For decades, selling to schools has been a maddening version of the “traveling salesman problem.” Throughout the US, there are approximately 14,000 districts and more than 130,000 public K-12 schools. How can a small company, no matter how innovative, hope to succeed in this fractured marketplace?
The happy answer is that they can not only succeed but they can thrive--and that, I believe, is good news for teachers and students who want the best available tools to support their learning. In particular, over the past three years, we’ve built a 35-person company with an “inside” sales team of eight people, and are successfully serving hundreds of districts across over 30 states. Here’s our story.
The number of English Language Learners has grown dramatically. In 1990, one in ten students in US classrooms were ELLs; in 2014, one in eight students were ELLs; and by 2015 that number is expected to hit one in four. These students have all too frequently experienced the nation’s widest achievement gap and yet, as of a couple of years ago, there were few tools to support the hard-working teachers who serve these students every day. In 2011, my co-founder, Teddy Rice and I started Ellevation to dramatically improve outcomes for English Language Learners (ELLs).
Since then we have built an instructional and data management platform for ELL educators. Using Ellevation, educators can gain a much deeper understanding of the ELLs they serve, set goals aligned to language standards, generate individualized learning plans, enable much better collaboration among colleagues, and more.
Like other early stage companies, during our first year we experimented with how to get out the word about our product. My cofounder and I attended conferences to meet district leaders, launched mail and email outreach campaigns and threw ourselves into plenty of those “traveling salesman problem” roadtrips to meet district leaders in the field. Online demos helped, too: We worked with two part-time, former educators who reached out to districts to schedule online demos which Teddy and I delivered, enabling us to move partnerships through to completion.
After a year under our belt, we needed to make a strategic choice about how to transition from a founder-led sales process to one that could grow beyond us in ways that were scalable and replicable. A couple of key considerations informed our thinking:
Keep Price Points Within Reach
In the early days, we realized that to grow quickly, we needed to keep our price points reasonably low in order to avoid time-consuming RFPs. A lower price point drove the economics of our sales model, which needed to be efficient and low cost. Today, we are in a different place: We serve nearly 10 of the largest districts in the United States, but we credit our ability to serve large districts to our early focus on serving--and delighting--small and medium-sized districts that could purchase our solution without friction.
Strengthen District Experts
Our key contacts are the instructional and ELL leaders in school districts. These leaders have deep expertise and passion for their work. They want be well informed. Many want us to conduct a demo for them--perhaps even a few. They also frequently ask us to demo to their teams. We wanted to be staffed so we could deliver a demo as quickly as possible, even on the same day we received a request.
Pick Meaningful Metrics
We are huge followers of a number of influential thinkers on how to build great Software as a System (SaaS) companies and on what metrics matter most. Both Dave Skok of Matrix Partners and the team at Bessemer Venture Partners offer compelling arguments about how businesses become viable when they tightly manage two variables:
- CAC: the Cost to Acquire Customers
- LTV: The Lifetime Value of a Customer/Renewal Rates
Our decision about sales strategy was greatly influenced by how we could hit important CAC and LTV/Renewal benchmarks.
Grow a Collaborative Culture
Our culture thrives on collaboration. We have prioritized building a team that works closely together in Boston. We’ve come to believe that it’s critical for early stage sales teams to have deep communication with other parts of the company, including people work on product development, engineering and support.
When we put those priorities together and added in our personal experience as founders selling during the early days, our choice was clear: Our sales team had to be an “inside” sales organization based in Boston.
In 2013 we recruited Phil Charland, a leader who could build and scale a primarily inside sales organization and actively coach and mentor members of the sales team. He helped us understand a number of additional strengths of inside sales organizations that we had not considered. Specifically:
- It is easier to specialize sales roles that map to each step of the sales process;
- Inside sales organizations can more easily prioritize lead generation, a critical accelerant of growth;
- Working together in one place enables greater understanding of product, product roadmap, new feature releases and more, especially during the early stages of a company’s growth;
- Proximity makes real-time coaching and immediate feedback easier.
We didn’t need a field force of dozens. What we did need were people with great passion, excellent listening and communication skills, a deep commitment to improving outcomes for ELLs, and a willingness to learn--even if they hadn’t had much sales experience. And that’s exactly what building an inside team let us do.
Within about six months, Phil assembled a five-person team that is showing results and great promise. He has hired talented and motivated team members, a few who have no prior sales experience. Phil developed playbooks to help people specialize in either initiating relationships or delivering demos, created plans and expectations for daily and weekly call activity, opportunities, and new business, and communicated progress in a very transparent way. He has created a culture focused on data, transparency, coaching, and some healthy competition.
During the second half of 2014, the team has scheduled and delivered hundreds of demos with prospective districts, closed business deals and maintained a 98%+ renewal rate, and most importantly--developed strong and long-term relationships with passionate educators.
We’re very pleased with the results that we’ve seen from our inside sales team and we’re excited about the team’s potential moving forward. Our bet--that we could assemble a small team that collaborates in-person to build an effective, fun and sustainable sales culture--helped us hit our 2014 numbers.
We know we have a great deal to learn and there will be challenges and setbacks. Yet we are excited about what we have learned and what is to come.
Jordan Meranus is cofounder and chief executive of Ellevation.