Page 80 - The Sales Acceleration Formula: Using Data, Technology, and Inbound Selling to go from $0 to $100 Million - PDFDrive.com

the salesperson's next month of earned commissions). After his clients reached
four months on the platform, the salesperson would keep the entire commission
even if the customer canceled any time after four months.

This plan was simple, clean, and hunting-oriented.

The plan worked well to accelerate the velocity of new customer acquisition.
HubSpot scaled from 100 to 1,000 customers in fewer than six months. We had
grown the annual run rate to $3 million. Beautiful!

However, there are typically side effects for every commission plan. This
certainly was the case with our hunting plan. As you might expect, customer
churn exploded to an alarming, unsustainable level. Guess which month in a
customer's life cycle had the highest churn. Month five, of course, right after the
claw-back had expired. Was this a coincidence? I think not.

The sales compensation plan drives the results of the business.

Plan 2: The Customer Success Plan

The customer retention issue needed to be addressed. First we leaned into the
data in order to understand the situation further. At the time, each new customer
was being assigned a post-sale consultant, who would help them get set up and
trained to be successful using our service. Our first theory was that some of the
post-sale consultants were doing a better job than others. If we could identify
which consultants were most successful, we could dig into the consultant's
process, understand what they were doing differently, and introduce the superior
processes across the team. However, when we analyzed the customer churn by
post-sale consultant, the levels were similar across the team. This particular
theory had not checked out.

Next, we analyzed customer churn rates by salesperson. Eureka! Here was our
answer. Across the sales organization, there was more than a 10-fold difference
between the salesperson with the lowest churn rate and the salesperson with the
highest churn rate. We did not have a customer onboarding problem. We had a
sales problem. Our customer retention was predicated on the types of customers
the salespeople chose to target and the expectations they set with each new
account.

I immediately shared the analysis with the sales team, illustrating each
salesperson's churn rates and how they compared to the rest of the team. I
educated them on the importance of retention to our business as well as to our
customers. I informed them that I would be adjusting the sales compensation