In mid-December, we launched our new Sales Engineering department with the goal of providing more help for resellers selling HubShout services to their customers. We’ve offered a beta proposal service for over 147 reseller prospects since we started. We've seen about 8% of these proposals close. We had set an internal goal of 25% so we are testing ideas to improve the close rate.
Today we will begin charging $25 for these “Done for You” proposals. If a reseller closes the proposal and signs the SOW within 30-days, we will apply the $25 towards the first month of the campaign. This program continues to be a beta so you should expect more changes as we work to make this a sustainable part of the program.
“Done for You” proposals include:
- Service plans selected based on client goals
- Competitive analysis
- Keyword research
The “Done for You” proposals can be requested by selecting the Request Proposal button on the Agency Dashboard screen.
In addition to this announcement, we wanted to share our approach for making this decision. Most of our current customers know that HubShout has implemented The Lean Startup methodology as a way to manage our innovation process. We talk about it in our monthly review calls and our newest customers hear about in our initial presentation. Lean Startup helps us sort through the hundreds of ideas that both your customers and employees bring to us. It allows us to understand cause and effect and find ways to improve our business.
In this particular case, one of the goals for the Sales Engineering team was to learn how to help our customers close more proposals.
Leap of Faith Assumptions
The first step with the Lean Startup is to list out the assumptions that need to be tested in order to learn how to increase our proposal close rate. We brainstormed assumptions that tied to our learning goal. In other words, if we couldn’t prove the following to be true we would not be able to learn what we wanted to learn. Here is the list sorted from most to least risky.
- Our resellers have qualified prospects
- Our resellers’ customers view the proposals
- Our resellers have the training to close deals
- Our proposals communicate the value of our services
We sorted these assumptions from most to least risky because you want to test the biggest uncertainty first and not waste time on things that are less risky. We then began work on testing the assumption that “our resellers have qualified prospects.”
We then wrote up our hypothesis for the first experiment. It was “If we require our resellers to rigorously qualify their prospects, there will still be prospects.”
Our team brainstormed several different ways to test this idea. Eric Ries suggests that teams should use the quickest most minimal way for testing their hypothesis. This prevents waste and and decreases cycle time. The other critical part of The Lean Startup is to test new ideas on new cohorts or groups of customers. Testing ideas on existing customers often confounds the experiment because these customer’s experience have been influenced by other factors.
In the end, we decided to test charging $25 per proposal. Our thinking was that resellers would better qualify their proposals requests if there was a small cost for creating proposals.
We then tested offering a $25 proposal to our next 5 resellers who joined the HubShout program. We decided that if at least 60% (3 out of 5) were willing to pay $25 for a proposal within the first two weeks of their relationship with HubShout then it would prove our hypothesis to be true.
After executing the experiment, 80% (4 out of 5) new resellers used the Proposal Request process. We, therefore, proved our hypothesis and rolled out this change to everyone. The team is now in the process of testing our next risky assumption and iterating on this initial experiment.
Stay tuned as we share more experiments that we are running at HubShout.