Speaker 1Is the startup you're about to join going to become a unicorn? That's the billion-dollar question. It's so hard to tell. But one of the leading indicators of that that's rarely talked about is whether they're scaling to massive revenue through only inbound leads. It's so hard to find those companies. And if you do, latch on. That's what happened with my friend and LP at Stage 2 Capital, Kerry Bosworth, who a few years ago joined Checkr as the head of sales. They had done that. They had scaled to huge revenue numbers through inbound only, but they knew it was going to dry up. In order to keep that pace, they brought in Kerry to diversify inbound with outbound selling. She's been there for two years, and she's accelerated scale. In her words, It's not simple. And that's what we're going to unpack in this episode. I'm Mark Roberge, and this is the Science of Scaling. This is an extraordinarily common motion, which is largely inbound going to outbound. We've got to unpack that. You lived it. Tell us what you found, how you did it.
Speaker 2Anybody that says it's easy is crazy and lying to you. It's very hard. There's the profile of the rep and the profile of the leaders. Because oftentimes people that are at companies for a while and they're doing inbound, that's a different skill set and a different way of operating throughout a week or throughout a day than if you were to shift to outbound. There's very different motions and rigor that needs to be put in place. And I think then there's the whole other bucket of where do you focus and how do you target? And all of that work takes a long time. So when I stepped into the role, I spent the first 90 days or so trying to figure everything out and figure out where the gaps were. But it took us about probably six to nine months to really. Get the org ready to fully approach outbound with the right books and the right operational rigor in place. I also believe that strongly, and I think more leaders need to think about this, that exec outbound. Everybody in the company should be doing outbound all the time. This isn't something that the sales team can just launch and do by themselves. We're focused on the enterprise this year. And I would say the amount of. People will probably be surprised about the amount of outbound messages I'm sending to C-Staff or there's a bunch of different things you need to do. And I think if I were to summarize it. It's how you hire, it's how you create the books, and then it's how you go after the market. And those three things, you have to be really tight on what you're doing.
Speaker 1All right. We got to unpack each one of those in detail because there's a lot of gold in there. But let's just start with that last point, which is so interesting, is everybody's outbounding. Can you help bring that to life by illustrating what the outbound messaging and strategy of, say, a 23-year-old BDR is? Compared to what you do as head of sales of a large organization?
Speaker 2Yeah. So I think, first of all, C-Staff or E-Staff doesn't typically have the time to write all the messages. So the first expectation that I have is that the reps are going to write me the note that they want me to send to whoever that person is. I always adjust the note because I like it to be authentic. So I won't always. And I don't want the notes to be very long. I like my notes to be introductory in nature, getting them motivated about talking to me. I share my background. Companies I've worked at, I've worked at very admired companies, Salesforce being a very big notable one. And also that I'm just interested to learn more about some of the things that are on their plate and ways in which we could potentially help and some sort of message like that. And I ask for 15 minutes. So my message is less than a paragraph usually. And it's readable on a phone since I do 90% of my job on my phone. And I'm always traveling. So I keep all of those things in mind. But I do have a structure to it. And recently, we have what we call Lighthouse. And those are, for right now, this year, big focus again was Enterprise. So our top 30 to 50 Lighthouse accounts, the ones we really want to break into, those are where I'm pushing very hard for the team to make sure they're asking for execs to do outbound for us because we're seeing a much better rate of breaking in and even just getting that first call if it's someone on e-staff. And we're asking, it's not just me. We're asking our CRO, our CEO, our CPO, Alon came from Slack and Airtable. He's amazing. He sends out outbound notes. So we're, you know, I'm not shy about. I'm not bothering all of these stuff. And I also highly recommend that you leverage your board.
Speaker 1Hey, folks, just Mark here. Wow. Isn't that cool? Like you go outbound. It's not just a new role. Everyone, CEO, CTO, CPO, her as head of sales, CMO. I mean, and obviously, as she points out, you're doing a lot differently than a BDR. You're not running 17 sequences. In a way, you're leveling up as the CTO. You're probably calling the CTO, you know, so you're leveling up and you're peer to peer. If you're a strategic enterprise rep, I guarantee you carry strategic enterprise reps that are some of the best reps in the ecosystem and make a ton of money are cold calling and cold outreaching, but they're not doing the 17 sequences. I remember my buddy who went to a MarTech company, very large MarTech company. He was handed a territory of two accounts, two accounts that were not doing business with his, his company. And they're very, very large public global companies. One of them was a toy store. And I asked him, I was, Hey, now with them, I'm like, so what do you do to like get in there? And he was like, I'm not like, I'm not going to call him for like two months. Now, Carrie would probably hate me for saying that, but that's what he said. And I was like, what are you going to do? He's like, I shop all day at their store. I literally go online. I shop, I buy stuff. I return stuff. I take screenshots of all the emails. I go to the store. I download the mobile app. I understand what they know about me and what they don't know about me. And after two months, he built a 50 page research paper on all those screenshots and all the weaknesses. And all the opportunities, and he printed it out and binded it and sent 25 copies to the company, one to each of the top 25 digital marketing executives at the company. He had a meeting in three days and a contract in two months. That's beautiful. And that's a great illustration of how you alter outbound tactics based on your role. Let's get back to Carrie.
Speaker 2So I did this a lot when I was at Yext. I tend to control reaching out to the board a little bit more just because they're really busy, but I will write the note for the board member if I feel like I'm going to be able to do that. And I feel like there's something they could offer or a connection that I'd love for them to help us with.
Speaker 1Wonderful. All right. So let's, let's unpack each of those three. And I think I want to take them one at a time and kind of like the start with hiring, right? So like you had a particular profile of a rep when you arrived that was there because it was largely an inbound organization. So you can tell us a little bit about like what that typical, the typical attributes look like and why that wouldn't work for outbound in a lot of cases and how you had to evolve your hiring strategy. To accommodate outbound.
Speaker 2Yeah, that's a good question. So they, the reps that were in seat when I joined had come from SDR at Checker for the most part, which is inbound only on like receiving on the phone line or the email or the drift chat bot and hadn't had any BDR experience. So they went from SDR to an inbound rep. And then when they're an inbound rep, they're just taking basically really just, we have again, we have a lot of demands. They're basically like all day had a queue and they would just answer the phone, sell a deal. Sometimes they're like, one call closes. They could be three days or less closes. Like there were very fast transactions. Some of the deals would be bigger and they would be a fast transaction because again, background checks are regulatory. So people have to use them and the customer would already know that they want to switch and there wouldn't be at that point a ton of discovery and we could get some bigger deals done. But that, those were anomalies. The deal sizes were probably anywhere up to 15K, 20K in size. And they were very much an inbound flow where you could, you could also potentially even offshore a team. Like that because they're literally just answering the phone and taking orders. They're not doing like a full sales discovery process, but a lot of that has to do with that. We weren't all the way up market. There's a lot of factors around that. So when I joined and looked at the skillset, like to throw someone into an AE role that has no outbound experience, that's going to switch from 95% inbound, 5% outbound to like 80% outbound, 20% inbound, they're going to be set up for failure. So, you know, I think the, the answer to that question is that over, we gave them a chance and over time, they're going to be set up for failure. And over time, people either opted out, didn't like the type of work. It's very different work. Or maybe they were a better fit on the customer success side and we found them a different role in the company. But many of those folks just weren't the right fit for the direction that we were headed from a skillset experience. And then to answer your other question around like how to then shift how you hire, I didn't bring anybody else into the company that didn't have outbound experience. So that depended on the years and the tenure of that depended on, you know, what the role was. If it was SMB versus mid-market versus enterprise, obviously there's going to be more tenure and more expectations as you go up market. But we just required and shifted that profile to be outbound. And all of the leaders that I hired to build out the leadership team, because I started with probably like three and then I ended with 14 or 15, all again, had to have had outbound experience, not just as a rep, but also as a leader, because it's a way different way in which you lead your team when you're focused on outbound.
Speaker 1If you're a rep that sold to outbound appointments that are generated by a BDR, you didn't generate them yourself. Does that still count?
Speaker 2No, that's like a nice little softball lob that someone could hit out of the park without having to do the grit. So not in what we were doing at Checker, because we didn't have a BDR program, number one. So that's probably a good point to make. So we did not have a BDR program until last year. So those reps that I was hiring, like actually had to be able to do the outbound because they did not have that support. And I needed the leaders to have had experience leading, they didn't have to lead a BDR team, but lead AE teams. where they had at least 50% was outbound, so they'd put in the right operating cadence and rigor once now we have a bdr team and i still hire aes that have outbound experience because when you think about what the breakdown should be it really is like 50 outbound by the ae or the bdr and then 50 marketing or partner but out of the 50 as you go up market especially it's probably 25 bdr 25 a bingo
Speaker 1you have to do it even if you're segmenting this up differently than carrying it's okay if you do if you have like an inbound team and outbound team that's okay it works at certain stages in certain contexts but you can't have reps that are only going to get fed from marketing you can't because you've taken away their accountability the minute they hit quota they're gonna be like it's marketing's fault i don't know the demand you have to set up as kerry says the books so that the rep is fully accountable and so even if you're running a team where like you're going to get most of your revenue and customers from inbound they still have to be accountable let's say 20 percent of pipeline and revenue revenue comes from outbound and believe me they're going to push back and you're going to show up at the end of the quarter i'm like good job you hit your quota 110 you're doing awesome fantastic my only concern is you were 60 below your outbound pipeline generation goal and again whatever roll their eyes next quarter they hit again good job you're doing great you're making money and again you're 70 below your outbound generation goals and they roll their eyes next quarter they miss their number they come in under by 30 percent of their revenue and they're going to push back and hey what happened oh well i didn't get the inbound leads so where you didn't do any outbound prospecting you're supposed to be doing outbound prospecting i told you the last two quarters you missed by 30 on pipeline generation last quarter and 40 of the quarter over what's going on they have to be accountable they have to be self-sustaining and that's what kerry's done a great job setting that up let's get back to her so you still need to have a's that have that experience before we leave hiring you you've built the bdr team now and you've built the bdr team now in the last year yeah um and so these are our junior folks who are specifically just to clarify the audience they're specifically cold calling to set appointments for an account executive correct uh i don't know like if you know the hiring profile there because because sometimes when people do that they hire people who are kind of out of college i don't know if you've done that or if you've only gone to existing bdr farms and either way how did you pick the right i guess if it's out of college how do you assess someone who has no sales experience to know they can do it and if it's out of like a a big bdr team how do you know that you're getting the top 10 i'm going to answer that in reverse
Speaker 2order so our uh bdr team is all folks that were previous bdrs at other companies you can go look at many of my bdrs are from salesforce because i know exactly what they're being trained on and how they're being trained um adp also has some really great training and i just have friends in the industry that have shared with me like what where what's going on at their companies so i tend to lean towards the companies that do really good training for the reps because some companies don't pay attention to business development and that's hubspot if we're going to speak about the person on the podcast with me had a really good bdr program so um and some training for sdr so i just kind of know the companies that are putting the effort in there so we did require uh at least one year bdr experience without bound from a company we admire on the college question that's really difficult i think it's really i think it's awesome to hire people from college i prefer to put them in sdr roles where it's truly entry level no expectation you teach them everything from the ground up
Speaker 1two things here on sdr recruitment that carries really nailed and i want to highlight first off is like yeah this extreme awareness of like where they have great talent and recruiting them away and i find that first time leaders and entrepreneurs undervalue what you have to sell as a company like not not just like your not your product just the opportunity there are so many sdrs at a large successful company with a big brand and they're psyched to be there and they worked hard to be there and they're a year and a looking ahead to the next 20 years that they'll get promoted to account executive and strategic account executive and make a lot of money and be happy and have a really stable life and that's great but there are a lot of them who had their buddy quit and get lucky on snowflake or zoom and now they're millionaires and they want that too and that's what you have to sell is like they want that opportunity because they're not getting it at the big company so carrie's done a great job of recognizing that the other thing she's done is really crafted a nice career path for them i love her recommendation totally agree with it 22 year old out of college put her on you know inbound small business leads some stuff even that might have gone into like the self-service mode great low risk just get them started and then promote them up to outbound bdr meaning they're cold calling into the smb and then if they can get through that they have two path journeys probably uh account executive for smb great now you can sell them and then maybe they go to outbound bdr for mid-market and maybe they go to mid-market account executive and then maybe they go up to strategic account executive so there's like a 10 year journey that is fast moving and comes with more equity and more cash and more experience and more overall compensation and more skills that she has crafted here that's an abstract journey that's beautiful copy it thanks carrie i
Speaker 2tend to lean towards trying to find college athletes because you can't teach motivation you can't teach motivation you can't teach motivation and work ethic and grit and you tend to get all of those things with an athlete
Speaker 1wonderful okay let's go to the second piece which i think you called book and i think at the same time you also talked about segmentation and maybe in territories and maybe those are all you can push back i mean if that's not but it's kind of very similar so can you talk can you do the same thing like how was it when you came in when checker was largely inbound how did they think about book and segments and territories and then why wouldn't that work as you moved out by what'd you have to do
Speaker 2well just to remind the audience there's 14 reps and so it was like a round robin cowboy situation which is great for a startup like that's the type of mentality people should have like they should be fighting over leads all that kind of stuff as you grow mature as a company to 150 reps you can't just have a round robin fight over everything experience it's going to create a really poor culture so um segmentation becomes really important so i that was one of the first projects i took um under what like when i first started and and i was that was something that i had to work very closely with rev ops on and we had to be really thoughtful around like what is this segmentation going to look like where do we want to go where do we not want to go we purposely did not want to go up into the true enterprise we wanted to land mid-market smb and mid-market and then go up to enterprise which we did in the last year and a half um so thinking about the size of company and then the type of company that we want to focus on and making sure the books are balanced so figuring out like the icp and the types of companies the sizes of companies and locations of companies especially if your product is not necessarily something that could be sold to everywhere and everything is really important and then once you do that work then you can start to carve books for the reps and actually give them accounts and prospects that are in their name how did you determine the icp we've still been determining our icp so i would say that's an ever-evolving process especially as your product matures or you roll out new products which we've done um so initially i pulled a bunch of data to figure out like where are we landing the deals and where are we landing them the fastest and let's focus on those and did some due diligence around like what industries were we playing the best in also which what is our product we're best in our we started off as a company like owning that we own the gig economy 90 of 95 of the gig economy works with checker so that was the first one for sure because we already had all the logos and we could share all the names um and then i just looked at where is the rest of our customer concentration because selling without having a customer you can reference or names that you can drop to another customer is very difficult and of course we want to try to start with our customers we want to start with our customers but starting this off like for the first time we we tried to lean into icps where we had customers we could reference and other customers that we had done good work with and we had had some enterprise customers because we've had the demand so we did have some like bigger customers that reached out to us inbound over the years so we did already have like 50 enterprise customers we had some mid-market customers and it was based on that inbound um so we focused on on where we play really well i'm going to
Speaker 1very respectfully evolve the advice that carrie gave here on icp definition because i do think a lot of people define their icp based on close rates or cac or inbound flow which those are all related like easy is to to attract and close just be careful because you have to include ltv and retention in that formula and i'm sure she did right but like i almost want to start there like sometimes the highest ltv accounts don't have the lowest cac and if we're building our icp based on where our inbound leads are coming from or where our close rates are higher you can end up with a very churny business versus if we build our icp based on the account segments where we have exceptional ltv you can actually afford a higher cac and have an exceptional business so correlate icp definition more with ltv than minimal cac let's get back to carrie well and
Speaker 2so we started with maybe like three four icps um that we really wanted to hone in and focus on and i would say now we're at like five or six depending on which segment we're in and what we're what products we're trying to sell but trying to start a little smaller and nail that i think with some focus is a good direction
Speaker 1every company at that scale comes across like how to actually organize the segmentation of the team and generally speaking usually they fit into three potential dimensions and sometimes all three can be used when you're at scale you're certainly not going to be able to use all three of them We saw that at Salesforce and eventually at Yaks. And those three are geo, geographic based, which was historically what was happening until sales could be done over the phone and eventually Zoom, et cetera. Then there's industry alignment, specialists in healthcare, specialists in finance. And then there is size, S&P versus mid-market. How did you think about that? Did you split size first, then geo in there, or you didn't even use it? How did you think about that at that turning point?
Speaker 2COVID changed all of the ways in which I look at segmentation. So if we hadn't had COVID, I would have had to have a lot of conversations with mentors in my network to figure out how to shift that mindset from geo to something else. I joined Checkr while COVID was still going on. So it just challenged me to think a lot differently. It didn't really matter wherever it is located. It was all on the phone, which is very different than the first 15 years of my career. So it kind of was a blessing, actually, because it helped me to think differently. So I did not do geos at all. And I always felt like, even at Salesforce, and I'm lucky that I had tenacity, I was able to make something of this territory. But I had states that no one ever had sold into. I mean, it was like the middle of the country. And I'm like, people weren't even using iPhones, wanted to use an app. I'm like, this is crazy. So I do think not having geos has been a good thing. So in the start, we didn't do geos. We did it based on account, what's going to be the best account? What are the best? Sized accounts? And also, what are the best types of industries that we work in? And we tried to balance the books that way. As we've grown, and we've come kind of out of COVID, and people are traveling more, we have sort of split the US in half, but not so granular that it goes by state or zip code. We're just not doing that because the way that our, frankly, you wouldn't have enough fairness across the books, too, because gig is really big for us. And not everybody would have gigs. So there's a lot of that that's gone on. We focused more on size and industry, not for territories.
Speaker 1Very cool. All right, one more question on the territory alignment. Common concern, question, issue is, okay, fine, you set up the books, you go into January, you got the year cooking. And our reps got their book, they worked their book really hard, all their work, their territory all year. And now we're going in the next year. And you have to grow, you have to add more reps, or it doesn't even have to be next year, it could be about the time of the summer is we have to grow the team by 20%. So we have to take stuff away. Yeah, essentially. So now I'm like, I'm sitting here, I'm a rep, and I'm working my territory. And I'm like, I got these 17 accounts at stage four. And you just took, you took five of them.
Speaker 2I've always created extra territories, because I always join high growth companies. So my goal is that by mid year, I have to hire more people. And or maybe we want to maybe want to try something, we want to do a pilot, we want to have some of our best people test something out. So I always build probably like 20% more territories. And then when you hand them out to the reps that started, the year, you're just very clear on what part of their territory is their core versus their overcarve. And you motivate them to be hungry and go after more than they potentially will have all year, you can split it all up to you could take an overcarve territory and just bucket it all and make it even or you could reward some top performers from the year before. There's different ways you can do that. But I always have extra.
Speaker 1Yeah, I learned this from Salesforce, we brought in Hunter to take over sales. And this is a huge value that he brought at HubSpot was to bring a territory in and teaching us that you carve out additional territories at the start of the year and planning. And you give them out temporarily to reps to work knowing that you're going to pull them away when you hire new reps. It's perfect. And I don't know, I'm sure Salesforce grabbed it from like Oracle or something. I don't know the history there. But I know a lot of folks in the earlier stage arena don't understand that. And at some point, you're probably going to have to move to that. And Kerry does a good job of explaining why and how. The only other point I want to make, folks, is just be a little careful of like, if you're a young company, if you're sub 10 million, sub 20 million, you know, she's talking about a lot of these complex stuff, like lead rotators, she just mentioned that never do that don't work. No, like in the beginning, do it. It's okay. Like you have two, three, four reps, like, don't overengineer this thing. At the younger side, what we're getting a taste of here is when you start to grow up, you know where you're going. Okay, so just make sure you differentiate between those recommendations. Let's get back to her.
Speaker 2I don't think there's been a time since I've been responsible for having territories outside, maybe the first year I did it to not have extra territory, because I learned throughout that time that like, you always want to be able to have the flexibility to do things and not impact someone's, like, especially momentum in sales, you take something from like, like that from a salesperson and mid year, that's like a crushing thing to do. So I try to avoid those situations.
Speaker 1All right, we have just a few minutes left. And we have to hit the third point around, like the playbook and the methodology and the motion. Um, so can you tell us a little bit about when you came in? How did the sales playbook work? And how did you have to change that for for in for outbound?
Speaker 2Yeah, it was very react reactionary, because there was so much inbound. So there wasn't it was really just like, the playbook then was around being really solid with product knowledge, being able to move quickly through the sales cycles and making sure they had the coverage for all the leads that were coming in and working very tightly with marketing, because that was something that was always a pillar. For checker. Now, the playbook is very much like, around operational rigor. Like, what are you going to do from Monday to Friday to move the needle? And how much of your day you're going to spend on outbound activities versus in current opportunities, because you also have to balance moving the opportunities through the cycle. And that's a lot of work, as well as the internal meetings, and maybe potentially some other external stuff that we do. So there's a lot going on. And I think calendaring for the rep and the manager is really important. Because we all know it's Friday today, Monday and Friday go by Monday to Friday goes by pretty quick. And if you don't put that dedicated time into outbound, you're not going to do it. So that's the piece that keeps me up at night, like is to make sure that everybody's focused on that and putting in the right calories, because outbound in upper mid market and enterprise, cold outbound, it takes three months to get pipeline from that sometimes, or even two months for someone to respond to you. So every day really matters without bound. And that's the part that I think is the most foundational is making sure that you have that operating cadence, and that the whole team is driving to that and bought into it. You can't just throw an operating cadence down and not get the team to buy into the why. So I very much encourage my leaders to talk about the why I get their team involved in the beginning, ask for their feedback, and then they commit to make commitments as a team so that they can drive that forward.
Speaker 1How do you hold that accountability? Because I've seen teams that have run teams that do that. And the rep has this natural tendency to gravitate toward that inbound opportunity, because they're a little more bought in. And the outbound opportunity is harder. How do you hold them accountable to both doing the outbound and taking those opportunities just as seriously? I mean,
Speaker 2we have scorecards for the reps. So every quarter, they go through monthly scorecards with their leaders and measures all our key KPIs. That includes outbound activity, as well as inbound activity. And outbound activity, we put much more weight on. We also in our comp plans, we're not only paying on like using the product, but we also pay on the number of new logos. So I want to keep velocity going. It's not exciting for me if a rep closes one big deal and hits their quota. Well, that's awesome for the company. Like, that's not exactly what we're trying to build here. We need velocity. So we have different mechanics that we're putting in the comp plan and different spiffs that we run to drive that activity. But a lot of it comes down to like daily rigor with activity dashboards. We call it, you know, AMP, activity meetings pipeline. I'm sure you've heard that 100 times in Salesforce. And we're referring to those things every day. We have pipeline meetings to start the week, forecast meetings to end the week. So again, it goes back to how you run the business essentially. It's to be structured and we need to stick to some of those daily habits or else they won't hit those numbers.
Speaker 1Well, Carrie, this is so helpful for the ecosystem. I mean, not just the aspects of bringing outbound into an inbound motion, but so many successful companies need to go through, but also the nuances on territory planning and consumption-based pricing. Congratulations. Congratulations to Checkr for finding you and for you finding Checkr and making some magic and us learning from it. So thank you so much. Thank you so much for coming on the show and dropping knowledge. Yeah, you're welcome.
Speaker 2Thanks for having me. All right. That does it for me, folks.
Speaker 1I'd like to thank our showrunner, Matthew Brown. Editing support comes from Pizza Shark Productions. Of course, I want to thank HubSpot for Startups and the HubSpot Podcast Network for keeping the audio on. And by the way, I'm a huge fan of feedback. And so get this, if you're listening on Spotify right now, check your phone, see that Q&A field. That's a direct line to me and our show. So let us know what you think. All right. I'll see you next week.
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