Jason Bay’s Cold Calling Coaching Framework

We’re all familiar with the hustle culture, “rise and grind” mentality. CEOs and founders maintain that the only route to success is through 18-hour workdays and pushing oneself to physical and mental limits.

Although we know this approach is unhealthy, many of us continue to do it because we think it’s the only way to secure funding and reach that rare $1B valuation. This week’s podcast guest believes otherwise.

Matt Melymuka is the Founder and Partner of PeakSpan Capital, a growth equity firm that takes a “contra-silicon valley” approach to scaling. Matt joined the Predictable Revenue podcast to discuss what’s wrong with this revenue growth at all costs model.

The problem with prioritizing revenue growth above all else

Most of the pressure for rapid revenue growth comes from outside the company, from venture capital investors. These investors expect a certain number of their companies to go to zero, which is why they push revenue growth at any cost.

The capital loss ratio of any given venture firm is typically 35% (meaning 3.5 out of every 10 companies will go to zero). With those odds, it’s easy to see why most venture firms choose to remain generalists and push the same revenue growth goals on every company.

Although an investor may push to scale from two to 100 reps, such rapid revenue growth isn’t necessarily the healthiest choice for your company.

The risks of rapid revenue growth

When a company experiences rapid revenue growth, that $1B valuation may come with a cost. If the company hasn’t scaled sustainably, there’s an inevitable dropoff, and founders are often left without an exit plan.

If you raise a massive amount of money at a high price, not many companies can afford to acquire you. Matt often sees founders who have backed themselves into a corner by raising so much so quickly. If you choose to go that route, understand that you may need to reach $3-4B before selling.

Another drawback of raising funding early on is that you become reliant on the capital market to fund the business; you raise one round of funding only to get to the next. Companies that have to grind in their early days learn resilience and resourcefulness, and they become very capital efficient.

What to do instead

Instead of aiming for the $1B unicorn, start with a more attainable target. For example, if you’re starting at $2.5 million, focus on reaching $7 million before moving on to your next revenue goal.

This slow and steady approach will help your company reach goals in a much more aligned way, and build resilience along the way. Matt and the PeakSpan team now have three companies approaching the $1B mark, all of whom have focused on this slower revenue growth approach.

How sales fits into sustainable revenue growth

Building consistent, repeatable sales performance is key to revenue growth–but often difficult to achieve when the company begins hiring too quickly.

Before hiring more reps, Matt recommends starting with the sales infrastructure: training and onboarding programs, enablement tools, and playbooks. Hiring more reps won’t be effective if you don’t have those foundations in place.

If you need help hiring, training, or scaling your sales team for predictable revenue growth, our coaches can help. Click here to learn more about our sales coaching!

Final advice for founders looking to raise capital

Focus on growing sensibly and prioritizing capital efficiency. Don’t get pressured into massive revenue growth goals, thinking you need to do so to secure funding. No one knows your company better than you do–set ambitious but achievable goals, and then stay the course.

If you want to connect with Matt to learn more about a sustainable approach to revenue growth, reach out via LinkedIn or email matt@peakscan.com.

We’re all familiar with the hustle culture, “rise and grind” mentality. CEOs and founders maintain that the only route to success is through 18-hour workdays and pushing oneself to physical and mental limits.

Although we know this approach is unhealthy, many of us continue to do it because we think it’s the only way to secure funding and reach that rare $1B valuation. This week’s podcast guest believes otherwise.

Matt Melymuka is the Founder and Partner of PeakSpan Capital, a growth equity firm that takes a “contra-silicon valley” approach to scaling. Matt joined the Predictable Revenue podcast to discuss what’s wrong with this revenue growth at all costs model.

The problem with prioritizing revenue growth above all else

Most of the pressure for rapid revenue growth comes from outside the company, from venture capital investors. These investors expect a certain number of their companies to go to zero, which is why they push revenue growth at any cost.

The capital loss ratio of any given venture firm is typically 35% (meaning 3.5 out of every 10 companies will go to zero). With those odds, it’s easy to see why most venture firms choose to remain generalists and push the same revenue growth goals on every company.

Although an investor may push to scale from two to 100 reps, such rapid revenue growth isn’t necessarily the healthiest choice for your company.

The risks of rapid revenue growth

When a company experiences rapid revenue growth, that $1B valuation may come with a cost. If the company hasn’t scaled sustainably, there’s an inevitable dropoff, and founders are often left without an exit plan.

If you raise a massive amount of money at a high price, not many companies can afford to acquire you. Matt often sees founders who have backed themselves into a corner by raising so much so quickly. If you choose to go that route, understand that you may need to reach $3-4B before selling.

Another drawback of raising funding early on is that you become reliant on the capital market to fund the business; you raise one round of funding only to get to the next. Companies that have to grind in their early days learn resilience and resourcefulness, and they become very capital efficient.

What to do instead

Instead of aiming for the $1B unicorn, start with a more attainable target. For example, if you’re starting at $2.5 million, focus on reaching $7 million before moving on to your next revenue goal.

This slow and steady approach will help your company reach goals in a much more aligned way, and build resilience along the way. Matt and the PeakSpan team now have three companies approaching the $1B mark, all of whom have focused on this slower revenue growth approach.

How sales fits into sustainable revenue growth

Building consistent, repeatable sales performance is key to revenue growth–but often difficult to achieve when the company begins hiring too quickly.

Before hiring more reps, Matt recommends starting with the sales infrastructure: training and onboarding programs, enablement tools, and playbooks. Hiring more reps won’t be effective if you don’t have those foundations in place.

If you need help hiring, training, or scaling your sales team for predictable revenue growth, our coaches can help. Click here to learn more about our sales coaching!

Final advice for founders looking to raise capital

Focus on growing sensibly and prioritizing capital efficiency. Don’t get pressured into massive revenue growth goals, thinking you need to do so to secure funding. No one knows your company better than you do–set ambitious but achievable goals, and then stay the course.

If you want to connect with Matt to learn more about a sustainable approach to revenue growth, reach out via LinkedIn or email matt@peakscan.com.

Jason Bay is the Chief Prospecting Officer at Outbound Squad (formerly Blissful Prospecting), serving companies such as Zoom, Gong, and many more. He joined the Predictable Revenue podcast to discuss how to cold call and how to coach cold calling. 

How to think about cold calling as a sales leader

The best thing a sales leader can do to improve their team’s cold calling process is to pretend to be a rep. Put yourself in an SDR’s shoes for an hour and think about who to reach out to, what to say to them, and how the call will go. 

It sounds basic, but many sales leaders haven’t done an exercise like this in years. Putting yourself in the position of your SDRs can help you spot inefficiencies and any lack of enablement. 

The biggest mistake in cold calling

The way most salespeople have been taught cold calling involves too much talking about themselves and not enough listening to the prospect. Instead, try reverse-engineering the call from the prospect’s perspective.

Think about that experience from the moment they pick up and say hello. You might be cold calling all day, but no one picks up a sales call on purpose. Therefore the first thing you need to do is establish that you’re not a telemarketer.

Instead of launching into a rehearsed sales pitch, speak to the prospect like a peer. Try to demonstrate business acumen in the first 30-60 seconds. Jason recommends a three-step process for the rest of the call, starting with a permission-based opener.

Ask permission 

After you introduce yourself, start by asking for permission to continue. For example: “Hey Sarah, it’s Jason with XYZ company, I know I probably caught you in the middle of something. Do you have a minute?”

Wait for the prospect to confirm before continuing. If they say no, you can ask for a better time to call back. This ensures you have a two-way conversation rather than just talking at them.

Relevant research

Next, you can introduce some relevant information that you’ve found beforehand. Research is a crucial part of cold calling, but it can be difficult to strike a balance between too much research and not enough.

Try to focus on the prospect’s current situation and pain points. For example: “I noticed one of your big initiatives right now is XYZ. Is that right?” Again, frame it as a question and wait for them to confirm before you continue.

Priority drop

Try tapping into your customer’s voice for this next portion of the call. You’re likely familiar with your product or company’s value proposition, but how would your best customers describe what you do? Tuning into that customer’s voice will help the prospect feel seen and understood.

Think about what your prospects typically want to accomplish and what’s standing in their way. While you’re doing this, be mindful of the prospect’s seniority. A sales development manager will have different priorities than a VP of sales, and they’ll also use different language to describe their problems.

Example: “The reason I’m calling is that I talk to a lot of people in [the prospect’s situation], and we hear [common problems]. Are either of those things top of mind for you?” 

Cold calling research tips

Think of your cold calling research within the Hierarchy of Relevance. 

At the bottom of the hierarchy, you have basic information like the prospect’s name and company. In the middle, you have information related to their industry, buyer persona, and company. And at the top, you have information specific to that individual.

Instead of starting from scratch with each prospect, try looking for 2-3 specific things every time you research and make those items related to the problem your product solves. Segmenting your prospects makes this process even simpler since most people within a certain buyer persona are going through the same thing.

The three main categories to research are education, accomplishments, and investments.

• Education: What are they educating their customers about?
• Accomplishments: What do they brag about?
• Investments: What are they investing in?

Objection handling on cold calls

The problem with most cold calling training is that reps are trained to counter the wrong objections. Most prospects object for shallow, vague reasons: “not interested” or “not right now”. Instead of focusing on handling budget objections, for example, reps should be taught how to prevent objections from arising in the first place.

The two most common objections are either an objection to being interrupted or what Jason calls a time-to-value trade, where the prospect doesn’t feel it would be worth their while to continue the conversation. 

No matter what type of objection the prospect throws your way, you can handle it using this three-step formula:

• Empathize: Acknowledge what the prospect said and tell them you understand where they’re coming from.
• Validate: Restate the objection back to them, so you’re both on the same page. Mention that others in their industry are also feeling that way.
• Offer: Use a customer story to share insights into what the prospect’s peers are doing and how you helped.

How to coach on cold calling

Certain parts of your cold calling process should be very scripted (the intro, for example), while others require more improvisation and personalization. The latter two can be difficult to teach. Jason recommends a four-step process to train your reps on cold calls.

Teach

Most reps won’t watch a training video that’s longer than five minutes long. Instead of bombarding them with information in a monthly training session, think about you can incorporate more regular micro-trainings into the week.

Practice

Try swapping your role-play exercises for more structured simulations. In simulations, you (or the coach) know what your persona and problem are, but the rep doesn’t have that information yet. This helps them hone their active listening skills and learn to ask smart questions.

Executing

Once your reps have begun training, it’s time to put those cold calling skills into practice. Instead of sending everyone off on their own, try hosting a group cold calling hour where everyone goes over their work together. Look for ways to facilitate collaboration and learning even in a virtual environment. 

Listening in on the execution portion will help you identify gaps in your coaching. By watching the reps implement right away, you can start to see where they might have missed something or misunderstood the training.

Feedback

If you want your reps to get better at cold calling, you need to invest in consistent coaching, ideally every day or week. If you don’t have time to coach your reps yourself, consider outsourcing. 

Our outbound sales coaches can help you build a winning call flow, handle objections, and understand your customers through a better research process. Click here to book a free discovery call!

Lastly, remember that your reps should also be coaching themselves. For example, they should listen to their call recordings and score themselves before asking your opinion. This creates an environment of self-sufficiency and continuous improvement. 

A better framework for cold calling

Cold calling takes time and practice to master. These tips will help you handle objections smoothly, book more meetings, and coach your reps to cold call success.

And if you want to connect with Jason to learn more about cold calling, visit OutboundSquad.com or check out the Blissful Prospecting Podcast. 

 

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