The Funnel and Revenue Math w/ Matt Plank (CRO, Rippling)
Aug 23, 2023
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Matt Plank, CRO at Rippling, joins Mark Roberge to discuss setting sales quotas, demand generation, balance between inbound and outbound, 5x quota on reps' OTE, and the role of SDRs in the sales process.
Aligning sales capacity with demand gen capacity is crucial for successfully scaling a startup.
Transitioning from a round-robin system to territory-based assignments helps to optimize sales operations as the company expands.
Deep dives
Scaling a Startup: Unpacking the Funnel and Revenue Math
Matt Plank, CRO of Rippling, discusses the key role of funnel and revenue math in successfully scaling a startup. He shares insights from his experience at Rippling, a company that started with just five engineers. They focused on optimizing their email marketing and building a strong inbound sales organization. As they grew, they faced challenges in maintaining email deliverability and had to find creative ways to improve conversion rates. Matt also emphasizes the importance of aligning sales capacity with demand gen capacity and shares how they determined the ideal opportunity-to-demo ratio. He highlights the need for constant iteration, data-driven decision making, and aligning quotas with the cost of hiring reps.
Planning for Growth: Transitioning from Inbound to Outbound
As Rippling experienced growth and reached saturation with their email marketing strategy, they had to evolve their demand gen tactics. Matt explains the shift from relying solely on email marketing to incorporating outbound strategies. They established separate teams for inbound, mechanized outreach, and pure outbound SDR functions. He emphasizes the importance of increasing conversion rates to make outbound efforts more effective. Matt also discusses the challenges of transitioning from a round-robin system to territory-based assignments as the company expanded. He highlights the need for aligning leads with reps based on geographical regions or time zones.
Optimizing Sales Capacity and Demand Gen
Matt outlines the concept of sales capacity matching demand gen capacity and the significance of finding the right balance. He explains how Rippling determined their ideal quota-to-OTE ratio as a guideline for hiring reps. He emphasizes the importance of considering the cost of hiring reps and the revenue they need to generate. Matt also discusses the importance of conversion rates, ACV, and win rates in creating a scalable and repeatable sales funnel. He highlights the need for iterating and adjusting the funnel metrics, such as opportunities and demos, to align with the revenue goals of the business.
Scaling Challenges and Transitioning to Territory-Based Assignments
Matt shares the challenges Rippling faced as they scaled their operations and moved towards territory-based assignments. He discusses the evolution of their inbound, mechanized outreach, and outbound SDR functions. Matt emphasizes the importance of testing and iterating various demand gen channels to meet growth targets. He also highlights the need for strategic planning and aligning sales territories with geographical regions or time zones. Matt concludes by emphasizing the importance of continuous improvement, data analysis, and keeping up with the changing dynamics of demand gen and sales capacity.
How do you set the right sales quota for a rep? What about the quarterly spend on account executives, marketing, or SDRs?
Host Mark Roberge is joined by Matt Plank (CRO, Rippling) to discuss how to think through all the different projections on your sales and marketing spends. In this episode learn more about:
The evolution of email as a growth channel
The importance of demand generation and scaling
Finding balance with inbound and outbound
Why you should 5x quota on a rep’s OTE (on target earnings)
The role of SDRs in the sales process
The Science of Scaling is a HubSpot Original Podcast // Brought to you by The HubSpot Podcast Network in collaboration with HubSpot For Startups // Produced by Matthew Brown.
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