What does it take to become the fastest growing private software company in North America, as Deloitte named Acquia in November 2013?
Well, it helps if you can create all the qualified leads you need, because with predictable, scalable lead generation, you can create predictable revenue & growth.
Acquia’s sales leaders decided that, to hit their very aggressive IPO-track / $100 million+ revenue growth goals, they couldn’t depend solely on inbound leads coming to them, or on partners.
It outlined exactly how a dedicated outbound prospecting team can predictably generate new, quality sales leads month after month, giving a company a way to control and dial up new sales growth (as Salesforce.com did back in 2003, when it was less than $100 million in revenue and 300 people.)
Tim read the book and immediately thought to himself “I wonder if the author Aaron Ross does private training sessions?”
Tim and the sales leadership team (including VP Inside Sales Mike Stankus and Director Jeff Smith) jumped right in, and in just 37 days, they had executive agreement on the outbound sales strategy, had hired the first three prospectors, and signed on Aaron Ross of Predictable Revenue for help in building & training the team.
$100 Million is “When”, Not “If”
After just a year in launching the prospecting team, and growing new business pipeline by 75%, it’s clear that Acquia ‘s outbound team will add significant incremental revenue in the coming years, while helping Acquia also break the $100 million in total revenue faster.
Acquia: Metrics After ~One Year:
- Created an extra $6 million in qualified sales pipeline / Sales Qualified Leads (SQL*) in the first year.
- Closed $3 million in revenue already from the first 18 months of pipeline generation (which will multiply fast now that the flywheel is rolling)
- Grew the prospecting team from an initial 3 people to 25 reps across the USA and UK (which required more management help, thus hiring Tom Murdock in the USA and Tom Cain in the UK)
- Are already creating an extra $2m in pipeline per ramped prospector, or about $12-$15 million in qualified sales pipeline per quarter right now, and still growing; (many prospectors are still ramping because the team is growing so fast)
- Prospecting went from generating nothing to creating 40% of the new business sales pipeline.
* A Sales Qualified Lead means a prospector passed a new lead to their salesperson/Account Executive, who qualified it through a demo or discovery call, and ‘accepted it into their pipeline.
What’s Expected Of A Prospector At Acquia
Acquia expects each prospector to do:
- 300-500 outbound emails a month
- 100 “quick conversations” / “call connects” a month with all kinds of people
- 20 longer Discovery Calls with influencers/decision-makers
- 15 Sales Qualified Leads passed to and accepted by salespeople *
And they expect that activity funnel to produce, in pipeline and revenue…
- Average outbound deal size of $50,000 in Annual Recurring Revenue (ARR)
- 15 SQLs / month = $750k pipeline generated per month (a lower goal than a common goal of 8-12 SQLs per month per prospector, because they’re specifically going after large accounts.)
- Expected $55k-65k Annual Recurring Revenue per month per prospector; = $720,000 in ARR per year per prospector.
Doing the math, with 20 prospectors after just a year, at $600k Annual Recurring Revenue per prospector… Acquia already expects to add an incremental $60 million in pipeline and $12-$15 million in Annual Recurring Revenue in 2014 at a minimum. Revenue they wouldn’t have had. At a 10x revenue valuation, that’s also an extra $120-$150 million in equity value to investors in just 2.5 years.
And they’re planning on roughly doubling the team again (to ~40 prospectors) over the next 18 months, which will help them add an extra $30 million per year in Annual Recurring Revenue.
6 Things That Made Acquia’s Outbound Program Take Off:
- The top management team was on board, supporting it from the very top. If the CEO doesn’t buy into the idea of specializing sales roles into ‘prospectors that prospect’ and ‘closers that close,’ it’s not going to stick.
- They ‘just did it’, avoiding analysis paralysis. It only took VP WW Sales Tim Bertrand 37 days from the time he read Why Salespeople Shouldn’t Prospect to having executive agreement on the strategy, job recs approved to hire the first prospectors and a signed consulting agreement with Predictable Revenue. They figured out all the other details along the way, such as messaging, CRM / sales tools, data and comp plans. The faster you get started, the faster you learn what it takes to get results.
- The sales team and prospectors were hungry for new ideas, including this kind of approach, especially while moving to a territory-based model, where inbound lead distribution wasn’t going to be equal anymore and they felt the need for constant sources of pre-screened new leads.
- Acquia initially hired three excellent specialized prospectors – two in the US, one in the UK – and their only job was to prospect. Not close deals. Not handle inbound leads. Not invite prospects to events for marketing. Just prospect into cold accounts with the techniques outlined in Predictable Revenue. And three great people made everything work much smoother & faster. (See more in the Predictable Revenue Hiring Guide.)
- They brought in experts who’d done it before, rather than trying to recreate the wheel. They knew exactly what to do and when to do it, at every step, without wasting time or money.
- Focused on bigger deals & opportunities: Acquia has a big average outbound deal size, and the way the math works out with prospectors, the bigger the deals you can find, the more total sales you’ll generate. As a rule of thumb, we at Predictable Revenue recommend companies average the top 10%-20% of your customer base or deal sizes to gauge the kind of deals and companies to go after with outbound prospecting.
The First 120 Days
The first 30 days of the new prospectors were spent mostly getting organized:
- Learning the Acquia product & market, Studying Predictable Revenue’s online Cold Calling 2.0 materials, & Shadowing salespeople
- Email & other online/IT accounts setup, including learning Salesforce.com
- Completing initial Predictable Revenue milestones like getting their first 200 outbound emails out, a first 20 phone conversations completed, writing up an Ideal Outbound Customer Profile (which is different than a company’s general Ideal Customer Profile), and building initial list of prospects.
Over the first 120 days, even as new hires starting from scratch, the three prospectors created their first $1 million in new sales pipelines / Sales Qualified Leads.
Some Tools Used:
To support Predictable Revenue’s Cold Calling 2.0 templates & processes…
- Yesware for email templates & tracking across the whole sales team – case study coming soon. (We also recommend a similar app, Tout as the best when you’re using Salesforce.com to mass email)
- CirrusInsight – if you use both Salesforce.com & Gmail then you need this awesome app
- LinkedIn + SalesLoft for finding prospects and building a clean list
- InsideView for general list-building data & phone numbers
By creating a prospecting team, Acquia now has a better career path for its salespeople. They can bring in affordable talent, see how they perform, and then promote them as appropriate. This practically eliminates sales hire failures into the Account Executive role.
Are You Trying To Add $100 Million+?
While Predictable Revenue has helped many companies as small as a $1 million in revenue break out, our system’s uniquely able to help b2b companies speed up and sustain fast or IPO-track growth, such as with Salesforce.com, Acquia & Responsys (who used our systems to grow 10x from $20 million to $200 million in revenue, and who was just sold to Oracle for $1.5B).