Sales Compensation and New Interview Methods: An Interview with Max Lowenbaum, VP of Sales at Hireology

Max Lowenbaum, VP of Sales at Hireology and former Sales Leader at high-growth Groupon, joins  The Best Team Wins Podcast to talk about sales leadership, compensation plans, and role-playing as an interview style.

             

 

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Adam Robinson: Hello. Welcome to The Best Team Wins Podcast. This is Adam Robinson, founder and CEO of Hireology. We are here today to help business leaders and managers build their business through building their best possible team. Excited for the show today. We have on Max Lowenbaum, the VP of Sales at Hireology. I get to interview a friend and colleague here today so I’m looking forward to that. Max, welcome to the show.

 

Max Lowenbaum: Adam, thank you so much for having me. I’m really excited to talk to you about my career and help the folks out there build their best team.

 

Adam Robinson: Max has over a decade of experience in building and training sales teams. We’re going to hear about some of that experience. He lives here in Chicago with his wife and dogs. He’s the resident gourmand here at Hireology. Fun fact about Max…you climbed Mount Kilimanjaro earlier this year?

 

Max Lowenbaum: Yeah, I did. My wife and I always had it on our bucket list. Five days and about 10,000 vertical feet later, we made it to the summit. One of the most incredible experiences of my life. I highly recommend it.

 

Adam Robinson: Awesome. Well, that sounds amazing. We like to start off The Best Team Wins Podcast every week with a right foot, so best business or personal news from the last seven days from your life, Mr. Lowenbaum. What’s going on? What’s your right foot?

 

Max Lowenbaum: Personally, over the weekend, I turned 33.

 

Adam Robinson: Congratulations.

 

Max Lowenbaum: Thank you so much. Another year in the books. It’s cool. I was able to spend some time with my family and reflect. My wife, for my birthday, bought me an hour in a sensory deprivation tank. Have you ever done one of those?

 

Adam Robinson: I have not.

 

Max Lowenbaum: I would actually recommend it, especially considering all the stuff that we’ve got going on these days, hooked to our phones and difficult to shut things off, as you know, with how connected we need to be. For an hour, I was in a pod in River North. There was no sound, no light. I was just able to relax. It was super cool and a really good way to recharge going into my 34th year.

 

Adam Robinson: Congratulations. So, Stanley Kubrick 2001 approach to relaxation…

 

Max Lowenbaum: Here we go.

 

Adam Robinson: That’s pretty cool. Well, let’s dive in to the topic at hand here. You were one of the earliest sales leaders at Groupon. Is that true?

 

Max Lowenbaum: Yeah. I was actually one of our first reps. Then after about six months … I had a handful of years of sales experience. I was really focused on leadership is where I thought I could make the biggest impact. I was moved to be one of our first sales managers in early 2010.

 

Adam Robinson: Pretty awesome. As many listeners know, Groupon was the fastest growing business of all time. In the history of business, Groupon was the fastest to hit a billion dollars of revenue. I think that happened in 18 months. Just unbelievable. You were right in the middle of all that and promoted through to sales leadership. My question to you, in the middle of all that chaos and what could be described as simultaneously fun and exasperating as I know, what do you feel like you did right, first? Second, what mistakes do you think you made and did you learn from while scaling that team?

 

Max Lowenbaum: It’s a great question and I think a really smart way to ask it because I would start with the mistakes and work backwards. One of the things that we did well is that we made a lot of mistakes. As you mentioned, fastest growing company ever. With that billion dollars, it meant that we had to scale the team. I, early in my career in sales leadership, went from managing six people to managing 15 people to managing 20 and then 35. Then, as a director, I was promoted after a few years, ended up managing 225 people. You got me in my late 20s learning on the fly while the business was still learning so much. We created an industry.

 

We were trying to figure out how to promote it and how to price it, how to protect both our customers and the businesses that we work with. In order to do that, we’ve made a lot of mistakes because it was trial and error. I can tell you we changed compensation probably twice a year for all six years that I was there. Going through 12 comp changes, you know as a sales leader as well as I do, it takes a big toll on leadership as well as on the rep population.

 

What we did well was each time we learned, and we got a little bit better at understanding what are the drivers in our business and what’s our goal with the change that we’re making. We also got much better at tracking. We were tracking: is this comp plan working? If we’re going to make a change, why are we making the change? What’s the behavior we want to drive? Then assessing afterwards: did it work or not?

 

My big advice I think to businesses is to think through the changes that you’re making. Understand that as you scale, you’re going to have make some. Do the best you can to look back and see if your intended outcome is actually what happened.

 

Adam Robinson: I know, Max, you’re a big believer that the comp plan creates most issues and also, done correctly, can solve most issues as it relates to your sales team. Why were you changing comp plans every six months for six years or however long you did that? For most people, they’re not going to believe that that’s possible or necessary.

 

Max Lowenbaum: Two reasons. One, because the business was changing and our company was changing. As I’ve mentioned before, nobody knew what a Groupon was before we made it up. We had to continually change what we were putting into the sales engine because the expectations were changing really rapidly. We would look back in a quarter and think: did we achieve our goals? Because those goals were constantly changing, we had to change what we were putting in and the inputs needed to change.

 

The second thing, the second reason we were able to make that many changes was because we got really good at change management. Reps will never love a comp plan changing unless they feel like it’s changing to their benefit and the benefit of the business and unless they’re really invested in the growth of the company. We got so much better at telegraphing change and getting ahead of it, co-creating comp plans with reps so that when we made a change, it didn’t come from what leadership or management was pushing down the reps, but instead came from rep feedback. It came from focus groups that we were doing. It also helped us achieved our goals. Because the vision was clear and because everyone that worked at Groupon was focused on changing the way that things were bought and sold, if we came up with a comp plan that will help us do that and do it more effectively, reps were mostly bought in.

 

Adam Robinson: Well, it sounds like the comp plan had a lot to do with the culture that you built, both impact on changing it and also just creating it intentionally. For so many business leaders, culture is something that they think about all the time. It’s something that’s talked about all the time. It’s really easy to talk about. It’s really hard to actually create culture intentionally and have it manifest itself in a way that is what you have envisioned it. Tell me both at Groupon and here at Hireology what are the ways you shape culture on your team? How do you do that?

 

Max Lowenbaum: It’s a great question and it can be tough to pin down. I think if you just start with one thing … One thing that I think we do really well here and a torch that was passed to me but has been carried by all of leadership here is shared vision. If you can just sit down with your leadership team and say, “What is the one thing that we want to do in the next six months, in the next year and in the next three years and five years?” You start there. You get buy-in on that vision.

 

At Groupon, we wanted to change the way that goods were bought and sold. At Hireology, we want to change the way that businesses hire. If you can buy into that one single vision, and you can build your culture around that vision, and you work backwards from that vision and you say, “In order to do that one thing, what do our people need? What do our values have to be? What’s core to being a Groupon or a Hireologist?” Then the culture creates itself. It’s not just you and your senior leadership team sitting in a room. Then you can get with your employees and say, “Hey, if you had to describe an ideal Hireologist in order to help us achieve this vision, what does that person look like? What do you want your colleagues to be thinking everyday when they come into work?” You create values around that vision and a plan to execute. Everyone is rowing the boat in the same direction. It feels like you don’t have to stand in front of the room and push everybody because they’re all driving the change and pushing the culture forward.

 

Adam Robinson: All right. When you’re looking at making a hire, every manager has the things that they’re looking for and the things that they absolutely would consider nonnegotiable. You’ve hired hundreds, if not thousands of reps in your intense 10-year career. What are your non-negotiables? When you’re hiring a new sales rep or someone for your team, what are the things that either have to be there or, if you find them, are automatic disqualifiers?

 

Max Lowenbaum: Starting again from the mistakes that I made and working backwards, I think when I tried to sell myself on a hire.  We tried to sell each other as a team.

 

Adam Robinson: What do you mean sell yourself?

 

Max Lowenbaum: When you get out of an interview and you think, “Man, we really got to fill this spot. I think that person is good enough.” There’s some red flags that you can address quickly but you feel like you’re justifying those against the need to fill that spot. We all have those spots that are open. We think, “If I can just get somebody in this spot, who knows? Maybe he could turn into or she could turn into this person that’s going to be a silver bullet and solve the problems that we have.” That’s when I made the biggest mistake was when I put that pressure to fill the role on myself and I felt like myself and my team were justifying why we should make a hire.

 

On the other end, when you sit across the table from somebody, and you’re asking them questions, and you’re engaging, and you’re getting specifics, and you’re teaching and testing, which I’d love to give you more feedback on in terms of interview style, and you look at that person and you say, “We’re growing as a company,” and this person has a growth mindset and can grow with us, even if we didn’t have a spot open, I would hire this person because they’re going to make us better. Those are the hires that propelled us forward at both Groupon and Hireology.

 

People that can grow with the company. As you guys were scaling, we plan to double our business last year. We’re doing it. We plan to do it again next year. That means I need people that can double their ability every single year. If you look at somebody and they can do that no matter if you have a position available or not, you got to find a way to get those people on your team.

 

Adam Robinson: Well, is there one favorite interview question you have that you think gets right to the heart of what you just described?

 

Max Lowenbaum: Yeah. I kind of mentioned it. It’s more of a technique than a question. We call it teach and test. What we’ll do in most interviews is we’ll have multiple people interview the individual. The first person, we’ll usually have an opportunity in the interview to test. Let’s say if it’s a sales role, the sales skill of that individual. Adam, if I was interviewing you and we were talking about your role at Hireology, and you were talking about pitching the business to potential investors or to large clients, and I ask you about an objection that you got and you told me one that you run into, I would ask how you’d respond to that objection. We role play that conversation.

 

As I listen to you, I’m not only evaluating how well you do handling the objection, but I’m hopefully coming up with some things that I could teach you that would help you handle that objection better. After we role played it together, I’d say “Adam, you did a great job. These are three things you did well and these are two things I want you to focus on. I’ll give you two things that I thought can make you better at handling objections moving forward.” Then, in the next interview, the second manager would ask you how you would handle the same objection. We would test if you had learned and absorbed what we taught you in the first interview. We learned it and tried it at Groupon. It works so well that we brought it here to Hireology. You not only get a sense for someone’s skill, but for me when you’re looking at folks with a growth mindset, you can tell can these guys really learn and learn on the fly. If they can, those are the people you want on your team.

 

Adam Robinson: That’s awesome. What percentage of your interviewees learn it and use it in that situation?

 

Max Lowenbaum: It’s probably three out of four get marginally better. That’s great. We’ll take that. Even if they don’t put it completely into play right away, I’m just looking for, even the giving on the second time around, can they improve? Skill development is so important for us as a growth company. We know we’re going to take some chance on some folks that aren’t all the way there. We’re not looking for people with a ton of experience. Because we need them to grow, any sign that they can get better is a big green light for us.

 

Adam Robinson: It’s a pretty powerful technique. For people listening who may be thinking right now, “Role playing, that sounds weird. I don’t know if I can put myself in that situation.” How did you start doing that? It’s not a natural behavior.

 

Max Lowenbaum: It’s a great question. I don’t say, “Okay, Adam. Now we’re going to role play,” because that sounds weird on a lot of levels. Instead, I would come up casually in the conversation. If we’re doing a resume review and we’re talking about a sales role, I’d say, “Great. When you were selling copiers, if you made a cold call, what did that first call sound like?” You’d give me a sound bite. Even if we didn’t get into a role play, you would tell me some of the value proposition. Then I may pick one piece of value and say, “Did you ever get any objections about your ability to save them on their toner use?” Then they would come up conversationally instead of making it feel awkward like a formal role play.

 

Adam Robinson: That’s good. Good advice for our first time role players out there. What would you say is the biggest challenge that you’re currently facing with your team right now?

 

Max Lowenbaum: When you’re at a growth company, I think it’s almost always, or at least for me, going to be scale. As I mentioned to you, we doubled the business in the last year and we’re going to do it again. While we’re adding sales people, we’re not doubling the size of our team every year so we’re asking our folks to do more and we need to give them more. In the last year, we have looked at our compensation planning and we’ve created sales training and we’ve built career progression. My focus is constantly trying to give my reps some more so that they can scale with the business.

 

 Max Lowenbaum: In the last year, one place where we’ve won a ton is our close percentage. We looked at our close percentage about a year ago and we realized that instead of doubling the size of our team, if we could get our reps to close at twice the percentage, we would get double the output. Looking at training, and comp, and some of the levers that I mentioned, we were able to make that happen. It’s obviously a challenge that never goes away, as you know, in the growth company. Now, we have to double again. I’m just always looking for ways that I can empower my people to do as much as they can with what we’ve got.

 

Adam Robinson: That’s great. What are the tools you’re using to do that either actual technology tools, and feel free to name them, or just verbal techniques, management techniques that you’re using?

 

Max Lowenbaum: From a training and development standpoint, we started using an LMS. It’s called LearnCore. They’re a local company here in Chicago. I think they’re fantastic. Having a documented sales training program is huge for the skill development of our team, but also for our employment brand. When I’m interviewing folks now, we’re having a completely different conversation than we were a year ago because we’re able to say this is the training that you’re going to get. We also created a career progression plan. If you do this in the next three months, six months, a year, these are the titles you can have, this is the compensation you can have, these are the benefits you can have, and it really changes the conversation. Specifically in terms of what we’re training, when you graduate college or when you have a year or two of sales experience, you don’t really learn how to ask questions.

 

A thorough discovery has changed the way that we close business. Not assuming that our prospects have a pain or a problem and instead asking, and digging, and getting them to quantify and qualify that pain and commit. They have this big problem that they want to solve gives us such momentum going forward. That when deals slow down or people go cold, which happens quite a bit in any sales role, you can say, “When we talked to Adam and they asked you about this hiring challenge that you’re facing and you said it’s costing you a thousand dollars a week, that was two weeks ago. Have you lost $2,000 in the last two weeks? If so, can we solve this problem today so that another two or four weeks don’t go by and you guys don’t lose 2 or $4,000?”

 

Adam Robinson: That’s pretty good, Max. Let me tell you, that’s pretty good. Pretty good. Let’s switch gears for a little bit and talk about you and your career. First, why are you doing what you’re doing right now? What or who has had the greatest influence on you now a senior sales leader?

 

Max Lowenbaum: A good question and one that I wrestled with early in my career. I got into sales because I felt like I could do it and people said, “Hey,” I was going to be a lawyer, “instead of going to law school and spending a bunch of money, why don’t you try to make some money, and see if you could put yourself in the black.” I went into sales without knowing that much about it and just knew I like to talk to people. What I really learned very, very early in my sales career is that I love winning personally. What I really love was team wins. Even if I close a deal, if we missed our number or if I felt like I wasn’t contributing to the growth of the overall team, I just wasn’t as satisfied.

 

What I started to do was do the job before I had it. I wanted to be in leadership but I only had a couple of years of sales experience and nobody would give me a shot to be a manager. I just started player coaching. I started, as I was trying to get my work done, helping out others and sitting in on sales calls. The amount of satisfaction that I got from seeing the team member win, teaching them a new technology, being able to help them overcome an objection, that just drove my desire to move into leadership. In the end when I look back, I think it’s just my drive to want to make the biggest mark on a company or a group of people that I’m really passionate about and understanding that even though I could do a lot as an individual contributor or some as an individual contributor, if I can take what I would do well and teach it to others, the thousand bucks more that I could bring in a month if I have 10 reps is 10,000 more dollars.

 

We took the team at Groupon from $0 to $128 million in revenue in the year when I was a director.

 

Adam Robinson: Incredible.

 

Max Lowenbaum: Having that impact just was really profound on me. Probably more so than the revenue, thinking about the actual people. There are people that I’m still really close with that have just grown a ton because of cultures that we’ve been able to create and some of the stuff that you and I have talked about today. Having that large scale impact is a huge driver for me and what’s put me in the role that I’m in today.

 

Adam Robinson: That’s great so influences. As you evolve as a leader … You’re certainly not standing in place. You’re teaching others who’s teaching you. How are you growing professionally and who are your influencers today?

 

Max Lowenbaum: In our current org, I’m really fortunate. We have an amazing senior leadership team. We’re super close. I followed my VP, Julie Rodgers, from Groupon who’s just been a tremendous influence on me and is someone who’s helped me developed a ton professionally, one of the smartest people I’ve ever been around. We have leaders here in finance who’ve taught me a ton, in product who’ve taught me a lot, in marketing. In our current culture at Hireology, the leadership team, no one siloed. Nobody says, “Hey, I’m in charge of sales,” and puts walls up. Everybody brings everybody in to the business. I’ve learned so much more about running a business in the last year than I ever knew before.

 

Then personally, my father and I are incredibly close. He is a lawyer and talked me out of the law route. When I decided to move into sales-

 

Adam Robinson: Got to respect that.

 

Max Lowenbaum: Smart guy. He really invested a lot of time and energy in helping mold me as a leader and as an entrepreneur. Having a personal relationship with him has been huge.

 

Adam Robinson: That’s great. Thanks for sharing that. We’re wrapping up here. Closing question. If we were to have you back on the show a year from now and you are reporting on the one thing that you absolutely had to get done, the most important thing, could be anything in your role and what you’re trying to do, you’re telling us about how you’ve got it done, what is that one thing?

 

Max Lowenbaum: If there’s one thing, it’s revenue. We are at the sales engine for a fast growing company. We’ve got to do our part. Our part is to grow the pile, the cash pile. We want to make sure that we’re hitting the numbers that are expected of us. However, in order to do that, I’ve got to continue to grow my people and that means two things. One, the current folks that we have, got to continue to progress on the career progression plan that we have, go from a rep to a senior rep to a strategic rep, take more on target, achieve more, call on bigger business. We’ve got to be able to bring in new folks to fill our internal funnel with the best possible people. They need to be able to grow as well. If in a year my best people now are twice as good and our new people are ramping quickly and hitting their numbers, we’ll hit our revenue targets and we’ll be in great shape.

 

Adam Robinson: That’s great. All right. Ladies and gentlemen, that is Max Lowenbaum, VP of sales at Hireology. We’re talking about comp plans, culture and management techniques. Max for The Best Team Wins. Thanks for being on the show.

 

Max Lowenbaum: Thank you so much, Adam.

 

Adam Robinson: All right. Thank you for listening. That wraps us up here today. For more information, check us out on www.thebestteamwins.com. Thank you for listening, I’m Adam Robinson. Have yourselves a great week.

 

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