7 Key Factors Driving a 42% YoY Growth in MRR

2022 was a very challenging year for SaaS.

“The SaaS crash” says “ The sweet spot in the eye of the storm” an article written by Jacco Van der Kooij, (Founder and Head of Research & Development at Winning by Design ).

He said that the golden years of SaaS were gone, and three factors drove this result:

“Factor 1. The ‘grow-at-any-and-all-costs’ approach, which we will come to learn, clashes with SaaS business fundamentals and principles.

Factor 2. Using unskilled labor at critical growth points causes widespread operator error.

Factor 3. Availability of unlimited funds with little oversight and guidance, which amplified

factors 1 and 2. Many board meetings have been derailed with the question, “If I

give you twice as much money, can you grow faster?”.

My company is 100% bootstrap, so the third factor didn’t impact me as much as the other 2, and mainly the Second factor because of unskilled labor and operator error. I believe that we, as Intrapreneurs, have more control.

Honestly, it is where most of my mistakes were, and could it be one of yours?

But let’s be compassionate with ourselves, and as Nassim Nicholas Taleb says in Fooled by Randomness:

“An error is not determined after the fact. But in light of the information available up to that point”.

I hope that all this information helps those who need it the most. You may already know Some topics, but understanding them is entirely different from applying them correctly. We have to question our methods constantly.

1. Hands-on

In 2022, I lost the majority of my team. The team I lost said several times that it was not because of me, that I was a great leader. However, deep down, I knew I wasn't the leader I wanted to be.

When you fail to help the team achieve its goals, it tends to become unhappy and seek other opportunities in the market. That situation opened a hole in me and provided a chance to be hands-on and return to the frontline to understand why we didn't achieve our goals. I took accountability to improve my leadership skills and better understand how to enhance the sales playbook.

The main gap point was in the discovery stage; the sales meetings missed linearity and lacked impact in presenting the proposal/solution prescription. This made it difficult to gather the necessary information to lead the client to commit to the process and coach the development of the salespeople, as it was complex to understand what needed improvement to tie up the sale better.

With the moments of the discovery meeting (40 minutes duration) well defined between:

1 - Rapport

2 - Agenda

3 - Discovery

4 - Education/demo

5 - Budget confirmation

6 - Pre-objections

7 - Next steps

The key moments of the proposal presentation (15 to 30 minutes duration) are as follows:

1 - Rapport

2 - Agenda

3 - Recapitulating the pain

4 - Pain vs. Solution

5 - Who we are

6 - Scope and investment

7 - Closing the door

8 - Next steps

The team increased the average conversion rate from executed meeting to sale from 12% to 35%!

After closing some deals by myself, improving the playbook, and passing the knowledge to my assistant rep, we achieved consistent results, and I knew it was time to grow again.

Hands-on experience is essential, and in difficult times, it is indispensable to always communicate with your clients. I understand that the closer we are to strategic decisions, the more difficult it becomes to engage with customers, but it is necessary to prioritize some moments to do that.

2. Hiring Process

Paying attention to the most essential item described by Mark Roberge in the Sales Acceleration Formula impacted a lot. In his book, Mark highlights the importance of the hiring process because it is impossible to coach a team that doesn't have basic soft skills. After deep diving into his operation at HubSpot, he discovered 'the recipe' that constructs a great rep at HubSpot. This main characteristic is highly applicable to consultative sales products, but of course, every company will have its ISP (Ideal Sales Profile); many times, it depends a lot on the social style of your ICP (Ideal Customer Profile).

According to Mark, the primary abilities are:

Coachability

Curiosity

Intelligence

Work Ethic

Prior Success

Of these points, I used a lot of curiosity, coachability, and others not on the list, such as self-awareness and openness to feedback. The rule is simple: do a role play before hiring, and if the candidates are open to feedback, they will take notes of every word you say. If they have self-awareness, their rate for the performance's role play will be close to yours, and if they have coachability, in the second chance executing the role play, they will apply at least three feedbacks.

My prior error was when I scheduled the role-play. The goal was to execute an entire meeting about my product. This way, we stayed without time to pass feedback and perform the role-play again. So, I defined the role-play challenge as only focusing on a specific moment of the meeting, the discovery time, which was the most critical time. By reducing the role-play duration, I had time to pass feedback and ask the candidate to execute again.

To have a good talent acquisition who cares about process improvement is essential. Sara Samuel reduced some process steps without jeopardizing the quality, and as she conducted more hiring meetings, she worried about learning the sales questions and consistently delivering the best candidates.

3. Onboarding Process

The dreaded micromanagement is essential in the first days of a closer or pre-sales. It is often poorly viewed by some people but necessary in an initial moment or even for individual recovery.

The structure of Onboarding contributes significantly to the absorption and learning of the team. Acting with a structure of 1st-week product immersion, 2nd-week product applied to sales and buyer journey, 3rd and 4th-week practice with the guidance of a team lead or a more senior closer. These simple adjustments and improvements in the hiring process allowed us to reduce the ramp-up time of the team from 5 to 3 months!

4. Commission as a Success Vector

Many companies underestimate the power of commissioning, which can act as a driving force for achieving the desired sales metrics. In our case, the board's main goal was the number of accounts followed by MRR. We had a very complex commissioning policy with numerous percentages, which was unattractive compared to other companies. The mission here was to simplify the commission strategy, and it's not because I'm simplifying that it's easy. Having a simple commissioning method that balances the salesperson's desires with the company's objectives can be very challenging.

After analyzing our CPS (Cost Per Sale), I presented a commissioning plan to the board that aligned with the company's and team’s expectations. We arrived at a simple policy where when the seller reached the super-goal of accounts, it made a difference in the seller's monthly earnings, using the number of new accounts closed as a commissioning vector.

Of course, adjusting this point won't matter if your goal isn't SMART (specific, measurable, achievable, relevant, time-based). My team didn't believe in the goal for a while because, historically, they had never seen anyone consistently execute it, destroying their confidence. If someone consistently meets their targets, you'll replicate them; if you don't have anyone, the issue lies with the target and the process. That's why one of my adjustments consistently brought the goal to an achievable historical average. Once trust was built, I worked with frequent adjustment percentages, "raising the bar" again.

Oh, and all this is acknowledging the team publicly when a goal was achieved or exceeded. Since our team was remote, some challenges to fulfilling this item were solved: customized posts on the company's general Slack channel congratulating the sales representatives who reached the goal. The post is a simple form of recognition but of great value to the sales representative because later, it can be used as proof of career performance success.

5. Alignment between Sales and Marketing

The taboo that marketing and sales are constantly at odds needs to be broken. Constant alignment between the teams is essential for a continuous update on how the process is going and how to improve it. The sales team has to provide feedback with data to marketing and internalize that marketing is doing its best to generate good leads and understand how to improve and increase the volume without compromising quality. As a sales leader, we cannot allow the team to complain about marketing because creating and developing demand is challenging. Instead of criticizing, we help to conduct a deep dive and understand what is happening to provide precise feedback.

If you let the team complain, they will start to see the half-empty glass. It could be hazardous because it can reflect their performance with good leads.

So, to track the leads' performance and ensure that the salespeople saw conversion potential in the right leads, we often set aside time in our team meetings at the beginning of the day to study the day's meetings strategically. I usually managed to open the salespeople's eyes to the mega opportunities they would have on the table that day.

6. Data Driven

Sales is very much a numbers game (although it's fantastic when it has a touch of “art,” haha). Constantly assessing where the team is and where it wants to go, I would say, is one of the essential elements that make up this growth trajectory. This year, while developing the Leadership Playbook to carry forward the successful routines of a Sales Leader at Huggy, one of my main challenges was how I would document this analysis line. While scrolling through my LinkedIn timeline, I noticed that Ricardo Okino from Escola Exchange gave me a great gift: a board documenting the entire analysis and diagnostic process through numbers to reach an action plan. It is perfect; it encapsulates the process I have repeated several times to maintain pace and achieve the team's goals.

This allowed me to see the entire path of the analysis I made during the evolution, starting with the month-to-date, and see where the team was and where we needed to go. Subsequently, the Month-to-Month, and finally, a comparison with the best months, looking at OPIs (Opportunity Pipeline Index) and pipeline to see if our speed is adequate to reach the end of the month with growth or not. From this, it is possible to understand the constraints formed in the three sales pillars: Conversion rate, sales cycle, and average ticket. And by doing a deep dive to find hypotheses of possible problems causing friction.

The data and action plans need to be consistently looked at. Throughout my journey, at every point in this article that helped me achieve these results, there's an insight from Leo Calandriello of LACAP Consultoria . Since day one of deciding to change, I realized I needed a mentoring process, and that's been the case since July 2022. We religiously held weekly meetings, almost in a sprint format, to track what had been implemented, and according to the analysis map on the process numbers, the following items were to be adjusted.

There's much experimentation to test new objection breakers, processes, copies, cadences, coaching formats, etc. Constantly raise hypotheses with the team and use operational numbers to drive tests and validate.

"The ability of an organization to continue improving its activities and results is largely a consequence of its culture. A striking characteristic of companies that become leaders in their respective categories and have mastered the art of go-to-market lies in the ability to have feedback cycles with high informational quality. And quality information is (almost always) based on data and transparency. The notion of continuous improvement within operations involves the combination of these two variables: a culture that looks at experimentation and learning in cycles and the key metrics that determine what success means." - Vitor Pajaro

7. Ceremonies

I have often heard salespeople say they see their leaders only once or twice a month, which leaves me worried and alarmed because sales require constant monitoring. I can jeopardize the entire month's results if I have a short sales cycle and don't look at my numbers weekly, daily, and often by shift or hour. Similarly, if I have a very long cycle and don't start building a pipeline one month or one quarter before, I harm the entire progress of the sales machine.

That's why monitoring is essential. To help me with this, I use some monitoring tools, such as a modified version of Scrum daily, which consists of two daily meetings, one at the beginning and one at the end of the day, to solve doubts and obstacles as quickly as possible.

Another ceremony is 1:1 with the team, which is crucial for feedback monitoring and alignment. These are usually conducted weekly, but depending on the need and seniority of the salesperson, they can be more spaced out (every 15 days).

I had difficulty getting the sales reps to apply the feedback after coaching sessions. That's when we changed the coaching format:

Instead of watching an entire meeting with the closer and giving all the feedback at once, I became more cautious in the feedback delivery because they couldn't always catch all the points, and even if they did, the problem lay in prioritizing what to apply. In the new format, the sales reps could absorb and use it more precisely.

While watching the entire meeting, I noted the feedback points and explored the most critical aspect more profoundly. For example, let's say something needed significant correction during the diagnostic stage of the meeting. I would conduct a role-play for that specific moment, with the closer acting as the prospect and myself as the sales rep.

Once we finish, I ask the sales rep what was applied differently, from how I did it to how they executed it with the prospect, and I await their analysis. This moment of reflection greatly aids the closer in cementing the feedback and helps them evaluate their self-awareness.

The third ceremony that most positively impacted our day-to-day was a moment for the closers to develop their storytelling of how they won a particular sale. By recounting the process, they share how they learned from the 1:1 sessions with leadership and the points they applied in the sales meeting that led them to the close. With this action, you significantly reinforce your legitimacy and authority, and the team becomes more open about the strategic challenges in meetings with you, which facilitates the team lead (helping the team to conduct and close a sale). Another positive aspect is the homogeneity of team meetings; you ensure that everyone executes the process the same way.

External training complements all these ceremonies very well. With a focus on conversion and negotiation, exploring essential points of diagnosis, and proposal prescription, external support makes all the difference when it comes to team follow-up for consolidation. You present the same content but from a different perspective, making it easier for the team to connect solutions to daily challenges with prospects.

When combined, the seven items I mentioned above could drive the operation to a 40% increase in MRR and 50% in new accounts YoY, with a team three times smaller than in operation in 2022. And now, in the last 6 months, with adjustments in productivity and pre-qualification quality in the SDR team, the actions continued into 2024, still positively impacting, resulting in us achieving a 119% increase in recurring revenue generated in Q1 2024 and reaching 106% of the target for new accounts acquired.

References

Taleb, N. (2001).Iludidos pelo acaso.

Kooij, J. (2022).The sweet spot in the eye of the storm.

Okino, R. (2024)

https://www.dhirubhai.net/posts/ricardookino_vendasb2b-gestaodevendas-salesops-activity-7158096562852679680-aDp1?utm_source=share&utm_medium=member_desktop?

Pajaro, V. (2023). Pt 3. Em busca da eficiência: Refinando a máquina de vendas.

https://vitorpajaro.substack.com/p/pt-3-em-busca-da-eficiencia-refinando?utm_source=post-email-title&publication_id=1885095&post_id=139518327&utm_campaign=email-post-title&isFreemail=true&r=2088io&triedRedirect=true