Michael Hoy remembers the conversation vividly. It was the day his new boss asked him to break down the performance of the onboarding process Hoy had created for his sales team. Hoy, then training manager at product experience startup Pendo, struggled to give sufficient answers to a relatively simple set of questions.
When asked how much pipeline Pendo’s reps typically built when they came out of training, Hoy didn’t know but his gut reaction was that it wasn’t a lot. “We didn’t focus much on pipeline build,” he says today. “We focused on how to command our message in the market.”
Next, he was asked how many reps hit their quota when they finished training. Hoy said it was around 40%. Some shot high and others didn’t see sales for months or quarters. Much of a rep’s success or failure was down to their own entrepreneurial instincts, rather than the impact of their training.
When he was asked about segment-specific ramp time, Hoy stumbled again. His process was segment agnostic and reps graduated with a very general, rather than specific, skillset. He replied that the sales org’s ramp time was three times its financial projections.
And finally, in response to a question about how he defined when a rep was actually contributing to the organization, Hoy blanked. “That’s a great question,” he recalls saying. “I don’t have an answer for that.”
The questions landed like a sledgehammer, reducing Hoy’s onboarding program to rubble. But the criticism didn’t beat him down. Instead, he used it as motivation to rebuild Pendo’s onboarding process from scratch. And now, six months after that humbling conversation, Pendo’s vastly improved, data-driven onboarding process is powering the next phase of the company’s growth.
Hoy joined Pendo, in the spring of 2016, as its second account executive. The fledgeling business was just three-years-old and was still finding its feet in the market. “We hadn’t locked in our product market fit yet and we certainly didn’t have go-to-market fit,” Hoy says. As such, many systems and processes were still undocumented or completely unplanned.
On Hoy’s first day, Pendo’s then-vice president of sales Chas Scarandino placed a sheet of paper on his desk. It was a record of Pendo’s onboarding process and it was minimal to say the least. “It had day one, day two, day three, and under each day of the week it just said, ‘Figure it out,’” Hoy laughs.
Without a formal sales onboarding process or training strategy, Scarantino relied on his employees’ innate entrepreneurial skills.
On one early afternoon, Scarantino brought in a six pack of beer and told Hoy, “The best way we can [onboard you] is by calling people.” So that’s exactly what they did. Scarantino, Hoy, and the rest of the sales team drank some beers, hit the phones, and figured out what pitches, plays, and strategies worked by trial and error.
Pendo’s ad hoc sales training was enough to get the startup off the ground and build some buzz around its product. But as the sales team grew, Scarantino recognized the need for a formalized onboarding process—and he challenged Hoy to build it.
In November, 2017, Scarantino promoted Hoy to training manager and tasked him with collecting and organizing all the tribal knowledge they had acquired.
Over several months, Hoy interviewed his colleagues, gathered information, and built a basic onboarding process. New employees came in, got a quick briefing on Pendo’s culture and a brief overview of the sales org’s strategy. Most training was done face-to-face and important docs—market research, sales playbooks, buyer personas—were also stored online.
This was Hoy’s first role in sales excellence—Pendo’ term for sales enablement—and his first attempt was far from perfect. “If I go back and look at some of those plans and frameworks, they're really brutal to look at,” admits Hoy, cringing at the memory. His process didn’t add anything new or improve anything they were already doing—but it was documented and that was still a giant leap forward. But for the highly self-critical Hoy, this wasn’t good enough.
For a while, Pendo’s sales team hobbled along with its makeshift enablement program. But then, in early-2018, the company hired Bill Binch as its CRO. Binch was a sales veteran. He’d led Oracle’s sales organization during its boom years and had helped grow Marketo into a worldwide marketing superpower.
When Binch joined Pendo, he pulled Hoy aside and challenged him on his sales excellence performance. “I've reviewed the program," said Binch, " and it's fine."
But Binch didn’t want fine, he wanted great so he helped Hoy identify several key areas for improvement. “I've interviewed a number of people on the floor,” said Binch, “and nobody can tell me where they are within their training. Nobody really knows what the curriculum is. They’re not poorly trained but there’s a lack of visibility as to where people are."
Binch encouraged Hoy to take his qualitative feedback, own the criticism, and create a brand new onboarding process. Some sales leaders would have crumbled under the pressure—but not Hoy. He took Binch’s feedback, squared it with his own exacting standards, and resolved to build a new, better program. “I knew we had to build a program that is measurable, facilitates great knowledge acquisition, and grants our reps visibility so they know exactly where they are," Hoy says.
Fuelled by a determination to do better, Hoy began his rebuild project with thorough research. He talked his way into several sales orgs at companies a year or two ahead of Pendo and shadowed their enablement teams.
At New Relic, for example, he learned how Kimberly Billings, vice president of sales enablement, had implemented a two-day product onboarding sprint they called a product summit. “Tenured reps—reps who have been [at New Relic] for two or three years—are fighting to get into this course to renew their knowledge,” says Hoy.
When he arrived back at Pendo, Hoy felt revitalized and he had a clear idea of what he wanted his new onboarding process to be. “We were going to build a program,” says Hoy. “We were going to brand it. We were going to make it extremely well known. The goal was to ramp reps fast and to ensure every rep knew what the training was—how to describe [the training], how to tell their manager where they are with it, and so on.”
Hoy dubbed his new month-long program Immerse and began rolling it out in the fall of 2018.
For the first three weeks, new employees worked through a sales 101 e-learning course, covering everything from Pendo’s corporate culture to specific sales plays for specific market segments. Throughout the e-learning section, new employees also had regular face-to-face meetings with mentors to clarify sticking points and reinforce important knowledge.
The final week was dedicated to an intensive bootcamp. “We took new reps for four and a half business days and we put them into practice sessions,” explains Hoy. “It was four and a half days of training, but there wasn't a single slide deck. Everything was exercise-based.”
Hoy and his managers would play prospects and new employees would have to run through a mock deal cycle. They had to research the prospect, manage the lead in their CRM, perform cold outreach, and guide Hoy and his other managers towards a sales meeting. “It all culminated in a final value and pricing proposal to an executive team,” says Hoy. The idea was to test all the knowledge and skills that new employees should have learned over the past three weeks.
After the bootcamp, Hoy “kicked reps out of the nest” and handed them off to their managers. Then he turned his attention to the next cohort of new employees.
Immerse was a huge leap forward for Pendo and Hoy describes the program as “extremely successful in some areas,” such as producing company and market knowledge and getting reps on the phones quickly. And it helped Pendo grow from a plucky startup into a thriving and profitable business.
Then, almost one year to the day after Immerse rolled out, Pendo reshuffled its senior employees and shifted sales guru Dean Patton from operations to sales excellence. And it was Patton who asked Hoy that fateful series of simple questions. “He was very non-judgemental and very positive but he started asking me really good questions around benchmarking,” Hoy says.
Those questions were enough to reveal the cracks in Pendo’s onboarding process.
In just a few days, Patton pulled back the successful veneer and revealed just how little Hoy understood of the inner workings of his process. Again, Hoy didn’t take the criticism lying down. Instead, he got straight back up and began designing a second iteration, one better, smarter, and more intentful than the versions that came before.
Under Patton’s leadership, Hoy resolved to rebuild Immerse from scratch. “We wanted to gut the thing and build something based on four key pillars,” Hoy says. The second iteration of Pendo’s branded onboarding process—Immerse V2—had to be segment specific, it must cover the entire sales ramp-up period, it must create valuable data, and it must be owned by sales excellence and delivered by sales managers.
Immerse V2 followed a very simple three-part structure. First, every single new employee at Pendo attended a two-week training session on the company, its value proposition and the marketplace it existed in. This primer was dubbed Flight School. Beyond learning about the product experience market, new employees also have to research their assigned territory. They were expected to independently learn about their specific competitors and uncover unique opportunities. At the end of Flight School, reps presented a territory plan, showing how they planned “to be the best rep possible to Pendo.”
This primer was incredibly effective, too. “What we've found is that reps going through Flight School create 2.5X more pipeline in their first two months compared to those who don't,” Hoy says.
After Flight School, Pendo’s new employees split into one of three streams based on their segment—startups and SMBs, commercial accounts, and enterprise customers. Although the training in each steam is structured in the same way—creating pipeline, advancing it, and closing it—the content of each is radically different. “The competencies and skills needed in [each stream] are very different,” says Hoy. “There’s probably about 50% to 60% shared knowledge and after that it's very different. Essentially we've created three different playbooks.”
In the first stage, new employees learn how to sniff out deals. Employees on the SMB stream learn how to liaise with marketing and process paid search leads. Meanwhile, those on the commercial or enterprise streams learn how to prospect themselves and evaluate high-value opportunities.
Next, employees learn how to guide leads through the sales funnel and towards conversion. SMB employees focus on high-velocity sales skills, such as personalization, drip campaigns, and so on. Meanwhile, employees on the enterprise stream will learn about account mapping, account-based marketing, and project management.
The second and third segments lean heavily on e-learning with reps reading, practicing, and assessing themselves via a learning management system (LMS). But Hoy knows that e-learning alone often isn’t enough to cement complex topics and techniques. So alongside his LMS, Hoy also implemented a robust advisory network. If a new employee is struggling or wants to clarify something, they can go to an experienced seller and ask for more details, a different explanation, or an opportunity to practice a technique face-to-face.
Finally, employees learn how to actually land deals. Again, SMB sales employees focus on high-velocity tactics, learning how to negotiate quickly to cut down on their average sales cycle time. Because enterprise deals are much longer and higher value, these employees focus on communicating the return-on-investment for a deal and producing legal structures that allow for easy deal expansion. “If we're selling IBM, how do we land with a legal vehicle that allows us to tack on 48 other products easily in an expansion notion?” Hoy says, imagining an enterprise deal.
All three segment streams take reps all the way through to full ramp. In the SMB tier, that’s four months. In the enterprise tier, that’s six. Although the timescales seem long, Hoy says it’s important to stick with new employees during the process so they stand as good a chance as possible of becoming the perfect Pendo sales rep.
But Hoy doesn’t support new employees unconditionally. In his talk at LeanData, Patton estimated the cost of a bad sales rep hire to be 4X to 7X their annual salary—typically around $1 million. Few organizations can stomach that sort of financial hit, especially relatively young companies like Pendo. So in Immerse V2, Hoy designed a strict evaluation process that runs alongside the onboarding program.
Throughout the onboarding process, reps are evaluated using knowledge tests and benchmarks to see how they are performing. In stage one—creating pipeline—employees must pass four separate exams to prove they understood all the course content. Not only that but they are expected to create 2X their quota in pipeline to prove they can actually implement the knowledge they’ve acquired. These tests are important, says Hoy, because if they can’t create sufficient pipeline now, it’s unlikely they’ll succeed in their role later on.
When Hoy identifies someone who isn’t performing, he’s quick to either offer tailored support or move them out of the program. The latter might seem harsh but Hoy holds his reps to the same exacting standards that he holds himself. “The best thing that you can do for the business and for the rep is to limit the amount of time they spend struggling in role,” he says.
Hoy only rolled out Immerse V2 in the fall of 2019 so his data on the new program is limited. But the trends he has identified are very encouraging. Segment-specific ramp time is down, pipeline is growing, and quota attainment is up. But there was something more important—consistency.
In Immerse V1, reps graduated from onboarding with very inconsistent abilities. If they were natural entrepreneurs, they would almost certainly do well. If they were more process driven, they would likely struggle. But with Hoy’s new onboarding process, reps are graduating with a much more even and predictable skillset.
That predictability means Hoy can accurately judge how his ramping reps are contributing to Pendo’s finances. And that’s important because, in any one quarter, around 27% of Pendo’s reps are working through Immerse V2.
Now Hoy’s reps are becoming more consistent, he can predict how much of the company’s quarterly goals are coming from reps who are still ramping. At the moment, that figure stands at 10%. For employees who are potentially just a couple weeks in their job, that is a huge achievement—and it’s just the start. As Hoy continues to iterate and improve, he expects that figure to rise as Pendo’s new employees join, learn, and sell faster and faster.