Founded in 2008, Capillary Technologies has since then seen numerous ups and downs to become one of India’s largest cloud-based platform for providers of omni-channel customer engagement solutions to retailers and brands. The growth trajectory of this Bengaluru-headquartered company was driven mainly by some key structural changes in its Demand Generation and Sales teams. In order to understand some of the initiatives that helped navigate this journey, we spoke with Ankur Saigal, CRO (Chief Revenue Officer) at Capillary who has been leading this effort.
Capillary has had a good year – what, in your opinion, has contributed in scripting this success and where does demand generation fit into the picture?
There have been a series of systematic efforts on multiple fronts for creating a robust sales engine and that is yielding the results for us today.
We realised that while the core framework of a sales engine had always been a part of common understanding, we weren’t giving enough weightage to all its individual pieces. We were a team of generalists who did anything and everything. This mindset diminished the role of support functions and set up our sales people to underperform by not letting them focus on their expertise – which is running the engagement on the ground. Soon after we realised this, we set up a fully defined sales engine with 3 pillars at its core – Demand generation (DG), Sales Structure & GTM and Operations & Execution.
Over the last few years, we’ve invested a significant amount of leadership bandwidth to train and coach DG teams on communicating the right message based upon the customer context. We also invested in tools to improve the productivity of the DG teams.
Second, we restructured our GTM based on required sales motions across different segments of our addressable market. This helped teams to get more focussed and improved our territory coverage.
The third factor, has been more of a cultural shift – From “best effort” and lack of regular cadence for field sales (FS), to defined quarterly annual targets with incentives to drive target-centric behaviour.
Implementing the above changes was possible, only because we moved towards a ‘Common’ operating system. This was made possible by having well-defined processes and policies and moving away from individual interpretation of definitions. It resulted in a common understanding across the organization in terms of Opportunity, Opportunity Stage, Opportunity Classifications, etc.
Why do you feel demand generation is so important?
Demand generation is one of the most underrated activities that fail to get due attention and weightage while you plan for your yearly sales targets. Fixing it has yielded disproportionate results for us.
DG serves as an indicator of future revenue potential and aids in gauging the scope in the newer markets
Systematic lead generation is important for building a healthy pipeline which translates into recurring revenue. This is where a dedicated DG team becomes critical. It helps reduce dependence on “Star” sales performers and improves sales productivity by enabling the Field Sales executives to focus on what they do best – stakeholder mapping and closing deals. DG also reduces the ramp up time for new field sales.
Furthemore, it serves as an indicator of future revenue potential and aids in gauging the scope in the newer markets too. A well-oiled DG engine is responsible for creating a mindshare for your products and services in the marketplace in a structured manner via multiple channels like webinars, white papers and newsletters etc. This in turn supports your company in establishing itself as a trusted advisor in your chosen space.
What were the widely prevalent and established norms that you had to move away from as you created this engine ?
I think there are many myths/ old school thoughts that exist even today but they fall apart on closer scrutiny.
In order to double the revenue, all you need to do is to double the sales force by hiring experienced field Sales teams.They are believed to bring industry connects and relations, build their own pipelines and close deals. But in reality this alone never gets the engine running for all the reasons that I touched upon earlier.
Demand Generation (DG) is the responsibility of the sales teams and is not a specialised function like sales, presales and marketing.
Even if some people are convinced on having a demand generation team – how to structure it and measure its effectiveness is not very clear. You start by assuming that tracking activities (# of calls, # of emails etc.) is how you evaluate team productivity; assume that inbound & outbound DG motions are similar, so both be handled by the same set of people. This sets you up for an ineffective team which doesn’t get you the desired results
Outbound lead generation is about just cold calling a curated database of prospects and e-mail is an ineffective tool for prospecting.
We have been able to challenge a few of these and some experiments have indeed been quite successful.
You spoke about the multiple channels and practices that you have experimented with while setting up your DG function. Would be good to understand these and what has worked for you?
There are 7-8 channels today that a DG team can leverage to get results. Some of them are organic sources like your own website – SEO on your website. Then there is the entire search engine marketing which is AdWords, etc. You have affiliates which are analogous of partners in the offline world. Then you also have LinkedIn, events, webinars, newsletters, campaigns, mail campaign, etc – all of these are there to generate interest about you and then push them down the channel to finally convert them into a customer.
We realised that we need specialized teams to tackle outbound and inbound queries effectively
New channels may evolve in future as well, and each will have its own beat. However, despite different beats, one thing that I would want to emphasize on here is the standard definition and understanding of the stages across all the teams, no matter what channel it is. The bare minimum requirements of moving from one stage of the sales funnel to the second stage have to be clearly defined. This is a very strong and important component in making the demand generation function successful and aligned to the sales goals.
Another thing which is crucial and has been seen creating a difference is having specialized inbound and outbound teams. Earlier, we had the same team doing both but then we figured out that it’s very difficult for the same guy to switch flows during the day. Today, for calling an inbound lead we have a separate team because the motion is very different – in an outbound you are prospecting, in an inbound you are answering a query. Thus, you need specialized people to tackle these two activities effectively.
You also spoke about one of the conventional wisdoms that email doesn’t work and cold calling being the way of doing things. I sense a difference in opinion.
It’s much more difficult and high friction to call a person right in the beginning and introduce yourself as well as set the context. Instead, if you send a mailer to the CXOs asking for the right reference in their companies to connect to, it works much more smoothly. We tried this and observed that a combination of calling and email worked best for us in the last 3-4 months.
Cold calling alone in not enough to identify leads today
Cold calling alone in not enough to identify leads today – you need to reach the right person at the right time and at times, may be even nurture a prospect for them to be ready to receive your call. Instead of bombarding people with cold calls, setting a prior context is always helpful. Interestingly, since implementing this change we are observing an increasing trend in the productivity of teams. We are now seeing a response rate close to 8-9% to these emails. And the mails I am talking about are not the designer, HTMLised mails of the bygone era. Rather, these are very short mails, text mails and it seems to be favouring us.
And that is why we now have our outbound, inbound DG teams, marketing and nurturing teams all working in tandem to get the potential customers to the sales readiness stage.
You touched upon the importance of setting targets being one of the important reasons behind the turnaround. How should one think through the goals and their measurements?
This is one aspect that has led to a huge cultural shift across the organization. As I mentioned earlier, we were operating as a team of generalists and the hustle to close the deal at the month end/ quarter end was missing. Defining clear targets, creating a weekly cadence and creating a strong layer of support functions to enable achievement of the same along with the right incentive structure, has helped create that motion towards closure in the organization.
Equally important is creating the incentive structure around the same – today all our field sales are on a 60: 40 fixed and variable pay structure, with incentives/ accelerators linked to closure as well as to CRM hygiene.
And we have done the same thing for all the teams – moving away from input metrics to output and closure. For e.g. each DG executive is mapped to 3 sales executives and has a portfolio of 100-150 accounts. And they are measured not on the number of call/ emails but on the number of qualified leads & opportunities generated in a month They typically have a 70:30 split on targets between lead generation and opportunity conversion. We also benchmark these across the team which gives us the cue to intervene wherever we feel someone is falling behind.
When you talk about intervention, what does that mean across the board? How do you enable people to do better?
Defining targets alone is not going to put you on the path of success. Along with targets and measurement, we understand that enablement of people to reach the targets is equally important. For the field sales executives this might mean having well-oiled support functions like DG, pre-sales, etc; For DG employees this would mean training them at par with your sales and pre-sales teams.
In some ways, DG executives act as the first touch point in your customer journey. Hence, it becomes important to hire the right talent rather than making price driven choices and further investing into the training of these resources. DG executives have to be trained enough to communicate the real essence of what you are trying to do and what your solutions are trying to do, to a potential customer.
For example, conversion rates from a Sales Ready Lead (SRL) to Opportunity in our outbound and inbound motions today are approximately 26% and 36% respectively. There is a lot of headroom for improvement here.
One of the things that we are trying is to record pitches for the DG teams – inbound as well as outbound and give them feedback periodically on the same to improve the effectiveness of the message. These are WIP right now, but the idea is to set targets across the organization and then enable people to achieve them.