Firmin Zocchetto - Founder & CEO, Payfit
Founded in 2015 by Ghislain de Fontenay, Florian Fournier and Firmin Zocchetto, PayFit digitizes and simplifies payroll management and HR processes for over 4.000 companies across France, Spain, Germany, UK and Italy. Fast, intuitive and automated, the PayFit solution allows employers to easily manage payroll on its own, saving valuable time and money. Payfit has raised more than $495mio and employs more than 900 people.
We should have focused on a more accessible target segment in the beginning. We were a bit over-optimistic that we could win big companies, when our initial ICP actually was an SMB with 1 to 200 employees and a digital affinity. Only now, we are starting to become increasingly successful with bigger and more traditional companies.
On the transition of founder sales to a sales organization:
My role is changing every 3 to 6 months. In the beginning, I was the one calling prospects and trying to bring in customers. Then we hired the first sales person, but I still helped out a lot for a few months until I could begin to deal with other issues like customer support and tax declarations. Eventually, when we hired more sales people, my role became that of a Head of Sales who helped the team in closing more. From there I went on to become a Country Manager, and when we internationalized, I worked on the sales strategy for the other markets. Just recently, we nominated a Country Manager for France, so now I can focus more on other tasks within the company.
In the context of hypergrowth, you have to challenge and to change your organization often to adapt it to your needs.
On organization and SDRs:
For a long time, our sales and marketing strategies were rather basic (word-of-mouth, emails, digital ads etc.). As the company grew, the “hunting” part of sales became much more complex and interesting. It made more sense to have hunters on one side and closers on the other. But the missing link between these roles were the SDRs. Their job would be to book meetings with qualified leads for the sales team. This model already exists in many tech companies, but it’s still somewhat new in France. Most people in our sales team initially didn’t understand why we needed those guys. So we gathered the team to explain the SDR’s role to them, and how it was going to be amazing for them.
We have defined our own KPIs to measure SDR performance. In effect, we look at the ratio between what we call PMRR (PayFit Monthly Recurring Revenue) and Growth PMRR. The resulting number is the value of the SDR’s contribution.
Growth PMRR refers to the total value of a deal that is created by the SDRs and added to our sales pipeline.
For example, if the basic plan is €99/month + €14/user, the total deal value/Growth PMRR of a company with 25 users is = 449€.
PMRR is a derivation of Growth PMRR. It factors in a coefficient for lead source (inbound vs outbound), and a coefficient for how close the lead is to our ICP (measured by number of users).
For the above mentioned example, the PMRR would be €449 (deal value) x 20% (coefficient for inbound leads) x 100% (for a target that’s within our ICP) = €89.8.
On leadership and hiring:
Transparency is key. If everyone knows and understands what the macro goals are, they can easily measure their impact on the company’s development.
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 internal competition, and this naturally impacts the sales team’s spirit. To be able to build a good sales team in this context, we needed to define the right attributes to make sure we hired the right people. By discussing within the founder team, we found that 1) being a team player and 2) having a high level of coachability (ability to learn, to question oneself) were the two essential qualities we were looking for. From that point on, it became much easier to find the right PayFiters to grow our team.
When we started to redesign our compensation plan, we had five different objectives in mind:
Achieve better and fairer pay for the sales team (depending only on the MRR they’ve signed).
Offer a real acceleration bonus for the best performers.
Define precise and reachable targets.
Avoid report effects as far as possible.
The resulting compensation plan works as follows:
Each month, we define individual targets. If the sales person reaches the target, we pay a fixed bonus. In addition, the sales person gets a percentage of every euro they sign. This percentage increases if the monthly target is reached.
If two-thirds of the team reach their target, everyone gets an extra bonus. This component is a great way to create strong bonds within the team.
Because our compensation plan is so straightforward, we just give the team access to the report so that they can monitor their performance in real time.
We believe that everything these days has to be a game, especially in the sales team. So we used TeamDrill to create a training game called Sales Training. It builds on a huge database of questions a prospect could potentially ask during a meeting. For each game session, it generates ten random questions coming from that database. After answering them, the sales person can self-evaluate how well they’ve done and check their overall advancement on a dashboard. No one else will check their results--but they all understand that knowing the answers well does have a direct impact on their closing rates. The most amazing part of the tool, though, is that it’s a collaborative project: the database is enriched only by actual prospect questions and the answers the sales team members suggest. This makes our training tool as dynamic as we need it to be: we have to continuously adapt and learn, as both labor laws and our product are always on the move.
Our philosophy is to constantly improve yourself by training on the job. I would estimate that our salespeople spend 70% of the time training, simply because they constantly test out new arguments and approaches on the phone. We further scaled our training through onboarding, buddying and a clear career path. We hired a Sales Enablement Manager to provide the team with the most relevant content about product, competitors and industries.
At PayFit, the salespeople are the experts. It’s much more efficient than having two people (a sales person and a product expert) sitting in sales meetings, especially for SMB targets. And there is an additional benefit: the more our salespeople know about the product and the topic in general, the more they believe in the project, and the better they are in their job.
On customer success:
Our definition of customer success is to help our customers to get their payroll right, so that their employees get paid and the company pays the correct taxes. For our customers, this is an essential task and they need to do it every month, so there’s no need for us to hunt for usage. Instead, we strive to always be there for them, especially during the peaks of activity within each month and during certain periods of the year.
Investing in customer onboarding is a win-win situation: if the onboarding process is easy and intuitive, our sales cycles become shorter, too, because the prospects are more willing to sign the contract. Our customer retention rates really benefited from introducing onboarding, too.
When we moved from our internal back office to a proper CRM, we had shortlisted two products: Salesforce and Hubspot. Salesforce is more powerful and much more flexible, but requires more time to introduce properly. Hubspot, in contrast, is very intuitive, but offers fewer possibilities for personalization and sophisticated reporting. Although we have transitioned to Salesforce since, choosing Hubspot was the right tool at the time, for two reasons:
We already used Hubspot as our marketing automation tool, and it made much more sense to have the lead generation and sales teams working on the same database.
Even more importantly, we knew that the team would be happier with this solution.
Therefore, we comfortably made the choice, knowing that we could always move to Salesforce a few years later when we had the time and resources.