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TSE 1136: How HubSpot Grew From 150-1500 Individuals!: Whether you’re a sales rep or a sales leader, a sales manager or a business owner, we can learn valuable lessons from the study of how Hubspot grew from 50-1500 individuals.  Sam Mallikarjunan has sold for a variety of organizations, from the...

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Whether you’re a sales rep or a sales leader, a sales manager or a business owner, we can learn valuable lessons from the study of how Hubspot grew from 50-1500 individuals.  Sam Mallikarjunan has sold for a variety of organizations, from the five-person startup to the Fortune 500 company, so he has seen the sales story at a couple of stages. He’s a fellow at Hubspot and he teaches digital marketing at Harvard University.  New revenue Sam loves the idea that whoever chases two rabbits catches neither because it’s a reminder to him to focus. He has spent the last year focused on teaching, speaking, and research. He points to doing one thing at a time and doing it really well before moving on.  A weird pivot exists for startups that are growing from “we’ll take anybody’s money” to losing cash faster than you can acquire new cash. The core pivot occurs when you reach the point where you’re struggling for customer retention, because the economics of your model will break down.   It’s a matter of sales reps making time to ensure that they are bringing in new revenue. One new customer was upset because she couldn’t access her email after signing on with Hubspot. She had cancelled her Internet provider because she thought that’s what Hubspot was.  It cost the company money because they had to service the issue. The problem didn’t arise because the seller was a bad person. He just didn’t verify that the customer was going to be successful. Healthy revenue The company implemented clawbacks which withdraw commissions from sellers if the customer cancels their account within a certain window. Sellers are heavily incentivized to ensure that the person they are bringing on will result in healthy revenue.  Because Hubspot is a SAS, a recurring revenue model, the company loses money acquiring customers. The company doesn’t break even for some months. If the customer cancels too quickly, the business loses money.  Cashflow is more important than your mother.  Keeping customers Many companies miss the core principle, which is that you can’t spend money to get customers unless you’re good at keeping them. If you’re selling iPad covers that are cheap, people will likely only buy from you once. But if you’re really good at keeping customers, it’s not necessarily how much they pay in the first transaction, but rather the lifetime value.  If you’re good at keeping those customers, you can pay your sales reps really well. You can give them lots of collateral to help them close deals. You can also spend a lot of money on marketing to tee them up for good conversations or on training for their reps. Sales sequence Sam recalls being a cell phone salesman in a mall. He asked his customers questions about cell phones, but he didn’t listen to their answers because it didn’t matter what they said. He was going to ask the next question in his sequence. Either they would sign on the dotted line or walk away. It didn’t matter to him.  The company had more than 50 percent cancellation rate coming out of the kiosks, but the sellers never missed quota. He got big bonuses for his teams because they always met their quota. It cost the company a lot of money in support costs, lost device costs, and refunds, so they shut down the entire unit and retrained the reps.  The company was designed as a subscription model, which meant they would lose a little bit of money to acquire customers.   Platinum rule The platinum rule goes a step farther than the golden rule, which only requires that you treat people the way you want to be treated. The platinum mindset demands that you treat people the way they want to be treated.  Trust is core to the sales process, and trust begins by taking the time to ask questions and understand who you’re selling to. People like to be personalized.  Sam points to Netflix’s business model as an ideal one because it has motivated him to rate more than 800 movies. He said he does it because he knows that Netflix will use the information to impro

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