I’m just gonna say it:
Now don’t get me wrong. It doesn’t suck for everyone. Some folks are just born to work in sales, and it works for them. You know, they can just talk the talk, people love it, and the money comes rolling in. Boom.
I was never like that. Maybe it’s my down-to-earth Midwestern upbringing, but I’ve always had a problem with direct sales. It’s too pushy, too in-your-face. And let’s face it, for the customer, sales is really annoying. I’ve actually drawn four conclusions about what’s wrong with traditional outbound sales:
- People are busy and want to be left alone
- People want to and are capable of making their own decisions
- People will ask for help if they desire it
- People see through anything that is not genuine
For marketers hoping traditional sales is the answer, it’s not exactly a recipe for success.
The truth is, you can build a business (and build it fast) on outbound sales alone. But in my opinion (and I’m going to show you why), sales is not the most profitable, sustainable, or scalable option for long-term growth.
I should know.
I built my first business on outbound sales. I didn’t really do any cold calling or face-to-face selling, but I used paid media and persuasive copywriting to sell golf books and DVDs. For a while, it was easy. Almost too easy. Within a year of launching my online business, I was generating 400 leads per day, selling tens of thousands of products per year. I thought I had it made. The business I’d launched in a closet, in a studio apartment, on a $300 eMachines computer, was suddenly doing about $1MM annually.
(If you want to learn more about my entrepreneurial journey — and why we built Hubstaff — check out this post)
But here’s the thing: it wasn’t sustainable.
New competitors entered the market, and competition was suddenly fierce. Beyond that, ad prices soared. I was paying 400% more for paid media than I had when I started. My business started shrinking. On top of it all, I’d lost my passion. In 2009, I ended up selling the business.
I learned a TON running my first business. I’ve shared some of those lessons in our growth story on the Hubstaff blog. But one of the most valuable things I took away from that experience was this:You can build a better business by marketing, not selling. Click To Tweet
Fast forward a few years.
I’m not selling golf DVDs anymore.
After I sold my first business, I spent some time running an SEO company, but for a number of reasons, it just wasn’t for me. Still, the SEO company is where I learned how to build and manage remote teams. It’s also where I came up with the idea for Hubstaff — a tool to help people build and run successful remote businesses. Today my co-founder, Jared, and I are focused on growing Hubstaff, and while we’ve had our share of failures, we’ve been pretty successful. Currently (writing this in July 2016), we’re at $108K monthly recurring revenue (MRR), a figure that’s grown 152% in the last 12 months.
(We’re a transparent company, so you can follow our progress in real-time)
So we’re doing pretty well. And we’re doing it without selling.
My shift from building my first company using outbound sales to growing Hubstaff using inbound marketing didn’t just happen overnight, though. When we launched, in fact, we tried the traditional sales thing.
Reach your goals faster with time tracking and work management.
What we learned trying traditional sales methods
Despite my misgivings, we gave outbound sales a try when we started Hubstaff and hired a full-time salesperson to follow up with companies in specific niches we thought would be good targets.
It didn’t work.
We tried other sales tactics, too. For a while, we personally followed up with every new trial via phone, Skype, or email. Big mistake. Conversions from trial to paid account actually dropped.
We also reached out to prospects who weren’t using the product but we considered a good fit to use Hubstaff. That didn’t see success either.
It was frustrating, for sure. But like any failure, it taught us some really important lessons that have helped us grow the business.
As our early experiments in outbound sales crashed and burned, I started piecing together a new philosophy for growth based on what we were seeing. That philosophy is based on 3 simple truths:
1. People are smart
I’m not telling you anything new when I say the Internet has changed everything. Before, people were willing to listen to salespeople because salespeople held all the information. Today, largely thanks to the Internet, consumers want to do their own research and make their own decisions. If they don’t have the information they need, they can easily find it on their own.
2. People’s time is valuable
The only thing salespeople succeed at doing when they call a customer is annoy them. I don’t want to waste anyone’s time. The customer’s time is valuable. My time is valuable. By staying away from sales, we respect that notion.
Gary Vaynerchuk has a great video that talks about how consumers want to digest information on their own time, not yours. I think it’s the same with sales.
3. The software should sell itself
One thing I started noticing soon after we launched Hubstaff was that the people that required us to get on the phone were usually the same people that didn’t end up becoming clients. I think this is generally because we don’t have this feature or that feature, or they’re just looking around. Our best customers never request to talk on the phone (probably because they’re just as busy as we are).
The lesson in this?
If we’re doing our job, the software should sell itself. That’s why improving our free trial is one of two top priorities for our marketing team (the other is creating valuable content – I’ll get to that in a moment).
Unfortunately, I think there’s a tendency for the salesperson to ask, “How do I get the customer to buy?” before asking, “What’s in it for the customer?”
The #1 make-or-break question in marketing your product
By asking “What’s in it for the customer?” first and always, we ensure that every communication and every piece of content we produce adds value.
The thing is, time is our most valuable asset. Yet every day we’re hit with so many unsolicited emails and phone calls. It’s gotten to a point where if I don’t recognize a number, I send it right to voicemail. If you’re anything like me, you’ve also gotten pretty good at screening your emails. A quick glance at the subject line or first couple sentences is usually enough for me to decide whether or not something is worth my time:
“I was wondering if you have a minute to chat”
“Are you free this week for a quick call?”
“We love what you’re doing at Hubstaff!”
Of course, some exceptions apply, but the bottom line is this: the majority of sales emails (or phone calls for that matter) that I receive are offensive. They don’t value my time. And let’s be honest: trying to fool people with a dynamic “Hi [FIRST NAME]” or “Love what you’re doing at [ORGANIZATION]” inserted via merge tags is pathetic. This kind of impersonal approach puts “How do I get the customer to buy?” first and “What’s in it for the customer?” a distant second.
I think you know what I’m talking about. Our inboxes probably aren’t so different. Here are just a few of the kinds of emails I hit DELETE on asap:
“We love what you’re doing at Hubstaff!” If I had a quarter…
Wow. How long did it take you to Google “interesting places in Indianapolis?”
Now, to the salespeople out there, hold on. Before you go calling me a hater, I want to be clear: there’s some good stuff out there, too. I like this one I got via LinkedIn. It’s personal, it’s clear they did their homework, and I don’t feel like this guy just walked off the used car lot.
In this example, I get the feeling that this guy wants to help me solve a problem — it’s not (purely) about selling me something.
So some outbound sales does ask “What’s in it for the customer?” At Hubstaff, we’ve invested heavily in inbound marketing to grow our business, but we haven’t shunned some of what people might say falls under the larger “sales” umbrella. This includes:
- Getting on the phone or Skype when the customer requests it
- Light content marketing outreach to influencers
- Automated email funnels when people start a free trial, including follow-ups asking for advice on what we could do better, etc.
- An email from me about Hubstaff, why we exist, and what’s in it for them
- Personal responses to support issues regarding pricing or high-level clients
We’re also starting to experiment with webinars as part of our onboarding process, to help potential customers understand how to get the most out of Hubstaff.
Put yourself in your customer’s shoes.
You don’t put up with that impersonal, used car lot type of talk, do you? You shouldn’t expect your customers to behave any differently.
How do you grow without outbound sales?
At this point, you might be thinking, “Ok, Dave. So sales sucks. But what can I do to grow my business without outbound sales?” Fair question.
It’s not always an easy shift, and there is no one-size-fits-all solution. There are a lot of ways to grow your business without relying heavily on traditional sales. But success is focused on one thing: value.
I can’t say it enough: “What’s in it for the customer?”
At Hubstaff, we’ve grown a million dollar company focusing on marketing, not sales. What does that look like? For us, marketing is all about creating value for the customer. Sales is about getting people to buy; marketing is about getting people to buy in. Before they even consider purchasing, if we can get John or Jane Smith to say, “You know, these folks at Hubstaff really get it,” we’re already 99% successful. The last 1% is actually, you know, selling the product.
For us, sales takes a backseat to marketing, and our customer is so much better off. And thanks to our value-based model, we’re better off, too.Sales is about getting people to buy; marketing is about getting people to buy in. Click To Tweet
Remember, it’s 2016. Consumers are rather enlightened. I truly believe that if you’re out pedaling your product, it’s not very sustainable. Many people have told me they respect what we’ve done because we’ve reached sustainable growth. I think the single biggest reason why we’ve been able to reach this kind of growth is because of our focus on marketing over sales.
If we want to get really good clients — the kind that keeps coming back, month after month — I think a few things have to happen:
- People must realize they have a problem (or have experienced a problem recently)
- The problem must be painful (at least enough for them to seek out a solution)
- It’s best if they find / discover that solution on their own
- The solution must be backed up by positive reviews, social proof, or a positive experience via a free trial or some other use of the product
- You must prove to them you are there for support and you truly care about “what’s in it for them”
Our marketing plan is built around these five things. When we can check the box next to each of these, nine times out of ten we’ve got a good chance at getting a long-term client that becomes an ambassador for our brand.
This is what’s working best to help us get there — without selling:
I’m not going to talk ad nauseam about why content marketing works (you can get that from these folks). I’ll just briefly refer back to rules #1, #2, and #3.
When people have a problem, they turn to Google:
The goal of our content marketing program is to offer the best solutions to our clients’ problems.
What’s really important here is going beyond the product itself. We don’t want to only put content in front of people searching for things like “best time tracking software,” “time tracking software for agencies,” and “time tracker app for freelancers” (though we certainly do that, too). We want to offer solutions to a wide range of common problems shared by our customers. For Hubstaff, that means creating high-quality blog posts, podcasts, infographics and more on such topics as:
- Managing remote teams
- Running a successful agency
- Growing a profitable business
- Improving productivity
- Building a marketing strategy
We continue to build off the foundation, too. This year we launched Hubstaff Talent – an absolutely free database of agencies and freelancers.
This is the kind of stuff that helps us get from “What’s Hubstaff?” to “Hubstaff really gets it.” The first 99% of the sale.
Especially following Google’s Panda and Penguin updates, it should be clear: quality content is the name of the game. So when it comes to optimizing Hubstaff content for search, quality takes a front seat. We’ve developed a style guide that puts the AP to shame, we pay our bloggers well, and our Trello editorial board is buzzing with activity.
At the same time, we pay close attention to the details, investing heavily in technical SEO, as well. My background running an SEO agency comes in handy here — we’ve had some consultants come in and do audits for on-site SEO like site architecture, as there are a lot of pages on the site currently and I don’t have the time to do this work.
Referral and Affiliate Programs
Word-of-mouth, online reviews, and influencers account for a significant chunk of our business, so we’ve put programs in place to incentivize that kind of activity. If you’re a SaaS startup, or really selling anything online, I highly encourage you to put together an affiliate and referral strategy. You can get started with our free database of affiliate marketing freelancers.
Anu Hariharan has some great insight into how people-powered “network effects” grow businesses — especially software-as-a-service (SaaS) companies like Hubstaff. There’s a lot of great stuff in Hariharan’s SlideShare, but the most important point is this:
Simply put, a network effect occurs when a product or service becomes more valuable to its users as more people use it.
When you hear someone say “viral” marketing, this is what they’re talking about. Hubstaff has a viral component that we use to 1) demonstrate value, and 2) scale rapidly. It’s pretty basic:
- An employer signs up for Hubstaff and invites freelancers (who usually have multiple clients)
- Freelancers like the system and tell other employers when they ask for similar software
- The new employer signs up and the cycle continues…
This naturally leads me to another marketing component that has helped Hubstaff achieve “sales-free” growth:
For a SaaS company like Hubstaff, the free trial is our bread and butter. You can invest EVERYTHING in content marketing (and we come pretty close), but if the free trial doesn’t convert, it’s all for nothing. Remember when I said the software should sell itself? This is where that comes into play.
After all, we tried the hand-holding thing. For a while there, we would personally follow up on every free trial via phone or Skype, and look what happened: trial to paid account conversions actually dropped. Our intentions were good, but I think we put the cart before the horse. In our eagerness to demonstrate the value of the software, we failed to consider the onboarding process from the perspective of the customer. And as I (hopefully) demonstrated earlier, the customer doesn’t want to be talked at by a salesperson. They want to solve problems by themselves. It’s our job to help them do that.
That’s the goal of the free trial. So we’ve put a lot of resources toward improving our trial. Andy, our marketing director, has a great post on how we’re doing just that.
For us, it is far more valuable for a user to complete a trial and say, “I solved it with Hubstaff,” than to say, “Hubstaff solved it for me.” It’s more than just a nuance of language: we want our customers to take ownership. This is the difference between selling (getting them to buy) and marketing (getting them to buy in). This is how we turn customers into ambassadors.
It’s also the essence of a touchless sales model, which is great for the customer (who doesn’t want to talk with us) and the company. As David Skok says:
Businesses that have a touchless conversion have spectacular economics: you can scale the number of leads being poured into the top of the funnel, and not worry about growing a sales organization, and the associated costs.
We’re not 100% touchless. I’d call Hubstaff very low touch. But we’ve experienced the same kind of “spectacular economics” Skok talks about by investing in marketing, and not sales.
Why marketing is a better investment than sales
For us, marketing has had a much higher ROI because a single investment pays back multiple times. Take our blog, for example. If we write a blog post, we may invest $700 (that’s pretty close to the actual investment). If we can get three new clients from that investment, it’s already more than worth it — our customer lifetime value (LTV) is right around $550.
(NOTE: Baremetrics calculates our LTV to be quite a bit higher).
Marketing is also a much better use of our time. Think about this. Right now, about 30,000 new users visit our website per month, and from this about 1,450 new trials are started (4.833%).
If we could improve our conversion rate by even just half a percentage point (from 4.833% to 5.333%), it would create 150 new trials per month for Hubstaff. I figure we could do this by investing maybe 8 hours in marketing services — copywriting, design, you name it. There is no way we could get that kind of ROI from traditional sales.
Scalable marketing ideas (vs. 1-to-1 systems) for better ROI:
- Improving web and email copy
- Setting up A/B split tests
- Improving content pieces
- Creating new content pieces
- Creating better support documents
- Setting up follow-up systems
A 1-to-1 sales model may work for other businesses with higher revenue per client. But at Hubstaff we average around $35 in revenue per month for each client. Say we hire a salesperson at $25 / hour plus commission. Working an 8-hour day, we’d be paying that salesperson $200 plus commission. When we’re averaging $35 in revenue per month for each client, it is extremely difficult to imagine a salesperson making any legitimate commission numbers. It’s far easier for enterprise-level software companies, where a salesperson can still do well making a few new sales per month vs. per day.
The sales model math just doesn’t work for us. Marketing ROI does.
Get off the treadmill
Sales works. I’m good with that statement so long as you follow it with a gigantic asterisk. Because sales only works for some, not all. Too often, companies fall into the traditional sales trap — where growing the business feels like a never-ending slog on the treadmill. You’re running on fumes and the dial is busted: it keeps speeding up. It’s starting to get away from you.
I should know. I’ve been on that treadmill. It beats you up. It’s discouraging. It’s depressing. It just plain sucks.
Several businesses and way too many books and blog posts later, I’m a convert. It’s been two years since my last “true” sales operation. Hubstaff has reached sustainable growth, and we’ve done it without selling. We’ve built a million dollar business through marketing, not sales. It hasn’t been easy, it didn’t happen overnight, and it’s not quite “set it and forget it.”
But it’s close.
I’m not going to lie to you and say getting to sustainable growth isn’t hard. It’s very hard. But it shouldn’t be that hard. And marketing, not sales, is the best way I know how to do it. See for yourself.
Do you know what it’s like to get stuck on the sales treadmill? Have you discovered a better way through marketing, too? I’d love to hear your thoughts in the comments below, or shoot me an email at dave (at) hubstaff.com. No sales emails, please.