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What can you really do to lift the performance of your sales team?
That's exactly what we discussed with Chris Orlob, who was part of taking Gong from $200K to $200M in ARR.
In the episode, we get into:
References:
Matt Green on quota attainment
Jacco van der Kooij on Solving underperformance
And of course pclub.io
That's exactly what we discussed with Chris Orlob, who was part of taking Gong from $200K to $200M in ARR.
In the episode, we get into:
- (00:00) - Introduction
- (02:44) - Why quota attainment is down
- (06:06) - Why sales takes longer today
- (08:32) - How do you solve the problem?
- (10:48) - What does good look like?
- (12:56) - Discovery: Understanding the need behind the need
- (17:48) - Mutual action plan
- (20:00) - Understanding intent
- (25:37) - Dealing with finance and other stakholders
- (30:39) - Making the case
- (34:53) - Quota - raise or decrease?
- (39:23) - Q5 deals
References:
Matt Green on quota attainment
Jacco van der Kooij on Solving underperformance
And of course pclub.io
Creators & Guests
What is The Revenue Formula?
This podcast is about scaling tech startups.
Hosted by Toni Hohlbein & Mikkel Plaehn, together they look at the full funnel.
With a combined 20 years of experience in B2B SaaS and 3 exits, they discuss growing pains, challenges and opportunities they’ve faced. Whether you're working in RevOps, sales, operations, finance or marketing - if you care about revenue, you'll care about this podcast.
If there’s one thing they hate, it’s talk. We know, it’s a bit of an oxymoron. But execution and focus is the key - that’s why each episode is designed to give 1-2 very concrete takeaways.
[00:00:00] Toni: Hey everyone, this is Toni Holbein. You are listening to the Revenue Formula. In today's episode, we are chatting with Chris Orlob and we asked him a big question, which is how do you lift the performance of your account executive team? Enjoy.
[00:00:18] Mikkel: This is where it starts.
[00:00:19] Toni: There you go. .
[00:00:20] Well, Mikkel, nice to sit again. It's a little bit late today,
[00:00:23] Mikkel: isn't it? Yeah. And all the riffing we already did before. Yeah, I know. Our guests joined because we, so the thing is, when we're recording here, we can't play the intro music for some reason and really messes with me. But then when you play it, that's the trigger.
[00:00:35] That's when the riffing part kinda starts. So
[00:00:37] Toni: when, when do you wanna start looking? Not, not anymore. Is it over now? I can't. It's not
[00:00:40] Mikkel: playing. There you go. .
[00:00:42] Toni: Anyway, so we have a fantastic guest here today. It's Chris Olo. Uh, welcome Chris.
[00:00:48] Chris: Glad to be here.
[00:00:49] Toni: Wonderful. really nice to have you and, uh, really looking forward to chatting here for, for a little bit and, uh, really diving into some of the ways how teams can lift the
[00:00:59] performance of their, of their AE teams.
[00:01:01] Chris: Great. I'll follow your lead. Let's do
[00:01:03] it.
[00:01:04] Toni: So
[00:01:04] Mikkel: we had, Udi, uh, visiting, not so long ago, talking about obviously building the brand at Gong, taking it from zero to. I guess one, one brand or one billion or something, I don't know, or one billion. So that was a really interesting story. Um, and now we have you here, and I can understand you helped grow Gong to 200 million AR, is that correct?
[00:01:24] Chris: Yeah, that's about
[00:01:24] right.
[00:01:25] Mikkel: So also from the very early innings and you
[00:01:27] Chris: Udi hired me.
[00:01:28] Mikkel: with Udi. Yeah, Udi hired you. So, so, you know, you were also,
[00:01:32] I, understand a product marketer there.
[00:01:35] Chris: Uh, I, I was like a sales guy
[00:01:37] trapped in a product
[00:01:38] marketer's
[00:01:38] Mikkel: Oh, okay. That explains a lot because I was like, I have so many questions for you now, and that's not what the episode is going to be about.
[00:01:44] Um, so you went into sales and I think that's perfect. You're doing, uh, something called PClub. io, uh, which is, a ton of courses and training for AEs, I guess, and B2B SaaS companies. So that's pretty cool. And, um. One of the things we've talked a lot about, uh, with other guests, so we had Jaco and a few others on, and we've seen, a lot being shared is there's a lot of challenges out there for the sales team at the moment.
[00:02:10] Uh, we've seen, ACVs dropping, sales cycles extending, and even, I think last week, Matt Green at Sales Assembly, he noted that 36% that's the amount of people who can attain quota at the moment. So it's really dropping. Yeah. Yeah. It's really dropping a lot. And, um, I'm hoping that today we can provide, uh, hopefully some, some path to remedy that a little bit.
[00:02:34] It's a, it's a big ask. I know, but that's, that's the aim. But I also wanted to understand why do you think, uh, we're seeing such low quota
[00:02:41] attainment at the moment?
[00:02:44] Chris: I think there are a number of factors and they're all related. The obvious one, right, if you sell to tech, you're probably struggling to sell through a difficult economic climate, right? So that's a big thing, and I think math stat feels right to me,
[00:02:59] um, I think he said, he said 36% and anecdotally, right? I talked to a lot of sales teams and most of the ones I talked to are between 20 to 40% of reps meeting or exceeding quota. In fact, some of them are lower, right? Like I've talked to a couple of recently where, where nobody's hitting their number, and so I think it's incredibly difficult to sell through this economic climate, but there's also a backdrop to it that makes it even more difficult, which is we abruptly transitioned from the go to.
[00:03:26] There were the go go days of B2B tech where you didn't have to sell, you just took orders. You just had to get in front of somebody who had a wallet and you could close deals. And so it didn't take much in terms of skill or sales acumen. And then the economy, it didn't gradually shift. It shifted in 180 degree, um, you know, turnabout almost overnight.
[00:03:52] And so not only was it just harder to get budget and sell to people in general, but reps, many reps were left with a skillset that, you know, left them ill equipped, to be able to really sell at all, but particularly through a tough economic climate where the mix of skills that are demanded to close deals are completely different.
[00:04:14] Then what was demanded, you know, 18 months ago or 24 months ago.
[00:04:19] Toni: Okay. Crazy. So, uh, you basically kind of have the perspective that it's, uh, largely a skill driven gap that basically now has been forming, right? So it was easier back then, and therefore a bunch of people were hitting target. Uh, and now it's less easy, but really it's also, you know, a massive amount of.
[00:04:36] Professional skills, especially in the sales profession that are simply missing or lacking or not up to par in order to sell successfully in the current environment.
[00:04:44] Chris: Yeah, I mean, a good example is, all right, we're in 2023, economic climate's tough, and the skills you need to sell through a tough economic climate are writing compelling business cases, right? That's one. Reps didn't have to do that in 2021. Uh, accessing the CFO and selling to CFOs. Not only did reps not have to do that in 2021, reps have almost never had to do that.
[00:05:10] This is like a fresh, new skill. Um, working with FP& A teams to get spend approval and that kind of stuff. Building a league of champions. Not just one champion, but a league of champions. Let alone... You know, what does it mean to even have a champion? What does a champion even mean? But how do you do it right?
[00:05:29] We're in a totally different reality when, you know, it comes to the skills that are demanded, um, to sell through this economy are completely different than, than it was just a little bit ago. Now, one of the things I wouldn't say is. This is exclusively a skill issue. I think that's probably the biggest piece, but I think there's a lot of, there's a lot of different variables going on that makes this a particularly challenging environment, but skills are the one thing that we can control.
[00:05:58] And so it's worth spending the time to build them so that even if we are selling in a tough economy, we can sell our way through it.
[00:06:06] Toni: Yeah. So the thing is, right. It's not only, the, you know, the, the other side of the skill gap probably is simply the, the demand gap. That's also out there, right? Kind of there's fewer inbounds happening, fewer people take meetings and so forth. Right. So it's, it's harder to get in the elites. It's harder to generate those opportunities.
[00:06:23] And that is then matched with a more skeptical buyer persona that suddenly sits there, right? And listening to you, you know, when you think about a league of champions, when you think about working with FP& A, uh, very much new, actually working through and, you know, the, the CFO, I mean, all of those are signals to me where I'm thinking like, yeah, that, that makes total sense that, uh, sales cycles are pushing up, right?
[00:06:46] And even, even if you have all of those skills. Just getting all of this additional work done actually will result in, you know, longer sales cycles and, you know, maybe you can, you can help on the, you know, the conversion rates, maybe you can help on the ACVs, but, um, do you believe that, um, sales cycles by themselves, uh, if, if you were to isolate it like this in this current environment, that they're probably going to stay as they're, uh, as extended as they are right now?
[00:07:12] Chris: You know, I don't think the sales cycle has to extend just because those other things are demanded now. Now, Sales cycles demand more work than they used to, but that doesn't necessarily need to translate into a longer sales cycle because there are things you can do to accelerate a sales cycle in this economy.
[00:07:30] Namely, you know, one of the things we already talked about is building a league of champions. Um, but, but I think one of the things that's making sales Cycles longer than they need to be is most reps and most sales teams are struggling with converting the first or second stage of their sales cycle into the next stage, right?
[00:07:51] That's probably the most common challenge I'm hearing in sales organizations right now is they have a bunch of opportunities in their CRM that have been sitting in like stage one or stage two for like 82 days
[00:08:04] Toni: Mm hmm. Yeah.
[00:08:06] Chris: And you know, that's, we can talk about why that is. That could be, um, the result of many different root causes.
[00:08:13] But I think sales cycles are long, not because it takes a bunch of extra work to get it done, but because deals are stalling and frankly, reps aren't doing the hard work, um, needed to get deals done because frankly, a lot of them just don't know how,
[00:08:32] Toni: And, and if you, so a couple of our listeners going to be revenue operations and CROs, if you were to give them some advice on, um, how to address that besides buying all of their reps, uh, access to, to PCAP, obviously, uh, what, you know, what, what would it be? What would you, what would you tell them that they should, uh, that they
[00:08:51] should consider doing?
[00:08:53] Chris: well, I think, uh, the first step anybody needs to take when it comes to solving any. Issue like this is very finely tuned to diagnostics of what is going on in their world, right? Like the last thing I would say is, you know, just go get sales training or get P club or whatever, and, and your problems are gonna be fixed.
[00:09:12] solving this, right, solving any problems starts with. Defining the problem, right? Some sales organizations I talked to, like I mentioned, they have a lot of first and second stage deals just kind of stuck. Well, why is that happening? Right? It's probably different for every organization. Some of them, maybe they're not accessing power, right?
[00:09:32] They're stuck with somebody low level. And so they just kind of languish in that first or second stage. Some of them might fail to communicate a message that triggers demand. Right. I suspect that that's the case with a lot of them. Some of them aren't going deep enough with discovery, right? They're not getting to the need behind the need, and therefore there's no motivation or urgency to continue a project.
[00:09:54] And then some of them might just not be controlling the sales cycle. Right. They, especially if they're coming from an environment where they could have order taken in 2021, you didn't have to control sales cycles in 2021. At least a lot of people didn't. People were just, you know, if they could fog a mirror, they were going to buy something.
[00:10:11] Forget mutual success plans or mutual action plans or, or controlling the sell buy cycle. None of that was needed back then. Um, so, so I think that's the first step is like. You have to get very granular with defining your own problem, and that starts with looking at data, right? Conversion rates between stages, time and stages, and then it goes into observation, right?
[00:10:36] Looking at Gong calls or, or any of their neighbors in the space and seeing what's actually going on during calls to get an accurate diagnosis of, of what's the root cause of your problem.
[00:10:48] Toni: So squeezing one more question before Mikkel takes over. Um, so let's just say you're a RevOps person right now. and you're thinking, wow, Chris, this, you know, he's totally figured this out. tomorrow I'm going to go out, you know, look at all of that data and going to dig into this. Do you have a bit of advice in helping them to figure out what good looks like, right?
[00:11:11] Because it could be that they're looking at those stages and those, time and stage conversion rates and, and so forth. And then they look like, well, I don't, I don't know, is it good? Is it bad? Is this something that, you know, is a problem for us or is this, are we maybe even, you know, uh, above the fray actually in terms of, uh, how we're converting, how quickly
[00:11:29] we're doing this in that particular stage.
[00:11:31] Chris: Yeah, I mean, I think, uh, when it comes to understanding what good looks like just in the data, right, forget about observation for a second, just in the data, there is likely to be a sore thumb somewhere in your data where it's, you don't even have to, have to ask yourself, like, what does good look like?
[00:11:48] It's obviously bad, right? If you, if you have a stage in your CRM with the average days in stage, 82 days, just as an example, you only need to, you don't need to even know what good looks like. You just know that you have bad.
[00:12:03] Toni: yeah,
[00:12:03] Chris: So let's make a goal to improve that. But beyond that, like once you start digging into, you know, what's actually the problem, what's going on on the calls.
[00:12:10] Um, I think one of the best things RevOps people can do is lean on an experienced, trusted sales leader to get their take, right? Because usually the best sales leaders in the business are close to what's going on. And while it's anecdotal, they still have some very... Um, wise observations about what's happening, right?
[00:12:30] Some of the examples that I gave have come from the field, right? We're not accessing power or we're not delivering a narrative that disrupts the status quo, or we're not going deep enough on discovery. So the best RevOps people are always paired very, uh, closely and partnered very closely with their sales leaders.
[00:12:49] And I think that's one of the best things that you can do to really figure out what's going on and in your environment.
[00:12:54] Toni: I think that's excellent advice.
[00:12:56] Mikkel: Absolutely. So one of the things I actually was very keen to get back to is you mentioned discovery a bit now. Um, we've seen this report from Winning by Design, they basically split the performance of the sales team into three buckets. You have your top performers. Uh, the average, and then the bottom performance.
[00:13:12] And what they've shown in this report is that there's been a massive shift. So you have fewer top performers, they've now become average, and you have more bottom performers, right? So overall it's looking, looking pretty terrible. And the way, uh, they recommended to try and go in and lift basically the average was to focus amongst others on discovery.
[00:13:30] And so now that we're in this world where you actually need to work a whole lot harder to, you know, book meetings, close deals, what does that look like in discovery? What are some of the important practices that, you know, even revenue operations or the sales management team should pay attention to and work with the team on improving?
[00:13:50] Chris: I think the first thing I would say is like, you kind of have to be careful with that prescription, right? Because it's probably right. You could probably broadly say that most sales organizations should get better at discovery, but also every sales organization is a little bit different. Now I'm not shocked by the, um, distribution of performance that's in their report, but again, just take every, um, you know, piece of prescription or advice with a grain of salt and apply to your situation because.
[00:14:18] Maybe you guys are great at Discovery. Maybe you just suck at building champions. And so you've got to figure out what the problem is for your organization rather than taking, you know, a report and, and treating it as God for lack of
[00:14:32] Mikkel: was over
[00:14:32] simplifying. I think that was just to give people a
[00:14:34] starting point. Right. But, uh, but yes.
[00:14:37] Chris: but, but, you know, let's say that's the case. Um, and Discovery is the thing that we want to zero in on, which is likely going to be the case for a lot of people. I think There's a couple things that I've noticed account executives and salespeople are, are not very good at. Um, one of them is understanding the need behind the need, right?
[00:14:59] So if you ask a typical sales rep, did you do good discovery on your latest discovery call, they'll tell you yes, right? Like, if I took an average gong rep, I said, did you do good discovery? And I, they'll say yes. And I say, okay, well what's the customer's pain? And they'll go, well, they just, they really need better coaching.
[00:15:19] Now, the question to anybody listening is, is coaching pain? Is coaching a problem? The answer is no. Coaching is a solution. Right? Coaching is like a proactive thing you do to solve a problem. And so most reps fail to peel that back. They fail to even recognize the fact that their customer is expressing their need in terms of a solution rather than a problem.
[00:15:44] The best reps will take a step back and say, I understand why you would want to get better coaching intrinsically, but what's going on in your business that's driving you to prioritize that? Because frankly, when I hear the word coaching, I hear solution, not problem. And what's the underlying challenge going on?
[00:16:01] So I think that's one thing that most salespeople are not very good at, and we desperately need to get them better at that. Um, the second thing, once you've found that thing, once you've found the need behind the need, Is validating whether it's a top priority, because sometimes buyers are just kind of talking about whatever most recently happened to them, like on a Zoom call or on a Discovery call.
[00:16:28] They're inflicted by, I don't know if that was the right word. Afflicted? Afflicted by recency bias, right? You ask them about a problem, they pontificate about that problem like it's the worst thing in their life and you think you've, you've got something, but it's only because it happened to them that morning.
[00:16:44] And then you get off the zoom call and their slack is lit up like a Christmas tree and they've got 200 unanswered emails and they got missed calls and they're on calls from dusk till dawn and they've completely forgotten about that problem, right? And so some of the best salespeople, especially in this environment, Pressure test the staying power of the problem they're talking about with their customer, right?
[00:17:06] They go halfway through a discovery call, you'll hear them challenge their customer and say, Okay, you shared X challenge with me. This is going to sound a little redundant, but is this the thing we should be anchoring our relationship to? Right? Like, cause I asked you about this and you shared it with me, but like, is this what you're going to care about a week from now?
[00:17:25] Or is there something more top of mind? That we should be discussing. And most salespeople, uh, don't have the guts to ask that because they're afraid of what they're going to hear. Sometimes a customer might say no, actually, like when I think about every other priority on my priority slide, you're right, I'm probably going to forget this one.
[00:17:44] So there's a number of things going on there that we
[00:17:47] could expand on.
[00:17:48] Toni: So you mentioned this mutual action plan thing earlier. I was, was wondering if you had like an opinion or perspective on that. Is that a thing that you would recommend people to do? Is this, uh, just, you know, you know, a way to fix something that is actually broken in a different way? For example, some of the priority pieces you just mentioned.
[00:18:06] What's your, what's your perspective on that?
[00:18:08] Chris: I think. Mutual action plans are a downstream sales skill. Like this isn't something you need to get good at at the end of your first call. In fact, it would be weird, right? So just for the audience, if you've never heard the term mutual action plan before, what that is, is essentially a series of events.
[00:18:26] That you agree on with your buyer, that you take together, that will lead to, um, a closed deal and beyond. Right, the best mutual action plans go into like customer onboarding and implementation. And there's go, no go points along the way, and it's basically a way to project manage a sales cycle. Now, using mutual action plans is a skill.
[00:18:48] Right. Just like anything else, if you walked into a discovery call, first time meeting with somebody, you had 25 minutes with them and you whipped out a spreadsheet with, you know, a bunch of steps that you're going to take, it would, it would feel a little bit like you proposing on the first date,
[00:19:04] right? Like they're, they're not mentally committed yet. And so mutual action plans. Solve for a different challenge than what Discovery solves for, right? Discovery solves for, um, finding a significant business pain, making sure it's the right one, and just aligning the stakeholders that this is the problem we're going to solve together.
[00:19:23] A mutual action plan comes in after you've agreed to an active evaluation. Actually, I'll say that a different way. After your buyer has agreed to an active evaluation. And once you've gotten them to that level of psychology, right, they're committed to evaluating you, not necessarily purchasing you, but taking a series of steps to evaluate you.
[00:19:44] Now, yes, let's map out what those steps should be. Um, let's make sure we have the right people involved in each one. Um, but each of those things, right, discovery and mutual action plans. They solve for different challenges that will show up in your sales cycle.
[00:20:00] Mikkel: So I'm also wondering if, if you're running discovery, is there a difference? So, uh, you know, I've worked in marketing and we usually try to split the inbounds we deliver to sales into two kind of categories. There's the explicit interest. So someone literally saying, Hey, I want to see this product. And then there's the implicit.
[00:20:18] So someone who didn't actively say, yeah, I want to check it out. Right. And usually you're going to have, you know, buyers at different stages of whether they're yeah, I'm fairly committed versus not literally just heard about it because your SDR called me. What does that do to the process around, you know, things like discovery?
[00:20:34] And how do you, how do you adapt the process accordingly?
[00:20:39] Chris: Well, I think your discovery approach changes pretty dramatically based on those two situations. Right? So, you and I think about this very similarly, we just use different language. I call it latent pain versus active pain. Right? Are people actively solution, or exploring a solution, or are they passive?
[00:20:57] Maybe they have a problem, maybe they don't, but you've got to find it out. first, the first few questions you ask each of those types of buyers should look and feel very different. And the questions you ask should align with the fact or align with the stage of the buyer's journey they're in. So I'll give you a couple examples to make this really concrete because I'm talking very abstractly right now.
[00:21:20] If somebody is actively exploring a solution, And you ask them, tell me about your biggest challenges. Like that's the first thing out of your mouth. Many people are going to get a little bit irritated by that because psychop psychologically they're past that. They've already defined their problem. Um, and you need to meet them where they stand by asking them something more along the lines of what's motivating you to explore a solution, or what are you looking for in a solution.
[00:21:46] Now you can always go back to the pain later, but like the first few things you should ask about should align with where they stand. You should meet them where they stand. Versus, imagine somebody has totally passive pain. The only reason they're showing up to the call is because they were impressed with the personalization that your SDR Employed on their outreach.
[00:22:05] And so they thought, you know, they would give you a courtesy of showing up to the meeting. Well, if, if I asked the same question I just recommended. To them that I did the active buyer. And I said, help me understand what motivated you to, you know, look into a solution or show up to this call. They're going to look at you
[00:22:21] like you're crazy Because
[00:22:23] your SDR asked me to show up, that's why I'm here.
[00:22:26] And you're, you're already on an uphill battle versus you saying something like, look. I want to make you aware of some of the challenges, uh, that we solve so that you have context for the rest of the conversation and you walk them through a customer story that illustrates the pain you solve, ideally in a way that they can see themselves in, and then you stop and you say, anyway, enough about our customers.
[00:22:51] Help me understand the challenges that you're facing that would be problematic if you didn't solve them six to twelve months out from there, right? Those are two very different discovery motions, but you need to be able to do both. If you're selling to buyers who have passive pain or implicit pain, as you call it, versus though that, versus those that are actively exploring solutions.
[00:23:13] Toni: I think this is really, you know, something that, that folks that might have seen some of the marketing demand drop over the last year or so, that then felt like, oops, outbound, let's try outbound, let's do that, right. And then went from a, predominantly inbound motion, where sales reps basically could do this, uh, okay, let's, uh, you know, let's, let's basically process you through, let's take that, take that order in versus what you just walked through in terms of an example there that that's really the, you know.
[00:23:43] The reason why your outbound motion, you know, that you just started yesterday doesn't work might maybe have something to do with what you just said there, Chris, right? I
[00:23:50] Chris: That's right.
[00:23:50] Toni: mean, that's, that's one of those things that I've, I've seen also myself many times, where the AE team that was very inbound focused just wasn't trained and wasn't aware of, that dramatic shift there, right? And then it always becomes, Hey, those outbound demos are, uh, you know, bad quality and Hey, this doesn't work. Uh, and, and, and, you know, let me, let me please go back to the inbound team, right? I mean, that's what you then usually hear.
[00:24:15] Chris: Yeah, I mean, they're different skills. One is about fulfilling demand. Uh, you know, those are the people that are coming to you and one is channeling demand. The demand might be there. You got to go find it there and it's not, or you got to go find it though, and it's not obvious, uh, where it is. And so you've got to run a discovery motion that...
[00:24:34] Um, lends itself to finding a meaningful pain and helping your buyer crystallize their thinking around that pain. Because that is a characteristic of buyers with passive pain, is they haven't defined their problem well, right? They probably feel pain, but they only vaguely know what's going on and they certainly don't know all the root causes of it.
[00:24:58] And so, When you look at it through that lens, you actually have a huge opportunity as a salesperson to be somebody who earns the status of trusted advisor, right? If you can deliver insights to them and help them diagnose their root cause and that kind of thing. That typically doesn't happen with inbound buyers.
[00:25:17] They're already indoctrinated, right? They're educated by the market. They've got their buying criteria. You've almost got to un teach those buyers. So, you know, big opportunity there if you can do it. It's not an easy skill to acquire, but if you can do it, then you can really separate yourself from the pack.
[00:25:37] Mikkel: So one of the other, uh, other elements you mentioned, so I'm basically just with discovery now and, uh, mutual action plans. I think there are kind of some clues for where people can look and I've kind of lined up. Mikkel is learning something about sales today. No, exactly. It's really interesting. I haven't moved over to sales yet, like, like someone else on the show.
[00:25:55] Um, but the, uh, the other very interesting piece is, you know, we're, we're seeing more people involved in the deals and we're specifically seeing the CFO. Involved in the deal as well, which is a very, you know, entirely different person all of a sudden to, to deal with, right? And in this situation, you know, that also requires some skills and potential processes.
[00:26:16] Can you walk us through how, how should the sales team best approach this scenario where you have a CFO coming in or other, you know, new stakeholders being introduced? How should they tackle that situation?
[00:26:27] Toni: Or, or maybe not even introduced, but you kind of know that's what's going on in the
[00:26:31] background, right?
[00:26:32] Yeah.
[00:26:33] Chris: Yeah, well CFOs are an interesting one. I spent Q1 interviewing a bunch of CFOs to understand how to better sell to them and They all told me they don't want to talk to salespeople and I challenged them on this. I'm like, okay, so you guys don't want to talk to salespeople, but salespeople want to talk to you because what they're dealing with is they work on a deal for months only for you to bat down the proposal at the very end after months of work.
[00:27:05] Because they never talked to you. And so how do we reconcile that? Right? How do we prevent not just the salesperson, but your teams from wasting months of work only for you to be surprised and to decline it. Um, but you don't want to talk to them. So what do we do? And they had amazing advice. They gave me two pieces of advice.
[00:27:24] All of them. One of them is they said, well, it's not our job to advocate for the technology. That functional teams need it's the CXOs job or the VP's job, which is your champion. Um, so a short answer to the question is you need to get better at champion development, but the better answer they gave me had to do with working with their FP&A teams, which most salespeople, I mean, I would guess most salespeople don't even know what FP&A stands
[00:27:52] So I'll save the embarrassment of anybody listening stands for financial planning and analysis. And what these CFOs told me is. A company of any meaningful size, their CFO is going to have a deputized force, which is an FP& A team, right? These people's jobs are to analyze spend and the potential return on that spend.
[00:28:15] And the way most of most FP& A teams are structured is Each line of business leader, VP of sales, VP of marketing, et cetera, is going to have an FP& A partner in the business. And so their advice was to align with FP& A toward the beginning of the sales cycle, who will then keep the CFO informed. Right, so the sales motion version of this is Let's say you've built your champion, you've done Discovery, you've done a demo, you've got somebody pretty fired up about your technology, and they want to champion it, right?
[00:28:50] Maybe it's the VP of Sales. Well, the next move you should say is, look. I've been running the sales cycle for a while, and I know particularly in this economy, your CFO is going to have to approve this if we get that far. I can also tell you that your CFO doesn't want to meet with me, right? If they're like any other CFO, they are not going to want to talk to me.
[00:29:12] What I have found to be successful in these situations is most CFOs have FP& A people who keep them informed of the background. And so what I would ask is on our next call. Let's say it's like a proof of concept setup call where you're going to define success criteria or whatever. We invite the FP& A person to align on the financial ramifications of this deal.
[00:29:34] The business case, a range of what it's going to cost so that they can budget and then go keep the CFO informed. Is that a fair ask? Right? And if they do have FP& A people, most of the time they're going to invite them. And now you have more or less solved the problem of the CFO getting blindsided at the end of the deal.
[00:29:52] Mm
[00:29:53] Toni: So it's basically kind of getting the, the, the mini me version of the CFO basically involved and then doing it like this. Yeah, I think that's, that's a, that's a great way to do it.
[00:30:02] Mikkel: I mean, it's interesting also because we had, uh, Ben, the SaaS CFO on the show. This was from, you know, the opposite perspective.
[00:30:08] You want to go and buy a tool and the CFO says, no, well, you need to go and build the case. And he also pointed out that the CFOs, they understand that the business needs to invest money at the end of the day to grow, right? So there is that understanding, but I think it's, it's solid advice to go and work with the FB& A team.
[00:30:25] Also, I think a point of discussion you can take, if you're in revenue operations, that you can take within the commercials team to say, what does that mean for marketing? What does that mean for sales enablement? Would we potentially need to even partner with our own finance team to get their take on the cases we're developing?
[00:30:39] Toni: so, I mean, I don't have your authority on that topic, but I recently also interviewed a couple of CFOs for, for us to figure out how to sell to those better. And, uh, one, one of the, one of the things I got, I got out of this was also that, Yes, you know, this business case and so forth, it's all cool.
[00:30:57] but if they, if they actually did get the ROI of all the stuff that they bought in the last five years, they would all be already a billion dollar company, and, therefore, therefore they're kind of stopping to believe this ROI calculator stuff all the time, right? What's your, what's your perspective on that?
[00:31:15] Chris: Well, I think that comes from a couple of things. I think most business cases are authored by the salesperson, and they shouldn't be. Uh, there's a guy named Nate Nasrella, who... If you haven't interviewed him already, he's worth getting on your podcast. He's probably the world's expert at writing or teaching salespeople how to write compelling business cases.
[00:31:38] And the insight he has is the salesperson shouldn't be the author of the business case, they should be the editor of the business case. You should be pulling in insights and data and information from the range of champions that you've built and then creating the business case based on their insights.
[00:31:57] But their names should be on it, right? They're the authors. You're just kind of doing some of the work in the background. And so I think that's step one is like if a CFO is looking at a business quote unquote business case and immediately it says like Chris Orlob, account executive for pclub. io. Okay, so now I'm going to take this with an extra grain of salt versus somebody.
[00:32:18] Internal, right? So that's one. Two is I don't think most salespeople understand what a business case actually is, right? Some salespeople, if a buyer says, will you help me put together a business case? They say things like, yeah, I'll send you a couple of case studies. Or I'll send you an ROI calculator to your, you know, to your point.
[00:32:39] That's not a business case at all. An ROI calculator is not a business case. A business case is a write up that explains the customer's situation, their problem, the financial ramifications of that problem, a proposed solution, and why you're proposing that solution, and the Resources that are going to be demanded of the business to make good on the opportunity, which by the way, a lot of salespeople leave out that last part.
[00:33:08] They go, yeah, yeah. Our products don't take any work. Don't take any time, just cost some money. And people know that's not the case versus what great salespeople do is they'll say, this is going to take work. This is going to take time. Here's exactly what we would need from you to make the successful.
[00:33:23] Instant credibility compared to most salespeople. Now the customer might not like to hear it, that this is going to take time, attention, resources, not just cash, but you build credibility and trust. And frankly, it's the right thing to do when you bake that into a business case.
[00:33:41] Mikkel: I mean, so it sounds
[00:33:42] like actually quite a bit of work to do if you're
[00:33:45] Chris: Oh yeah.
[00:33:46] Mikkel: several deals, like, how do you make, I'm guessing this is mainly enterprise or do you also see this for mid market or?
[00:33:53] Chris: I think you see it for mid market. I think doing this in SMB, you would want to only do it in the most valuable deals in your pipeline, right? If you're closing 10, 000 deals and it's a transactional sales cycle. Probably not worth your time to go through that motion. But if we're talking about, you know, 50, 000 deals, 100, 000 deals, anything beyond, um, now the challenge starts to become time management, right?
[00:34:20] And opportunity management, which deals are real, which deals, for lack of a better word, which deals have blood in the water that justify you putting this extra work into, because some deals don't have blood in the water. Some deals, You just kind of got people tire kicking around, but it's not serious.
[00:34:38] And so of course you're not going to go super deep on. You know, building a bunch of champions. So there's a lot of variables. I mean, if this stuff was easy, we would be all, you know, we'd all be making millions of dollars in sales, but you know, that's the reality
[00:34:53] Toni: I wanted to circle back to one of the first pieces we discussed here. So quota attainment down to 36%. And it's actually. down another 14 points from the previous benchmark. And I remember back then, you know, 50%. Everyone was already like crying out loud and you know, how could this be? And, and now it's, it's, you know, we're talking barely a little bit more than a third of sales reps.
[00:35:19] Do you, um, I mean this quota, it's even has two sides to it, right? Both the revenue that's being, uh, generated in order to achieve the quota and then the size of the quota. Do you see that, um, folks out there playing around with quota and either increasing it or not pulling it down enough? Or is there, is there some, some, some of those shenanigans going on?
[00:35:40] Chris: I, um, look, I think it is worth having a conversation about reducing quotas to an extent. However, um, I don't think it makes sense to, like, a lot of sales reps are going to disagree with me when they hear this, but hear me out. I don't think it makes sense to dramatically decrease quotas just because we're selling through a tough time.
[00:36:02] One, because it doesn't make economic sense for the business. There comes a point where it's like, all right, well, I'm not even breaking even on my reps if, if we hit quota or we're barely breaking, breaking even. Okay. There's a lot of things that go into a financial model that make it just not make sense to decrease quota in a very dramatic way.
[00:36:23] But the other one is more culturally, right? Sales is about winning in good times and in bad times, right? This is just part of the game, right? You win together, you lose together as a team. If there's two sides to this coin, if a rep said you need to chop my quota in half during tough times, then the other side of that is, okay, so in good times, are you okay with me doubling your quota?
[00:36:52] And if they're not willing to say yes to that, then it's like, then this is not a two way street. Now I'm coming across as like really hardened and almost compassionless right now, and I want to make it clear. Now, I think it's worth chopping down quotas a little bit, but I think there are some salespeople who are a little too entitled when it comes to how much quota they think should be chopped off their accountability.
[00:37:16] I'm sure I'm gonna get just rocks thrown at me or
[00:37:19] Mikkel: We can cut it out. Worst case.
[00:37:22] Toni: So what's going to happen is the people listening will record that clip and play it to their reps. And then, then, then they're going to reach out to you, you know?
[00:37:30] Chris: Now I'm
[00:37:30] like the bad
[00:37:31] guy
[00:37:32] Toni: Yes. Drop 10, 000 followers on LinkedIn just right now. No, but, uh, so real, real cool insight on this.
[00:37:39] And also, Also kind of getting the level check in and also hearing what other people are doing, right? Because this is a conversation that's happening in those RevOps teams and those, you know, CRO rooms, to try and figure out what are we going to do with this? How are we going to deal with this?
[00:37:53] Because it's from a systematic perspective, from a leadership perspective, It's also not cool to have a whole floor, uh, missed target. It's not, it's not cool either. Right. So it's, uh, uh, there, there is this dependency. I mean, then just think about the mood on the floor, just think about that. And then, you know, you have 36% have fun with that sales kickoff, right.
[00:38:14] And then, then walking into the next quarter and then trying to push out motivation. So I think it's, um, it's not fun for either side. And, and obviously, you know, some. Some reps will bring up the ideas like, well, then chop the quota in half and then we have a, then we have a dying chance to actually get there.
[00:38:30] Um, and really cool to get that perspective from you on,
[00:38:32] on that particular problem.
[00:38:34] Chris: Yeah. And again, like I want to make sure there's a winning locker room for lack of a better word. I want reps to be making an exceeding quota. And as a business owner, I like to write very big checks, but those checks also have to make sense in con in context of the business's cost structure and revenue model and all these things.
[00:38:52] And, you know, if I'm a, if I'm paying a rep $300,000 a year, OTE, if they meet exceed their number and their quota is only $500,000, then Alright, we're winning the battle, but we're losing the war. The company is going out of business actively, uh, by paying out commission rates that high. It's just not sustainable.
[00:39:15] So, I mean, it's just kind of one of the shitty aspects of selling through a tough economy.
[00:39:23] Mikkel: I almost want to see if I can sneak in a last one. We'll have to make it short. Just, you know, the timekeeper here.
[00:39:30] Toni: Maybe you just ask instead of wasting your
[00:39:32] Mikkel: time. I'm building suspense here. You don't pitch on... Anyway, so, uh, I was thinking to talk about the Q5 deals. That's really the last, like, completing the journey you almost lined up in the beginning of the show.
[00:39:45] You have deals that are stuck for 82 days, right? And the number can be whatever, right? I think the businesses, they will know whether they have deals that are being stuck or not. Otherwise, revenue operations should totally go and do that report to uncover whether that's the case. How do you go from there?
[00:39:59] Like, how do you go from solving, if that is a problem that persists for some of the listeners out there, how should they go about potentially solving this issue?
[00:40:08] Chris: And that, just to confirm, the issue we're talking about is the opposite issue we teed up the, the show with, is like, I've got a bunch of deals stalled in late stages. Yeah, that's what we're getting at. I mean, I hate to say it, but the answer is it just depends, right? What's causing this goes back to the first thing we talked about, which is what's causing the issue, um, and using diagnostics to understand what's actually going on and it just depends on what's causing it, right?
[00:40:35] Like maybe. Those deals shouldn't be at the end of the sales cycle. Maybe you skipped a bunch of very important steps at the beginning. And so artificially it looks like you're at the end of the sales cycle, but really you just didn't do the hard work of setting up that deal for success. Um, that's one example.
[00:40:53] Uh, it could be a bunch of other things, right? They, the customer could be hung up in negotiations, right? Maybe your competitor is offering 60% of what you charge. And so you're haggling with them for a significantly longer period than Um, what you normally would. And that tells me, well, you didn't rig the buying criteria in your favor early on enough.
[00:41:15] So I, I hate to give the answer. It depends,
[00:41:18] But unfortunately,
[00:41:20] Mikkel: think that's also fair, like, there's not that many silver bullets at the end of the day, if there are any
[00:41:24] Chris: There's
[00:41:25] Mikkel: And, um, you know, we've talked a bit about that the sales reps, they need to work hard. You just gave, uh, some work here to revenue operations or the CRO to go and do some hard work and figure out, you know, if there's deals stuck, why is that?
[00:41:37] So I think that's a totally fair play. Absolutely. Wonderful. I think that's kind of marks the end. Chris,
[00:41:44] Toni: this was a very, very fast, what is it, 40 minutes? Uh,
[00:41:47] Chris: super fast. Didn't it?
[00:41:49] Toni: Yeah, really, really interesting stuff. Really interesting stuff. And I mean, I even take screenshots of your posts, by the way, like, Oh, you know, I need to read this later, you know, really,
[00:41:59] Mikkel: really cool, really cool content.
[00:42:01] Yeah. So check Chris Orlob out on, uh, on LinkedIn, a bunch of more insights there. If you're interested in the sales side, thank you so much for joining Chris. I hope we were able to produce a really good show here for the listeners. I at least think so.
[00:42:15] Chris: It was fun. Thanks for having me.
[00:42:17] Mikkel: Wonderful. Thank you, Chris. Have a good one.