The PayFit Growth Machine 🚀
Since we launched PayFit in April 2016, a lot has happened: the company grew from 5 to 90 employees, we moved from 40m2, to 200m2, to 2000m2 offices and our MRR kept on (pay)rolling! It’s pretty exciting!
A lot of people asked me how we managed our growth and which processes we set up to scale, so here is the story !
👶 Phase 1: From Launch to the 1st Salespeople (Jan. 2016 — Oct. 2016)
1. What happened before, during and right after the launch of PayFit?
- January 2016: Nestor becomes the 1st company to manage their payroll with PayFit. It was the first time they ran payroll.
- January, February, March 2016: Merci Handy, Heetch, Alan are among the first ten companies who become our beta users.
- April 2016: PayFit is launched, and 14 companies are already paying and enjoying PayFit. Pretty exciting!
- May 2016: our Content manager Margaux arrives.
Between April and July 2016, the first 100 customers were signed and onboarded. At this time we had no demo nor onboarding process. I closed all our clients by phone without leaving the office. Our customers added their employees by themselves on PayFit.
Our first Sales, Aymar, arrived in June 2016. He signed his first customer in July — the beginning of a fantastic series of Slack messages popping up on a daily basis in our #newcustomers channel! At this time we did phone calls from the kitchen or on the terrace: our neighbors soon knew our pitch better than us but unfortunately didn’t want to become PayFit customers.
Back then, our customers onboarded their employees themselves on PayFit. We often had to remind them to add new employees and their payroll variables, to get their payslips right.
It soon became pretty obvious that the fact that customers onboarded their companies themselves was slowing down the process. We saw a great opportunity for us to ease the lives of our customers even more in removing this task from them entirely.
That’s why we recruited Charles, our Onboarding Wow Guy, a role purely dedicated to ensuring a smooth, stress-free transition when customers moved from their previous payroll system to PayFit.
👨👩👧👦 Phase 2: From the Sales Team to the SDR Team (Oct. 2016 — Sept. 2017)
1. Our biggest Sales challenge: build trust
In October 2016, we reached product-market fit, and clients were interested in PayFit and ready to pay for it. We decided to raise funds (5M€ with Otium and Kima) to give a boost to our growth. It’s time to start the second phase!
We did not talk yet about predictive models, sales machine or anything related to what we can read in books but I knew one thing: we needed a proper Sales Team. Our saleswowguys would have to scale what we’ve been doing with Aymar during the last few months. Within four months, between October 2016 and February 2017, we recruited two batches of Sales (6 people in total). I had one obsession: coachable people with a keen interest in our product.
Back then — and still now — our biggest Sales challenge was to build trust. On one hand, payroll and HRIS for SMBs is a very traditional market. On the other hand, labor laws are very complicated and often changing in France; HR people are afraid of making mistakes, and it’s quite understandable. For many people, working with older & traditional solutions is more reassuring even if they are not error proof. As a newcomer to this market, we had to make twice as much effort as our competitors to be heard by our prospects.
2. Salespeople are the experts
Our Salespeople had to become payroll experts and to be more didactic than pushy with prospects. I didn’t want to reproduce Salesforce or other Saas sales models for sales meetings (1 Sales + 1 expert): at PayFit salespeople are the experts. It’s much more efficient, especially for SMBs targets. The more they know about the product and the topic, the more they believe in the project, the better they are at their job.
At this time, we had the product, we had the team, we knew the basic principles of what we wanted to do, so now we could accelerate the pace and focus 200% on our MRR. We wanted and still want to be one of the fastest growing Saas companies in Europe. To reach their targets, our Sales Team needed to have enough leads they could work on. Enter our Marketing Team whose primary focus is to generate leads! The team is split between one Content Manager, Margaux, and one Lead Generation Manager, Clément S.
3. Onboarding focus
Selling is crucial, but we also needed to focus on the onboarding part so that our future clients feel like they’re not alone. Without the Onboarding Team and with the kind of growth we’re experiencing, PayFit wouldn’t have thrived. And it’s a win-win: as it’s easy and intuitive to be onboarded on PayFit, prospects are more willing to sign the contract, and the sales cycles becomes shorter.
At the beginning, we offered the first month free, however, it was the responsibility of the customer to onboard their employees themselves. In November 2017, we decided to change this offer. There is no free month but we are now handling the onboarding process as this is a very time-consuming process.
This change was well received, and the transition process was a lot smoother for everyone. All our customers had to do was to provide the necessary payroll information required (payslips, employees information, contracts, etc.) and our Onboarder at PayFit, Charles, looked after the rest.
Back then, we didn’t have internal tools in place to automate account creation, so we set up accounts straight from the application itself, which was quite tedious and lengthy. To deal with the workload, we had help from interns from companies like Side and Crème de la Crème. But at this time, we already knew that some technical improvements would later allow us to speed up our process.
By November 2016, we started to realize the number of new customers arriving in January 2017 was more than we anticipated, so we decided to recruit a new Onboarder. And here comes…Thomas, who used to be an integrator for a payroll software called Sage. With Charles, Thomas and the help of two siders, we managed to guarantee a gentle transition for the 150 new customers that we welcomed in January.
4. From 100K€ MRR to our first SDR
With a small team of motivated and smart people we succeeded in reaching amazing targets. We went even quicker than we expected, and in less than a year, we had reached our 1st goal: 100K€ Monthly Recurring Revenue (MRR), signing some prestigious clients (MyBestPro, FACE (Fondation Agir contre l’Exclusion), Big Mamma, Doctolib…) along the way! It’s been super intense but super exciting.
Still, our sales & marketing strategies were rather basic (word of mouth, emailing, digital ads, etc.) and if we wanted to keep on growing fast with such a fantastic team, we needed to be more organized. This is when I decided to dig into concepts such as “Sales Predictability” or “Sales Machines” (The Sales Acceleration Formula, From Impossible to Inevitable). If we wanted to be even better we needed to specialize our team, and one link was still missing: the SDR (Sales Development Representative). Their target is to book meetings with qualified leads for our Sales Team. The hunting part had become much more complex and interesting. It made more sense to have hunters on one side and closers on the other. I loved the concept, and this is when we decided to recruit Andy.
This model already exists in many tech companies but it’s somewhat new in France, and most of our Sales didn’t understand why we needed guys like Andy. I’ll always remember, during a PayFit weekend, as Andy had just arrived, I gathered the team to explain to them why we were doing this and how it was going to be amazing for them.
After a few months of trial to find the perfect model, we decided to accelerate in September 2017, and we built two separate teams that work hand in hand: Sales & SDRs. Mathieu took the lead of the Sales Team and Clément R. of the SDR Team.
Specialization is the key to success in a Saas company. By specializing our different teams, and having recruited the right people, we were finally able to go very deep in understanding our acquisition processes. The deeper you go, the more you can learn and improve. We iterated on our way of working until it got better and better every day.
🏎 Phase 3: Scaling THE Growth Team (Sept. 2017 — now)
The 3rd phase of our process could begin: structuration & scale.
Here were our challenges :
- How do we grow sustainably a team from 7 (SDR + Sales) to 22 within seven months?
- What KPIs do we need to build to measure performance both at an individual and team levels?
- How do we align the Lead Generation, SDR and Sales objectives?
- How do we go from 800 to 1600+ clients and make their onboarding as smooth as possible?
1. The development of 2 main KPIs: Growth PMRR & PMRR
The Sales Team already had its metrics to measure performance (first-month MRR closed), so we needed to find out a way to measure the performance of our SDR’s.
With Clément R., we thought a lot about the best way to measure and correlate business performance with effort, while still making the SDR and Sales Teams aligned (i.e. not creating a deal with a great reward for SDR when closing probability is low).
We finally found out PMRR (PayFit MRR? Performance MRR ? We still haven’t found what falls behind these letters yet) and Growth PMRR.
Growth PMRR refers to the total value of deal created by SDRs and added to our Sales pipelines whereas PMRR is a derivation of it.
Growth PMRR = 1st-month-MRR-deal-value = [ Nb of users ] x [ Monthly price tag per user ]
Ex: our actual payroll pricing is 99€ / month / company + 14€ / month / user. The monthly deal value for a company of 25 people will be = 99 + (14 x 25) = 449 €.
PMRR = growth PMRR x [ source coefficient ] x [ size coefficient ]
Ex: Regarding PMRR, this same deal value depends on the acquisition source (inbound vs. outbound) and the number of users range. If it’s a inbound lead then = 449 x 20% (inbound) x 100% (nb of users range) = 89.8€.
Why is there a “source” coefficient?
We value efforts concerning deal generation, from the SDR prospective. Inbound takes less effort and time to convert than outbound. Depending on the source, Marketing and SDR acquisition costs are structured way differently, so that’s why we also wanted to add this coefficient on the PMRR.
I understand “source”, but why is a coefficient is linked to thenumber of users when it’s already taken into account in the Growth PMRR?
It’s a tool that ensures our alignment between SDR targets and our highest conversion 6-month conversion rate (Coefficient is 100% for deal sizes which are a sweet spot, and decreases if the size doesn’t fit with our current needs. Companies outside our target will generate little PMRR). We make these “size” coefficients evolve along with our Product Development and Sales Strategy.
2. Align Lead Generation with Sales targets
The 2nd main focus on Growth scalability was to align Lead Generation objectives with closing objectives. Since we had enough data to analyze marketing acquisition investment and ROI, we could link all actions (Marketing — SDR — Sales) to build a scalable and predictable Growth model.
From Growth PMRR, cohorts helped us determine our monthly conversion rate over 15 months into MRR and build over our new objectives concerning Lead Generation to reach MRR targets.
A magic thing: our model becomes more and more accurate over time thanks to new deals / new customers.
Analyzing these cohorts, and adding the Lead Generation to Growth PMRR impact, we simply reversed back the Lead Generation model (given the point that x% of our leads come from Marketing).
If I need to add 200K€ new MRR in 6 months and assuming Growth PMRR converts to MRR at 30% over 15 months and x% of this conversion occurs after the 1st month, x% after the 2nd, x% after the 6th…. how much Growth PMRR do I have to generate now?
And given that 1€ of marketing investment generates x€ Growth PMRR after the 1st month, x€ after the 2nd, how much should I invest?
Lead Generation objectives being set, we still wanted to maintain or improve two ratios to ensure acquisition budgets were being optimized over time:
- Ratio Efficiency = Growth PMRR / Cost: if 1€ investment generates 3€ Growth PMRR, then if we invest 2€, it should generate at least 7€ Growth PMRR (simple).
- Ratio Productivity = Derivative of Efficiency (Growth PMRR N / Cost N) / (Growth PMRR N-1 / Cost N-1), that should be an increasing function (basic).
In the end, we also used a distribution key between Inbound mediums (organic branding, paid, social) to keep a right and “healthy” balance between our acquisition channels.
3. How can we scale Sales?
Trust comes with transparency
Since we launched PayFit with Ghislain and Florian, we’ve always been driven by the product, but we knew we wouldn’t go far without a strong team. That’s why we also wanted to build a new way of working for all PayFiters. And it’s not just with words that a team can become as one. We think that transparency is key: if everyone knows and understands what the macro goals are, they can easily measure their impact on the company’s development.
To build that positive mindset we need to trust one another, and we have to be the ones showing the example. Everyone knows the company targets for the coming year, knows how qualified leads are split between Sales, has access to our clear and understandable compensation plan and knows how to train if he wants to get better. Within a group they strongly belong to, they can be independent. This equilibrium is key!
Sales jobs, in general, are hard because you always need to get out of your comfort zone to convince prospects. It’s also a job with strong competition, and this naturally impacts the Sales’ team spirit. But at this point it’s important to remember what Mark Roberge (ex VP Sales of Hubspot — The Sales Acceleration Formula) wrote about how defining the right attributes for your Sales Team is essential to make sure recruitments are the proper ones. With Clément R. and Mathieu we asked ourselves what we were looking for. We all felt confident that being a team player and having a high level of coachability (ability to learn, to question oneself) was necessary. From there it became much easier to find the right future PayFiters. We could grow the team without fearing to put it in danger.
Once we knew how to build the team and how to make them work together towards the same goal, we had to provide them with the right tools.
Our scaling tools
Implementing efficient tools is also part of our culture. We’ll always be ready to invest time and money in software that will help the Sales Team focus on the more strategic part of their job. It’s also a way to show the team that we’re doing everything we can to place them in the best working conditions. This is a mark of respect. The best Sales guys will always prefer to spend time closing new clients rather than doing administrative work. There’s nothing revolutionary about this statement but as a Sales leader, you must always keep that in mind when you’re about to implement a new tool. The tool has to be made for the team, for the Sales guys and not for managers’ reporting.
Here are the different tools we’ve been building and implementing in the last few months.
The compensation plan
One of the first things we did with Clément R. & Mathieu was to rethink the compensation plan entirely. At the end of 2017, we didn’t have any clear plan for the SDR Team, and the Sales one was based on my assumptions back in September 2016 when we just had one sale in the team.
We had different objectives in mind when we first started to work on this plan:
- Better and fairer pay the Sales Team depending only on the MRR they’ve signed.
- Propose a real acceleration bonus for the best performers.
- Encourage teamwork.
- Define precise and reachable targets.
- Avoid as much as possible report effects.
Having those principles in mind, it became much easier to build our plan. We just had to determine how much we wanted the best, average and less performing Sales to be paid and we were done.
Each month individual targets are defined, whenever this target is reached a fixed bonus is paid. Moreover, Sales get a percentage of every euro they sign, this percentage increases if the monthly target is reached. And last, if ⅔ of the team reach their target, everyone gets an extra bonus. This last component is a great way to create strong bonds within the team.
Thanks to a clear compensation plan, it’s very easy to give access to reporting to the team so that they can follow in real time their performances.
The training plan
Once the targets are defined, the next challenge is to be sure the sales properly train to become experts on their topic. With easy access to the right resources, they’ll have all that they need to hit the targets.
Training starts from the very first day a newcomer joins the PayFit Sales Team. New PayFiters are always being taken care of by another PayFiter who has more experience. It’s what we call a buddy. The buddy is here to explain what our sales processes are, to teach the product, to show the tools and more importantly, to make sure the people who join us feel warmly welcome and feel as if they had been working at PayFit for ages.
Once the Sales have been onboarded, they still need to train continuously. With time we also realized that top performers are the ones who both know precisely the payroll specificities, and our product and its roadmap. We had to find or to build a tool which was flexible enough to be easily and quickly updated, and that would allow the team to train whenever they want.
This is why we built with TeamDrill what we’ve called the Sales Training. It’s a huge database that combines all the questions a prospect could ask during a meeting. Sales can easily generate ten random questions coming from that database; they can either choose to answer to test themselves alone or with another PayFiter. Once they’ve responded to all the questions they decide for themselves how well they’ve done. They self evaluate. No one will check if the level (Beginner, Ok, Master) they chose is the right one but they understand they should be as accurate as possible as it will have a direct impact on their closing rates. Thanks to this data they can follow a dashboard showing their evolution over time.
And the most amazing part is that it’s a collaborative work: the database is enriched only by Sales proposals linked to prospect questions they didn’t know how to properly answer. Our training tool is thus dynamic which is what we need: we have always to adapt, as both labor laws and our product are always on the move.
THE tool every founder or Sales manager spends so much time on. Once again our choice was representative of our philosophy. Obviously, when we were about to move from our internal back office to a proper CRM we had shortlisted two software: Salesforce and Hubspot. Salesforce is more powerful and much more flexible but not intuitive and hard to apprehend for the team. Hubspot is complete but offers fewer possibilities for personalization and sophisticated reporting. However, it’s very intuitive to work on for the Sales Team.
We went with Hubspot since it fits much more with our current needs. Indeed, we already used Hubspot as our marketing automation tool, it made much more sense to have the Lead Generation and Sales teams working on the same database. Moreover, we knew it would bring more satisfaction to the team and that was key for us. And we kept in mind that if we would need a more complex tool we would have the time and the resources to move to Salesforce a few years later.
3. How did we scale Onboarding?
The most significant change to scale onboarding was a new “Import“ feature on our beloved back-office.
From June 2017, we started to share an Excel template to our customers so that they could fill it by pulling data from their previous solution automatically. It takes them very little time and it greatly reduced the onboarding time from beginning to end.
Once we receive the Excel file back, our onboarding team double-checks and tests the information as well as the file format to ensure total compliance with our system. They also check employees’ contract and settings to make sure our new customers will be able to use their account without anything to setup (ex: contract status, vacations, etc.).
Our back office automatically pushes employees to PayFit and after adding health insurance contracts, our client can directly use his new account. All that is left for the customer is adding the variable pay elements of the month.
We automated this task with poor added value to bring new services to our clients during the onboarding phase: answer technical questions, help them use the tool, run 1:1 personalized demos, follow up on their 1st payroll and reduce the number of tickets on our support side.
Scaling our internal tools allows us to keep a small Onboarding Team. Today, one Onboarder can absorb the flow of new customers created by 6 Sales. And of course, we keep the Wow effect all along the process.
Thanks to the vision, processes, and tools, we’re building a powerful predictable model that enables us to have a clear view on what is needed if we want to reach our super ambitious goals.
Even more than the new MRR we sign every month, what truly makes me proud is to see that a bit less than two years after we’ve recruited our first Sales, we now have 11 Sales and 13 SDRs. All of them are very happy to come to work and are 200% focus on what they do, we haven’t lost any PayFiter from the Sales Team during this period. Our Team is impressive and, with them, I’d be ready to start over any new business, I’m sure we would make it in the end!
🚀 Phase 4: To infinity and beyond
Here we are, in May 2018, with a solid basis on which we can rely for the coming months. We’re still at the very beginning of what we want to achieve with PayFit. And even if we’ve successfully passed different tests, we still have a lot of challenges ahead of us. We plan to triple our MRR by January 2019.
1. Generating more pipe without compromising quality
Obviously if we want to grow we need to create more sales opportunities. But higher volume of leads doesn’t mean lower quality. Actually this should be the contrary as we’ll have more data to analyze with our growth. This is going to be very interesting to see the Lead Generation Team tackle this challenge.
How can we generate more leads & deals in the French Market and approach “less early adopters prospects“ but maintain/improve our Efficiency and Productivity Ratios?
2. SDR & Sales Team organization
While we are expecting to have 45 to 50 reps within the SDR & Sales Team, we are exploring how we can sustain performance on both the individual and team levels.
To reach our objectives, should we start specializing our reps at PayFit? For instance SDRs on inbound and BDRs on outbound? SDRs and Sales indifferent sectors? Geographic zones? Target sizes?
We believe in autonomy for our reps to manage their pipelines and performance but we do not exclude that kind of organizations.
3. Go further on the onboarding scale
Technology offers a wide range of optimization for our Onboarding Team. We are planning to use OCR to scrap data on the payslips, pull data history from DSN (API to communicate with payroll & taxes institutions), or improve data imports directly on holding.
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We are still hiring fantastic people each and every month so if you wanna be part of this magical adventure we may have your dream job ✨
Warm thanks to our first customers who believed in PayFit since the beginning : Nestor, Heetch, Merci Handy, Trusk, Alan, Crème de la Crème, Aircall, Lunettes pour Tous, Cartesia Education, Coorpacademy, Spendesk, Sellsy, etc.
Launched in April 2016 by Ghislain de Fontenay, Florian Fournier and Firmin Zocchetto, PayFit digitizes and simplifies payroll management and HR processes for companies. Fast, intuitive and automated, the PayFit solution allows employers to easily manage payroll on its own, saving valuable time and money (usually spent on editing payslips, social statement support, expense reports, leave, insurance, employee benefits, etc.). Employees have access to a dedicated online space for payslips, leave requests, expense report entry, HR data, etc.
The company’s ambition is to support the digital transformation of business’s human resources through a reliable SaaS solution providing a unique experience to its users.