SaaS Interviews with CEOs, Startups, Founders
9 mistakes sales reps make when they finally send the docusign to the prospect
24 Oct 2022
Chapter 1: What challenges did DocSales face in scaling their business?
Hey folks, hope your Q3 and Q4 is off to a good start. We just wrapped up Founder 500 in Austin, Texas. Hundreds of bootstrap founders showed up. It was an amazing time. I loved meeting so many of you.
This interview today is a recording from that session, which you're gonna love because now we have visuals, we have the founder teaching, and I made every single speaker include their revenue graphs and real artifacts in their presentations. Without further ado, let's jump in.
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Chapter 2: How did the COVID-19 pandemic impact DocSales' plans?
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I want to introduce Mauricio Quiguela from DocSales, who will be talking about how RevOps doubled his MRR in three months. Thank you.
thank you guys good morning so thanks for being here so I had a problem this morning because my the title of my presentation was wrong and the previous speaker was not here and the room was empty and I thought oh my god what has going on with my speech my speech so I'm from Brazil and I'm very happy to be here too and great And I'm very happy to be here.
So it's a big challenge for me to talk to this such qualified audience, especially in English. That's my first time that I speak in English, give a speech in English. So I'm kind of terrified, but that's okay. I'm gonna do my best too.
Chapter 3: What mistakes did the speaker identify in their sales approach?
And I hope you enjoy. So where's my control? Okay, so let me give you first a context about DocSales. So we are a contract and proposal automation platform. So what we do, we help sales reps to prepare sales documents and close deals with assigning, processing the payment and so on. So we add a kind of automation layer on the top of the CRM.
So the sales reps just need to drag the opportunity card from one phase to another phase and the magic happens in the background. So we started this business in Brazil two years ago. The idea was to be international first, but then we were caught by the COVID pandemic. Actually, we and everybody else, right? And we had to change our plans.
And then we focused for the first two years in the Brazilian market. So we had to adapt product and everything because we had to focus on Brazil. And since May, we are focusing on the US market. So over the next 20 minutes, I'm going to discuss a problem that we faced on Doc Sales about a year ago. So basically what happened was I thought my business was not scalable. We were growing.
Actually, we were selling, but we are not growing. Our growth rate was flat during like six months in a row. And I thought, oh my God, what's going on?
Chapter 4: How did revenue operations change the company's dynamics?
If we are selling well, if everything looks well, what's going on with the company? So at that time, we were at the $26,000 or $30,000 in MRR. This is all MRR. Now you can see that from June on, we started growing faster. So we were able to solve the problem. Look at this. In a year, we doubled our ARPU. We tripled the number of paint customers. Our churn rate was at a very reasonable rate.
So for the stage of dog sales was really good. And in October 2021, we prepared this report to our investors and we showed the problem. So if you take a look on this graph, you're gonna see that the growth rate was flat for several months.
And at the time we listed a lot of actions that we would take to solve the problem in terms of lead scoring, customer support, lead qualifying or lead generation and so on. So we thought we knew the problem. We thought we knew how to fix it. But in fact, we had no idea about what was going on for several months. I am on my fourth company, two exits.
And when I faced this problem, I thought, oh my God, what can I do? What am I doing wrong? So what's going on with the company because we are facing this kind of problem?
Chapter 5: What are the critical KPIs to monitor for business growth?
So the first conclusion was even small companies have a very high complexity. And I made some mistakes on the beginning of the company. And that caused a higher complexity than I could have. First of all, we should start selling to one persona and one ICP. And I was in a dis-purchase sale, so I was selling to whoever wanted to buy dog sales.
And that caused a big problem because when I had to analyze our customers, the behavior of our customers, I was analyzing in average. And for the average was really good. When we took a deeper look at the cohorts of the customers, we found very serious problems. Second thing, we should generate KPIs since the first day.
I know that it seems very early to generate KPIs when we are starting the company, when we don't reach, we haven't reached the product market fit yet, but that information will be very valuable in the future. Not at the moment that we are selling, but after that, we would be able to analyze it in a different way. The third thing is, of course, don't use spreadsheets to generate KPI.
So actually, don't use spreadsheets to make controls over departments because they don't generate KPIs automatically. And that will make your life harder after that. And you should take care about what people think about the company. So people care usually about their goals, about their objectives, if they are making money or not.
But as soon as you have a very aligned culture in the company, people would care just about themselves and not about the others or other departments. When we take a deeper look on all departments, we were in 12 guys only. So 12 guys is like a small family, you know? So we figured out that there was a chasm between departments.
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Chapter 6: How can companies effectively manage customer journeys?
So everybody was taking care of their own department and they were not worried about what was happening to the company in general. So, we started a deep analysis and we came out with the idea of the revenue operations. So, just to have an alignment, do you know what revenue operations is? No? No one? Okay, so nobody implemented and it didn't help. Revenue operations
In fact, revenue operations is a kind of mindset. I know that we need to do a lot of things to implement it, but revenue operations is when you take a dynamic look of all your company and you have all departments aligned. And that's not easy to do. So you can imagine
when we talk about processes we use talk about our internal processes how we do things how we sell to customers how we upgrade customers how we can sell customers so how can we charge customers and and so on but imagine you become a customer-centric company and now we are talking about the
their processes their journeys we can call journeys but in the end of the day we're talking about processes so what happened to a customer when they want to buy from you when they want to turn they want to cancel the subscription when they need to upgrade or they they need to save money and you you need to offer something cheaper to them like a downgrade or or maybe a coupon or so on
So first of all, we have goals for departments. So the marketing department has a goal to generate X number of leads. Sales has a goal to bring X number of MRR, ARR, or whatever metric. When we implement revenue operations, we are not talking exactly about each department, but we are talking about the company.
So if we bring to the company global goals, how is the growth rate and who is responsible for the growth rate? Probably all departments are responsible for that instead of each one of those departments. So if you can have monthly, real time, a dynamic vision of your whole company,
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Chapter 7: What is revenue leakage and why is it important?
probably you're going to identify and fix all problems much easier and quicker. What we did on our assessment was, first, take a deeper look into our customers. As I told you before, we were selling to everyone. Now, I separated here only accountants. So, when we sell to accountant offices, we have an LTV of $1,400. The payback of cost of acquisition is like four months, only four months.
Our LTV per ARPU it's 45 times, which means 45 months. We spend the first four months to pay the acquisition and then 40 months to make money with them, which is really good. And the churn in average, 1.4% per month.
but when we take a deeper look now we separated all the accountants by group of users all the accountants with one or two users have just 30 months it's not bad but if you take a look on this one it's the triple you know look at the churn 5.3% per month.
So if we tell the marketing department that are generating leads not to generate this kind of company, so not qualify this kind of company, probably our metrics will be much better. And you know the problem? We had at that time much more accountants with one and two than the other ones. And what happens when you have this situation? Customer support was struggling with a lot of tickets.
The product department was receiving a lot of requests for features that fit only small companies. So you change the whole company and probably in the future, your product will not fit for those other better customers. So you need to be careful with that. We cannot take a look on the average.
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Chapter 8: When should companies start implementing revenue operations?
So if you put your head on the oven and your feet on the fridge, probably the average temperature is good. And what I'm showing you that you don't need to take the KPIs for average as serious as we used to take. And if you go to this regular dashboards and KPI software such as Chartmogul, ProfitWell and so on. We use ProfitWell and we like them, but they don't show this kind of reality to us.
They show the average only. So overall churn is not the most important KPI. We need to take a deeper look into the customer. There are many ways for us to predict customers or predict what they will do, their behavior. based on engagement, based on the behavior, based on the number of tickets, based on how they add or remove users to the platform, how they interact to the platform.
So if we can put some KPIs on this behavior, we can identify, track, and put some triggers on this behavior, we can predict problems like months before, and then we can take actions. And this is going to save us a lot of money in the future. So the tip here is don't look at churn. Look at what we call revenue leakage. Revenue leakage is everything that make us lose money.
We can reduce sales, we can lose money. For instance, if I'm trying to charge a credit card, after five days, we suspend the customer. After 30 days, we cancel the subscription. It's a churn.
so that's a financial problem we're not talking about marketing we're not talking about sales and then we need to go to the financial department and set a goal for them probably they need to change the payment processor or to add new payment methods or whatever so we were selling brazil brazil accepts accepts different payment methods if we don't accept pics or or bank slip for instance
probably we're not going to be able to sell to all of B2B companies. In the US, it's a little bit different, but for larger accounts, we need ACH. If I'm just doing credit card, probably I'm going to lose those customers, you know. So, and to solve the problem, what we did was to first map all the processes, all the journeys of our customers.
And after we met all of them, we had to understand if there is a standard procedure, but we can change that word procedure to behavior. Is there a standard behavior of our customers that we can identify what journey is? And what can we do with every journey? So can we control this journey or this trigger or this KPI? Can we set triggers to it? Who is involved to solve this problem?
Who is watching it? Because the guys from marketing are concerned about generating leads. The sales guys are concerned about selling. Who is taking care of our customer base? No one is. Customer support is struggling with a lot of tickets, so they don't have time to take a look on this.
And we are not big enough to have like a customer success department, a support department, and someone, a revenue department. So we are in 12 guys, 1,000 customers, 12 guys only. So it's, or you automate this, or you are really a big company and you establish like a department to take a look on all these KPIs. The second thing, you need to define a nice tech stack since the beginning.
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