SaaS Interviews with CEOs, Startups, Founders
How I use sales data to increase revenue without hiring more reps
30 Jun 2023
Chapter 1: What insights can we gain from the speaker's background in sales?
I'm very excited to share this recording with you guys, which happened at our conference, sasopen.com, with over 100 speakers, all founders of B2B SaaS companies. We have a very high bar for what speakers share on stage, so you're going to enjoy this episode where we dive deep into revenue graphs, real tactics, and real growth metrics.
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I'm looking forward to sharing with you some of the insights that I've gained over working with over 45 different B2B software companies, specifically on how to build a repeatable sales process. But where I first want to start here is understanding the room a bit. I'll tailor this based on what I see. So raise your hand if you do not have a sales team, but you plan on building one. Okay, nobody.
Raise your hand if you actually have a sales team. Okay, keep your hands up real quick. Only put your hands down if they are meeting and exceeding your expectations. Okay, so we have some room here. We can do a little bit better. So that's what I'm gonna share with you here today. Quick walkthrough of my background. So again, my name's Kyle Van Voorhis.
I've held just about every position you can have in sales. So I started off cold calling as an SDR at Intuit. About 10 months later, I was promoted to an account executive. And even though I had been promoted, my manager would still ask me to come and work with the new and often struggling SDRs.
And after working with so many sales development reps, I decided to write a book in 2017 called Cold to Committed, specifically on how to cold call, cold email, and book outbound sales appointments. From there, I went and ran the SDR team at a technology company, a tech startup, financial tech,
in San Francisco, scaled that team from three people to 14, and we went from 120 million in assets under management to over a billion in 20 months. So that was incredible growth, but it was also my first time building a team. And for those of you who have a team, and if you've ever built a team before, you know it can be really challenging, right? And you learn a lot of things on the way.
So I decided to try to repeat the success. I went to a large global supply chain software company running the inside sales team, and we 5x revenue in less than two years. So at that point, I was like, wow, I might actually be onto something here. So three years ago, I started a sales consulting company, and now we work with B2B software companies.
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Chapter 2: How can organizations effectively plan out their sales teams?
Step number one, we're gonna model your ideal state. What does the perfect sales team look like on paper? On paper. Because then step number two, we're gonna measure what matters. So that way we can replicate what's on paper in the real world, right? Has anybody here had the experience where you've built a spreadsheet and then it didn't really go the way the spreadsheet said?
Of course, right, we all have. Yeah, no, not in your life. Good, I'm glad somebody here is perfect. Let's trade mics. Okay, so I'm gonna walk you through exactly how to prevent that from happening. All right, we're gonna go into the build phase here. So let me ask a question here. This is a controversial question. Is sales a numbers game? Raise your hand if you believe sales is about quantity.
More activity, more activity, let's close deals, quantity. Nobody here. A little bit, okay, good, good being honest. By the way, I lean a little bit more to this one, by the way. I'll explain why in a minute. How many of you believe it's all about quality? Okay, some people, some people just don't have opinions. They're like, I don't know, it could be quantity, quality.
Yeah, well, that's just reality, right? The reality is you need both, because if you're not doing the quantity of activities, I promise you, you're not hitting your revenue targets. I can guarantee that to you. If you have SDRs making 20 calls a day, we're not getting anywhere. But if we're not doing quality activities, we're also not getting anywhere.
So you have to balance, you're 100% right there. so what we're going to use is a tool that we call the sales team calculator and i have sample data from a real company that we're going to go through today and i'm going to show you how to model out your ideal sales team and then you can use this at the end i'll give you guys all the sheets and everything okay who loves spreadsheets yes
So this is a spreadsheet, by the way. There's a lot of numbers on it, and I'm gonna go through it, I'm gonna make it as simple as possible. So this spreadsheet is split up into a couple of phases. The first one here are all of the assumptions. If you have real data, that's great, but if you look here, we have a revenue target, two million, that's what they put.
This is, they gave me these numbers. I plugged them into our sheet. Two million, they say we need to hit two million over the next 12 months. Okay, great, what's next? Close percentage, we close about 18% of the people we talk to. Awesome, what's your average contract value for a year? 15K. What's the show rate?
So the people who book an appointment, what percentage do they actually show up to that appointment? 80%. Of the people who show up, how many of them qualify? About 80%. What are you paying SCRs? What are you paying AEs? All right, perfect. And that's OTE, by the way, including commission, assuming they hit their number for the year. All right, so we have that in place.
Next, what are you planning on doing? So they told me, oh, we're going to hire one SDR, one AE. Then after about three months, we'll hire another SDR, another AE. And then after the six-month mark, we'll hire another SDR, another AE. We'll have a team of three SDRs, three AEs. I said, how did you come up with those numbers? Oh, it just sounded great to me. Perfect, one, one, we're gonna be great.
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Chapter 3: What are the three main challenges in sales team performance?
Now it's about to make, let's make it reality. So before, 1.2 million, but really where I wanna draw your eyes here is this. Remember that 42%? Some of you are sitting here thinking to yourself, well, of course you hit two million, Kyle. You hired more people and faster. You know, you're not pulling a fast one on me. And you're right, I am not. How come we're at 33%?
How did we hire more people faster and our cost of sale decreased? Yell it out if you think you know the answer. What do you think? Boom, exactly right. SDRs are cheaper than AEs. So when you have the one-to-one ratio, this is not full CAC, but it is impacting CAC. Your CAC is increasing, because you have higher, more expensive employees who are sitting around not doing demos. I want AEs selling.
And if you're in an environment where you have a large TAM, you're gonna need SDRs to drive that velocity. Does that make sense to everybody? So that's in this example here. So I wanna move on to improve because we did it on paper. But then we're in reality, and we're like, why is this so hard, right?
Well, it's because you're probably not tracking the right things, and maybe you are, but you're not using that data to optimize the sales team over time. And that's what I'm gonna show you how to do here. It's a tool that I call the Sales Metrics Analyzer. I'll give you this too.
It has filled in sample data here that we're gonna walk through, but it's blank, and I recommend people do this once a month, once a quarter, depending on your sales cycle, and it's gonna give you a clear view of what's happening in your sales organization, where are the actual bottlenecks, so that way you can get really focused on solving the bottlenecks that are actually hurting you from being able to hit your revenue targets.
So I'm gonna go through it top to bottom here. We have activities. Those lead to engagements, activities, calls, emails, LinkedIn, engagements, pick up the phone. Who picked up the phone? Who replied to an email? Who replied to me on LinkedIn? Engagements. Then we have appointments. Of the people who we engaged with, how many of them actually booked an appointment?
From here, in between, we have the percentages. So 10% of activities turn to engagements, 3.1% of engagements turn to appointments. After appointments, we have deal stage one and deal stage two. So you can see here, 76% of appointments make it to deal stage one, 46% of deal stage ones go to deal stage two, and then 67% of deal stage two goes to deal stage three.
You repeat that for however many deal stages you have. If you have fewer deal stages, you might not be doing something right. It might not accurately reflect your sales process unless you are a very transactional sale. If you have too many deal stages, it might also not be right. If you find your sales are at skipping stages in your deal stages,
That means you probably have too many stages and they're not relevant. So you wanna try to get this as well worked out as you can. And then finally, what percentage of deal stage three goes to deal stage, or to close one? Everybody follow so far. Cool, not rocket science. It's sales. Where would you focus? This is a question for you. These are all the numbers, right?
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Chapter 4: What does it mean to build an anti-fragile sales team?
That's where I would focus first. It's not a volume game, it's a purity game. And to me, I want those people to be so pure that the rest is like someone Right, and that's a huge part of it. You gotta make sure you're targeting the right market. So everybody's right here. The real key is if you can improve a couple of these metrics a little bit.
So hey, are we gonna have a 33% increase in our revenue? Like how do we increase our revenue by 33%? You can try to improve one metric by 33% or you can improve a couple of these metrics by 10%. Is everybody here, you think you're capable of doing this? If you put all of your focus on improving one of these metrics, you think it's gonna get improved? Of course it will. Of course it will.
So let me leave you guys with this. Sales is a complex organization. It might not seem that way, but it's complex. There's multiple variables. Your salespeople have to talk to prospects, understand their challenges. They have to gain their trust. They have to position your product or service as a true solution to the challenge and ask for their money.
Meanwhile, leadership's putting a ton of pressure to hit aggressive revenue targets. You have prospects pushing out appointments, totally ghosting you. It's tough, there's always going to be excuses with salespeople. A pandemic, if you remember that one. A hurricane in Florida, anyone remember that one? Oh, my internal champion left, the deal's dead. There are always going to be challenges.
What you must do is create a team that improves in spite of these challenges, not a team that's broken by them. And if there's one thing I hope you walk away from our conversation with, it's this.
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Chapter 5: How do you model your ideal sales team structure?
Measure everything that matters. Know exactly what your team has to do in order to be excellent. And most importantly, know what excellence looks like at your organization and expect nothing less. Build an anti-fragile sales team. And here's what I'm gonna ask you to do next so you guys can get all of these resources. Can you all pull out your phone real quick? Everyone pull out your phone.
And I want you to open up your camera. You're gonna get a picture of me. It's gonna be one of the best pictures you've ever taken in your life. I'm waiting. I got dialed up for you. And what we're gonna do is, oh, I had stuff, but we don't need stuff. Scan the QR code here, and there's a button you're gonna click, and you're gonna be able to download the tools that I gave you.
There's video walkthroughs on how to do it. If you have any questions at all, just shoot me an email. I'm more than happy to help. And actually do the work, which, by the way, most people won't do. And that's why you're gonna be different. Thank you so much, everybody.