On today’s episode, Rob chats with Damian Thompson, co-founder of LeadFuze. He’s also the founder of VPSales. They talk about if and when to hire a sales team, the kinds of cold email outreach campaigns that are working well today, the sales stack, and much more.
The topics we cover
- 5:43 Should a bootstrapper hire a Sales Development Rep (SDR)?
- 9:16 Assuming you understand your market, what kind of cold emails work today?
- 12:56 The formula to use for B2B cold email
- 14:37 Risks of bootstrappers hiring sales reps too quickly
- 17:19 Rule of thumb for hiring sales reps in 2020
- 21:29 Defining SDR (Sales Development Rep) and BDR (Business Development Rep)
- 24:47 What’s the bare minimum for a sales stack
- 36:42 The real challenge with outbound sales
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Rob: Welcome to this week’s episode of Startups For The Rest of Us. I’m your host, Rob Walling. This week we’re talking about making cold email work in B2B SaaS. But before we dive into that conversation, I’d like to talk about a couple of things. Number one is there are two exclusive episodes of Startups For The Rest of Us and these are only available if you join the mailing list. The episode titles are 8 Things You Must Know When Launching Your SaaS and 10 Things You Should Know as You Scale Your SaaS. There are two different points in the lifespan of a SaaS app. Head to startupsfortherestofus.com if you’re interested in hearing those. Both of those are solo episodes with me giving 8 things in one and 10 things in the other about things that I’ve learned and observed in my 15–20 years of entrepreneurship.
The other thing I wanted to mention—this is not an advertisement, but this is just something I wanted to call out that I think could be a useful resource and I’ve been recommending it to folks in the community—is dynamitejobs.com. This is a place to post remote jobs and there’s all types of categories, anything that you would need from developers to VAs to apprentices to SEO to paid ads. You can specify time zones and salary and all that kind of stuff. In addition to it being a job board, they also offer a paid recruitment service that some startups that I am invested in or involved in are using. It’s a really good deal for the money and they do a bunch of the upfront leg work.
This was a point where I got with Drip, where I was spending so much of my time hiring that I wanted to find someone who wasn’t the typical contingency recruiter where it’s like, I’m going to hire developer for $100,000 and you’re going to pay him $15,000, $20,000 because it’s based on their first year salary. I couldn’t afford that as a bootstrapper. What Dan and Ian are creating here is really a service for bootstrappers. It’s for people who can’t afford those high fees. From what I hear, they’re having really good results from it.
Again, not a paid advertisement, but I always love what Dan and Ian are up to. Dynamite Jobs is coming on my radar more and more and I wanted to point that out to you in case you are thinking about hiring. I would be adding it to my rotation of the job boards that I post positions to.
With that, we’re going to dive into my conversation. It’s with Damian Thompson. If you haven’t heard of Damian, he’s a Co-Founder of LeadFuze with Justin McGill, and he’s the founder of vpsales.co. His big thing is about scaling sales teams. I’m going to read from his Twitter bio, he says, “Building high-performing Sales & SalesOps teams for B2B Software & Service companies.”
He’s been, himself, a sales person or a sales consultant for going on 20 years, maybe a little bit more. I’ve known Damian for almost 10 years. We talked a little bit in the interview about how we met and it was via cold email that he sent which is pretty apropos for this. He has extensive experience both crafting cold emails, sending cold emails, testing them and closing deals, as well as consulting with software and service companies on how they should architect their sales process. His specialty is early stage to eight figures. I know he works a lot in the ‘get from seven figures to eight’ range, but Damian has a lot to share and I hope you enjoy our conversation today on making cold email work in B2B SaaS.
Damian Thompson, sir. Thanks for joining me on the podcast. How are you?
Damian: I’m great. Happy to be here.
Rob: Excellent. I already mentioned in your intro, you’d been doing a lot of sales for a lot of years, sir. Part of that is cold email and I’m glad you reminded me, I had completely forgotten that the way you and I met was that you sent me a cold email. You want to talk about that a little bit?
Damian: Yeah. Two things. One thing I love to say is, I think we were in Bangkok about May, four or five years ago, the DCBKK event you’re speaking […] stairstep thing, standing at the stage about I was your go to sales guy because I’ve been selling for decades. You aced it really well. I’ve been selling for a long time, cold calling especially.
About my first launch. I spent 15 odd years building sales teams and doing lead gen in enterprise sales. Symantec turned my career around the world doing that and got pretty good at prospecting, obviously. And then really took to cold email in the early 2010–2011 time frame. I burned the suit and tie in 2011 and moved to Asia, trying to figure this stuff out.
You got my radar, Danny from […] got my radar, and I was looking to build my first business—my content marketing agency—which I didn’t know about content marketing, but I just decided to sell it. I saw you when you were running HitTail. You had an eye out on oDesk for content writers, essentially. So, I reached out to some people who have shared in the same circles and […] and that didn’t work out. So I said, whatever. I’m just going to send an email. Cold email. From that, you became a client. […] investor in LeadFuze. That cold email has been very impactful on my life.
Rob: Yeah, totally. I remember you and your team are writing blog content for HitTail and I think you did for some Drip at some point. Yeah, we go way back, man. It’s cool. That’s what we’re talking about. I probably titled this episode, How To Make Cold Email Work With SaaS or In SaaS or something to that effect.
I actually got an email from a listener and right now, he runs a SaaS app and bootstrapped as well. He said, “I’m looking at investing in two SDRs plus a marketing person to run an outbound sales campaign that will run for at least six months. It’s pricey to do, but I just feel as though it is the right thing for us.
I come across a decent number of venture-backed startups which have done this with success, but I’m wondering if there are bootstrappers out there who have done it. The recent survey you ran, which is The State of Independent SaaS, seems to indicate there are because there are a lot of folks saying cold email was working for them.”
That’s the reason that I called you on. We don’t have to just answer this question because I know you have a lot of thoughts around this. You want to kick us off and talk about, he’s wondering, does this work for bootstrappers? Can you hire an SDR too? He has revenue, probably tens of thousands MRR. He has the budget to do it. But talk to me about what you’re seeing out there.
Damian: A couple of things. Yes, bootstrappers can do it. I’ve done it. I’ve been a bootstrapper […] a little bit of my LeadFuze that part of that was doing the rest of it and wasn’t a ‘change the world’ kind of array. You can. It comes into where you’re going to spend your money.
I love cold email. I think it’s very powerful. One of the reasons why I love B2B sales, especially B2B software or service sales, big ticket sales is that I’m in more control. It’s one of the real controls as a sales rep. If you’re in a high-transaction SaaS business, and always PC-backed, fast growing businesses where it’s all processed down, everything is basically an intake form of legs. You’re just doing these things they tell you to do. But the reality is that you don’t have any real control, you’re waiting on leads, you’re always complaining about the leads coming in, or this is not working, or the event or whatever.
With outbound, you’re in control. You decide, if I can define who my target market is and the better I can do it better, and I’m willing to do the work, then I can actually go to them. Most likely, if you define that persona well, they probably share the same problems. You solve the other people they solved problems with. That is not actively looking to solve that problem right now. Getting in front of them is 98% of people aren’t looking for an active solution right now. That’s a huge part of the market. I love it for that reason.
One of the things that people do (especially lovely bootstrapper people) is that we look for cheap ways out. We spend hours to save $10 on a monthly subscription charge. Or we find the cheapest way to do something because, money, cash is bullets. It gives us the ability to grow. Instead of spending tens of thousands of dollars a month on paid ads, Facebook Ads or whatever the other kind of lead mechanism would be, we try to do things like this.
Can it work? 100%. It happens all the time if our clients work every day. However—here’s the caveat—the problem is, generally, when people go in to do cold email, especially one to say, hey, I’m not sure this is going to work, or hey, it doesn’t work for me, it’s not about the mechanism. It’s not about the actual cold email versus what other tactic you want to use. It’s that they don’t understand their market well enough.
In order to rise above all the noise—just the amount of emails out there right now—you really have to punch someone in the face a little bit. The way you do that is, it’s to get straight to the point about what matters to them. It’s not about who you are or your company. It’s not even about being clever and doing all these silly ‘number three, are you trapped into a boulder’ kind of nonsense. It’s just about saying, hey, do you know the person you can help and you know the two biggest problems you can solve for them, and if you can, it gets pretty straightforward.
The challenge is people don’t do that a lot of times. You’ll hear all the time, why you? On time, they’re on a budget or because we are the XYZ, the sales force for HR platforms or whatevers it happens to be, which is not a reason people buy. They don’t have a good-enough understanding of their market and that’s the challenge.
Rob: Got it. Let’s really focus on B2B SaaS because that’s the majority of our audience here. When it works for B2B SaaS, you’re saying, you have to understand the market which is if I’m going to run ads and send people to the landing page, if your headline’s crap, you’re not going to convert people, either, so understanding the market. Once you do that, then what do you do? How do you translate that into an email? What types of emails are working today?
Damian: I can give you a pretty good framework, but […] point, you’re 100% correct. It’s interesting, I was talking to a client today actually about this. B2B SaaS company sells hospitals and health care networks, doing about half a million a year, about $600,000 in ARR. Doing well, […] about leads, but these are going through the process to get the set-up.
It’s clear he doesn’t really know his market. He’s done a lot of the inbound smaller deals. He’s trying to go up market, he’s got probably a handful of enterprise customers, and he’s trying to get more up there. We were talking about, well, who is the person in your organization that is involved in this decision, that’s not the person you’re talking to. The other people, the IT manager or the head of data or whatever, and what are their priorities? And became very clear, he didn’t know.
It’s not just […] conclusion that if you have some success, you have $50,000 MRR, that you’re going to know your market that well because it’s different, especially when you’re waiting for people to come to you. It’s, again, why I love outbound so much is that, especially in the earlier days, you can use this as market development or product development. You need to know this.
You said it. Your ads, your content, your SEO. You need to know how your customers are talking about the problems you solved and that lever has to be pulled somehow in your sales conversations, in your marketing materials and everything. It’s very important to do. It’s just that people a lot of times give up too fast on cold email because they don’t see the results they expect. You’re going to get an email from an angry person because where did you get my email address from?
Can work, sure. Here’s what I tell people, a couple of things. Long-term campaigns, these days about omni channels, it’s about multiple touches from multiple areas. Actually we’re putting together a sequence today, it’s 7 steps over 10 business days, over two weeks, and it’s a mix of LinkedIn connection request, cold email, two phone calls in there as well and then on the third emails of video.
You can get more tactical about the stuff, but that doesn’t really matter. What matters is the core, the message. The message needs to be, if you know the two biggest personas you serve and you know there are two biggest problems that you could help solve, you can write great cold emails. The format is this. I’m going to give away the secret and he’s never going to use it.
But the good news is, that it doesn’t matter. This is not a trick or a hack like the old break through their email stuff is. Let’s just say, you have any idea, think something else. What were the two biggest problems that Drip solved for people?
Rob: Well, I’ll throw this out and you can tell me if this is right, but we allowed them to communicate or stay in touch with their email list, for number one. And number two, we allowed them to see how their customers were reacting with their emails and to be able to keep profiles. It wasn’t just an email address, but if they clicked a link, you could tag them as something so there was knowing your customer and then there was also communicating with your customer.
Damian: Right. To me, one of the big things that you got right was this idea of heavy automation or work flow automation in the sequence when it wasn’t cool and no one else is really doing it. We had to go to Pardot or HubSpot so you can get ‘thousands a month’ kind of tool in order to do that. But that is all fed to that thing. This is the best.
For example, if all you do is talk about these features, sure, you’ll get someone that wants to talk about the features, but that’s not the issue. The real value is because of that, because I can trigger an email when someone lands on that specific sales page. Because they have that insight, the behaviors my customers are having, I get to understand my customers more. And as I understand them more, I can then sell them what they want. That’s the value I want to talk about.
Let’s just say we use that then. And then the second one, whatever it happened to be. Here is the formula no matter who’s listening. You figure out what those two problems are that you solve in your customer’s eyes. Not your eyes, I mean their eyes and their own language. Let’s call them AB for now.
Email one is very straightforward. Super short, no fluff, don’t use three words and one will do. Don’t thank them for their time, don’t tell them, I don’t want to waste your time, wasting your time. Just get straight to the point and the point is, in talking to other marketing directors, the thing they tell us they’re frustrated the most about their current to is A and B. Which of those is for you? That’s it, that’s your email. Don’t expect a huge response. You probably might get a 0% reply rate on that. But what we want to do is send that out.
Then, email two will be, if your problem is problem A, we talked about in the last email, here’s a free resource for you to help solve that problem. And then the third email is, hey, if your problem was problem B, here’s a free resource to help solve the problem. And the fourth email is, hey, maybe we can help you solve the problem, why don’t we talk?
It works gangbusters if you got the right person and the right problem. That’s what you have to have. You can overthink this stuff and you’re really crazy, and you do because you want even […] more success. But again, it comes down to do you actually know why your customers are buying and it is important to them?
We see this now, especially, I’m a geek about software. I love all the no codes stuff for the rest of it. We’re building a lot of stuff. It doesn’t matter right now. Which is cool, it’s fun, but that doesn’t last forever. You have to have a real reason. The customer has to have reason to engage with you.
These are the points where he’s thinking of hiring people. Then he’s got a lot of it figured out. Probably just needs to dot the Is and cross the Ts. This leaves them to the second problem, which is people hiring sales reps too quickly, especially technical founders. One gets sales off their plate. They bring people in without fully formed processes.
[…] engineers. Would have a code base that was maybe you skipped every third line and then you just expect for someone to come in and just fix it for you, just do it, just figure it out? That’s not what teammates too. It’s what employees do. Employees come in and work a process you give them. Especially in sales. This idea that you’re going to find this unicorn service provider that’s going to do it or this unicorn person just get him off the street and do this for you, which is very rare that happens.
In almost all cases, the same way when you write a code or you’re doing your content marketing, you’re doing sales. The founders should try it first, just to figure it out. Because you should have an understanding of a framework of here’s what working, here’s what not working, here’s what resonates to the customers, here’s what doesn’t resonate. Now let’s get better at it. Now, you get a full time person that could focus on it so this should be better, cool, but I have got an understanding of what’s working.
Rob: You’re saying you need to already have a working process in order to bring someone in, unless you bring in an expert. Like yourself, obviously. You’re the type of person that has done and seen so many of these that you would work with a customer, SaaS app or whatever to develop that process, right?
Damian: Yeah, if I do. If I come into B2B software companies, the beginning is always consulting 101. Give me your watch and I’ll tell you what time it is. […] figure that out, but once you do that, we craft some ideas. A lot of it is just me being tough love, telling them they’re wrong. What they’re saying doesn’t make sense or it’s not enough. […] for this too, but I have this idea of almost like the Toyota five whys kind of thing.
In sales, especially, we put these happy ears on it. We hear what we want to hear because it’s a tough job. When you’re being more cynical or more, not mean-spirited but a little bit more distrusting of what we hear or thinking we’ve got to figure it out. A lot of times, that means really pushing to get to that deeper core of what we do, so if you can figure that out.
Again, it doesn’t have to be something crazy difficult because they should draft everything. A lot of times what I find is, it’s because these people are having some success, they get away from the things that made success. They’re not talking to their customers so much anymore. They don’t really have these understandings of who they’re talking to and how they’re talking to them. That’s really what it is, it’s just about understanding your market. If you understand your market, craft. It’s simple to get that in front of them.
Rob: I have a rule of thumb of the lowest, lowest end annual contract value. Founders sometimes asks me. This is a couple years old. I haven’t run Drip on its own since 2016, but I remember saying if we can get annual contract values up to $5000 a year, that’s the bottom, bottom end where I would try cold email. Again, that’s years old. What is your rule of thumb here in 2020? If someone comes and says I have $1000 a year annual contract value. I’m guessing you’re like, no, don’t do that. But where is that number where you start to feel like it works?
Damian: To that question—I’m going to give the equivalent of ‘it depends’—you’re right. I say $3000–$5000 generally in that kind of space. But it also really depends on your cash positioning. Earlier in the journey, you might be willing to have it cost a little bit more. Because you’re figuring a lot of stuff out.
Like you said earlier, if you figure this out, this could help all the rest of your marketing as well. It might be worth it for that. But when you get bigger, then no. Especially if the idea is to have someone else to do it. Can you make it look profitable “on paper” if you’re the one doing all the work? Sure, you’re paying yourself that hourly wage. But to hire someone to come in, especially, roles like the BDR, SDR role where they’re going to be a little more junior to a sales rep and they’re going to need a lot of hand holding, a lot of managers, a lot of oversight, a lot of help like coaching.
Another thing I would tell people is, you think you’re going to get sales off your plate by hiring a team. Really, how you’re doing is just transferring it from sales work to sales management, so leadership of a team. If you have them come in and you don’t have a lot of these answers, they’re not going to have success.
This is what I see all the time when someone says, I just can’t seem to hire salespeople. That’s ludicrous. Yes, it’s hard. There are frameworks to do it, but it’s hard. The real problem is they bring them in, just throw them to the wolves, and just say, hey, you’re going to pay me a lot of money for it to be successful. Just go figure it out.
But that’s not how employees work. It’s team work and also you’re sending all these signals. I see this a lot when people are trying to do this too early, they just don’t want to do this anymore and they try and hire a couple SDRs, accounting execs, or whatever and they try to find ways to cut corners like try to find someone who’s commission-only.
I’m hearing it again right now because COVID. There’s so many people that are laid off. They want to do it. Even if you can find someone that’s good, that’s willing to do it, it’s going to be hard. You are sending the absolute wrong signals to them. You’re saying, hey, I don’t trust in my process, in this, or you, in order to actually commit this is a real rule. If you figure it out, cool and if you don’t, that’s okay, too.
Would you do that to other roles? Would you get a developer on board and say here’s the deal. If we sell a lot of these, if the product sells then I’ll pay you. Of course not. But somehow they think that’s a way to do it. It’s not that we’re scared of what we don’t understand. We look down on what we don’t understand in our circles a lot. ‘Sale’ is a dirty four-letter-word in a lot of ways.
The reality is, people that get to that stage, you’re a good salesperson, you’re a good marketer. Because you have to be, you had to be, to get to where you got to. Almost every founder is like that. If you don’t go out and raise a bunch of money where you solve problems like throwing money at people, then you’re going to have to figure almost everything out yourself first. That’s a good thing at the beginning.
At $100,000 a month or whatever, now you can start hiring people that are better and smarter than you in those individual roles because now you’ve got a framework of what’s working and their job is to come in and boost it up. Essentially, that’s what I do. I come in as a fractional VP of sales and say you can afford $400,000–$500,000 a year that a full-time VP of Sales will cost, but you need all this kind of institutional knowledge on how to do these stuff. So we come in and build it for you. On smaller, we’ll focus on things like building an SDR team, building the rev ops, just optimizing that, and finding these places to do that.
Sales is the most important function in a business. If we don’t sell, the business goes out. Period. I don’t care if you are the most in the basement coder, hate salespeople, hate everything about sales. I think it was Josh […] about the enterprise sales process the other day and yes, it’s a pain in the ass, but the reality is, it works because a lot of people do like that. Just because we don’t like that, […] sold that way, doesn’t mean other people don’t. You really have to give it the respect it deserves because it really is the important function.
There are two things that Peter Drucker said that a company does. It creates intellectual property and it sells it, markets it. Those are the two things you do. You build something and you sell it. We’re very focused on the building, we just have to get better at focusing on the selling as well.
Rob: Right, very cool. I think most people listening will know what SDR and BDR stands for. I started doing it, too. I read his email without doing that. SDR is Sales Development Rep and BDR is Business Development Rep. I’m going to say what I understand those to be and I’m curious if you have other thoughts. In my head, they’re the same thing. They’re two names for the same thing and it’s someone who is in charge of doing outbound outreach to generate leads, what warmish leads to hand to an account executive, which is just a salesperson. Is that relatively accurate?
Damian: It is. More importantly than that is, it’s not a good model. Love Aaron Ross, great guy, important in the software world to start thinking sales is a lot like an operation. A lot of the stuff he says is good, but this over-, hyper-focused sales roles of the BDR, SDR, AE, customer success all the rest of it is a model that worked really, really well at Salesforce a decade ago.
Salesforce was the first unicorn. It was the most important first SaaS tool. You could do that. It also raised a lot of money. You get through the palms at it. What I’ve seen here as well is these smaller businesses, bootstrap companies try to do that model as well. I think it’s a bad model. I don’t generally recommend it for my clients. What I suggest they do is, is get a little bit old school. This actually helps as well because if you think you’re ready to hire a salesperson, you have to hire two. If you can’t hire two, if you can’t afford to hire two, you probably are not ready for a salesperson yet.
Here’s why. There’s only three outcomes to happen if you hire two salespeople. Either they both fail and if so, it’s pretty clear you’ve got a problem. It’s a market problem, a product problem, it’s just an issue that you have to fix. If they both succeed, obviously that’s a win. Things are going well. If one succeeds and one fails, well cool, that’s probably a personal problem. It’s an HR issue, not a product/market fit kind of problem.
Really, two of the three outcomes are good. You kind of understand. Actually, all three of them are good because you actually have clarity of what’s happening. If you only hire one, you’re going to blame that person, it might not be their fault, it might be the process isn’t good, it might be that you don’t have things up correctly, it might be a bunch of things. You’re just never going to know, so you need both.
But here’s how you do that. Because we’re not going to do the SDR, BDR and get super hyper personalize it that we’re going to say your job is to handle inbound leads and outbound leads. Or do the outbound leads plus you handle the discovery calls. How you free up the founder’s time because they’re probably the ones driving the sales at this point. How you free their time up, when you start to give more of the selling function to this team. Again, you don’t want to single point a failure, it just makes a lot more sense.
The other thing is to really do it right, you probably got to invest the money. You’re going to need a decent CRM, you’re going to need some tools, you will not cheap out on it, you’re not going to want to figure out how to write a couple lines of code for […] endorse of it. No, just go buy your call. Pay $30 a month […]. You’re going to start thinking about that sales stack, start thinking about how you’re going to put that together.
What I’ve seen is, the people cheap out on them because they try to find one person and they try to make them commission only, it’s also not in the tools to be successful. Not only do they not have the direction or the clear strategy in plan, they also don’t have the tools. Inevitably, that founder blames that rep and says I hired a dud.
Rob: Let’s say I was a founder of a bootstrap, B2B SaaS, we’re at $100,000 MRR, so just in the seven figures. I want to hire these two salespeople like you’re telling me and I don’t have any of the sales stack you just said. When founders ask me I’m going to do email support. I’m moving from Gmail. I’m always like Help Scout’s a really good tool or if you want something lighter […] frontapp.com. Of course you’re going to use Stripe for payment. I can recommend all these stuff, but I don’t know much about the sales stuff. What is it? CRM and a call recorder? Is it just one tool? Is it two? What would you recommend? And specifically, too.
Damian: There’s 50 tools for the thing. Here’s the way I look at it now. I’m actually putting together a doc right now, actually. This is where I learned in my starting selling software in the late 90s. I worked at McAfee when they became Network Associates. They bought a slew of companies, they put this suite approach. They’re one of the first security companies for this suite approach together.
It’s always funny because I went to Trend Micro which was really good at gateway scanning. When you’re smaller and you’re good at one thing, you’ve screamed from roof top’s the best of breed. You own the best of breed solution, that’s what we want to do. When you’re bigger and you actually acquire those types, it’s all about suite solutions. You think whatever role you are is what’s the best.
The answer is, both of them can work. The first one is HubSpot. I’m a big believer in HubSpot. Is it the best here? No. But that Microsoft Office approach together is very important, especially in those earlier mid phases. From getting seven figures to eight. To me, there’s a lot of value there. It’s not cheap. You’re going to be spending significant money if you really go all in for the marketing and service, help desk and the sales. But the thing is, it handles almost everything. Your counter appointments, calling, everything. And it’s all one single record which is the true power of a CRM, should be the single pane view of your interaction to the customer.
That’s the one path to go down. And then the other path that I say is, it is PipeDrive is a pretty good cheaper alternative. They do a pretty good job now of having really good integration. It’s all about integration networks. It’s about their partner network.
In the RevUp side, the tools that really matter are a CRM, from the sales pipeline engagement manager point of view. You’re going to […] before that too. You’re going to need […] tool, a mail shake profit IOs and like that. And then you’re going to need a help desk tool. I’ve been talking about Help Scout a little bit. Freshdesk is actually pretty good. What do I start thinking about is the future of these tools as well, so how they interact great with everything else.
For example, Aircall is a Voice Over IP tool I recommend to most people because it integrates with the most other tools, with the most other CRMs, with the most other help desk, I would say, and that matters if you want to get that integrated understanding of what’s happening with the customer.
The other side would be PipeDrive, Help Scout, or Freshdesk, and then a marketing automation tool. I would’ve said Drip in the old days, but I’m not sure that’s the right solution anymore. Funny enough, these days, who’s doing a pretty good job is Mailchimp again. Again, I don’t care so much about all the landing pages, the rest of it. You know automation is deliverability and integration with the other tools. That’s when we can start thinking. This is how your head starts changing.
I’m talking to someone who’s doing about $1.5 million a year and he was like beating their chest proud that they were basically doing everything in Gmail still. I was like cool, you’re saving a thousand bucks a month, $1500 a month, whatever, but how much opportunity you lose because of that. How much of your time and energy is being spent doing that. He handed it off to someone else. If you live in your inbox, that’s where everything is happening, you’re going to give your inbox to your new sales rep? Of course not.
You have to start thinking about how you scale past where you’re currently are. I think that people overthink a lot of stuff. Just pick one. Go get HubSpot CRM because it’s free. Find out whether you like or not. It’s kind of a love or hate relationship a lot of times. And people that hate it, cool. Now, go buy PipeDrive then. That’s what we’re going to do. Then, integrate with the other tools you need to use. But understand that as you grow and as you grow up that kind of value stack and as you grow more, actually start growing the team, there’s even more and more tools. And then, there are meeting tools.
Now the big thing is around coaching. Things like gong.io and Chorus.ai which essentially records the calls so then the sales managers and leaders can coach with it, but also doing some really cool stuff where they’re essentially recording and anomizing hundreds of thousands of hours of sales calls and figure some really cool stuff out.
Like something I’ve been saying for a long time, which is, you should actually talk praising on the first sales call. Not specifics because you might not know, but really it’s the range. They just had a really […] recently, a big data set. Essentially, the call price was mentioned or discussed on their first call, closing it 40% versus a 28% where it was at way until the second call because people get frustrated by that. They don’t want to keep feeling like you’re getting away from them.
There’s some real cool stuff happening there about understanding what’s really happening, the real buying behavior and what’s going on. As you get deeper into it, you’ll have to have more and more tools. But to begin with, you want market automation or email service providers of some sort, you want a CRM, and you want a support service tool of some sort. Ideally, they all integrate very well together.
Rob: Cool. I want to return back to the thing we started with which was talking about the email sequence. What should someone do in their sequence? I think you named four emails that you would send in a sequence. But you also mentioned that you are putting one together for a client that had eight touch points. What’s that? Is that when you get more advanced? Or is that a specific thing where you would send more than four?
Damian: It’s actually for me. This is a ‘solved by me’ specifics on this. The most success you’re going to have is, again, […] challenge is multiple touches from multiple points. Same with leads, inbound leads, too. It’s being super aggressive in your follow up in your communications or in a short period of time and then bailing. That’s what I think.
They can’t pay me now; I just started today. I’ll be starting to run next week. Specifically—we’re talking about pain points here—I’m putting together a list with my VAs and the rest of it to look —again, I work for […] software and service companies—[…] before they reached seven figures, they want to get to eight figures, so looking for the kind of companies that match that profile.
They actually are hiring any role, generally not a salesperson. They’re looking for someone who doesn’t have a sales[…] or maybe they have one salesperson, but they’re hiring someone else. What I’m going to do is, I’m going to reach out to them about all the mistakes the founders make in hiring.
The first step, day one on Monday, I do a LinkedIn request. I try to connect with my LinkedIn. And then day two, which is literally a Tuesday, the first email will go out. That first email is going to be very clear, it’s going to be seen that you’re hiring for project manager, for whatever, who was not sure how many people to hire in that role. Or if you ever hired sales before, but here’s some mistakes that people make when they do that.
Mistake number one is not having the systems and process in place to actually make sure they have success. And mistake number two is not having a clear plan with how to manage them while they’re still there. Both these things end up doing what I call a $100,000 mistake, where you hire someone and they’re around forever. They’re not quite working out, but you don’t really pull the trigger firing them right away because you know it’s your fault, too, so they stick around for a while. The next thing you know, you’re $50,000–$60,000 into this thing, plus all that lost opportunity you had.
That’s email one. Which of those are your biggest issue? That’s email one. Then the next day, I’ll give them a call and then that’s Wednesday and then Friday, they’ll get another email. The Friday email will actually be me doing Hippo which is like a Loom or one of these screen recording types of things. I’ll do that from their website. I’ll be looking at the website, there will be a little picture of me up on the corner, basically pertaining to the same thing.
If your problem is not having a clear onboarding process and having a clear plan of […] goals, making sure they can hit the ground running, ramp up faster, all that kind of thing, here is a free resource (which is an ebook kind of thing) to help them figure out how to do that. Then, there’s a call to action for them to do that.
Then, the following week, they’ll get an automated email, then they’ll get an in-mail, like you said, like an in-mail, if all of a sudden I can’t get it from then. And then one last email, the end. That third email will be if your problem with hiring is you just don’t have the skillset here, you don’t know how to run it, you don’t know how to hire salespeople. Hiring salespeople is difficult for the fact that if they’re mediocre, they’re probably good enough to BS for three or four interviews. Also, sales is one of the few white collar high-paying, high-performing jobs where your work ethic actually matters more than almost any other job.
If you’re twice the salesperson I am, but I work three times as hard, I will sell more than you. It’s just math. It’s absolutely real. It happens all the time. The sales you’ll see generally indicate people in their 20s or 30s are decent salespeople. They’ve learned how to do it, they can talk the game to the rest of it, and then there’s this decision they have to make. I don’t think most people realize they’re making a decision, but either they want to take that next step, but they want to be the stars, they’re really, really good, or they’re just still happy making $100,000 a year, coasting.
The vast majority of them are happy making $100,000 a year, coasting. That’s what they do. Because the other one takes work. The difference between that person and the person who becomes that $300,000-, $400,000-, $500,000-sales rep is work, is effort. It’s actually how much time they have put into it. Thinking about how they’re going to solve each problem off work. They’re not punching a clock.
Really, that work ethic matters a lot. This is another problem that founders have, who are just bootstrapped once they’re remote. Everyone I’ve worked with has remote teams. You have to set the example early about a level of expected effort. The best way to do that is, in the old days being the same office, but now it’s about being really clear about their onboarding. That first week is very intense. Basically, you spend almost all your time with them. It’s very structured. You’re sending these signals to them about a structured, hardworking organization, that you have all the tools you need to be accessible, but this is what we expect.
But more importantly, in the recruiting process, what we have to do is we have to test them just to make sure they’re doing it. It’s to the point that adds some hurdles, add some things they’ve got to cross over to see how they deal with it. It’s about having a clear way of doing. Hiring engineers is different from hiring salespeople, which is different than hiring office people, which is different from hiring marketers. There’s a specific way to do it, but the problem is, people are bad at doing it. More importantly, they get them into business and they’ll figure it out. They leave with their own devices.
Then you’re a month or two in and then you’re upset with they’re not doing much work and they’re not probably. Engineers complain salespeople are lazy. That’s Damian’s axiom number one. It makes sense. Engineers don’t really complain. They look for problems, as we did, the problem solvers. They’re looking for ways to fix things. Salespeople, their job is to do as much as they can as fast as they can, cutting corners, moving fast. That’s what they do, but not focused correctly, those are both bad habits. They can get really bad especially in sales, especially when they’re remote.
This goes back to again, you’re going to worry about saving a couple hundred bucks a month on your CRM or whatever tool, but then without that, you don’t have this clear understanding what’s really happening inside your business. This is the challenge. People try to get sales off their plate very quickly. I tell them, if you hate sales, you’re going to hate sales management even more because now, you still have to be involved in the selling process. But you’re one person removed. You have lost control. It’s tough. It’s a tough thing to figure out. And now your job is really coach, your job is really support. It’s helping this person do it.
Again, it’s not like you’re all saying […] start coming out, you have to […] we’re sales again. It’s just now you were about bigger things, you were about how do we put the process in place, how do we create tools so we can double, triple, quadruple the size of the team over the next 2–3 years. It goes back to you having to have at least a working idea of what those problems are. I don’t care if you’ve never done cold email before. I can show you how to do cold email, that’s easy. I mean, it’s not easy. It’s work, it’s effort. That’s the big thing, is effort, but you have to have the content right, the context to it right.
The real challenge with outbound and why it is so enticing to hire people, why I think you should hire someone as soon as you can, is the real work is in the data. The real work is in the list building. It’s what takes the longest, it’s what actually makes the biggest difference. For example, I can go into co-founder of LeadFuze, we got a good tool. I can go in there and do a pretty dialed-in persona. The right title, the right size of the company, type of industry, all the rest of it, but that’s the beginning stage. I’m going to take that list and what I’m going to do is I’m going to get my […] admin or my VA to then go into LinkedIn and see how many employees on each account. I want them to be more than 2 employees, but less than 20.
The clearer you can get with that persona, the better you’re going to be which takes effort and time. And that’s the problem. Always on the shortcuts. I want to push a button, have a thousand of these pop out, I want to plug it into Mailshake, I just want to sit back and just wait for my 2% reply rate and now I’m a spreadsheet millionaire.
Rob: That’s the thing. I’ve taken away several things from this conversation—hopefully listeners have as well—but that’s one of the big things. This is a lot of work. Cold email in 2010 is different than it is today. Just like SEO is different than it is. And Facebook Ads back in 2012 when I was running it for HitTail. They were way cheaper and way easier. This stuff takes work. There are always of course new marketing and lead gen approaches coming out. They tend to be more uncertain, there’s not as much information out there, and it’s more of the wild west. But the tried and true things like cold email take time. That’s the same I take.
Damian: Yeah, they do. There’s always a market to sell. Again, let’s go back since we were lazy, you’ll never go poor selling salespeople on the ideas of not doing the things they don’t want to do. I remember when I first got to this entrepreneur game back in 2010, who’s the big ad? It was Gary whatever. He was the big monster in AdWords at the time, whatever his name was.
Rob: I know who you’re talking about, but I forgot his name, too.
Damian: Perry Marshall.
Rob: Perry Marshall, yup.
Damian: Perry Marshall dominates. But he, like all people in that world, was getting hard. When it gets hard to make money doing it, you start making money selling how they do it. He was doing that. It was funny when I was doing it. At the time, 2011, I cold email you, my business was what I’m doing now but I was working with Infusionsoft and a couple of things and was a little bit more down market.
I would send a cold email. It was one. I had the cadence of one email. Back then it was hard actually getting email addresses. The reportive hack on how to get stuff. You can get the VA to do it, but I would do that and then go to their website and find two things on their website. And here’s the list of seven you look for. There’s not an opt in on every page. There’s six or seven things.
I send an email to them. An email would be like, hey, Rob. I was checking out HitTail today. Really enjoyed this, something specific about what I enjoyed, but I noticed on this page and this page, you don’t have an email opt in. That’s probably killing your conversion rates. I’ve got three or four more ideas I’d like to share with you. Here’s a link to book a time. That was literally my first email and I have an 11% booking rate, like 11 people booking meetings.
Great. That’s awesome. It was hard to do. But it’s like every single marketing. It sometimes gets more expensive, the more people that do it, the less effective it is. It just loses efficacy, that’s just what happens. On the cold email especially, because everyone hates cold calling, I’m a crazy person, I really enjoy the game. I enjoy the gameship of it and I think I’ve just had to learn back in the days when jobless […] phonebook go, but 99.99% people don’t like it. If they say they do, they don’t want to do it. They go to cold email because this is kind of I’m behind the computer screen, I feel safe, I don’t have […]. It just happens over and over again. This is social selling nonsense.
Do I believe you should have a good social […]? Yes. Do I believe there’s a lot of value on being on LinkedIn and helping people and showing that you have chops? Absolutely. Does it replace everything else? Of course, it doesn’t. This idea of some magical, automated, easy, stress-free way of generating millions of dollars of revenue for your business, doesn’t exit.
Again, it’s just funny that in most places we expect that. Even in our community, even in our bootstrap community, we still get caught up in the success stories. How long was Drip? How long did you have Drip before you sold it?
Rob: It was from launch until sale, it was 3½ I think. It was pretty quick.
Damian: Fast. Very fast. Maybe five is very fast, really. You look at the history of business. Listen to that Shoe Dog, the film […]. For 14 years it was near bankruptcy, which is the extreme, obviously, but it happened. We look at the Basecamp guys, whether we like the way they’re not acting these days or not. Look at their business, it’s a model for a lot of us, that’s great. That business is 20 years old now. It gets crazy how old these businesses are. It took 7–8 years to really make money. They were first movers, almost kind of that stuff. It takes time.
Now of course then we get the Wunderkinds, the Travises of the world that go out there and nail it right away. Good for them. But that is very much not the norm. We have some really weird outsize expectations on this stuff. I see this a lot with prospecting in sales is, hey, I’ve been doing it for three weeks yet, and I’m not rich. Okay, yup, you’re right, you’re not. Because it’s a muscle. It’s going to the gym. You can go to the gym for four hours one time a month. You got to go 30 minutes every day. That’s the same thing with hire prospecting.
I think that’s the biggest thing, is just the greatest salespeople that I work with are generally ex-engineers, ex-process-oriented people, or operations people, because sales is a process and its problem-solving at its best. This cliché of the fast-talking, back-slapping salesperson (that I know that I naturally fall into a little bit) is actually incorrect for who actually buys, especially in the technology world.
In my world, I have to tone it down a little bit when I’m talking to people because I don’t want to feel that kind of pushy salesperson. My job is to be a problem solver. That’s what my job is in selling. That’s cool. Most entrepreneurs I know, that’s the kick they get. It’s the problem solving the problem. Solving the product problem, solving the market problem. We like problems, we like puzzles, that’s what we like.
If we start thinking of sales as just that, seeing like you got a product puzzle or a marketing puzzle or whatever, it’s the same thing. You just got to figure out what piece goes where and when. The fun part is that, like a lot of things, it’s constantly changing. What worked 18 months ago doesn’t work anymore. That’s why, again, I think this is the good old Warren Buffet, Zig versus Zag kind of thing. Right now, I’m just seeing so much success with cold calling. People are answering their phones. People are actually home. People are working from home. They’re bored, they’re answering their phones.
I got a client who sells lead data to solar companies and their connect rate essentially almost tripled since this CoronaVirus came out. Because again, people are home, taking their phone calls. But no one is out there beating that drum because no one wants to cold call, no one wants to do it. But sometimes, being an entrepreneur is putting on your big girl/big boy pants and doing the stuff you don’t want to do because what has to happen.
Rob: Damian Thompson, sir, we’re at time. Thank you so much for coming on the show. If folks want to follow you on Twitter you are @DamianThompson and vpsales.co is your current project, what you’re working on.
Damian: Yeah. firstname.lastname@example.org.
Rob: Got it. If they want to reach out and get in touch. Thanks again to Damian for joining me on the show today. If you have a question for me or our future guest, please email to email@example.com. Thanks for joining me this week. I’ll see you next Tuesday.