185: Make Your Sales More Productive with Joel Stevenson

29
Nov

Joel Stevenson is the CEO of Yesware, a sales engagement software that helps high-performing sales teams do meaningful email outreach at scale. We discuss the future of sales outreach, ways salespeople can become more productive, and the fastest way to drive awareness for your products. 

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Make Your Sales More Productive with Joel Stevenson

Our guest is Joel Stevenson, the CEO of Yesware, a technology business that helps high performing sales teams do meaningful email outreach at scale. Joel, welcome to the show.

Thanks for having me.

Well, it’s great to have you at Joel. And I’m curious about your CEO journey. How did you land in the top seat of a fast growing startup yesterday?

Yeah, it was a long and winding road. I started my career in sales right out of college. And then I did that for a few years, sort of lived through the dot com boom, the dot com bust, and the 9-11 and all these things that seem like very, very distant memories now. And the economy started to slow down very significantly in the early 2000s. I ended up going back and getting my MBA and focused a little bit more on quantitative finance concentration.

So, I did mostly customer-facing things, wanted to do some more quantitative stuff afterwards. So, then I landed in consulting and then sort of back in the startup world, which brought me ultimately to this little company called CSN Stores that later became Wayfair. So, I was at Wayfair for seven and a half years. And one of the things that I did at Wayfair was I built up our B2B business, which is selling to interior designers and contractors and builders, that sort of thing, versus selling to individual consumers.

And we grew that to $400 million over a few years. And that was a really exciting journey. Yes, Wayfair eventually got a little bit too big for me, and so I was looking to do something different. And we spent a tremendous amount of time and effort using technology to drive sales productivity and in that B2B part of Yesware, and that part of Wayfair, which is so interesting. Sometimes I’ll say Wayfair versus Yesware because they rhyme, and I sometimes joke that I only work for companies that rhyme, but it’s not really true.

But then as I was looking to leave, there was an opportunity to join. We had an investor in common between Yesware and Wayfair. And, so I knew a little bit about the company, had to know him better. And the chance to sort of stay in Boston and go from a buyer of tech like that to a seller of tech like that and help other companies do sort of, you know, some of the things that we were able to do at Wayfair was exciting. That’s how I ended up here.

Well, incidentally, I recently purchased some tiles from Wayfair. So, I kind of experienced it is a pretty powerful B2C platform as well. Yeah. So, it seems like you did a great job there too. So, yeah, so I am excited about how you do this. How do you spur sales and marketing for a retailer or for a service business? So, can you please share about your favorite framework for customer acquisition?

There are many ways to acquire customers. Obviously, there’s, you know, people have different motions. Sometimes you have e-commerce, sometimes you have high call center, high velocity, you have inside sales, you have outside sales. There’s many, many channel sales. There are all kinds of different ways to do it.

But, you know, an important way to understand if you’re doing a good job with that, and then not only are you acquiring the customers which are retaining them over time is to what is generally preferred to his cohort analysis and one of the reasons why I really like this tool is because we used it pretty extensively at Wayfair and what was much more of an e-commerce world and we also use it very extensively here at Yesware and now Vendasta who acquired Yesware to look at all you know very different types of sales motion.

So, I believe it’s this is a broadly applicable framework. And the way it works is you basically take all your customers and you group them by, date by some common thing. It could be the date that you first acquired them, maybe it might be the first date you started advertising them, it might be the first date they actually started paying you money, there’s different ways to do it. But you group them into groups, for now we’ll just say, we’ll call them acquisition cohorts.

Acquiring customers is one thing; retaining them over time is another. Cohort analysis provides a powerful framework to gauge and improve customer performance. Click To Tweet

And people use different time frames, you know, oftentimes people use months, but you can use quarters or years or weeks, it really doesn’t matter. So, you group all your customers and then what you want to do is you want to see how these customers perform over time and whatever metric that it is that you want to manage, revenue or billings, this is a very popular one, but you also might want to look at how many actual customers pay you money in a given month or how you retain them.

You might look at profit metrics or there are different, uh, different things that you can plug into this framework. Then what you do is you need to get all that information. So, if I’m looking at revenue, I need to find for each customer, how much revenue did they pay me every calendar month, take all that. And then what you’re doing is you’re now grouping, you’re grouping that information by the acquisition cohorts and you’re normalizing it to be, or, you know, it’s called Ordinal Month.

So, if I have a customer that I acquire in January 2023, and I look at the revenue that they paid me in February 2023, that’s month one. Whatever revenue you collect in that same month would be considered month zero. So, you do that for all of your cohorts, and what you end up with is something that normally looks like a, you know, kind of a triangle. The long end is that there is sort of the hypotenuse is sort of going up into the right. And what you’ll see is in that is that you so next to now you have two views of your customers.

You have a view of your customer going from left to right, which is how does a group of customers perform over time. And then you have going from top to bottom, you have a view of for any given point in time, month one, month four, month five, whatever it happens to be, are we getting better or worse versus where we used to be? And so you can use those two sort of methods to say, where might we have a problem? And, so are there big drop-offs? Do there seem to be kinks?

Oftentimes for if you’re selling to small businesses, there’s a lot of churn at the beginning that it starts to level off. But where is that level off point coming? Is it moving out? Is it moving in? Is there some particular point where all of a sudden, well, you might have a lot of annual contracts, and so month 12 is the one that really matters, and that’s a challenge. So, you can look at this, and the reason I prefer something like this to, especially in software, we talk a lot about, people talk a lot about customer acquisition costs, and there’s another metric people talk a lot about, which is lifetime customer value, or LTV to customer acquisition cost, or LTV to CAC.

And those are great metrics, but their point in time. And to me, it’s kind of like trying to expect that you would have gotten all the content from a long form article by just reading the headline. There’s so much more depth that you get by looking at a view like this that can give you all the detail about what’s happening, which then allows you to say, okay, well, where do I have a problem? Like, oh, we’re getting worse here. Like, why are we getting worse here? Let’s go look into that. Or we’re actually pretty static, but for some reason, we get all this customer drop off in month six. Why are we getting all this customer drop off in months? So, it ends up being a tool to identify where problems might exist in your business or opportunities.

That’s awesome. So basically, how I understand is the steps of the framework. So, you gather all your data about your customers when they purchased and how they purchased. And then number two is you standardize this data into monthly cohorts. So, the customers, all of them, they bought in January and February and so on. And then you look at those cohorts. So, someone buys in time zero in January and then maybe something happens in March, something happens in May, months three, months five. There are different patterns emerge where people drop off or maybe they start to purchase more. more and then you identify those bottlenecks perhaps or opportunities in that chain where you can we can leverage or you can remove a bottleneck and then you keep adjusting your approach. So that’s that sounds like a very powerful approach.

The other benefit that I find it has is that it can be pretty useful for forecasting. So, whether you’re just trying to figure out what your revenue is going to be over some period of time. Or if you’re doing some sort of direct response advertising like Facebook or Google AdWords or something like that, you probably have some sort of a payback parameter that you’re operating within. And it might be that all of a sudden you start doing way better than what you thought and you can sort of, because you have a lot of data now, you can extrapolate with confidence what your revenue is going to be three months from now, six months from now, whatever it ends up being.

In the realm of direct response advertising, cohort analysis serves as a guiding light. It helps you fine-tune your spending, whether accelerating with confidence or pulling back to reassess and adjust. Click To Tweet

And that might allow you to start spending more right away and there might be inventory, and so that might allow you to accelerate your business. Conversely, you might see that you’re not hitting your targets and you might pull back and kind of readjust and figure out what some of those issues are. So, I find that it can be, it not only might point out problems with your product or your service, but it also is a tool to allow you to kind of be more responsive on accelerate or decelerating your acquisition spending.

So, you can adjust by analyzing what happens, what’s the pattern in the customer lifecycle. So, what are the kind of things that you can do to remove this churn pattern or to actually stop customers churning? What are the examples that you see you or your customers do to stop churn?

I mean, there’s a handful of tactics, I would say, broadly. I mean, to me, the most important one, the most important group of tactics tend to be really around, like, what is your core product and service, and is it meeting the needs of your customers effectively? And that’s getting out and talking to customers and looking at churn surveys and all these types of things. And in general, I would say the biggest gains to retention typically will come from making like doing the actual hard work of how do you improve your product and service over long periods of time and they don’t tend to come in big chunks.

Usually, they’re little small increments that you have to stack on top of each other but to me that’s kind of the most important the most important class of work. There are other classes of work which are also important and can produce a big benefit and sometimes can produce a big benefit much more quickly than the product work. One of them is just how are you servicing your customers. So, you might be servicing your customers all one way. You maybe have an opportunity to segment your customers and give your top customers better service.

You might already have some segmentation, but you might be able to do that a little bit differently. If you have people in the mix, it may be that they don’t have good signals coming in about how people are using your product or service and if they had better signals they would know when to go talk to somebody or when to anticipate a phone call or they could do it you could do better job with training and education of those folks to do a better job when they’re actually interacting with a customer.

So that that’s the type of work that you may find if you’ve got an opportunity to kind of re-segment you get a bit of it unlocked but generally speaking that’s one too that it’s usually you have to get a lot of small increments and stack them up over time to get a big benefit. And then the last one tends to be, what type of customers are you bringing into your funnel? And so, are you actually bringing in customers that are not good fits? And that might be because you’re advertising in a particular channel where maybe the good fit customers don’t exist.

Understanding the fit between your product and the channel you advertise in is crucial. Don't fall into the trap of attracting customers who don't align with your value proposition. Click To Tweet

You might have a type of a sort of a value proposition that is great for Facebook clicks, but actually your product doesn’t deliver that great on. And so, you can sort of get into that trap a little bit, or it just may be something where you could specialize in a particular industry or a particular size of customer or group of customers. And those are just the better customers. And so, you could, instead of casting a wide net, you could instead try to cast a much more, a much smaller net or, you know, you sort of do spearfishing instead of net catching if you will and that’s those are that that can be very effective in some cases.

So there are lots of reasons that there could be lots of reasons for churn and with an analysis like the cohort framework or analysis framework you can actually identify what happens to the customers in months two months five and you can correlate them to certain things they do or they don’t do or communications you do or that trigger churn or prevent churn and you can adjust your approach.

Yeah, and if you have good enough data. it’s easy to filter those things so you could say how do our automotive customers do versus our HVAC customers or I’m just making that up but there are many ways to handle that.

Okay so that gives you data that you can analyze for that rather than just the aggregate data, which is great. Now switching gears here. So Yesware is in the business of helping sales team do meaningful email outreach. So, what is the problem that you were solving at Yesware?

There’s two reasons people would typically look for a solution like Yesware. One reason is just good old sales productivity, where you might be doing some things manually that you could do in a more automated way, doing higher volumes of email outreach where you have some similar types of things that you’re saying, you know, calendar booking, syncing information back into your CRM, are all things that can be done in an automated way and that in turn free up more time for selling activities.

Then the other reason tends to be, has to do with intelligence or effectiveness. And so can I get more information into my sales process such that I can make better decisions about the content that I’m sending or how I’m reacting or how I’m sequencing my sales process so that I can improve not only the current sales process that I’m in, but future sales processes.

Okay, so you essentially help them optimize the sales process over time by gathering information on what is happening in their sales?

That’s right. I mean, like a very simple example might be, let’s say, you know, you and I have a, let’s say you and I meet and we just have a discovery meeting. I’m just trying to learn more about your business and I decide, okay, well, you know, Steve’s going to be a pretty good fit. And so, what I normally do after we meet is I have a template where I say, Hey, thanks for meeting. And here’s all the things that we talked about that I think are great.

And by the way, here’s a white paper that you should read when you have some time because it’s going to be great. And click here to schedule the next meeting or I’ll call you and say, yeah, something like that. You know, that might be the thing that you do. But then you might say, oh, well, you know what? There’s this other piece of content that I’ve always wanted to try and maybe that would work better than the white paper.

And so then you send that and you can do that enough times and you can just sort of watch, okay, well, what was my reply rate to those emails what was my rate of getting the next meeting booked like did people even look at this content like how did they look at this content so you start to get more and more information about that and that can be an individual doing that but where it’s really powerful and where a lot of the s4 customers have seen a lot of benefit is when you can then extrapolate that out to an entire team and so one rep might experiment or you might have a team of operations or enablement professionals that are driving this in sort of a more standard way.

And if one salesperson figures out, oh, this is a better way to progress from this part of the sales process to this other part of the sales process, and then that gets shared with the whole team. Well, now your entire team is more effective, not just that one person. So that’s where you start to get some real benefit.

I love that. I mean, that’s the old mirroring technique. I remember, I’m dating myself, but 20, over 20 years ago, I was involved with a McKinsey and company project for the new bank. And one of the things they did when they came in, they looked at, okay, who is the best practice here and how can we then have everyone else execute the best practice. So just by mirroring the best practices across the organization, they increased productivity dramatically. And that’s one of the main things that you do with Yesware. Yeah. That’s really interesting.

Mirroring best practices across an organization can significantly boost productivity. Click To Tweet

So where is the whole sales outreach game going? I mean, over the past years, it’s become apparent that cold calls have almost dried up. Now, the phone company even alerts you that this is a potential spam, don’t pick up the phone, or if you pick it up and there’s a long wait, there’s a machine behind and you hang up. So essentially cold calls have phased out. And also, I see that LinkedIn is becoming less effective and forced outreach email. So maybe email is still good. I don’t know. But there is this whole game going at how is AI going to influence things further?

The it’s an interesting question, and I think it is difficult. It’s hard and getting harder to do cold outreach. And I think there’s a couple of things to think about. One is that if you’re going to do cold outreach, then I think you really have to think about how are you going to invest enough in your cold outreach that it stands out as authentic and delivers real value in what you’re selling. And so, you probably can’t do that at great scale. You probably have to be pretty targeted in that approach.

And I would argue you should probably be selling something that’s pretty valuable if you’re going to take that approach, because it’s tough, and you just got to be willing to put in, I think, the real authentic effort to try to cut through, because not only do you have systems like Yesware and others that allow people to put a lot of, whether it’s in-mails or email or phone calls out into the world, but they also have AI, which is making it easier to generate content, and it’s not going to get any better, certainly, in the short term.

So, I think if you’re trying to do that, that’s one approach. Where I think things are probably, where it’s been moving and where I think it’s going to continue to move is the sales effort is going to start after the customer knows, in general, knows something about you or you’ve somehow gotten their attention or their awareness, and that’s either through content or through advertising or word of mouth, whatever it ends up. But someone’s going to show up into your funnel for some reason that wasn’t because you made 5,000 phone calls in general.

Effective sales outreach starts after the customer is aware of your existence. Click To Tweet

And at that point, then I think it’s all the same sales rules apply, like you need to be following up with someone at an appropriate frequency, you need to have a good, tight approach, and I think very importantly, you need to avoid what I would call unforced errors, which is like you didn’t follow up timely, you didn’t prepare for an appointment, you didn’t ask all the good questions you could have asked. So, you basically, you did something to foul up the sales process that if you would have just taken a little bit more time and attention, you could have done it.

Because the leads are so precious now that when you get one, you really want to close them. And so many of the same tactics and approaches that have worked for the last, say, decade on outbound sales, those are still important for inbounds, whether if your price is a little bit more inbound, you still have to sort of treat it like an outbound process, but I think that initial contact and how much the buyer knows about you when they first show up into the sales funnel, that is a bit of a different game now.

So, what you’re saying is that marketing, or maybe brand, brand building is more important than ever because without it. People will just not respond, they will just not take your call, won’t respond to your email. So, sales have to work with marketing very closely. Yep. Yep. As a sales company, do you get involved in marketing? Is this something that you need to keep control of in order to ensure that you are going to generate the results?

I think there’s a few ways to look at this. I think one way that you can look at it is if you look at a lot of the recent technology, you look at a lot of the public companies and leading companies that have grown a lot and have big sales teams. You used to always see marketing ops and sales ops and you increasingly see a role called revenue ops instead because the lines are so blurred and you might be in the marketing funnel for a while and then up in the sales funnel and then you drop out of the sales funnel and you’re back in the marketing funnel.

The lines have blurred quite significantly there. And we, even in our own process here at Yesware, we’ve traditionally been a product-led growth company and so normally the way that people first experience Yesware is not from a salesperson calling them but from them trying the product. And they start to try the product, they get a little bit of interest in it, then they might say, hey, I’d like to learn more about it, and we’ll talk to them more.

It might be that we start to see enough users start to show up at a company that then we might begin an outbound effort. But now we sort of know something about that you have an interest, that you have a need, that you’re trying this, that this might have some value within your company. And so, I mean, at least for our own case, we’re very deeply tied into marketing for that reason.

And then you have a product led company, then the question becomes, how do you create awareness for the product, right?

I mean, there’s a few ways we do, you know, kind of traditional old advertising. We used to go to trade shows, you know, somewhat, I think since COVID, we haven’t really done as much of that. We might go back and do that again in the future. We aspire, we don’t always meet the mark here, but we aspire to have a lot of that awareness be driven from the product, and so there are some viral loops, if you will, that the product generates.

So you send a yes, we’re a meeting center, or invite out to somebody they have a good experience with, and they say, oh, that might be interesting for me, or you have a sales, it’s a sales process for somebody that also happens to be in sales, like, oh, like how’d you, like you ran a really good sales process, like how do you do that? That certainly happens, you know, we see customers that move from one company to another that would bring Yesware with.

So there’s a variety of ways to do that, and I think the key for, for most businesses, but I think especially for product-led businesses, is you got to have multiple channels to bring people in. You eventually are always going to, you’re going to saturate the thing that works the best usually, and so you’ve always got to have the second and third, fourth, fifth channel that you’re developing when that, because that first channel will eventually plateau.

That’s fascinating. So that could be a topic of another conversation of how to create awareness, and how do you promote a product-led company, and these whole loops, the acquisition loops, the engagement loops, the viral loops, the fascinating topic for another day. So, we are coming here to the end of our time. So, if people would like to learn more, maybe they run a sales team, they’re looking for an edge, a product that can help them be more effective, scale their sales function, where should they go? Where can they connect with you and learn about Yesware?

The best way is just to come to yesware.com. We’ve got, if you go to yesware.com forward slash blog, we’ve got, I don’t know, a decade worth of sales content that we’ve written that tends to be pretty data driven and I think helpful and it’s all free, so you can do that. You can sign up for a free trial at yesware.com. We’ve got a free forever tier, so if you want to just, you know, have a little bit of email tracking or something, you can get that if you want to do more. We’ve got some more options available. And then I’ve got a sales focused podcast called the hard sell, which you can find at guesswork.com forward slash podcaster on the on the usual places, hopefully the same places you’re listening to this one.

Ok, so the hard sell, it sounds intriguing, it is hard to sell these days, even if you don’t do a hard sell, so definitely an interesting podcast to check out. So thank you, Joel, for coming and for sharing your knowledge, and those who are listening, don’t forget to check out our YouTube and subscribe to our YouTube channel because that’s where all the good stuff is, and we started putting shorts up, so you can go back and you can just taste some of the past episodes, look at the framework, and if you like it, you can go to the full episode and check it out as well. So, thank you for listening, and thanks for coming, Joel.

Great to be here, thanks.

 

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