Building the Team

Hiring, firing, and training in a new era.

Here is a quote I love from “Good to Great,” the Jim Collins book: “But once we looked at the facts, there was really no question about what we had to do. So we just did it.”

At H.Bloom, we try to live by that principle, which is why we are always collecting data, analyzing the evidence, and making decisions to improve the business based on these facts. Here’s an example.

Since we got started in April 2010, the company has experienced fast growth, more than doubling revenue last year. The majority of our revenue comes from corporate customers – hotels, retailers, residential buildings, commercial buildings and offices – who subscribe to our weekly flower-delivery service and/or our plant-installation and maintenance service. We acquire these corporate customers through a direct-sales force. We have account executives in all of our local markets – New York, Washington, Chicago, San Francisco and Dallas – who make cold calls, send e-mails, have sales meetings, give presentations, and close deals. The unit economics of our corporate business is terrific today: for every dollar of sales expense, we receive many dollars in lifetime value, measured as gross profit.

But we can always do better.

Our director of sales operations, Kim Scott, is no stranger to quantitative analysis. Equipped with an undergraduate degree from M.I.T. and a Masters Degree in Engineering from the University of California, she digs into the details of our sales team’s activities to optimize our sales process. The members of our sales team use Salesforce to track leads, sales opportunities and signed customers. As a result, we have a lot of data on the dynamics of our sales funnel; we can see the number of new leads that go into the top of the funnel and our conversion rate prosecuting those leads.

In Kim’s review of the data recently, she spotted some interesting facts. Our account executives are really good at closing deals when they have the opportunity to meet with a company in person. The conversion rate for even a brand new account executive is more than 20 percent given an in-person meeting. For account executives with at least a year at H.Bloom, the conversion rate rises to 52 percent! This is a phenomenal  rate and leads to a very simple conclusion: H.Bloom account executives should meet in person with a lot of companies.

Based on the data, Kim asked how we might increase the activities that create in-person meetings. She returned to the facts, and she noticed something else: Almost all of the activities – sending e-mails, making phone calls – that lead to in-person meetings are done remotely — 96 percent, in fact. That means that these activities do not have to take place in our local markets. Yet, until this point, our local account executives – the very same folks that go on the meetings and close the deals – had been responsible for generating those leads and filling the top of the sales funnel.

Our vice president of sales, Tom MacLeod, grasped the opportunity immediately: we could invest in lead-generation specialists to increase activities, which, if our conversion rate stays the same, would dramatically increase our new subscription customers and therefore increase monthly revenue. Moreover, because the majority of activities that lead to in-person meetings are done remotely, we could establish a lead-generation center in a place that is less expensive than our headquarters in New York City, providing a second potential benefit: a lower cost of sales.

Rebekah Rombom, who heads talent at H.Bloom, got involved to work with Tom and define the roles and determine how to build this new team. First, they chose a location for the new lead-generation center: Pittsburgh. It is a great town, surrounded by many terrific colleges that provide an educated employee base. It is a short flight from New York and much less expensive. And, it is a city both Tom and I know well. In fact, I was born in Pittsburgh and grew up just outside of the city in Wheeling, W.Va. (I’m also a lifelong Steelers fan, so having an office in Pittsburgh brings a fringe benefit, particularly during football season!).

Second, Rebekah and Tom defined the role we were looking to fill: account development specialist. These will be people with outstanding communication skills – both written (for e-mails) and verbal (for phone calls). They will be highly driven, ready to complete 100 activities per day in order the fill the pipeline for local account executives. They will be highly competitive, undaunted by the challenge of a daily quota. At the same time, they will work well with others, both on the account-development team and with the local account executives who will be the recipients of leads from the account-development specialists. Finally, they will be motivated to be part of a fast-growth start-up, knowing that their activities will have a direct impact on the performance of the company.

We expect to see a significant increase in new customers and monthly revenue.

Next week, I’ll talk about the recruiting campaign and interview process that we use in Pittsburgh. I plan to cover our entire hiring process for this new team in future posts: recruiting, interviewing, onboarding, training and results.

Bryan Burkhart is a founder of H.Bloom. You can follow him on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/04/04/how-data-analysis-led-us-to-reassess-sales-and-open-a-lead-generation-center/?partner=rss&emc=rss