Up until August last year, the Hubstaff team didn’t place much focus on direct sales. We assumed there wouldn’t be enough ROI since our product cost is pretty low at $5/user. Instead, we focused on inbound marketing because it’s the kind of channel that got us great results. I feel that this is often the case; direct sales are underrated and take a backseat to online marketing.
Nathan Barry of ConvertKit wrote a post on how he prioritized direct sales as a channel to acquire customers over his content marketing and other tactics. With direct sales, ConvertKit saw a whopping growth of 2605% in the last 12 months. That post inspired us to start allocating some time in direct sales as a growth channel for us.
Here are the steps we took, which ultimately contributed to our more than 200% revenue growth in the past 12 months.
1. Building our sales process
I knew we needed to build a sales process that was both efficient and economical, since we’re a bootstrapped company. To make that possible, I had to track my time spent on the project so that later I could compare it with our average LTV (lifetime value) per prospect, and decide if the strategy was worth scaling or not.
- Hubstaff (free*) – to track our time spent on direct sales and to determine if it is a reliable growth channel for us
2. Building a list of prospects
I began by researching a couple of prospects on LinkedIn, AngelList, and similar websites, then created a contact list. To start with, I had to set some goals in order for me to be able to reach our target of paid customers from this campaign:
- To get 20% response rate – I wanted 20% of the prospects that I contacted to reply back to me. This is double the industry average, which is about 8-10%.
- Keep the email outreach process as efficient as possible – I didn’t want to send individual emails to each prospect, but rather sent them in bulk so we could save time.
3. A/B testing our email pitch
Next step for me was to create an email pitch that would get our prospects to reply back. It didn’t necessarily have to be a sales pitch immediately; all we wanted was to get them interested. We tried 3 email pitches:
- One pitch advertised our product
- The second pitch sent a very personalized email which involved deep research on the prospect
- The third pitch sent a short email asking them one question for a research study we were doing.
Note: All 3 pitches above had at least 3 followup emails to them. If you’re not following up to the original emails, you’re almost certainly NOT going to receive a reply. There are a couple of tools out there that can help you schedule automatic followups – Rebump, Boomerang and Tout.
Now let me ask you a question: which one of the 3 pitches worked?
Both pitches 2 & 3. Although pitch 3 had a good response rate (above 20%) v/s pitch 2, pitch 2 was the real winner in terms of acquiring customers. So we realized, a combination of those 2 pitches would probably be the sweet spot for us.
4. Analyzing and optimizing our strategy
A couple of weeks after the campaign started, we went into our time tracking software and looked at the time we tracked on this campaign v/s average LTV of our customers.
We were spending more money on reaching out per customer and moving them across the funnel v/s the revenue from the customers acquired by us from this campaign.
Or in short;
Average customer LTV (Lifetime Value) < CAC (Customer Acquisition Cost)
Here’s a snapshot of the hours I spent doing this task in August & September via Hubstaff
However, we didn’t decide to end the campaign, label it as a failure and look at alternative growth channels. We knew optimization was the key here.
There were 2 things we needed to optimize to make this strategy work:
- We needed to hire someone at a more affordable rate to help us do the prospect research and reaching out. That would cut costs by a lot.
- We needed to reduce our time spent on sending highly personalized emails per prospect.
5. Hiring a virtual assistant
To solve the first task, we decided to hire a Virtual Assistant (VA). VAs can be very efficient and are cheap (~$4/hour). But the one thing that’s very critical for them to be successful is to have proper blueprinting & documentation in place for them.
To solve the second task, we worked with our new VA to set up a process for building a highly qualified list of prospects. To make our prospect research laser-targeted, we built lists filtered by industry, company size, location, role of contact etc.
6. Building a list of highly qualified prospects
How did we collect that data? By searching. It’s that simple. All this requires is some patience and hard work.
Tools we used:
- LinkedIn premium account (paid) – to find target companies filtered by our parameters
- Rapportive in Gmail (free) – to find the email address of our desired contact in every company
- Google Sheets (free*) – here is the template of our prospect sheet
- Gmail Mail Merge (free) – to set up highly customized emails based on our parameters
7. Managing tasks after you have an interested prospect
It’s also important to know that you must have a task-management system. You must load every single task into a centralized calendar and make a discipline of managing it. Trust your brain at your own risk.
- Insightly (free*) – to track your tasks and understand the conversion rate at each step of your sales funnel
- Google Sheets – Insightly Zap (free*) – to automate creating our tasks in Insightly when a new lead in added to our prospect sheet
8. Recording time to our Insightly tasks
What is even more awesome is that Insightly integrates with Hubstaff. All I needed to do was integrate my Hubstaff account with Insightly (<1 minute) and then my Insightly tasks would automatically show up in my Hubstaff timer.
Apart from time tracking, Hubstaff also takes screenshots and monitors our productivity levels throughout the day so we can make sure all of us are being productive.
9. Final Audit
The above optimizations helped us achieve our target of a 20% response rate and acquire some great customers. A month later, we checked our time data in Hubstaff again and found that now our customer acquisition cost was much less than our average LTV, thanks to the optimization we did based on the time data.
With time and sales funnel data showing positive numbers, I can confidently say that this campaign has been successful for us so far. Our company’s revenue has grown by more than 200%, from $287,873 to $883,000 in the last 12 months. We’re a fully revenue transparent company, so you can see all of our numbers in real time.
If you’re not tracking time to your tasks, you’re losing a lot of insightful data that can help you better optimize your sales strategy and efficiently manage your team.
Hope you found something actionable while reading through this guide. I like to blog a couple of times a year to structure my thoughts as well as share my experiences. I’m deeply grateful to the people who have mentored me in the past (and continue to do so today) and I feel it’s my duty to pass on that knowledge. You can sign up to my email list here.
An earlier version of this post first appeared as a guest post on Insightly’s blog.
*have a paid plan as well