This is part of a series of interviews with B2B revenue leaders. This interview is with Pete Caputa, CEO of Databox.
Note: at the time of the interview, Pete was working at Hubspot as the VP of Sales.
Getting started, who are you and what do you do?
My name is Pete Caputa. I am the VP of Sales at HubSpot. I joined HubSpot early in 2007 as the 15th employee. HubSpot offers an integrated sales and marketing software platform for companies.
I started our marketing agency partner program back in '09, and scaled that up. It was responsible for about half of our revenue, meaning there’s a lot of marketing agencies out there that recommend and resell our product, and then deliver services to their clients on top of it.
This year I've been very focused on building out a training program for our partners, sales leaders, and sales consultants, teaching them things like:
- sales hiring
- best practices
- sales coaching
- sales enablement
- sales and marketing alignment
- how to use sales technology
Things that are important if you're going to grow a sales team.
I didn't know that you joined when HubSpot so early. How has that journey been… going from a startup to a powerhouse in the marketplace?
It’s been crazy.
I had my own little startup before I joined HubSpot that I had shutdown shortly after I had joined. But before that, I had worked at a really big company with 25,000 employees. So I have had experience at two extremes.
Back then, HubSpot was just a few of us in a room. Our VP of marketing was this big guy and every time he got up from his chair he would basically bump into me, because the desks were packed into this little tiny room.
Now, I just read an article this morning how our office space is the envy of Boston. Beer on tap, refrigerators full of food, onsite gym facilities, ping pong tables, and all this other open space.
HubSpot, as an employer, has done more and more good things for employees, and we've always kept focus on serving the customer — that's never changed.
You write a lot of great posts on the HubSpot blog focused around the idea of reps building their sales capabilities as well as for sales managers to hire quality reps. What are some of the biggest challenges you’re seeing with sales talent?
There's not a lot of great sales talent out there looking for jobs. There's more sales jobs than there are qualified salespeople.
At HubSpot, we've taken the approach of building our own talent. We hire inexperienced reps, some right out of college, with little to no selling experience.
We put them through a month's training, sometimes two months, of classroom training. For each manager, we try to keep the number of new reps pretty minimal. That way, they can spend a lot of time with new reps, helping them prepare for calls, learn new skills, and review calls.
That's generally been our focus, to build up our training and coaching muscle, so we can groom new sales talent ourselves.
That's interesting. When you say classroom training, is it literally a classroom that you’ve set-up?
Yeah, we have a big classroom.
Everybody gets their laptop on day one and a subscription to the software, just like our customers do. They have to—in one month—produce certain results from it. That includes:
- publish blog posts
- build landing pages
- capture leads
- get links to their site
- establish a social presence
They'd need to do this for somebody else's business, maybe a family business, or they'll do it for a hobby website, but the main thing is that they produce results and then present that to a few executives to get graded from there.
I really like that model for you guys. Like you said, you’re hiring a lot of kids right out of college so you put them in an environment they’re already comfortable and transition them into a position where they can be successful.
We try not to call them kids, but yes, we hire a lot of people right out of college.
When I joined Hubspot, we didn't have this set-up. My first day, I was given a laptop, a phone, my Salesforce account, and a three page script:
- Cover page
- Qualification process
- How to demo the product
There wasn’t a lot figured out back then, but now we have a full sales process.
How does your sales process work? Where do the leads start? Where do they go to? How do you qualify them?
There's a lot to it.
We capture lots of leads through our website, literally tens of thousands of new leads every month through people downloading e-books, webinars, and things like that. Not all those leads are sales ready, so they get nurtured through automated messaging. They ultimately get nurtured down to what we call an MQL.
An MQL tends to be a company that fits one of our 'ideal fit' buckets. It's a real business and they're raising their hand saying, "Hey, I'm interested in talking with someone or I'm interested in checking out your software." It could be a requested consultation, a requested demo, or it could be them just starting a trial.
In some parts of our business, we have PQLs (product qualified leads). It could mean they've requested a call, but it also means that they're using parts of the software and they're up against a limit like number of phone calls made from the customer relationship management (CRM) systems. Once they've reached limits like that one, they become a PQL.
From there, we're calling, leaving voice mails, and we're emailing. We have a series of emails and voicemails that we’ll leave over a certain amount of time.
Once we get someone on the phone, our goal is to book a qualification call to verify that they have some need that we can help with. That qualification call is where we dive deep on their marketing and sales goals, what they are and aren't doing right now, and making suggestions on what could be helpful for them to help hit their goals.
If the opportunity is qualified, we could go a number of ways but usually it's to a demonstration of the software. During that demo, we're recapping what we learned on that initial call and showing them specifically how the software can help them achieve the goal.
What does your sales team structure look like?
It's fairly complicated, but I can walk through it.
We have a direct sales team, which is our main team. They get a lot of inbound leads, so their job is to call those leads, book appointments, and work through the process. They also target some accounts.
There's our channel sales team, which is basically the team that calls on marketing agencies, and manages the relationship with those agencies, helping them close deals.
We have another team that is inclusive to all of our industries. We could sell to media companies, universities, non-profit organizations, e-commerce companies. We specialize teams that focus on those markets.
With those teams that you just mentioned, what kind of levels do you have within them?
The easiest way to explain it is to just take the direct sales team and cover it there.
We hire a lot of inbound sales coordinators. Their mainly answering the phone and handling our website chat, trying to find opportunities to pass along to reps.
We also have a BDR team, they call on smaller businesses and set-up appointments for our SMB reps. The career path would be from that inbound coordinator to the BDR role, where the calling becomes a lot more proactive. The BDR team is going after contacts that have filled out website lead forms, but not necessarily asked for an appointment.
You move from being a BDR to being an SMB rep. It’s the SMB reps responsibility to go after client owned companies under 25 employees. From there, there’s the mid-market team. A lot of SMB reps go from SMB rep to mid-market. With that move, their pay goes up along with their quota. The mid-market is calling on companies that are 26 to 200 employees.
Finally, we have a corporate team that calls on companies that are more than 200 employees. There's also different BDRs for those different groups. Sometimes BDRs go from SMB to mid-market to corporate before they would become a rep… every situation is a bit different.
Performance measurement is really big for BDRs. I know, depending on what you read, there's a number of different measurement ideologies. What do you measure your BDR performance on?
The comp plan includes both base and a variable, but the base for BDRs is higher than for reps. The base is higher, since their overall compensation is lower than reps.
We've changed this throughout the years, but we're measuring two things:
- the quantity of appointments set (appointment has to show up for it to be considered set)
- the amount of revenue that's booked from the appointments they set
It works well because if a BDR is in a situation where they're behind their revenue target, they could book a lot of appointments and make up a big portion of their variable. When those appointments turn into sales, they'll get revenue from that as well.
It's a short-term lever for them to pull (the appointment sets), versus the long-term benefit of setting up quality appointments by giving them a commission on the sales that are ultimately closed.
The way you’ve got it set-up is very smart… having both the short-term and long-term incentives.
The appointment set is a newer thing and I think what it is does is it gives us as sales leaders the ability to turn the knobs and turn the levers when you need more volume. You ask the BDR team to do it and they'll do that. When you need more quality, you can ask them to focus in on that. It allows some balance, both at the manager level and at the leader level.
You've been an incredible sales leader for HubSpot over the past several years. When you look around at other companies in the marketing tech space, is there a gap in sales leadership, and if so, do you have any sort of solution for it?
I think it lies in the lack of experienced sales leadership in general, especially in the tech space.
Learning sales—in my opinion—is the last profession on earth that is passed from ancestor to ancestor. It's like folklore. No one's ever really bothered to write it down and actually pass it on effectively. Sales training is a big business. But, most salespeople seem to learn things they hear and see, instead of a thought-through sales methodology that’s customized to their buyer and their solution
In MarTech specifically, there's a lot of innovation, but not a lot of good selling. There's clear winning platforms and I consider HubSpot to be one of them. We have direct competitors in Marketo, Pardot, and a few others. I think the issue is that people think of marketing automation as a commodity, and so reps are too focused on features, benefits, and trashing the competition. We should all be focused on helping people understand what they need to do (marketing and sales wise) to be successful.
Looking forward, I see a lot of innovation on the dev and marketing side that I think will make salespeople a lot less important in the software world.
Specifically, we're seeing a lot of freemium offerings out there where the product is really easy-to-use, easy-to-setup, and the value is very quickly seen. In which case, you don't always need a salesperson to explain it. With that kind of a freemium sales funnel, there's the ability for marketing to have a much bigger impact.
HubSpot creates a bunch of great sales enablement assets. How have those pieces changed from when you first started to now?
Back in the days of 15 employees, we were just focused on getting leads in the door. There wasn't so much science around building out funnels and nurturing leads. We'd market our software to them at the same time we were trying to connect with them on the sales side. It was very basic.
Now, there's a lot more to sales enablement. There’s a team at HubSpot where it’s all they do. They create bottom of the funnel content as opposed to lead generation content. They're making content that's designed to:
- move people down the funnel
- educate them on our product
- educate them on the value of our product
- educate them on us versus competitors
For instance, they launched a video for our product (which can be quite exhaustive), it literally would take hours to demo it all, but they figured out how to include it all into a 35 minute video.
In the pieces you write, there’s a big focus on empathy for the buyer. How does your messaging and methods of communication need to adapt to that idea?
It starts with understanding the needs of the buyers. Too many salespeople out there are pitching their product. Too many salespeople seem to say, we do this, we do that, etc. instead of saying, "We can help your reps turn more of their demos into closed deals." Even that is probably too pitchy.
I must get ten prospecting emails a day. None of them really ask me a question other than, ”Can I have 15-minutes of your time to pitch you what I just pitched you in the preceding three sentences of my email?”
You've noticed I write a lot. Therefore, it's pretty easy to find a subject that I'll be interested in talking about. Yet salespeople who want to sell me something don't seem to do that. I think they're taking a numbers game approach to prospecting. They're blasting out the same message to everyone.
That's my biggest, most common rant when I'm writing… poor prospecting. I find that sales people are pretty good once we're in conversation. It's the initial connection that salespeople need to get better at.
They need to think of themselves a bit more like marketers. Just by writing a handful of articles, I could fill my calendar with more slots than possible, with people in our target market, yet very few people in sales write anything, share their thoughts, or establish their own credibility. They should.
How do you get reps to spend less time pitching me, me, me, and more time engaging prospects more effectively?
I think the first thing is understanding the pain points that a solution solves for a buyer prospect.
In our world, they could be as complex as a company that’s just raised funding, about to hire a load of salespeople, and have zero marketing efforts but still need to hit next month’s lead target. They have no time to waste because they think that’s what they need to support their reps. It could be as detailed as that.
It could be as low level as, "I'm frustrated with waiting on my IT team to build me a landing page and I want software so I can do it myself.”
It's a matter of sales reps really understanding that. We (at Hubspot) have the benefit of a big inbound funnel so we can see who might need a landing page builder and we could see who's a startup that just raised funding. When a rep picks up the phone or crafts that email, it's a matter of crafting a message that's related to what's going on in the prospects world and how that relates to a pain-point that we can solve.
I don't get as many prospecting emails as I’m sure you do, but I’ve gotten to the point where the I hit spam on probably 95% of them.
I used to not do that, and sometimes I'd even write people back, but at this point, when I get a fifth message from you that says nothing more than, "I'm putting this at the top of your inbox," I get pissed off.
That's the laziest thing they could possibly do. They could Google my name and find five ways to start a conversation, anything from politics, to my son, to soccer, to something work related. They're that lazy that they don't bother.
Instead, they just fill up my inbox. It's rude. Frankly, it's no better than telemarketing during dinner.
Other than the great stuff that HubSpot produces, what are some sales resources that you'd recommend?
I like to think of myself as a student of sales.
I'm a big fan of Dave Kurlan. He's been around in the sales space for a few decades now. He has built a sales assessment that I live and die by that helps assess candidates. That's the most scientifically sound one that also makes a lot of sense from a sales coaching perspective.
I'm a big fan of Jill Konrath. The way she teaches selling, it's straight-forward and really digestible. Marc Wayshak is similar. Simple way of teaching sales. Jeffrey Gitomer, of course, he's got the basics of sales more than covered.
There's a lot of sales advice out there, but If you start at the HubSpot Sales Blog, it'll lead you to a lot of these other experts, because we collaborate with them on content quite a bit.
