As VP of Sales at Hubspot, Mark Roberge oversees the entire sales function and has grown the department to more than 60 salespeople and over 2,800 customers in just three years. Roberge speaks regularly about inbound marketing and Sales 2.0 solutions at MIT, Harvard, and various industry events. On June 28 he will be at Sales 2.0 Conference East, in Boston, to participate in a panel discussion on Compensation & Sales Performance. In this preview Q&A, he shares insights on how sales managers can stop acting on hunches and execute improved performance based on metrics.
Sales20Conf: How can sales leaders use metrics to improve the performance of their sales teams and drive revenue?
Roberge: My favorite metric to hold every salesperson and the entire sale organization to is Customer Lifetime Value divided by Cost of Customer Acquisition (CLTV/COCA). That ratio is a big metric in SaaS and applies to most sales organizations. The mistake we made early on – and that perhaps others make – is putting too much emphasis on the initial revenue stream and not putting enough emphasis on what it took to get that revenue stream and how it evolved over time.
Sales20Conf: How do Sales 2.0 solutions help with the evolution of revenue stream?
Roberge: Sales 2.0 has helped us make smarter decisions on which leads we prioritize and how much effort we put into them. While it makes us feel good to focus on leads that move aggressively into the pipeline, those might not become big deals over time. There are other deals that are a hell of a time to get in and through the pipeline, but once we get them they’re extremely valuable deals.
Sales20Conf: Can you give an example?
Roberge: In other words, I can have two reps that sign a $10,000 deal. One deal cancels after 15 months, and the other stays a customer for three years and upgrades. In a traditional hunter model, reps would be compensated for that deal in the same way. But clearly the second one was more valuable.
Sales20Conf: Which session are you most looking forward to hearing at Sales 2.0 Conference East?
Roberge: The sales and marketing alignment panel should be a good one. This is such a hot topic these days, because marketing is being held much more accountable for lead gen. And sales is much more in need of good leads, because information control has gone away. Today, a prospect can go to a website and get all their questions answered and often can download a product and use it for free for 30 days. So the relationship between marketing and sales has to tighten up.
Sales20Conf: How does holding marketing accountable affect the sales team?
Roberge: When I hear complaints from sales reps, I have a way to see whether or not lead quality is actually down. If a rep says, “These are terrible leads,” I can say, “Well, what do you mean by ‘terrible’?” If they say, ‘I tried these two leads and they suck,’ I can look at the data and see that these leads in that vertical actually convert to opportunities at a very high rate. You cannot argue with the data. It’s about managing through metrics, not emotions.
Hear more insights on how to use sales data and metrics to better manage sales teams and align their efforts with marketing during the panel discussion Compensation & Sales Management at Sales 2.0 Conference East, on June 28. Panelists include Roberge, plus Mike Moorman, Managing Principal, ZS Associates. The discussion will be moderated by Peter Ostrow, Research Director Sales Effectiveness Practice, Aberdeen Group.