Are you struggling with prospecting to C-level? Peter Caputa, Databox CEO, told us what exactly SDRs are doing wrong and what should be changed about their methods. Some other topics of the interview include: how DataBox arranges its sales process, outreach in social networking website and perspectives of AI in lead generation. Enjoy!
Hi, Peter! Thank you very much for your time! It’s great to have an interview with a true expert like yourself. Let’s start with your background. You’re BS in Chemical Engineering. How did you begin working in sales?
My first job out of school — with a shiny, new engineering degree — was as a “Sales engineer.” I’d fly out to manufacturing facilities and work with local field salespeople at customer sites. I’d run tests on the customer’s machines to prove that our product offered a better overall value. That’s when I got interested in sales. But, I knew that I didn’t want to do field sales or even industrial sales, as that’s heavily reliant on relationships. It’s also relatively slow growth [compared to software]. But, I was more really intrigued by the diagnosis and recommendation part of sales; the logical, problem-solving side of sales.
A few years after school, I started a software company in 2001 with some buddies as a nights and weekends thing while we all had jobs. After a few years at it, one of the other partners and I went full-time. Up until then, we were all writing code. Someone had to do the selling. I was the more obvious choice at the time.
I struggled for a while until I hired a sales coach. Then, I was able to drastically increase sales, but it created more challenges for us on the services and product side of things. Ultimately, we weren’t profitable. Since my partner and I had to start making more money to support our families — my wife was pregnant, we had just bought a house and I needed a new car — we shut it down.
Luckily, my sales coach had connected me to his son, Mark Roberge. And right around that time, Mark started building the HubSpot sales team. Mark asked me if I wanted to join and the timing worked out quite good. It was late 2007.
I was worried that I wouldn’t be happy as “an employee” again, but I needed the income and HubSpot aligned pretty well with what we were selling at our startup. So I was able to jump right in.
I was the 4th sales rep at HubSpot and helped figure out the original sales process that ultimately helped us scale to thousands of customers.
I also petitioned to start a partner program for marketing agencies in 2009. I had experience selling marketing services in my startup and knew that there were lots of small agencies who needed help selling marketing services. I realized that we could help them. The partner program helped HubSpot successfully IPO and last I saw reported, still accounts for around 40% of HubSpot’s revenue. Here’s the story of my time there.
Your career at HubSpot as VP Sales was successful, why did you decide to change fields and become CEO at DataBox? Why Analytics — Is it your calling?
As an engineer turned executive, I am very passionate about data and analytics. I’m even more passionate about using data to improve performance of businesses in a systematic way, which is our focus.
I also wanted to be an entrepreneur again.
I spent almost 10 years at HubSpot. The early years of HubSpot were very entrepreneurial. Employees were even allowed to start companies on the side that were related to HubSpot. (I didn’t do that.) But, I did get to start a business inside a business (the partner program) and grow it. I had a lot of autonomy as I did that in the early years; I was largely left alone as long as I and my team were hitting our numbers, which we did very consistently.
As both the partner program and the overall HubSpot business got bigger, though, the program needed to be integrated into the business more. I wasn’t as passionate about that.
So, after a short stint writing for the HubSpot sales blog, I ventured out on my own.
I was going to start my own business.
But, then got introduced to Davorin Gabrovec, the co-founder of Databox and Chief Product Officer through TJ Mahoney, a partner at Accomplice, one of Databox’s main investors. I reluctantly took the meeting, as I really wanted to start my own thing.
Davorin had just rebooted Databox away from an enterprise focus more towards a self-service, small business focus. He actually had just downsized the team and was looking to rebuild. He needed someone with go-to-market experience as the remaining team’s focus was product and customer support only.
I started playing with the product and realized how easy it was to use. Although it wasn’t the main focus at the time, I also realized that we could make a few tweaks to the product and it could be really useful to marketing agencies, who I’m passionate about helping.
I ended up joining at the beginning of 2017. Since then, we’ve grown the business to $1.25M in revenue and 750 customers.
You’ve written extensively about sales and prospecting — especially expert tips and templates recently. What would you summarize as the biggest takeaways?
99% of salespeople don’t prospect. They spam.
It may not be spam by a strict definition of spam, but it’s unwanted most of the time.
I routinely ask salespeople what kind of response rates they get, and most are very proud of their single or low double-digit response rates. But, that means, they’re annoying ~90% of their prospects.
I don’t get that.
To prospect effectively, you really need to know the motivations of your typical buyer. For example, marketers love to see their name in lights. So, at Databox, our first email to any prospect is, “Would you be interested in contributing to an article we’re writing?” We get mid-double-digit response rates. To keep it high, before we send that messages, we research what they’ve written about and pick the topic based on that. We’ve crowdsourced more than 100 articles this way and about 1500 people have contributed to one. We’ve done that with one person prospecting in ½ their time over one year. I know no BDRs that get that many responses from so few messages.
Many of the people who contribute to our articles discover our product on their own and signup for a free account. And at this point — because our marketing is going so well — all of our sales efforts are focused on helping users of our free product.
In other words, we don’t have to send sales prospecting emails.
Our marketing actually generates more demand than we can handle right now. We’re hiring in support and sales so that we can offer more help to users, but we don’t need anyone to prospect into accounts.
Subject lines seem to be the first key to prospecting (or the stop signals that make prospects send emails to spam). In your opinion, what is the best way to write an “opening” SL?
We’ve written a comprehensive article on subject lines. I think it’s all about personalizing the subject and the email. Although other tactics like fear of missing out (FOMO) and curiosity work sometimes, everything else is just a trick.
What are the most pervasive prospecting trends you’re seeing?
I don’t see many trends as a buyer. Salespeople still do the same old stuff.
I have actually started receiving fewer cold emails in the last year once I joined Databox vs my time at HubSpot. But, I think that’s because Databox is less known (for now at least). But, they’re usually just as bad when I get them.
I think salespeople need to be on social media nowadays. I rarely answer the phone these days. My voicemail is full, but I’m probably slightly “addicted” to Twitter. The problem is that the same spray and pray approaches don’t work on social and I don’t think most salespeople are willing to put in the time to do social right, even though it gets much easier over time.
I kind of expected salespeople to actually develop their own followings, friendships and thought leadership via social media sites. A few smart salespeople pay attention to what I share and then interact with me there based on what my interests are. Unfortunately, I don’t really see that happening too often.
Which prospecting channels do you think are the most efficient in 2018?
Social prospecting has been huge for us, using the aforementioned approach of asking prospects to contribute to an article. We can connect with people based on what they want to talk about. We’ve mapped out what our buyers talk about online and have templates for initiating a dialog around each of them.
We also started prospecting a bit in Slack groups and Facebook groups. Once we have a critical mass of happy customers in one of these private groups, users often mention us when someone asks, “What software do you recommend for automating monthly reporting?” and we can just sit back and watch others recommend us. We’ll reach out afterward to offer assistance.
We enjoyed your article about horrible prospecting emails. Your tips were inspiring. Are you still receiving poorly written emails?
Yes. Almost all of the messages I receive are unpersonalised pitches.
With prospecting, salespeople are too eager to get to their next step, as they (or their bosses) have defined it. They’re usually trying to book a phone call right away.
They need to slow down and be equally excited about learning a bit more about their prospect so that future attempts can be tailored.
For example, I received a wonderfully written and researched note from a salesperson the other day. He read my articles. He referenced common connections. He didn’t just skim my content and my network. He really dug in. He found multiple commonalities. It was really very thoughtful.
But, then at the end, he asked me when I could get on a call with him to discuss their solution. That’s where he went wrong. It wasn’t a priority for me to invest in a solution like his right now and I don’t want to waste time coordinating and doing a call for something that’s not a priority. If he had slowed down and just asked me a question, he could have gotten a dialog going, learned more about me, maybe even found a reason to have a conversation down the line.
But, he blew it by showing his hand. All he cared about was taking the next step in the way he wanted to take the next step and with the timing he wanted.
Now, I’ll never see him as a peer. He’ll always be a salesperson just chasing a commission. Not really interested in me. Just the sale.
What prospecting tactics, in your opinion, don’t work in 2018?
I think it’s time to retire the automated, unpersonalised email sequence. I will admit that emails get lost in my inbox. And sometimes, when I want to or need to respond, a nudge is welcome. But, that’s rarely an email from a salesperson.
So, when salespeople send me “follow-ups to their last emails”, I actually get angry that I had to take the second to read it and delete it. Here’s my full rant on that.
Mike Donnelly from SeventhSense (an email send-time and send-frequency software) says something interesting. He says, “Senders think that sending email is free. But, it’s not. It’s expensive for the receiver and therefore, it’s expensive for the sender to send bad emails.”
That’s true for marketers and salespeople, I think. Most emails sent by marketers and salespeople do not get a response. In some cases, the majority of emails sent by salespeople don’t get opened or read. They get deleted.
Think about that for a minute. Think about how much of your prospect’s time you’re wasting before you send your next batch of crappy emails.
What tips on writing emails can you give to SDRs and template writers?
Find ways to scalably personalize your messages. Send less email, but with more personalization and care.
Also, find ways to reach out to prospects that get you a higher response rate.
Stop positioning your product to buyers in the first email.
Just show an interest in them and what they’re doing. Sometimes, just complimenting them is the best thing to do since most people respond to a genuine compliment.
You can always position your product or service later. But, if they’re ignoring you, you’re pissing them off. They don’t think you give a crap about them, they’re never going to respond.
Year after year, it’s harder than ever to reach prospects. How can SDR’s overcome it?
SDRs should become mini-market researchers and marketers. If you have insights your buyers care about and you share them publicly, they’ll want to talk to you.
We’re always collecting data from our prospects and publishing it, in aggregate. It’s the easiest way to be seen as an expert.
What do you think about the outreach on social media such as LinkedIn, Quora, Twitter, Facebook, etc.? What social media are the most productive?
We market on all four platforms. We prospect and market more heavily on Twitter and Linkedin. We have a small team, so we haven’t dived into Facebook and Quora for prospecting.
But, don’t prospect unless you’re also marketing yourself on those platforms. It’s 10x easier to start a dialog with someone who likes, shares or comments one of your updates. That’s mostly what we do.
Recently, unusual outreach has become popular. For example, personalized videos. What do you think of that?
I am personally not a huge fan of receiving videos of strangers talking to me. I haven’t listened to a voicemail in years for a reason — it takes too much time.
But, I know some people who prefer video over text. And I don’t mind it once I’m engaged in a conversation with someone.
Where I think a video is valuable is when the product is visual and you can show off the product and record video of yourself talking. Recently, a marketing agency told me they’ve had luck sending quick videos to inbound leads where half the video is showing the prospect how they could improve their website. I can understand why that’s effective.
Where I think salespeople go wrong is when they send video messages because it’s easier or quicker for them.
Many organizations complain about the tensions between Marketing and Sales teams. At HubSpot, you were VP for Channel Sales and Marketing. Can you give advice on how to build a healthy cooperation between teams?
It’s simple. Set goals so that marketing is accountable to sales and sales is accountable to the revenue goals.
Marketing should be accountable to growing traffic, leads and some lead quality metric. Many companies define a Marketing Qualified Lead or a Sales Qualified Lead and then task marketing with collecting enough information about each of them to determine whether they meet the definition.
I am not a huge fan of this method as I think marketers end up gaming the system by tricking leads into filling out more forms. My preference is to just track the lead to sales conversion rate and make sure marketing and sales are both accountable to that number.
I am also not a fan of a two-way agreement. Too many companies try to make the sales team accountable to the marketing team too by suggesting that salespeople should have to follow up with all leads within a specific time frame. But, that’s a sales manager’s job to enforce that rule if it correlates to revenue.
Do you think the inbound-outbound ratio has changed over the past years? If yes, which of them is more productive and why?
Yes. You’re stupid if you aren’t doing inbound. It is about a million times more scalable. It also produces compounding results, meaning that investments today reap rewards forever.
It’s not always easy. You can’t just follow HubSpot’s inbound marketing methodology blindly and expect it to work. But, if you’re not producing content that’s relevant to your prospects, you’re working too hard and you’re not investing in your future.
Did you introduce GPCTBA/C&I (Goals, Plans, Challenges, Timeline, Budget, Authority, negative Consequences and positive Implications) in DataBox or have you come up with the new method of qualifying prospects?
Many of our sales do not require a salesperson. The product experience is designed to be self-service. So, in many cases, our marketing and our product are letting our users self-qualify and make the buying decision on their own.
As one of the originators of this sales qualification approach at HubSpot, though, we’re of course using it as a framework when we do sell. But, we’re only using elements right now.
GPCTBA/C&I is great for a complex sale that requires a prospect to change the way they’re doing something. It helps a prospect see how their current plan and challenges will make it hard for them to hit their goal. For the early days of HubSpot, when no one knew they needed all-in-one software, it was very helpful. In the early days of the HubSpot agency partner program when we were trying to convince agencies they needed to start selling inbound retainers, it was absolutely necessary. It’s also good for agencies who are trying to convince a company to spend more money on a more robust marketing services retainer.
However, at Databox, our current sales process is simply about automating an existing process. So, the sale doesn’t require us to get that deep.
We are about to launch our own methodology for how companies should run their business. We’ve begun using that as our framework in our sales and onboarding processes. However, it’ll be built into our marketing and product, so it’ll still be relatively efficient for us to sell consultatively.
Our goal is to avoid building a large sales team. In software sales today, I think a large sales team is more of a liability than an asset. Like how Apple has built the most valuable company in the world without building their own manufacturing facilities, I think the software company of the future won’t need their own salespeople. (I’m not saying sales isn’t necessary. Just that some of it can be automated, some of it outsourced and a lot of it can happen through partnerships.)
You wrote that marketers should promote their salespeople. We like this idea a lot. What are the best ways a marketing team can help sales?
For example, a company has a blog that provides much valuable data on their product or service. Do you think sales should offer the prospects to read it if the prospects are at the discovery stage?
I think that salespeople should certainly use content to educate buyers. Old school salespeople used to say that content was a crutch; that a good salesperson shouldn’t need to “leave behind” content. But, that’s before all their competitors started publishing everything online and buyers would rather talk to Google than salespeople.
So, today, most marketers and salespeople produce content that’ll be useful to their prospects.
But, I don’t think that’s going far enough.
When I said that marketers should promote their salespeople, I meant that the salespeople need to become thought leaders. They should be the ones with the byline. They should be the ones that are trained to do market research and identify content ideas. They should be writing, shooting videos, hosting podcasts, etc. And their marketers should help them do it all.
Every marketer should read Robert Cialdini’s book, Influence at Work. The best way to influence someone (which is the job of a salesperson) is to be a known expert. Salespeople should take ownership over becoming experts, but they need access to their company’s marketing channels to be known and some facilitation from their marketing team would make the end result better.
SDR’s OTE is on the rise again, while the average tenure remains low (1.5 years). What do you think about the outsourcing of prospecting?
In general, I’d prefer to outsource than hire.
I’m a big fan of outsourcing prospecting. It forces companies to have focus and a process. It requires a lot of coordination with marketing and the sales team, of course.
But, I like it because it keeps the cost off of the books, enables a company to scale it up or down as needed and it enables a company to leverage best practices and tools, whereas most companies have no clue what they’re doing.
How do you generate leads for DataBox?
We get ~2500 signups per month through our website. It is all through organic marketing channels: search, social, referral.
We recently launched an affiliate program to scale signups further.
We have a few other tricks up our sleeve too. We’ll 10x that volume in 12 months.
We’re doing all this with just three full-time marketers and 2 part-time freelance writers.
But, lead generation is not our challenge. We just added a few people in our sales and services teams so we can handle our current lead volume.
Through product onboarding and marketing efforts, we improved our signup to paid conversion rate by a few percentage points since the beginning of the year, but think we know how to do even better. So, we’ve added a few developers to work on that over the back half of the year too.
What is the sales structure of DataBox?
We have one salesperson and two pre-sale product support team members. If another great salesperson comes along and wants to work for us, I’d hire them. But, I’m not actively seeking another person now. Our goal is to automate as much of our sales process as possible through our product and marketing teams.
Automation tools have facilitated the work of SDRs. Do you think there are more tasks we should entrust to software?
Yes. The automation tools we have now are automating simple things and bad habits. Simple things like booking a meeting and logging emails into CRM records, and bad habits like sending 5 unsolicited, unpersonalised emails in a row.
Some people think that AI will eventually take over many jobs. Do you think it’s the case for sales development?
Absolutely. The first phase will be about enabling people to do their job more efficiently. But, as we use software to do more and more things, they will be automated with AI.
At its core, sales is about diagnosing need and making recommendations. We won’t always need humans to do that. And I think we’re at the beginning stages of automating some of that. Thing like chatbots (Drift, HubSpot, Intercom), interactive sales playbook software (AndCostello, VOIQ) are the first generation of that.
I think this will be a good thing for salespeople and company productivity. We may need less salespeople in the future, but it’s not going to happen overnight. And if sales productivity goes up and there is less friction in the buying process, companies will really benefit.