell, sense of myself and idea and so on. But I didn't know how to build a sales organization. So, and which is for most companies what actually brings money in. So sort of important. And I say I didn't delegate sales. We hired a VP of sales. I abdicated it. And so when it wasn't going well, I had no idea what to do or how to fix it. And so now what I tell CEOs is like, you don't have to be the one selling, but you need to know how it works in lead generation. So I left that company, went out of business, and ended up starting— I took any sales job I could at Salesforce.com, because I figured where better to learn how to sell than doing sales at Salesforce.

Right.

This is back when they were still pretty small, about 150 people, 2002. And yeah, I actually took the job where you're answering the 800 line, handling inbound leads, because that was the only sales job they had. So I checked my ego at the door and I just wanted to learn. And I did that sort of inbound lead qualification role for 3 months before I proposed creating a prospecting team. So if you're not, especially if you're an entrepreneur, but one thing that's really important to understand is that The usual way that companies added, tried to grow revenue, if you have a sales team, is they'd add more salespeople, right? Because the thinking is, oh, a salesperson's quota is $1 million. If we just hire 10 more salespeople, they'll bring in 10 times that, $10 million.

Mm-hmm.

And it doesn't work. It doesn't work. Maybe it used to 30, 50 years ago. But today, it's lead generation drives new revenue, new clients. Salespeople help fulfill that. And one thing that Salesforce.com didn't have back, you know, 10 years ago was a way to create predictable lead generation at bigger companies. So the last little bit, so the background is, you know, it's like never in a million years thought I'd actually end up doing sales or being a sales author, sales consultant. But that's just sort of where life has led me. And I really enjoy it. And I love helping people. I look at it as teaching people, helping them avoid the mistakes I made as an early entrepreneur. And starting a business, actually bringing money in, and creating predictable revenue, or as I call it too, it's really peace of mind revenue. Got it.

Okay. And how long did it take you to help get Salesforce to $100 million in revenue?

Well, I don't remember what they were at when I was there. The part I helped do is, I helped, so again, there's, if you read the book Predictable Revenue, you see there's a section about seeds, knits, and spears.

Good book.

Yeah. Yeah, it's been a bestseller on Amazon. So I say that there's 3 types of leads. There's seeds, which are really word of mouth, which is how most companies get started, because your relationships, your networks. And then as you start to want to grow, usually you get to a few hundred thousand, a million, maybe $5 million, maybe $10 million. That's getting bigger. You decide, all right, we want to grow faster. So we want to spend money on marketing, spend money on prospecting or sales in some way. Now, Salesforce had grown before I got there pretty much all through word of mouth and great marketing. I mean, Marc Benioff is a genius in lots of ways. Marketing is one of the places he's genius. So Seeds, Nets, and Spears, they had incredible word of mouth and incredible marketing, which was bringing mostly small and medium-sized businesses through just word of mouth. I mean, this incredible flow of 10,000 leads a month coming in.

Mm-hmm.

But unfortunately, Salesforce was trying to target bigger companies. And all the word of mouth and marketing wasn't really affecting that very much. So the part I created was to create a prospecting sales team that really just prospected, no closing.

Mm-hmm.

We could get in, I came up with a new kind of process, it did involve cold calls, but we were able to basically generate as much pipeline or leads as we needed at these companies, even Fortune 100, Fortune 1,000, Fortune 10,000. And so that part of what I created helped bring in an extra $100 million to what Salesforce was already doing. So almost doubled their enterprise growth.

Wow, that is absolutely amazing. And so my understanding is when you're looking to spear someone, that is when you're— that's the sales team's job, right? That's the prospectors, or you call them the sales development representatives, right?

Yeah, exactly. So the thing is, the reason it's important for especially executives whether you're CEO or even board member or VP of marketing and sales, to understand seeds, nets, and spears is that they all have different funnels. They have different conversion rates, they have different ways you generate them, you have different ways you handle them. And seeds, word of mouth, the best way to grow them is through like a, usually a customer success program. Oh well, the best way is to have a great product, but then you have to know how to document it and share it. With nets, which is, you know, think marketing, like mass mass marketing. Now they say inbound marketing is the hot term. Basically create great content, people find you. And then spears is the, you know, more the one-to-one. You have a human involved, they have very targeted lists, they're making phone calls, sending emails, or going out to visit people in person. So again, they're all different, they're all complementary, and actually one of the big mistakes that companies make is treating all leads the same. So, sort of putting them all into a bucket, when really you have to understand each one, different purposes, different conversion rates, different processes, different values, and different ways you grow them. I'm a fan of spears, right, or prospecting, because it can be a very predictable way to create pipeline, create leads.

Right. And you know, a lot of sales teams, it doesn't seem they've evolved into separating the prospectors from the closers nowadays. So why is it that you've decided Why did you decide to separate them?

I think it's becoming more common. I know that's probably one of the main ideas that I push or preach even, is the idea of specialization. But I think what happened was like 100 years ago, sales was basically people in a wagon who would go out, take a bunch of stuff, go around and sell it. So they had to do their own prospecting and their own closing. But, you know, really in the last few years, and especially I saw it at Salesforce, is between the tools, the environment, and just the way the world is, you can't— like salespeople shouldn't prospect.

Mmhmm.

Right, because, so in the past salespeople had to do all their own prospecting, but now because they don't have to, and they shouldn't. Because if salespeople, if you have your closers prospecting, if you have salespeople, or again, you might be a single CEO, So I'll show you, or we have one salesperson, so I'll give you an example.

Okay.

But how to use this idea still is that you— salespeople shouldn't prospect because they usually aren't very good at it, they don't like it, and it's not sustainable. Because if you're a salesperson and you're— even if you are good at prospecting, which is pretty rare, maybe 1 out of 10, then you prospect, you get a bunch of opportunities and then you get so busy you can't prospect anymore. So you get into this up and down cycle. Now once in a while people can, once in a while people can juggle that. But, so if you have a sales team of one, that's okay. But if you're building a sales team of multiple people, it's, you can't, it doesn't scale. Trust me.

Right.

It's an exception, not the rule. So, but if you have a prospector who prospects and a closer who closes, That way each person can be the best at what they do. You can have a prospector who's truly an expert at what they do and be very focused. It's really about focus. And the closer, the same. You don't have to deal with a lot less multitasking and juggling. Because it really comes down to time management and focus. It's just, it's hard.

Right.

So prospector prospects, closer closes. And if you are one person, or even if you're an entrepreneur who's, you know, you're doing everything. I would, you should still specialize your time. Or focus your time. So take 2 hours, say, you know, I think you need a couple hours of blocks of time to do something well. Like prospecting, you know, a couple hours here. It could be Tuesdays and Thursdays could be your prospecting. But, so break up your week so you have focused blocks of time to do what you need to do.

Got it. And does the prospector, or let me backtrack, does the sales team provide the prospector with like a list of leads like from one source or whatever, or do they just go out and find Yeah, it could be both because if your kinds of customers you can get from like a data.com or InsightView or these, sure, just go buy a list. Mm-hmm.

But sometimes you have a niche, or if you're a unique professional services kind of company, and it's harder to prospect with professional services, then you might need to be pickier and, you know, watch the news or watch, you know, go through more You know, interesting or sort of different places to look for the diamonds in the hay— diamonds? No, needles in a haystack. Diamonds in the rough, needles in a haystack.

Diamonds in a haystack are good too.

But the idea is if you want predictable revenue, and you know, I don't know who doesn't, but the idea is predictable lead generation is what can lead to predictable revenue. So if you focus really on how can you create leads in a more predictable way, now whether it's through word of mouth or Prospecting or inbound marketing. If that's really what can help you, give you more peace of mind plus the ability to manage and grow your company. So that's why I said lead generation, like if you have bad lead generation, you can have the most amazing sales process in the world, if your lead generation sucks, you're gonna struggle. If you have great lead generation, but your sales process is crummy, you can still do pretty well. Mmhmm.

Right.

So to me, lead generation, I mean, of course, assuming you have a great product, good people, and so on, because they're, you know, without a good product or good people, you know, that's the most important thing. But then lead generation is really the most important thing that will help you drive revenue.

Absolutely.

And revenue adding new customers.

Yep. And you make a really good point on having a great product, right? It doesn't matter how good your sales or marketing team is, if you don't have a great product, they're just going to churn out and they're, it's a churn and burn game. It's no fun. So I guess the next big question is, you know, and I've been having this trouble myself right now, you know, hiring prospectors. Where do you find good prospectors from?

Well, actually, you know, first you always look through your friends, family, networks, you know, people you know, so on. So, and by the way, you should look at predictablerevenue.com/recruiting. At least a recruiting process that one of my clients put together, I thought it was really neat. So actually the title of the blog post is called A Neat Recruiting Process, blah blah blah. But it has a whole bunch of tips on what kind of person do you want to hire and how to interview them and so on.

Okay.

So it's predictablerevenue.com/recruiting. So I think beyond, you know, so I think that's more important is to know what kind of person you're looking for. You know, to me, just, I mean, I like people who have a lot of potential. They may not have, so for prospectors, Or even for any kind of young salesperson roles, I usually don't care that much if they've got sales experience. Because that stuff, you can learn sales.

Right.

But you can't learn if you don't have enthusiasm or drive or the ability to solve problems on your own or to be entrepreneurial. There's a lot of those kinds of values that I suppose you can learn them, but it takes a lot longer than to learn sales.

Got it.

Few months, few weeks, few months.

Right. And there's people that have applied, you know, and I've had sales development rep jobs on like Craigslist and stuff, and they'll apply and, you know, what's your take on people that have been like out of work for a while, they're like, you know, a little older, and they do have sales experience? Is that kind of like a red flag to you, or is it, do you still want to go through the interview process?

Well, I think, so it depends on every company because every company has a different culture. So that's just, you know, so again, you could hire a successful person for you, your environment, your product, could fail in another company.

Right.

So first you gotta know yourself and what you want. Now if you're a younger culture, and I don't know, Eric, how old are you?

I am 27.

Yeah, you're pretty young. I'm 41.

That's young, still.

Yeah, I think I was your age when I started the company that failed back then. You know, you're probably gonna have a harder time hiring someone who's my age, like 40, who's been out of work. But, you know, I think part of it is just interview people as you get a feeling of who's out there. And also where you live, like we're in LA.

Mm-hmm.

The kind of people we have here is different than— so I think if you haven't done any interviewing, just interview people. It gives you a sense of what you like, what you don't like. You know, trust your gut. Like, I think a lot of people hire— they don't hire based on gut. They hire— what's the term— spontaneously.

Right.

A bit too fast.

Yeah.

And, you know, sometimes you have this like, I don't know. It doesn't work out. But that's why I think this process that I shared with that link is a good one. It's a creative one.

Yeah, phenomenal. I will check that out.

But I think ultimately, the important thing is, especially for prospecting, and sometimes for sales, you know, the potential of the person is more important than their sales experience. And if they have— I'd rather hire someone who's got experience in the market. You guys do SEO, right?

Yeah, the full— yeah, everything.

So I'd rather hire— if I had to hire, I'd rather hire someone who knows a lot about SEO and nothing about sales. but they're entrepreneurial, than to hire someone who knows a lot about sales and nothing about SEO.

Mm-hmm.

And the way— one other tip I think I'd like to hire people, especially at the beginning if you don't have a team yet. So there's builders and growers, at least in my mind. I think of these 2 kinds of people. I like to oversimplify, but builders tend to like to build things from scratch, right? It's interesting if you don't have anything there. There's no sales collateral, there's no sales system, there's maybe no customers, and they're excited by that. You know, they're a much better fit if you're building a new company, new team, new process. And they're different from a grower, someone who likes to come in once everything's already working and they just grow it. So again, I would not hire, like if you're a new company, do not hire a VP from Salesforce.com or from Oracle or from IBM.

Right.

Because they're gonna want, they're used to having, well, who's gonna fill out my expense reports? Who's gonna write my sales collateral for me?

Mmhmm.

Who's gonna— I only have a $30,000 recruiting budget.

Yeah.

And they're not, again, it's just know what stage you need. So I think that's an important distinction. And now when you're early stage, some things to look for builders, people who have taken initiative, like they might have been a rush chair, or started a nonprofit, or started a business on the side, but they've just shown some initiative in some way around anything. Maybe they took care of their sick parent for— who knows? But I like to look for that sort of thing when you're in an earlier stage company. Or again, you need a builder type of person.

Right. So the key takeaway here is, you know, don't go looking out for enterprise tech or whatever salespeople that are making a ton of money already. You want to look— ideally, if you're just starting out, you want to train from the ground up. It sounds like that's better overall. And it's cost effective too, right?

Yeah. I'd say 2/3, you want— I mean, 2/3 grow your people organically, like build from the ground up. And plus you want to do some outside hires of people who have some veteran experience to help bring in new ideas. And if you find someone like, there are plenty of people out there who are expensive, but they have great knowledge, great experience, and they can add a lot. And maybe one of them plus 3 of the younger ones, or 2 veterans and 2 young— I mean, it's a good mix to have a balance.

Right. So what do you think, I mean, when do you think is the right time to bring on a VP of sales?

Ultimately, it's like if you just find that perfect person. Sometimes there's no rule, but I think a lot of companies, you know, a common mistake is that they hire a VP of sales too fast.

Mm-hmm.

Right, they have a product and like, okay, let's sell it, we need a VP of sales, or I need a VP to raise money. We just need— we just raised money. Usually what happens is they get to this point of, okay, we need to sell, hire a VP. Let's hire a VP from Salesforce.com. Let's hire a VP from Oracle. Let's hire basically a very experienced person who has grown companies to $500 million. And that person comes in, they cost hundreds of thousands of dollars, and they fail out in 6 to 18 months.

Mm-hmm.

Because they were— it's usually you hire a grower, someone who wants to come in, and they're not used to like the startup scrappy Right. They have to write their own sales collateral environment and it just doesn't work. They'd be great in a $100 million company or even maybe a $30 million company.

Right.

But not in a $3 million company.

They need to have the resources to be put in a position to win, right?

Yeah. They need to stand, you know, again, they need to be working and they're great at coming in and growing it. But if you find, you know, so I think it's usually what I see as more common is a company who should maybe hire like a first salesperson, a first director, you know, because you maybe don't have a lot of money for a really senior person, or you're just not— you don't have enough clarity to know what kind of VP do you need who's going to actually be able to stay there for 2 to 4 years and be successful, because things are changing.

Mmhmm.

So it's like until things settle down, if you can't find the kind of like scrappy builder VP who can like actually help Bring clarity to your business. And it's usually hire a little more junior while you get things into more of a steady state. And then that gives you a better place to find a VP. Gives you, I think, the ability to hire a wider range of VPs of sales and have them be successful.

Got it. Okay, awesome. Really awesome advice. And so backtracking a little bit, you mentioned prospecting is really important. And I've heard other entrepreneurs tell me, hey, You know, these telemarketer companies, you know, I just outsource them and they just bring me in leads all the time. So what's your take on using these telemarketing companies?

Well, I know they've worked for some people. I think usually for tech companies, I'm hesitant because I think you don't want to outsource something that's really important for you to do. But, you know, once in a while, let's say 1 out of 5, 1 out of 10, it might make sense. So I think the default is don't outsource it. Figure it out yourself first because it's important for you to know how to do it. And most of these telemarketing companies, just from my experience, aren't really gonna be that helpful to you.

Mm-hmm.

But, you know, again, once in a while people say— I've never had success with them, but once in a while people say they have. And I've never really been able to get— it's not proof, but the details on, you know, How they were successful, like how much money they made.

Got it.

So I think it's just, be careful, be smart, don't jump in and think it's, oh, they'll fix this.

Yeah.

No. It's still going to be work, it's still hard, but don't be afraid of trying it yourself first.

Yeah, it's better to have control in-house to kind of understand the process before you just say, hey, I'm just going to outsource it.

Yeah, for most companies. Now, an example, an exception could be like if you sell dental supplies.

Mm-hmm.

And there's like a well-known dental lead generation company, almost like a distributor. You know, everybody's different. But I know the temptation is, oh, there's this magic solution. And Salesforce, for example, we tried— even when I was there, there was at least 3 projects, 1 or 2 outsourced, 1 or 2 internal, which failed. It was a 0%, well maybe 1%, but it was like a 0% success rate. On some of these projects. Which is what led me to create the prospecting team and do it a certain way that I did it.

Got it.

Now, the last thing, I know there's a couple companies who have reached out who are actually adopting my methods from the book. So I don't know, maybe that'll help them be more successful.

Yeah. And I'm gonna actually cover some of those methods in a bit. So you mentioned buying lists. I wanna kind of give the audience an idea of where they can go to buy lists. So do you have any recommendations on that?

Yeah, so again, usually if you sell software, or you're targeting tech companies, which is pretty common for probably this audience, I don't know if they— but InsideView often has, if you're earlier stage, and if you don't have a list yet, InsideView is a good one to look at because they have an all-you— or at least used to, maybe they still have it— all-you-can-eat, sort of get as much data as you want for I think $5,000 for a year.

Mmhmm.

And then if you're a little bigger, or if you already have a database, I'd also look at Data.com, Salesforce. So you can't get as much data for the price, but they have more tools for how to keep it organized and clean.

Got it.

So there's a lot of data providers. I think in general what I hear is they're all pretty similar in terms of quality. There's ZoomInfo, NetProspects. There's a lot of ways you can go out to hire people to build your lists. And there's no simple solution. I mean, this is one of the places where every company is different. You just gotta try some stuff. Building a list takes time. It's also challenging to maintain it.

Mmhmm.

So it's more important to be as clear as you can about your ideal client profile.

Mmhmm.

Because the clearer you are about who you're really going after, what kind of company, what kind of person at the company or people, then the easier it is for you to build a list and keep it clean. You want a smaller, better list, is ideal.

Got it. That's actually really helpful. And so when you hire a sales development rep, like give me an example. Let's say you just hired me as an SDR. What kind of goals would you set for me? Like is there like a 3-month goal? Like what do I need to hit exactly?

Yeah. Well, so if you're a new company, then you don't have any kind of, you don't have any prospectors there at all. So it takes you about 6 months to go from finding people, hiring them, training them, and getting them to the point where they're generating qualified opportunities every month. Say 10. So now let's say you're starting from scratch, you're new. In 3 months you should be able to get to the point where either through email or through calling, and not cold calls but a different kind of call.

Mm-hmm.

You know, you're able to Get in touch with people who are relevant. So reach out, have conversations that actually then lead to early sales cycles. And in 3 months, you know, again, if you, you should be able to start, it takes probably 3 months to start getting at least some of these qualified leads. Which means, I don't call, let's say, a lead qualified. I'll do a simplified version of the process, but let's say that— Your prospector goes out to a company cold, they find a decision maker influencer, have a first call with them. Oh, is this basically a waste of time or not?

Mmhmm.

Nope, it's not a waste of time. Okay, then we should have a deeper call or discovery call with my account executive or closer. So that next step is prospector, closer, ideally prospector, closer, and the prospect are on a longer call. That the closer manages. And once that call happens and the closer or account executive says, hey, this is great, I'm actually gonna— it's early, but I'll take this and work on it, then it's qualified. So it's not only has there been an appointment, but the appointment's been accepted by the salesperson. So if you can get in a 3rd month, you get 2 to 4 to 6 of those, you'd be in pretty good shape for a new prospector.

Okay.

If, uh, but again, you know, I'll probably say it several times, every company is so different.

Right.

If you're in a software company, that 3rd month you might get 8 to 10. If everything's clicking and you maybe get even 8 to 10 qualified opportunities. But if you're in a professional services company, if you get 1, you might be lucky, or 2. Because it's just a lot more, you know, services, it's more based on trust and relationships, and there's package services and custom So there's a lot of— I have rules of thumb for this, but there's a lot of variety in the world, especially with professional services.

And do prospectors, do they record like their own commissions? Do they keep track of that on their own?

No, you can— it's pretty simple. Most companies use Salesforce.com.

Right.

But whatever app you've got, the comp is simple. Prospectors should normally get like a base a good base where they can cover their bills because you don't want them desperate to pay rent.

Yep.

Desperate salespeople are never a good thing for your company because these are people talking to your prospects and customers. And then they get a variable commission, half of which is tied to the number of qualified leads they generate per month, half of which is tied to percentage of revenue that comes from those leads. So it's a pretty— you should keep the comp plan simple in a spreadsheet. If you can't do it You know, whatever app you use, you can export your state, your monthly metrics, and keep it in a spreadsheet pretty easily.

Got it.

A team manager or executive.

Okay. And you bring up a good point here. You're like, you know, desperate salespeople are never good. So it almost sounds like commission-based sales closers are not a good idea either.

Well, there's a balance because you want to reward people for work they've done, but you don't want to have You don't want the incentive to be so large that people do shitty things or they get desperate. So there's a balance you want to walk. I don't know. I can see— I'm sure that some companies have and will be successful with salary-based salespeople. But that's just not how the culture is, so most still have commissions and it makes sense.

Yeah.

Salespeople usually mostly get commissions and most— like no one else in the company usually gets commissions. Salespeople do. But I think it's just because they're easily measured.

Mm-hmm.

Yeah, because salespeople, they do a lot of the work. Some are really good about bringing stuff in, but a lot of them, it's like if you have a good company, you've got good lead generation, you've got good support, marketing, a lot of salespeople are just helping fulfill orders. They're never taking orders because You really do want, you need good salespeople.

Mm-hmm.

Because they're talking to people who don't know you. And so they're helping build trust, helping communicate your value. They're really like, should be consultative.

Mm-hmm.

Like teachers, or educators, or helpful to your prospects. But I think if you have a good sales system, the system helps make your salespeople successful rather than having to hire Salespeople who need to make themselves successful.

Right. And there's a really good quote. It's like 95% of the problems are process-based, 5% of it is people.

Yep.

Sounds about right here.

Same thing in sales. And I say like, if you're losing— if you have more than 10% churn in sales, which means if you had 10 people in sales, you're losing more than 1 a year, which would be pretty low. I think most, most, at least bigger companies, lose 20 to 40% of their salespeople every year.

Wow.

And it's crazy. No, it's like, that's not— it's not them. It's your company. It's your system. That's what sucks. You're hiring these people, they don't even have a chance of success, then you fire them. You're not giving them good leads. You don't train them worth crap. Their system is messy. You know, your management team treats them like dirt. I mean, why, for some reason, you know, I don't know about the rest of the world, but in our country, the 2 teams we treat customer support and sales like cost centers, and the people usually get treated like crap.

Yeah.

And maybe not startups, but like the bigger the company is, that's the traditional culture.

Yeah.

These are the 2 teams that talk to your customers the most. It's like, hmm, I'm gonna treat my salespeople like dirt, And I'm gonna expect them to treat the customers well?

Yeah, not gonna happen.

Yeah, it doesn't.

Yeah. So we're saying aim for, you know, the 10% churn rate for, you know, good sales teams. Is that what people should be aiming for?

That's my rule of thumb. It's like you want, like if it's more than that, it's not the people, it's your system. Maybe you're hiring the wrong people, training may not be the right way, bad lead generation, bad— it's what you're doing. Not the people themselves. They're just not victims, but you're mismanaging the company if you have, or sales team, if you have more than 10% churn.

I like that. I like that a lot. I like having that metric right there to look at. Cool. And so, you know, you talk about, you know, there's cold calling, and you say how cold calling has kind of, it's something that's kind of been in the past, kind of dying out a little bit. And, you know, inbound marketing, obviously I'm a marketer and I understand How that's like building up right now. But you talk about Cold Email 2.0. Can you explain what that is?

Yeah. Yeah, well, I always struggled because, you know, the prospecting approach I created, because I did it from scratch. I sat down with a blank slate. I had a computer, a phone, Salesforce.com, some data, a bunch of sales books which I read and I threw away because they were crap. Or they were not crap, they were good for the time. And I came up I hated— I tried cold calling, I tried this, I tried that. I didn't like cold calling. It wasn't very effective for me at Salesforce. And this is before Salesforce was famous, so people hadn't heard of it outside the Bay Area.

Mm-hmm.

And the basic process was using a referral approach, either by phone or by email, to go in, hey, you know, who handles sales? And then there's a little more to that, but not much. And then by getting referred to the VP of sales, Now it's not a cold call, it's— you're much more likely to get a response from them or to talk to them. It's really taking a more friendly process-based approach to prospecting. So, I know I couldn't come up with a better term than Cold Calling 2.0, but the idea is that it is, it's a friendly way to reach out to people. It's very effective and very repeatable.

Okay.

So that we can, you can again generate the pipeline you need.

So do you send that email, so you send, hey, you know, I'm looking for, can you refer me to like the VP of marketing? Maybe there's like a really quick like one sentence intro, and then do you get on a call after that, or is it just continued emails?

Yeah, I can sort of walk you through a sample. Where let's say you might send an email, and again there's a phone-based version. In fact, predictablerevenue.com/mapping would be a sample for the phone-based version. But for the email, it can be as simple as, hey Eric, you mind if I ask who handles purchasing there? And maybe one more line that has something about you or some sample customers. Maybe not. It depends. There's a lot of testing.

Mm-hmm.

Now, the important thing is the email is really short. It's like 1 line, 2 lines, 3 lines. Thank you. Done. There's no paragraph this or this. And you're sending it to people. So let's say that you wanna sell to the VP of Marketing.

Mm-hmm.

Okay, send it to them, but also send it to their peer, like a VP of Sales, CFO, and send it to the CEO. So you wanna send it actually above and to the sides of the actual person you wanna talk to.

Mm-hmm.

Because it's a referral email. And then you'll get, let's say the CEO responds back, as they often do. Hey, thanks. Actually, Jenny handles marketing. And he often will CC that person. And so from there, you might email, okay, well, hi Jenny. Hey, nice to meet you. What's the best way to chat for 10 minutes on Wednesday about what— see if we can be of help?

Mm-hmm.

You know, again, short and sweet. Because when people don't know you, they're not willing to invest a lot of energy into figuring you out. And in fact, it's usually better to be a little more intriguing, not give them too much detail. So this is where, look, again, you always have to— it totally varies. I mean, different clients have gone shorter, different clients have gone a bit longer. But in general, it's better to be shorter and sweeter at the beginning, like little baby steps. And then, so there's short emails, you get the referral to VP marketing, and to them, hey, can we talk for 10 minutes? Sometimes they'll say yes.

It's worked.

Sometimes they'll write back, well, what do you do? And at that point, you share a little bit more. It could be a paragraph, could be a link. Again, on your signature, you can always have links to your key stuff. But, you know, so then you can maybe share a bit more. Again, just a teaser for them to see, hmm, is this interesting or not? At that point, you might have a short call with them around, hey, I always think first you want to have a call of You're not selling, don't sell at first. You don't even know if there's a fit. Find out, hey, is this a waste of time or not? Is there a mutual fit? Is it worth having a longer call? So again, the prospect, at first you're just trying to find out, is there something, is there a way for us to help them?

Mm-hmm.

Is there an opportunity, or is this a waste of time for either of us?

Mm-hmm.

And move on. Alright, rather than going in, and sometimes happens, which is, you know, How can I sell you everything? You know, I need to sell, sell, sell.

Right.

And it just turns people off and they go away.

Yep. And that— you bring up that good point about keeping it short and sweet, because the truth is executives get so many emails a day, and when you send them like an essay about how great you are, they just don't have time for it.

Yeah, they're like— yeah, because when I get one that's a long email, like, ugh, this is gonna— it just feels like a chore to want to read it.

Right.

If it's not from someone I know, And even if it is from someone I know sometimes. And so again, short and sweet. Now once you, a couple short emails, then they're like, okay, I know this person, we got an email conversation, or maybe we talked on the phone. Now I'm willing to spend a little more, invest a little more energy or time, 5 minutes, 10 minutes, to see what's going on here.

Right, really good process there. And so a little into the tactics. So how many mass, or how many cold emails are these prospectors sending a day? And are there any issues with like deliverability? Things like that?

You know, the whole deliverability, well, let me start with the email. So the number of emails per day could vary between, you know, let's call it per month, like 1,000 per month.

Okay.

These cold ones, to, it could be more, a couple thousand. You know, I have a client who, I think they were sending 4,000 emails per prospector. And I'm like, that's just, it's way too many. It means if you're sending If you're not getting at least a 5% response rate, go back and try to rejigger your template. And by response rate, I mean you send it, this kind of email, and you get any kind of response, whether it's you get a referral, whether you get somebody who says, you know, screw you, which doesn't happen that often, really. I mean, because it should be a friendly email, not salesy. So that's my response rate, that's how I define it.

Okay.

But what happens is if you send too many emails, you get responses but they get dropped through the cracks and people just get scattered and they can't stay organized. And it means you're taking too much of a shotgun approach.

Right.

And you wanna be as much of a sniper as you can. So I like slow, steady. Ideally, let's say 1,000 emails a month is a good rate for a full-time prospector, or 1,500. Probably emailing 4 days a week, 3 to 4 days a week. You know, it could be Monday through Thursday. Usually the best times to email are in the morning or afternoon, Monday through Thursday, maybe best in the middle of the week. But again, sometimes companies get better results or people on random times. So you always got to, no matter what, you always got to try stuff to see what works best for you. But what happens is you want to have a slow, steady drip because if a prospector, if you send 1,000 emails in one night, you get 100 responses, it's going to take you 2 weeks to work through all those.

Mm-hmm.

Not only to respond, But then to respond to the response you get after that and log it in whatever system you've got, make sure this and that and so on and so forth. I mean, it takes a lot of work to do it well and to keep it organized and to have a system to it. Because remember, if you don't— if it's not organized, if you don't have a system to it, then you're not going to have predictability.

Yeah.

So it's important. It's okay to send less and do less, but keep your system going, the organization of Things are getting logged. You're sort of measuring what's working and what's not. You're tracking. There's different metrics you want to track. But it's— again, another really common mistake is not investing enough in training people and having them— sorry, focusing too much on activity and not enough on quality.

Mm-hmm.

Too much like, we need more leads. We need 40 leads, you know, you get 40 appointments a month.

Right.

And you might get 40 appointments, but most of them are crap.

Yep.

It's like, no, better to get 15 that are really good than 40 of which most is crap. Because, I mean, a lot of the book is actually inspired through— the idea was from like manufacturing and Lean Six Sigma and process-based stuff. And if you look at manufacturing, modern manufacturing, high defect rates are just really inefficient. They clog the whole system. So conceptually here too, by focusing on fewer, better everything, fewer, better emails, fewer, better calls, fewer, better prospects, which still might mean hundreds by the way, but then you get a better system really. You get better, more sustainable, more trackable, more predictable results.

Perfect. And are these emails being sent manually through your inbox, or are they going through a CRM marketing automation tool or anything like that?

You know, yeah, there's a lot of ways. You asked about deliverability. You know, I'm not an expert on deliverability. I know our consulting clients get good response rates just by sending it through often either email. Some people do just through their email. Some send maybe through salesforce.com because they have a mass email feature. Some through, let's see, we've got other ones sending to like Pardot and HubSpot and Marketo. So, I mean, really there's a million, or Act-On, there's a lot of them. But my current favorite app is called ToutApp.

ToutApp, yes.

For emailing. Yeah. You guys, in fact, we're gonna talk about coming up with like a predictable revenue edition of it. So if you either use ToutApp or if you sign up, it's toutapp.com. If you sign up for that, you should, I don't know, let them know that I sent you.

Huh.

We're gonna— we're trying— I'm not sure exactly what we're gonna do, but we're gonna come up with something with them. Because it's perfect. There's lots of great email tools, and there's Yesware, but Tout has really done some stuff that's ideal for what we teach. You can go check it out. And especially if you use Salesforce.com, they have some new features that are perfect. So anyway, that's— I sort of leave it up to the deliverability people to figure that out. It's beyond my pay grade. I know it still works. It's not, you know, lots of stuff probably goes to spam. I mean, how can I— I got an email, I use Gmail, and I got an email from Google and it ended up in my spam Gmail inbox. So I don't know what's going on these days with—

Yeah, that's happening. So what happened with me is I had virtual assistants sending out 200 emails a day, and I think we eventually got filtered. So I think, you know, setting it at like a lower number like 40 or 50 and kind of controlling The flow is a really good piece of advice there. But you say, you said, you know, send 3 or 4 days a week you're doing cold emails. You know, for the rest of the time, are you doing like cold calls? Are you like cleaning up your lists? What are you doing exactly for a prospector?

Yeah. In fact, there's an example day in the life Excel sheet that you can get as well, which is at predictablerevenue.com/templates. So in fact, if you remind me, I can give you the links after. You can post them.

Yep.

Basically, in the morning, often you're doing your email follow-up. So the night before, you might— here's a sample. You might send an email campaign the night before. In the morning, you've got a bunch of responses, so you work through those for a couple hours. You might call some people, do this or that. And then in the afternoon, you usually have scheduled your demos or scheduled calls. It could be like a You know, anything you're scheduling prior, like with prospects.

Mm-hmm.

Then at the end of the day you do some more data cleanup and you send another email campaign. But the emails basically, for most companies, when the email works, which I think 80% of the time it does at least, then that's the main way you get in touch with people, first point of contact. And then when you do calling, it's usually just to follow up on emails. Like you calling somebody. Like, here's one great trick, which is if someone emails you a referral, let's say there's someone you want to talk to and they email you, that email pops up in your inbox.

Yep.

Bing. And let's say there's a phone number in it. Call them. They're thinking about you, they're doing email, they're not in a meeting, and they always pick up, or almost always pick up. So now one Once in a while, either because of the market or because of the company or the messaging or who knows what, the email, referral email just doesn't work. In that case, I suggest, hey, start with mapping calls, which was that, you know, slash mapping technique. And because when you do, it's sort of my version of a cold call, but without being a cold call.

Yeah.

It's a very, again, friendly, more of a research-based call. But by doing talking to people on the phone, it forces you to figure out your messaging. Because usually with emails, it's not— it's like a lot of, especially early stage companies, but even bigger, like you don't know how— like one thing with prospecting, it forces you to learn how to talk about what you do in a way that other people can understand. Rather than— because most companies sound like, well, we're the leading API platform scalable network architecture with the social media twist.

Oh, not gonna work.

They're like, I don't know what you're talking about. So you learn how to keep it really short and to again speak in English, not jargonish. And so by using phone calls, by doing phone calls, it forces you quickly to figure out how to explain what you do in simple language, which then you can use to put back in your emails.

Got it. Really good piece of advice. Simple and stupid, just like short and sweet for the emails.

I'll give you one great trick here too, which is when someone asks you what you do, first imagine they asked you, how do you help clients? Okay, and then so that automatically gets you to think about what's the result that you help create. Because I don't know, if you asked me what I did, if I said sales author or sales consultant, you know, you're like, all right, that's cool. But if I say, oh, I help companies double or triple how fast they grow. It's much more interesting. It doesn't really tell you what I do, but it's intriguing. So then this next tip is when— first you want to have like 5 to 10 words. You have your elevator pitch.

Right.

So they ask you what you do, you say, well— or actually, like, Eric, what do you guys do?

Yep, so we sell digital marketing services and help companies grow their businesses online.

Okay, so you might— so take whatever your thing is, take the first few words and Use that first, and then after you say that, then they acknowledge that they heard it, and then you give them the rest. So for example, you said you guys sell digital marketing services, correct? And then you might just pause for a second. Now whether they say— and then because people are like, okay, they're like orienting where— oh, okay, now I'm ready to receive more information. And then you can finish it. So I think that's really— yeah, because The thing is, if you do these mapping calls or if you coach people, you'll see it where people, their heads get overloaded after a few, like literally 5 or 6 or 7 words. They can't because their brains are so busy trying to orient who you are, like which box do you fit in?

Yeah.

Like, okay, digital marketing. Well, I don't know what that is, but I sort of know something. You're not in pencil making.

Yeah.

I know you're in North America. Now I'm ready for the address.

Yeah.

It's like when someone says, wait, let me get a pen.

That makes sense.

Now I'm ready to like write it down.

That makes total sense. So, you know, last few questions here. I'm gonna wrap it up a little bit. What is your take on marketing automation software? Infusionsoft, Marketo, and all that kind of stuff?

Well, I think inbound marketing is great. I'm gonna lump it all into this category of inbound marketing. So remember there's seeds, nets, and spears. So it's like word of mouth, which, and then inbound marketing and outbound prospecting. They're all important, they're all complementary. Now in inbound marketing with the email marketing automation stuff, you know, they're actually all pretty different, and so it's really up to the company. Like if you're selling to consumers, or if you're like a coach, I don't know, internet marketer, Infusionsoft is—

Yeah.

gonna be better for you than a Marketo, which is more of a higher-end enterprise package for when you have salespeople. I think HubSpot, I mean, generally HubSpot is a great tool if you have a smaller, small-medium-sized business. I think Marketo is better for enterprise.

Right.

Yeah, it's expensive. And then again, if you're more of an independent, I mean, I use MailChimp. There's a million of them. So it's, you sort of gotta know enough about your own business to be able to Choose wisely because they're all different. I mean, it's like an example of how noisy the world is today. Let's say there's probably 200 email packages out there. And so for you with whatever your business is, you probably have hundreds of competitors or potential competitors.

Yeah.

So it's like, how do you stand out from the crowd? I think is more important. Like your message, your people, your message, Your big ideas, that's more important than the tool you select.

Right, totally agree with that. It all comes down to product again, product or service.

Yeah, whether product is a physical product, a digital product, or product— I sell ideas, that's my product. You know, ideas. Books are just for my ideas. Even my consulting is a way to help people with ideas. Implement ideas, make them successful.

Yeah, yeah, really. I mean, you have a powerful product and you have a powerful Thank you. So inbound leads, how soon should you be— let's say you have a really hot lead coming in and it's inbound, it comes through your site, they fill in a form, it's like, hey, we have a lot of budget, blah blah blah. How soon should you be calling these people?

Well, if you've got the capacity, instantly is always the best. It may not be the most profitable way to do it. So if you have money, if you're again a fast-growing venture-backed software company, you should be calling them instantly.

Yeah.

If you are a small independent consulting company, sooner is better, but I probably would spend more time refining— like, I would— if you don't have infinite capacity, what I would do is spend a few days calling them instantly and learning about them, and then stepping back and updating your lead— whatever your lead process is to help The leads self-select themselves in or out, which means that if you're in a small company and you can't call everyone right away, you want the people, like the fewest number of leads who are really the best to get through to the point where you can call them quickly.

Right.

And so if you get 100 people coming to your site, it's like how can you either design your site, your landing page, your lead form, whatever, so that the 5 that are actually really good Who could be good customers get called and the other 95 still sort of get automated, you know, doing their own thing.

Yeah. Okay.

Because you want to be smart about your process, what's effective, what's profitable.

How long is too long though? Because I've seen some companies wait like 5 to 7 days for a really hot lead.

Yeah, you know, I think that, I mean, a day or two.

Okay, a day or two.

If you're software, you know, again, for my company, we're doing consulting, you know, people, it's not about fast decisions. It's like if people are a good fit, like we don't wait 5 to 7 days, but we talk to them pretty soon. But, you know, it's like our customers who are good customers, they excited to talk to us, they want to learn from us. And if they're not, like again, for us in a consulting company, if we did wait 5 days, The best companies we find for what we do today are just still interested to talk to us. And the ones who really probably wouldn't be a good fit as a consulting client, probably wouldn't— they're not interested anymore.

Got it.

So it's not a bad thing, again, it depends on the kind of company you've got.

Got it. Okay, final 2 questions here. How do you determine the right commission to pay salespeople? I know it varies company to company, but do you— what's the process? Do you Google it? What do you do exactly?

That is, it's like, what's the best way to start a company?

That's also a tough one. Yeah.

Well, yeah, I think you probably would have to do some research to see how salespeople are comped, how much. A lot of it comes down to how much you can afford to pay people. You know, how much margin you have in your products. Is it the first salespeople? So let me give you a better suggestion. I don't know if I can give you any real tips except to go do some research. But what I would say is if you're an early stage, if you don't have salespeople yet, I can actually give you a really good suggestion. Or if you don't have prospectors yet, if you're just trying to figure out like a new kind of sales team, whether it's from scratch or, you know, what I recommend is that you don't try to come up with a comp plan right away.

Mmhmm.

Because you can't come up with a good comp plan until you have some kind of track record of data. So for 3 months, maybe even 6 depending on if you have longer sales cycles, but at least 3 months, just have some kind of discretionary bonus or pay them a flat rate. Do something so that, look, you're all working together to get some first wins, to get some data.

Mm-hmm.

And then you say, look, after 3 months or 6 months, we're gonna sit down and we'll say, hey, do we— can we yet put together a fair comp plan? At some point you can say, yes, we've closed 20 deals and we can see the deal sizes and stuff like this. So let's come up with a fair comp plan for the future.

That's a really good idea. I've never seen any salesperson recommend that before. So that's phenomenal. Final question here. I wanna talk about your consulting company or let you talk about it. So what is— you run Predictable Revenue right now, right?

Yeah.

What do you guys do exactly?

Well, our— I say we can help with lots of things, but our unique genius is really helping companies build or improve that prospecting team.

Mm-hmm.

Because if you have, again, if you're the kind of company where it's a good fit to do prospecting, and you do it well, it can triple, double, triple, quadruple. I mean, it can make a huge impact on your revenue growth and your ability to basically set whatever goals you want and hit them. You know, there's one of our early clients, and I can't— I can either tell you the revenue they generated or the name, but not both. But they went from $1 million in revenue when we started working with them to $20 million in revenue in 3 years.

Wow.

82% of which was driven by outbound prospecting. And this is an inbound company, by the way. They do help other— but, and now, because they just, they went for it, they totally committed to it, and they— the CEO was very hands-on in the beginning to get it right. Or another company's— a bigger company went from— actually, I can say Acquia, which is a top— they're on the fastest growing companies list. Different list now.

Wow.

They went from having zero outbound sales within 5 quarters. Now they're adding $10 million a quarter in pipeline. So which means they're sort of going within 2 years, they're adding an extra $10 million, I think, in revenue. And that's only gonna keep going up and up as they go.

Wow.

So you can have a huge impact on your results. So that's our specialty. Yeah, we advise on hiring this or process that, and inbound someone, or mission, how to energize your employees, but it's all really first to help companies build a prospecting team that brings in, creates Predictable pipeline and brings in revenue.

Got it. So much good advice here. Aaron, thank you so much. And everyone, go out and get Predictable Revenue. It's a must-read sales book. Go to his website too. And if you're ready to really take it to the next level, you know, go talk to him about, you know, possibly getting some consulting work in with his company. But Aaron, thank you so much for doing this, and I hope to talk to you again soon.

Yeah, Eric, thanks. A real pleasure.