Welcome back to episode three of Sales Leaders Spotlight. If it's your first time listening, in this podcast series we speak with key players who are sharing their experiences and insights on the current sales landscape.
In episode three, our host, Joseph Fung, is speaking with Mark Smith, Vice President of Sales at Womply. Womply is a software that helps run the “front office”—or, the customer-facing part of the company—for more than 100,000 small businesses in all 50 states and across 400 industry categories. Womply can help boost small businesses online reputations, engage their customers, and monitor the health of their businesses with data and technology.
In this episode, Mark touches on four elements needed to have a successful inside sales team as well as building trust between leadership and sales.
Joseph Fung: So thanks again, really appreciate you spending the time with us, Mark. To get things started, maybe you can tell us a bit about yourself or your history. What are you up to, who is Mark Smith?
Mark A. Smith: I grew up in Southern California, the son of a stay-at-home mom and an attorney who ran his own very small practice. I always planned on being an attorney, and I went to BYU, and planned on studying that. Turns out I don't like school that much, and if you want to be a lawyer, you have to go to school. So sales it was.
Right after BYU, I got the dream job as an outside pharmaceutical rep. I still don't know how I got it. I certainly was unqualified, I flat-out hated it. But I made it work for about three years, until I finally decided that I should stop doing a job that I had to stress out about every single day.
So at that point, I was a little scared. What do you do when you're not going to be an attorney, and you don't like the greatest sales job in the world? After a few months of struggling a bit, it clicked, and I've really spent about 90% of my career since then in inside sales, home security software, solar. But my bread and butter has always been inside sales.
Joseph Fung: You've had such a wide career. Like you said, pharmaceuticals to security to small businesses across geographies. As you think about those, are there any common trends or patterns that jump out to you across that huge variety?
Mark A. Smith: You hear a lot of statements in sales. They sound really good but in reality, they make no sense, such as a lead is a lead, or a sale is a sale. And it's just not true. And I think what has stuck out to me over the last 15 years is that everybody thinks that inside sales is easy, and the ones that take it very seriously thrive, and the ones that don't have a very, very difficult time.
And so some of the best times of my career have been when I work with a company that really gets it, and you can make an impact very quickly, and you can rapidly scale. And there are some other rewarding times when you can go into a company and help them see that it's not as easy as they thought, but if they put certain things in place, they can be very successful.
Joseph Fung: You also have the advantage of having worked in both the sales and the marketing side of things, and has being on both sides changed the way you run your sales process?
Mark A. Smith: Spending some time on the marketing side has helped me to see where they're coming from. I wouldn't, in any way, claim to be an expert in marketing. But I definitely have seen their side of the fence, and I actually don't think it's that difficult to meld sales and marketing together and have everyone get along really well. I think what a lot of companies miss is an alignment at the very beginning that is very rigid, very exhaustive, around the forecast. Where sales and marketing can get together, be very honest about the approaches, challenge each other, and then sign up for a credible forecast.
When that happens, it's actually not that difficult to work between the two. The struggle that people have is a lot of times, the groups have not communicated with each other, and they make wild assumptions, either based on ignorance, or they're based on preserving their own territory or their own financial benefit. And there's a lot of times you can go in and you can see almost immediately that the forecast upon which they're working is rubbish. It makes absolutely no sense at all on one side or the other, or on both sides.
And I've seen this, by the way, in really great companies. I've spent time helping companies that are 99% outside sales, and they again believe, well, we should just start inside sales, it's probably really easy to do. If you can sell it door to door, you can sell it over the phone, and let's do this amount of business the first year. And everyone says sure, 'cause they don't want to tell the CEO that they can't. And then you walk in and you look, and it takes all of two minutes to eyeball a spreadsheet and realize it's based on pretty unfounded assumptions.
When it goes well, though, is when you can sit down with them and you can really dig in and challenge those assumptions. And then once everybody signs up for it, the trick is to act like an adult and hold yourself accountable and hold others accountable. At Womply, in our first quarter, we had a few misses between sales and marketing, but it wasn't that big of a deal. We had aggressively pursued a rigorous forecast, and the things I had missed on, I had no problem with marketing getting on my case, and the things they missed on, they had no problem with me getting on their case. And things got fixed literally within days, and life goes on.
But it's when you have a total separation that causes a lot of the bickering between the two. And sometimes that's organizational, sometimes that's based on financial incentives, sometimes it's based on politics. But if you can't get those things working together, it's just not going to work out.
Joseph Fung: Are there any obvious pitfalls or any recommendations that you share with companies that are trying to make that transition, from being predominantly outside to inside sales?
Mark A. Smith: It's a simple question, but it's such an important question, because most of the time, they really don't have a solid plan on how they're going to do it. Again, the assumption is, our product's good, you can sell it to a business in their business, you can sell it in someone's home. Certainly we can sell it over the phone.
And it's not that that's necessarily wrong, but there are, in my opinion, there's four elements that determine whether or not you can have a successful inside sales team. There's obvious things everyone needs to have, such as talent and proper leadership, but the things that are very specific to inside sales, in my opinion, is first, you have to have a viable lead source or a viable way of contacting your prospects. And I know that sounds very simple, but it isn't as simple as people often think.
For instance, we have a product at Womply that is unbelievably valuable to our merchants. It's priced probably 25% of our competitors. If we get somebody on the phone to do a demo, we close it more than 60% of the time. But if right now you gave me a million dollars and told me to go spend it on paid search, I could probably spend $10,000 of that, because people are not searching for that.
So companies will assume, well, I've got a great product and there's a huge target market out there, and I can just make sales. Well, it might not be true if you don't have a viable way of bringing in paid leads or warm leads or, on the other hand, if there isn't a way for you to contact those potential customers. For example, in the consumer space, if you want to follow the law in the United States and you don't have the warm lead source, you're effectively blocking out about 85% of your potential market because of the Do Not Call list. And if you don't pay attention to those things, your forecast is going to be very, very wrong.
The second thing is, they need the ability to absorb fixed costs. So take, for instance, the home security space or the solar space. The Vivint Solars or the SolarCitys or the Sunruns. These are awesome companies, and they've built tremendous outside sales. They also pay commission only, and they need very little fixed overhead to make the first sale. It's not really the case with inside sales. You have to have some office space, you have to buy software, you have to purchase leads that don't yield a return immediately. You generally have hourly wages. You have benefits, you have FICA and Medicare. And these things add up very quickly before you see a return.
And so whether it's a publicly traded company that wants to quickly do inside sales and tell their shareholders that it's profitable immediately, or whether, as it's been the case many times in my career, I get a phone call from a rich local doctor or real estate investor who wants to start an inside sales software company, I typically can sit them down and show them that depending on what they're selling, they may need to fund me with half a million dollars before they see a single sale. And it obviously freaks them out a little bit.
They're also ... And this is, again, obvious, but people forget it many times — there needs to be a margin to the product. So it may be that when you sell something direct, you have this massive margin. But when you add in the fixed costs or especially the lead costs, if you're purchasing more leads, that margin can disappear very quickly. And so you have to, whether or not your product can sell, there still has to be enough margin in the product to make it work. And that's where a lot of software companies, for instance, struggle, is the cost of acquiring a demo is so high that even if they have a very high demo to conversion rate, unless they have a strong margin or unless the LTV is a really long tail, they're going to struggle unless they find a strategic partner.
And then the last one is, there needs to be a process to maximize the inside sale. So again, going back to some things such as consumer goods, like a home security system or maybe it's solar panels ... When you sell something outside, you can generally get it installed very quickly. But when you sell something over the phone, there is going to be a degradation in your sales funnel between the yes and the time that it gets installed, unless you are supporting that sale with the same process in terms of the time from yes to install, or with a better process that, even if you can't have the same time to install, it keeps them warm and nurtured and engaged so they don't fall out in the meantime.
And so if you have those things, I genuinely think you can be very successful doing sales over the phone. But if you're missing one of those things and you don't really acknowledge it, there's a chance you're going to dump a ton of money into something, and get very little yield.
Joseph Fung: When you think about sales reps in an outbound, in outside sales, very often they're building their own prospects. On inside sales, that's that balance between what marketing does and what they do. How do you see inside sales reps best developing their own leads?
Mark A. Smith: There are going to be times where a rep really just doesn't have the ability to do so, where social selling doesn't make sense, or they just don't have a wide enough reach in their own life to make that happen, and they do need to rely upon marketing to deliver. It doesn't always have to be a warm lead, but in some industries, it's so heavily regulated that even a cold lead that's provided has to be really thoroughly vetted out.
But for a rep to really increase their income off of their own efforts, it really comes down to learning how to get a referral. And we all know that a referral, or a self-generated lead, is going to be the highest converting, the highest value. But it is really challenging for reps, even the top reps, to get those referrals. And I wouldn't say I'm an expert in teaching people how to do it. We've done quite well in some industries, and others, we struggle with.
For instance, in B2C, it's not that hard to get a referral because you're asking for neighbors, friends, family. But if you're speaking to a small business, these are really busy people, and they might not actually know any other people that run small businesses. If you look in your phone book right now on your iPhone, you might only have 10% of your contacts touch a small business. So it can be really difficult to get that self-generated lead, but it is critically important.
We always say in the B2C world that for every sale you make, you need to add about 15% as a referral factor. It's a little bit less in the B2B world, especially with a short sales cycle. But it's really important if you want to maximize the yield on your leads.
Joseph Fung: We always hear that a hard part of sharing online is being really authentic. And when we take a look at your comments and stuff you share on LinkedIn, it always comes from a genuine place, a place from the core. Did using LinkedIn that way come naturally to you? Did you expect your reach and your audience would be so large?
Mark A. Smith: No. I think you could call it natural, but I think it's more accurate to call it a fluke. I'm not a social person. The assumption is that a VP of sales is very outgoing and extroverted, and that's just not the case for me. I really like being a loner just with my family or a small group of friends, and I'm not exactly a social butterfly.
Really, what happened is about a year ago, I had an experience purchasing some software that really frustrated me, and so I made a comment on LinkedIn. At the time, I had, I don't know, 300 connections and 0 followers, and I had never posted anything.
Frankly, I didn't know what people even post on LinkedIn. And it was crazy, because that post got nearly two million hits, and things sort of started to take off from there. But I've never intended to make sales from LinkedIn. I still haven't. I've made sales for other people, where if I make a comment about the quality of their product, one of their sales reps will call me and say, "Oh my gosh, we just did $150,000 of revenue off of that comment."
But honestly, and I posted about this recently, people will ask me all the time what the strategy is. There isn't a strategy. I don't think that much of myself. Basically, when I have a thought that I want to put down on paper and I think others could benefit from, and it's something that I think is credible. I'm not going to speak to something I don't know about. But I'll post it, and if people like it, that's really great. And if they don't, that's okay. I've had posts that have, I'd say the lowest one is maybe 250,000 views, but I had one that had 27 million hits.
But there isn't a strategy between the two. It's just trying to help people out, and learn from others, and if good stuff comes form that, then that's really great. This is the first podcast I've agreed to be on. I've probably been invited on 30. It's just not something I'm super comfortable with, and there is no strategy for me to become a speaker or make a ton of sales. And if I ever run out of things to say, then I suppose I'll disappoint a lot of people. But in the meantime, once a week, you get to be bugged by me on LinkedIn.
Joseph Fung: How would you compare coming in to help a company in that type of coaching and consultancy role versus being in there longer term and running it yourself?
Mark A. Smith: Well, I actually enjoy being an employee. I don't love being a consultant. I think I'm a really bad one. I've gone into companies, and they're doing great. They don't need me for six months. What they need is some really good, tough conversations over three or four days, some followup a week or two later to help them put in processes that maximize the good that they're already doing. I don't really get involved in leadership changes. I certainly can make recommendations. There have been times that I've had to let a CEO or Head of Sales know that I think they're struggling with a few of their leaders that maybe are lacking in buy-in to the company's vision. But typically, my focus is to go in and determine what they're doing well, help them put in some pretty basic sales 101 processes, and help them maximize things.
And then, the question you had asked earlier was about how you establish the trust between leadership and sales in such a short period of time. There's nothing that I'm going to do where I can go in and have a Dr. Phil session where I get everyone in a room and we do a get to know you game and everyone starts trusting each other. That's, to me, some cultural nonsense. Trust is not built on doing ropes courses together. It's not built on having a beer together. It's built on people setting expectations and delivering. And then when they're wrong, accepting that they're wrong and fixing it.
You enable the individual contributors or the mid-level managers to be very successful. You help them with little tips and tricks to where all of a sudden, their sales reps see them as a real expert in the field. But trust isn't built over 30 days. It's built over many months of good decisions and then owning up to bad decisions.
When you put the right processes in place, those things will reveal themselves, and then you just have to hope that they have good character, 'cause in the end, leadership is just revealing character. Nobody can hide being a bad leader. You have to have certain character traits that help to bring out those traits in other people, and no matter how good a consultant is, or how good a process or product, trust will never be built between a bad leader and any employee.
Joseph Fung: In one of your recent posts, you talked about five promises you make to reps, and one of those promises was that, I'm never going to ask you to trust me. Those promises were really impactful and really profound. Are those unique to your time at Womply, or where did those come from, and the thinking behind them?
Mark A. Smith: They've developed over time, and it's really through my own life experiences. When I got my first management job, I'm so grateful that I got it, because I was really unqualified and I was pretty bad at it. And god bless the guy who hired me, because he was also a bad manager, and he didn't realize that I was so bad. And so it gave me time to learn.
But over time, you just sort of learn things. You start to feel really disconnected or resentful with people that demand things of you, but don't give you anything in return. One of my favorite quotes, I think it's by Thoreau, who talks about ... the more he talked to his honor, the quicker we counted our stones. And that's always been the case in my life, which is when somebody says, "I can be trusted, you can trust me," it's generally the person who can't be.
And so what I've figured out over time is that nobody trusts me because I tell them to. Some people, I suppose, do. But the ones you want to win over, they just need to see your actions.
And so I figured, I might as well treat others how I want to be treated. To give you an example, Toby, our CEO, he can drive us pretty hard. We're very demanding of each other. But I can call him at three in the morning, he'll answer the phone as if he's wide awake, and he will engage with me, and he will deliver on his promises every single time.
And so whether you're going through a tough month or getting ready for board meetings or whatever it may be, when you have somebody like that who always keeps their promises, you can go through some pretty tough times and still have a ton of trust and really enjoy working with them. And that's what I try to be with my people.
Joseph Fung: If you had to pick a single piece of advice for somebody who's making that move into a management role to grow their own team, what's the one thing you'd leave them with?
Mark A. Smith: The first thing I would say is just, be patient. You're going to want to get in there and when times are good, you're going to want to throw out Winston Churchill quotes, and when times are bad, you're going to want to fire people and yell at them and — it's what we all think we need to do, but generally what you need to do is just slow down, take things in. When you take your first management position, you should not be agreeing to that promotion or that hire unless they have committed to you a good 30 days for you to really observe and learn.
I would say you should not attempt to take over the world in the first week. You need to learn the strengths of your people and you need to embolden them and let them know you're not coming in to be better than them. You're coming in to augment the good things that they do and potentially help with the things that they struggle with.
If I was going to give general career advice, I actually would borrow this from a guy named Noah Goldman, and I learned this just a few months ago. And so the advice he gave, and I hope I state it properly, is in your career, if you want to be tremendously successful and have job security forever, everybody should seek to be known as an expert in one thing.
So one of the things that's helped my career is when some CEO says, "We really need to start an inside sales group, or we need to grow our inside sales group." I've been fortunate that I've got a lot of colleagues and connections that say, "You need to talk to Mark Smith. He is the expert in growing or building an inside sales organization." And that has given me tremendous security and a lot of great opportunities, and I think that is the case whether you're in sales or management, is being known as somebody who is legitimately an expert in one particular thing, and you'll have value forever.
Joseph Fung: Thank you so much for your time, and looking forward to keeping in touch and keeping the conversation going.
Mark A. Smith: Sounds great. And thanks to you guys for reaching out.
Thank you for tuning into this episode of Sales Leaders Spotlight.
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