Hello everyone. Welcome to this episode of the win rate podcast. I'm your host, Andy Paul and join me. Gosh, another stellar cast of panelists. Can give everybody a, yeah,
you don't
Mr. Hunter looking around. We're going to give Mark Hunter everybody a sort of minute to introduce yourselves. We'll start with John with the best name in sales, Mark Hunter.
and that's the name I was born with. I didn't change it. Yeah, I'm known as the sales center. So don't steal it. I've been doing this for 25 years. What's this? It's helping people see and achieve what they didn't think was possible. A lot of my work is top of the funnel, but sales is not a job. It's not a profession.
It's a lifestyle. And when you do what you get to do, it's a lot of fun. That's what I do.
certainly
So you've only been in sales for 25 years.
Well, I've been doing this. I walked out of corporate America before some of these people on this show were even born.
But I
I don't think quite, but
And it started
yeah, but close. Yeah, I have similar thing. Yeah, I'm sure I've been in sales perhaps longer than certainly longer than Todd's been alive. And maybe Tom. So,
yeah you and I both interviewed at like the same company that doesn't even
About the same time. Yes, we did.
We've had that conversation.
Yeah. We've had that conversation. Well, let's not have it again. Todd.
Yeah, everyone Todd Bustler here. I've been in sales since I got out of school about 13 years now. So not as long as you guys, but, I really got started cutting my teeth in tech at a startup called heap. I was a super early employee there in the product analytics category there from like zero to 40 million.
And then I kept seeing this problem around Mark, what you mentioned, just top of funnel. It's really changing. It's getting harder and harder so much so that some of the internal things we did there inspired me so much to go start a company. So now I'm the founder and CEO of Champify. We help companies take an advocate at first approach to go to market.
So understanding who are the people that love them, whether that's customers, people that implemented users, partners, et cetera, and implement that data to help them drive good outcomes. Thanks for having me on and you appreciate it.
Yeah. Pleasure to meet you. Tom, who's a Champify client. We're just going to start with there.
Yes. All right there. I'm Tom Williams. I'm in the strategy and operations team here at Clary nowadays, but it was through an acquisition. So I co founded a company called deal point. My problem that I was solving was actually not top of the funnel. The thing that always kills me is that you get these glorious deals in.
And then I was VP of sales and marketing. My reps had guaranteed closed by the end of the month one too many times. I called the customer. They had no idea what was happening and you just drive me crazy. I saw this in manufacturing. I saw it in sass. And so realizing that if the buying team and the selling team could only be looking at the same piece of paper, we might all be slightly more efficient and be able to call a good deal.
Good. Bad deal. Bad. And
Waste a little bit less time. So that was the premise of a deal point. We were acquired by Clary about two and a half years ago. And now myself and the whole team came over align is now the the product inside Clary. And I'm kind of like a, well, an S and O person who just helps our customers with better collaboration and revenue cadences.
So that's how I spend my day.
for having me. And looking at the guitars sitting on the wall behind you, are you a guitarist? You in a band?
For I have done this for the right client. I will write you a theme tune. So yeah, absolutely. I'm big on theme tunes.
gosh, could you write one for our podcast?
I got onto Jeremy Donovan's podcast by covering his podcast theme tune. Like full on band cover of his theme tune with me as like, Coming on next, Tom Williams. And that's how I got on the show. So,
yeah.
original for my show.
Yeah, we'll get you an original. Something smooth. Smooth as Andy Paul.
Well, a little bouncy too. We like the high energy coming into it.
alright. Smooth and bouncy.
You
All right. Very cool. Wow. And of course Todd's a surfer. He's a few people who are watching on video. You can see the surfboard behind Todd. So where do you like to surf?
favorite spot ever anywhere is in Peru. I spent a decent amount of time down there traveling all up and down the coast, but I grew up real close to the beach in New Jersey. Most people don't realize there's really good waves in New
Yeah. Yeah.
in hurricane season, fall gets kind of world class. But favorite place in the world is a beach in Northern Peru.
A
And so when you look at the weather channel and the hurricanes are coming, roaring up on the East coast. And they say, Stay out of the water. But invariably there's some guy on a surfboard in the background. That's you.
hundred percent. Yeah. There's a crew of us that are watching that, making sure the wind's right, figuring out the right window you're going to get. And that's exactly right.
Very cool. All right. So let's start talking about sales. Interested in your thoughts on this collectively is, I've seen sort of this trend happening, you see it online, LinkedIn, and I saw this post a couple days ago about this, which will be, by the time this airs, it'll be a couple months, but sure there'll be more in the meantime, and the sentiment is that Sales is killing revenue. That was that lead line on this. This one is that, you know, too many deals being brought, they're just a bad fit and you know, it's caused by CROs who are too anxious to hit their numbers and they're just bringing everything in the door. Just trying to set sentiment shared by you all. What are your thoughts are on that?
totally agree. It's because we have comp plans. that are so screwed up and there's so much pressure on sales to deliver. It's like we were talking in the green room before we went live about how you know, stuff just happens magically at the end of the quarter, even though the customer doesn't know it's coming like, what really?
So, yeah, it is. Sales can screw up revenue pretty quickly. It sounds like an oxymoron, but spot on.
I think there's a fear of deficient pipeline right now. So, I think you're more likely to kind of widen the aperture of what you would accept to be in your pipe. And that's going to, of course, result in the exact same number of sales, but just a rougher conversion from stage, say, two to three.
Everything's getting into stage one where it, S0. Because people are nervous about lack of pipe. So I hadn't read that particular post, but I could see it being true.
It feels oxymoronic to me to start, but I agree with kind of what both of you said. I think we've gotten so over specialized. Right where it feels like the person doing a lot of the new logo hunting might not have to deal with that client later, especially in the SAS world, SAS startups in particular.
And, you know, you don't really feel that. If you're a rep, you go, I know this is a fringe fit. It might not be the best thing, whatever it's thrown over the fence. I don't have to deal with it. It feels like a year or 2 renewals a long way out. I think that's a big part of it. I think the 2nd part is. You know, VP of sales are under a lot of pressure, grow faster, grow, you know, 16, 18 month average tenure.
And like Tom said, when there's lack of pipeline or a lot of pipeline sitting in early stage, that should probably not be there. I think people make decisions that aren't smart for the long term.
Yeah. So to your point, Todd, who's you serve gave the problem and the solution, but who's responsible for making sure that doesn't happen? This is not like. Yeah. I've run sales in many startups and, you know, rep just can't bring in a deal and bring it to closure without everybody agreeing that's a deal we want to take.
Right.
I think the idea has been, hey, you know, we've seen the CRO role be created really in the last, I don't know, 10 years. You guys probably know that dating better than I do, but really be created in theory for that reason. Right? So you're not just that person has to be responsible for the renewal number for that expansion number to hopefully be accountable for it.
But to me, it's on leadership, like. You can, especially if you have younger reps, like, you can't expect them. Hey, you have a comp plan where you're getting a certain percentage of deal. They're going to do what it takes to do that. Right? So I think it's putting more strict rigor on what is a good fit. What happens has to happen before deals close.
What sign off do you need? Et cetera. It's ultimately on leaner leadership to put the right guidelines in place.
But
I think I
sales engineering because the sales engineer should be scoping it, you know, in the second disco call. So if you had a sales engineer with nerves of steel who doesn't have a quota, they could give an unbiased blessing or thumbs down on, this is going to suck. Cause yeah, you can't rely on the poor old rep to self sacrifice.
know of many a rep that, and I was guilty of this. I would keep stuff in my pipeline just to keep me from getting chewed out. You know, it was because, my boss would always go and jump on the person who had the skinniest pipeline. So I just would keep stuff in on my pipe as long as possible.
So, Hey
and he was the quote about actually closing bad fit deals or was it about gunky, messy, early stage progression?
More about closing bad deals
Right.
and yeah, bad and in air quotes. Right. But yeah, things that don't fit. But isn't part of the problem here, and this is obviously something we talk about a lot in the show, with sales effectiveness, win rates being the exemplification of sales effectiveness to the nth degree, is if as a leadership team you are more focused on winning a higher fraction of your deals, you are going to gravitate to more high quality business.
And it
Well, wait, can we say that again?
If you have a real focus on win rates, you will focus over time more. You're going to dial in on your ICP. You are going to be more focused on higher quality business. That's been my experience. if you're saying, look, we're going to take anything that comes in, you're going to be in a low win rate situation as we see in SAS in general.
Right. We're going to be focused on top of funnel and we're just gonna be marginally effective. And we see that in the numbers that exist in Sass in general.
Well, that's if you're picking and choosing, right? Because right now I think in general The total addressable market, if you like, is shrunk dramatically in certainly in SaaS world, people are less likely just to buy any old piece of software. So the,
well, what's dramatically?
do you mean in terms of like the percentage of how many, like what pipelines look like?
Yeah, it's, it's, we've, everybody acknowledges there's, you know, we've got a quote unquote Sass, a Sassacre going on. And, but, you know, I always, I put in the context, like, you know, I've sold through so many recessions, it's, you know, I've forgotten how many there are. Yeah. And what we're saying is, it's not like people stop buying in recessions.
Fewer people are buying. But it doesn't mean there's so few buying. You know, recessions, you might see, what, one, two, three percent contraction in economic activity. It's, you know,
Well, it's different in SaaS though, in the global, the regular economy is doing great. It's humming along, but I don't know, maybe it's just because I'm so micro completely focused on B2B SaaS. There is definitely fewer people are hitting their quota and the pipeline coverage number is definitely lower than it was.
Right. And to that point, though, isn't that a good thing?
No, because people are hitting the numbers either. It'd be great if everybody was still hitting their targets. That'd be
Well, to the point Mark made though
well,
if you're, if your pipeline coverage ratio requirement is five X, let's say your win rates will be 20%.
Yeah.
So my contention is if you've got a four X or five X pipeline coverage, even three X, you've got more than enough prospects to hit your number. If you focus on winning a higher fraction of your deals.
Yeah. Yeah.
let's flip that around though, because I see a lot of CROs. that are desperate to make their number. So they in turn challenge your people. It doesn't matter if this is not a perfect fit. We got to deliver a number because if well, I'm not gonna have a job and let somebody else worry about that.
This is a bad fit install. I mean, we see that happening all the time. No wonder there's customer dissatisfaction. Because salespeople are out there selling expectations that just don't line up.
Todd.
I think there's a lot to unpack there. I think there's a component. Kind of what on both what Mark and Andy, you were saying around. I think some of this comes from the leadership saying, hey, we have this arbitrary number of 5 X pipeline or 4 X pipeline or whatever we have to have. Therefore, feel the people feel the pressure to get stuff in the top of the funnel.
That probably shouldn't be there to begin with. I think that's a big component. I agree. Also with Thomas. You know, if you're in a market that sells to other B2B SaaS company, you're feeling it, right? And I think the answer.
isn't that the problem with SAS in general though? Is they all
For sure. They're all for sure. I mean it, yeah, it wasn't Now I think people are really feeling that problem more, and I think it's on leadership to understand like, hey, how does our target account mix change? Right? How are we telling good stories in other verticals and industries? So like I don't think this on the reps, they have certain comp plans.
They have to do the things they're told to do, right? This is leadership's job to say, Hey, actually we should, we do have a pretty good story for manufacturing. We do have a good story for logistics, hospitality, whatever that may be. There's really only a small sliver of the economy right now that feels like this, and it's on leadership's job at the highest level to figure out they're pointed in the right direction.
I think that's the crux of a lot of these problems,
I agree a hundred percent. Right. I think win rate issues. Yeah. Start at the top. They don't start at the bottom.
You might look outside of sales too. You might look outside of the revenue team and say, is our product focused on or. catering to broader problems.
Yeah. Well, and that's, yeah, champify, you seem very specialized in what you're doing, but. know, there was a post some time ago by Santos Sharon from retention who had gone into G2 and counted, you know, how many conversational intelligence companies, how many email marketing companies saw that?
It's like, holy shit, man. How are you expected to compete in an environment where there are literally 150 competitors? I know I have my answer to that, but it's, you know, from a seller standpoint, it's like. Yeah that's a challenge.
Well, is the SAS occur problem? Because we've got too many people out there creating solutions for problems that don't exist because it was easy to get money.
I
Well, the problems don't exist or they're just, yeah, the market
they're not
enough to have enough competitors, that many
right. And they may exist, but Hey, customers today are only solving the number one or number two priorities. You know, this may be something important, but you know what? It's not a burning platform for me right now. Go away, come back later. And I think that's what's, that's what's happening to a lot of sellers out there that their stuff is, it just isn't relevant enough.
So as a result, then you widen your ICP, you start putting crap in the pipe. You start pushing deals through that don't fit.
I also like Andy's point though, that if you, cause I believe I believe more in putting money into conversion and therefore I'd say solution fit and actually fixing problems than in bringing in more trash into the thing that also doesn't close. So I'm a, I've always been an advocate of focus on conversion rate rather than raw numbers of.
Of people with a, you know, conversion rate. And I do think that most of the SAS products out there have value. If it can be well enunciated if you can actually find somebody who has the problem to, who has the problem, because there's a lot of companies out there. There's a lot of money sloshing around and there's a lot of inefficiency in the markets.
The question is Mark, if you can find the person at the moment who, for whom the, of the 10 problems they have, your thing is. In that top two. I think that Todd actually has a great product in that it helps identify propensity because if I can see somebody who understands the problem that I fix just moved next door.
Now I know why.
fixed the problem for before.
Yeah. Well, and hey, I wonder if these guys hired this dude because he can fix the problem that we know about. And if that's the case thing, great. And now I'm on I'm on a I've found a much stronger propensity to buy. Yeah. rather than having the world's best email which is what we have tended to focus on in the past.
Yeah. To an extreme, right?
Yeah.
It's, so what, so I want to ask this question and Todd, start with you. Is have you. Start branching out and stop selling as much. Focusing as much on selling to other SaaS companies and looking at manufacturing logistics and so on,
Yeah, it's like an active. It's like an active initiative. 100%. We're still pretty new company. We're just 2 years since publicly launching. Right? So the 1st year, get some early customers, make them happy, get some wins, et cetera. But that's like, I just right before this account planning for this year and a big chunk of that is like, okay, what, which of our bets are we making?
How big should that be of the target accounts we're going after? Why do we think these are the right sub verticals or size of companies or whatever that is? But yeah, that's definitely an active bet. I talked to probably 15 either sales or marketing leaders that are thinking very similarly, like a week trying to figure out what do I need to adjust here?
And for us, it's like, all right, what's the most natural transition, right? Who looks the most similar, whose sales teams are set up the same, et cetera. Yeah.
Yeah, I just it was like a year or two before the start of the pandemic going to Saster, and I made a point of going to every booth on the display floor and talking to the people in the booth. After I made the circuit, I come back and go. Oh, shit. They're all selling to each other. It's like if the shit hits the fan, things can really be a problem because there's very little diversity in who they're calling on.
Yeah. Tom.
started focusing two years ago on on we call them strategic industries. So there's still technology, but they're not SAS. So if you think FinTech
healthcare, there's, they still have the same problems and they still use computers and there's still a lot of like remote things to work. I was really pleased to hear that because I come from manufacturing and there's, I can tell you, there's nothing more satisfying, nor more satisfactory than going down to the production floor and seeing that cardboard boxes being shipped into a UPS van.
I love it. I used to, sometimes I used to go in and just put the stickers on. If it was a particularly big deal, I'd go down and see the stickers. I like, I made that sticker.
Oh yeah. Yeah. I came out of that background. I was, it was, yeah, nothing better than seeing boxes leave the factory. Back when we actually had factories before we outsourced everything
I'll have you know audio precision makes all this stuff in Beaverton, Oregon to this day.
Ah, there you go. All right, I want to jump, transition a little bit to a post Todd had written. And I promised we were going to get to this is eight lessons he had learned in his career. And I thought there's some really interesting lessons because they run counterintuitive to, or not counterintuitively, they run counter to sort of the trends you see.
And one of your eight lessons was, is set realistic quotas. Now, You know, year after year, we see these reports from originally CSO insights. Now it's a bravado and other people saying, you know, fewer than 40 percent of sellers are hitting their quota. And I'm like, why is that the case?
Right. Why aren't people? I know that we know what happens and we know how quotas are set in most companies are speaking to CEOs, portcodes of a private equity firm. And this is right for the pandemic. And I said, okay, so, of hands, who's going to raise quotas next year. And, you know, everybody raised their hand.
I said, Oh, great. Okay. So, you know, let's get a sense, you know, on average, how much are you gonna raise them? And it turned out to be like. 2025 percent they're gonna raise quotas. Okay, great. How many of your sellers hit quota this year? Yeah, you know, less than half on average. Great. So what you're saying is you're gonna raise quotas by 20, 25, 25, 25, 20, 25%.
Excuse me. I was the first question. So how many of you have invested in your sellers to enable them to be 2025 percent more productive? No hands, zero. It's like, okay, so how many of you expect you're going to hit the quotas? None of them. It's like, so why'd you raise them? So Todd, tell us about this point.
Setting the importance of setting realistic quotas.
think it goes back to a couple of things and my opinions on this have changed a lot. I think there's kind of a bit of a changing of the guard and sales overall. Like Mark, you mentioned like, hey, pressure to have five X more of like a fear based. Why isn't that in commit? Like, I think that's starting to change quite a bit, which I think is healthy.
I think where the quota stuff comes from. It's like, Ultimately, what are you trying to do? You're trying to maximize revenue, the company, ideally good long term customers as well. But you're trying to create a winning culture, right? And I think having you know, 3 out of every 10 reps hitting quotas, the exact opposite of what you want to build a winning culture I remember sitting the 1st time I started getting exposed to this.
I ran a big sales team for about 3 of the 6 years. I was the last 3 years. I was the VP of sales. And as I was getting introduced I remember how they were setting code quotas and I was watching it for the 1st time. And I said okay, so we want to increase these quotas. I understand we have to grow as a company for sure.
Like, there's no doubt about that. But I said, are you looking at the math? Like, we're looking at historical. What happened the year prior? We're looking at the exact win rate, the exact pipeline capacity. Sure, we can performance management, manage the middle of the pack and get them to the top and the bottom should always be weeded out 100%.
But my approach to this is if as a sales leader, you can't give someone a recipe card that says, here's the past year number based on historical data or slight improvements that we agree on the inputs that are going to improve there. Then you're going to create a losing culture that's going to have higher turnover, unhappy rep, sharky environments, et cetera.
I think most of it stems from companies. You know, a lot of companies raising money, probably going after markets that naturally aren't as big as the investors think and people having to make some short term decisions thinking that's going to work. And it never does, or at least I've never seen it work.
So that's how I think about it.
yeah. This idea of a winning culture is, I like to pose the question I have to CROs and so on. I said, okay, so. you know, average win rate across the organization. You know, 20%. It's like, okay, so let me just, theoretically, if practice makes perfect, what are you practicing doing? Losing. They're getting really good at losing. And, yeah, I had a CEO client not that long ago, I was talking to him, and I interviewed his VPs, all of his VPs, CRO, VP of success, and so on, top reps. I, and they had a, Actually an 18 percent average win rate. And I said, and they're selling the enterprise, a SAS product. And I said, here's the problem. And to your point, Todd, you're people going out expecting to lose.
I how do you build a company with that cup of culture?
I think it's bigger than that because I see so many SaaS companies. They have a solution that plays well in the SMB market. Suddenly they bring in, they got and raised a bunch of money and the investors come in and say, Hey, you're now selling to enterprise and we're just going to ratchet the number up and you're going to go after enterprise.
And it's like, look, the dog don't hunt. So in other words, we're raising quarters, we're raising expectations all based off of investor expectations, which have zero. Potential of panning out. I see this play out time and time again with, I was recently with a company that shocked me. The board actually told the CEO and the CRO to lower quotas. First time I'd ever seen that. And this is a pretty powerful board. The players who are on the board, this is some heavy hitters and they actually lowered quotas.
You might, it might be a function of headcount as well, because say there's a TAM, and then you've got your target, which is, I don't know, it's a billion dollar TAM, and your mark, your target is one percent of that, so a hundred million dollars. And if you have a hundred reps, then each of them has a quarter of a million bucks.
But if you have fifty reps, then each of them has a quarter of two million bucks, because now there is more business for them to go get. So it might be a function of people five, six years ago, because they got all the investor money. They over hired way too many people. So now maybe they're cutting down.
So I think really the question is, has the company target, because the real question is your company target was a hundred million. Did you beat or miss it? And if you missed it, then why is it now 120 million? I think that's a more personal question because then. The quotas is directly proportional to how many reps do you have divided by what the company target is, which ideally is a function of what the actual potential market will support.
In the old fashioned way of looking at it. Yes.
And in this particular case, the headcount is even and the TAM has actually increased
in which case, I
the total addressable market has actually
And the company you were referring
and they're leaving the headcount the same and yet they still agreed because and this is finally, okay, hey, the realization, if we don't bring quotas and put them in expectation, we're just going to have account executive churn and, you know, we're just going to keep churning people.
We've got to create a level of success.
So is one of the, one of the issues is where my pet topics talk about is it time to get rid of quota? I mean, if no one's making it, what's the point of it?
think the point of it, so you can get that tasty accelerator.
Yeah, no, but serious as a leader what's the point of it?
you need to have a yardstick by which, cause I don't like measuring people. Just, I.
If there's no time, it's very hard to know how much effort you should put into something. If you don't have a target, if you don't know where you're headed, it's hard to tell if you're, because in terms of demotivators demoralizes, it's give me everything.
And Todd, I went, I've been surfing exactly twice. The thing that drove me crazy was that I go as fast as you can. For as far as you can. I was like, which one do you want, buddy? Do you want me to go fast or do you want me to go a long time? And so if you don't know what the goal is, it's very demoralizing.
And I think having, I don't know if I'm doing the right amount of effort. If I don't, if it's just earn as much money as you can, how do I know if I'm, when can I stop?
When can I go
with quotas, even with good hearts law, So Charles Goodhart, British economist back in the sixties, studied this and came up with this law, which mathematically proven out is that measures become a target, they lose all value
Yeah.
right? Because what people do is they optimize their process to achieve the target as opposed to, which artificially perhaps constrains productivity, right?
Cause you say, look, go sell a hundred or something. Potential sell 300, but they're going to focus our efforts on selling a hundred.
Oh no, that's why you have accelerators, because if they do hit 100, then it goes berserk, it goes like this.
Right. But most people don't hit the position and hit the accelerators anyway. Right.
they still have it, they still have the target, they're still if you have people going over the target, then yeah, but I think quotas are a great target.
Now go ahead
no, go ahead. Cause I'll, you go and then I'll tell you what I would
because
do instead.
quotas play different things. We're talking about a sass world where it's a finite. If you're in a manufacturing world, quotas are based built around the manufacturing capacities. So they take on completely different, you know, you know, you know, assess world. You can crank as much as you want.
You can't get the machines to go any faster. If you're building the production plan to go at 98 percent of capacity. You can't go any higher.
And this is,
So you should have a quota.
So in that case, you need to have a quota because you know, there is no point of trying to go beyond because you can't deliver.
well, so I'll ask you, Tom, how do you calculate the productive capacity of a sales organization?
Of the entire sales organization. I would base it on what I think a typical rep could accomplish if they were motivated in doing all the right things. And I would base that based on my sales process and a model that I have of what a good sale looks like. And then I would figure out how many of those they could do and what the win rate I expect to be and the coverage rate I would expect to be.
Then make sure they're That would fill up, you know, a solid 40 hours a week.
There's actually a way you can calculate this very precisely. So, and I've done it, I've run organizations this way is by accident. I learned how to do it, but you know, early in my career, I was working for companies that I came and started commercial divisions for companies that were in the defense business. Everybody has to have a time card when you have defense business. Cause non direct charging employees, as all of us commercial people with charged overhead, because when you bid defense contracts, you have to calculate an overhead factor for your bid, right? So I was filling out this time card and I said, well, shit, why don't we sign job numbers to qualified opportunities? And then we're going to charge our time to these qualified opportunities. So the big consulting firms do this, by the way, is I knew exactly how many hours it took Joe to generate a million dollars in revenue. I knew how many hours it took John. I calculated a productivity revenue generated per hour of actual selling time for these sellers.
Then I could look at my sales team. I said, well, I know what their productivity factor is. Assuming they're going to sell about a third of actually sell about a third of their hours. I can calculate very closely exactly what we thought we're going to produce this year because I knew what they're going to be able to generate.
and so you tell him what that number should be.
No, what we did is we comped them on productivity improvement. If they could improve their productivity by a certain percentage, then they. Yeah, we paid him some on revenue as well, but we're sort of early stage. We were, you know, lots of people were charging to, to the jobs to support it because it's definitely a team effort, but driven by the individual.
But we calculate this productivity.
Have you seen the bumper sticker? Jesus is coming. Look busy.
Yeah. But there was no, you couldn't look busy in this environment because we knew exactly what you were spending your time on. And I think this is one of the things we have to get to in sales. We want to talk about, Oh, we're consultant of selling or professionals. Charge your fucking time to a job. I can track it.
And everybody's like, Oh no, sellers won't do that. It's like, and that's first question. People ask me, how'd you get your sellers to track the time? I said, as well,
a,
wanted a paycheck, right?
a deal point. We tracked hours on everything and the, including on the salespeople. And the key was we didn't harass people about it. We hassled them if they didn't do a very good job, but not the fact that they were doing 32 rather than 36 hours.
Oh, we
and and then we actually, we promised like, you wouldn't go over your hours.
So we, we were really hardcore about not making people do
Right. But what you learn though, is if I let's take two sellers example, and I had one, yeah, John and Joe, John took 20 hours to generate million dollars in revenue. Joe took 40. What's Joe doing differently than John as a manager? That was hugely valuable. Cause I could say, look. Something fundamentally is going on.
Or alternatively, I can say, look, Joe took 20 of his own time and 30 additional hours from the rest of the organization. And John may have charged 40 of his own time, but it only took 10 hours from the rest of the organization. What's that tell me about these two sellers and their capabilities and what we need to do to enable them in order to become more effective.
So when you break it down to time, again, I said the consulting firms are doing this. You begin to really understand revenue in a way that you don't, if you're saying quota. And it's, we have these tools and as we were doing all this with spreadsheets, you know, I hate to say it, we were doing it with Visicalc back in those days.
Yeah, first level, you can do it. And It's makes so much sense because now I'm not guessing about what our potential productivity as an organization is. I knew. And then I could say, okay, now I've got some levers. I got to really try to change, but I'm not guessing, which I think quota is just this huge guests.
And why we're still doing it this way. This is, I said, I think we're managing sales the way we did a hundred years ago. Let's do something differently. That's my
I don't think that I don't think that's too dissimilar from how a lot of the more transactional oriented SAS companies think, like, most of the sales leaders I know are looking. You know, at people's calendar, using a clarity to understand how many meetings, how many new meetings people are having really less a function of time, more of the output, which is likely a meeting at a different stage.
I think that still goes into the bottoms up model of. Okay. How much time does this person have and what can they produce with that time based on. You know, when rates and conversion rates and average deal size and velocity and things like that. I haven't thought about that too much Andy around. Like, do we even need that?
I was at a conference this week for a company, and I was talking to the CEO of a company. I respect. And. They're you know, in between the Clary size and champify size, and he said, the sales rep didn't have a quota. And at 1st, I was what I kind of mind blown that and he said, look, this person's on.
This is what it is. Yeah, they can over perform a little bit, but there was no set quota and the person's doing really well. I know me personally, Tom, I'm, I think a little more wired how you're talking. Like, I want to have a yardstick. I want to be accelerated to get there. I want to be. Having the chance to get to accelerators, and I kind of like that.
But I haven't thought deeply enough of, like, does that thing still need to exist? Silence.
we always had a hardware component we were selling and I was selling seven, eight, nine figure deals. These are big deals, but yeah, we focused on this on productivity. You know, it wasn't on and not productivity in terms of how many activities, but actual productivity on output, the classic definition of productivity output per unit of input.
And I think it's a perfect way to measure sales. Mark,
yeah, you know, if you think about the role of the AE, you know, if I'm managing existing accounts, I used to do this all the time in terms of where do I allocate headcount? This account has a potential to develop into X plus, you know, three or X plus five. I'm going to dedicate more headcount towards developing it.
It's the same basic principle just wasn't as finite. But you're right. You look at the KPMGs, the Deloitte's and so forth. They measure project, every project right down
That's because they're building by the hour. they, it'd be sweet if If we could build sales by the hour, like you didn't actually buy the product, but I put 60 hours into it. So here's my invoice.
Yeah. But you know what though,
don't you want to know if you what you're really capable of achieving as an organization?
absolutely, I don't think I don't think
discreet, discreet
don't
think anybody's advocating against improving the seller productivity. And you're right. Todd, thank you for the name check of Clary. We do we track that stuff to the nth degree of how many meetings, how many calls we, we record all the calls and then summarize them and push them to the manager to me and then score them by key messages. All that stuff to make sure that people are being as productive. And then of course. The actual time so they can spend more time selling, but ultimately when I'm deciding like, okay, so who do I keep and who do I not keep? It's the people who made more money are going to be more likely to then going to be more likely to want to keep and compensate higher because they outperformed.
And it might've been, they just had a lucky patch. You know, I just, they just happened to get the dope territory or but. Not year after year. It's the better sellers are the ones doing it. And frankly, if they're the laziest people in world and they don't do any emailing at all, but somehow they get 10 million a year in nail their quotient, I give them a 30 percent accelerator.
I'm down with that. Ultimately, I only care about productivity on the people who suck. I don't really care about, except to monitor, like, what are they doing? Right. But there are some just naturally charming people who can just get the attention of more senior people. They can talk at a more senior level and they can make the more senior sale just because they're dope.
Often with English accents.
Well, because you have an English accent, you sound more intelligent. That's just a
far more
at least to
I feel terrible for people from the intelligent people from the South. I'm like, they got it rough.
Well, I was at a startup when we were competing this back when the American Electronics Association still existed, we were competing on this pitch contest in Vegas. Yeah, big conference and our CEO had done our pitch and she had just crushed it. And then the last contestant was this guy that comes on charming, Brit credible accent product wasn't worth a shit, but he was so charming.
The audience was just blown away and they won the competition. But anyway, yes, that's your natural advantage. Sean,
I have an unfair advantage for sure.
you do. Yes.
yeah, I'll, I'll.
So with that unfair advantage though, Tom, we could pay you half of what we currently do. Good
I am paid half of what I'm currently worth. So that,
Aren't we all,
answer. I like that. I like
honestly, Yeah whatever the bag of tricks is, then I need, I want to be able to rate them. And I do want to monitor my folks and figure out what works better so that we can roll out those innovations across the team. And I don't like busy work and like, make sure you send out 200 emails.
It's not a great, the guy who sends out 200 emails is probably not. As effective as the one who sends out two ready, well thought through emails.
Well, let's slice,
two emails. It's hard to like, how do you measure that objectively? Spend 10 hours on emails.
let's look at the issues similar, but a little different lens. I saw a client that a couple of years ago, they were excelling, the CEO was celebrating this. Yeah, they had won their first. Six figure deal. And they'd done a pretty good job of yeah. Calculate or not calculate, tracking all the activity, meetings, demos dah.
I looked at it. I went to the CEO and said, congratulations, and you're not gonna be able to do another deal like that this year. He said, what are you talking about? I said, well, take a look at how much time it took and number of meetings. You had a number of demos. You had a number of, it's like, you know, this is a different way of looking at the productivity.
I said, you're just not going to be able to do another deal like that. And they weren't looking at on a deal basis. Okay. How much time are we investing? And yeah, some guy got angry with me online last year because I said, Yeah. A hundred K deal is kind of small deal. The big scheme of things, but
AI can help us with is it, AI is really good at multifactorial analysis. So it can, it may, if it has a fantastic revenue database to kind of pull from, it may be able to make those correlations and actually figure out what really is productive rather than looking busy.
But what the actual productivity nodes are, and then, yeah, sure, maybe you could comp on those. You could certainly tell people to do it. And I would certainly run my one on one based on those nodes, even if I'm not actually providing compensation on it.
here's the problem in my mind with some of that opportunity, not necessarily the problem, but the opportunity is that sure, but the AI is learning against an experience base that oftentimes in the SAS world is. You know, 20 percent win rate, 25 percent win rate. It's not helping you get smarter in that degree,
What would be, if you looked at only the winning one, I would tell the AI, don't look at the ones that lost. Look at the winning ones and see if there's any
Sure. But even look at the ones that won, there's, you can't isolate that. The reason they won at a rate they did still means it wasn't very good selling. My, my belief, right? You're not gonna learn a bunch from the ones you won. If your overall win rates are low, because if you're really that good, your overall win rates would be better. Does that make sense? That's my belief, right? Is that, yeah, we're AI is intelligent machine. It's learning on what it's come before it. You want to learn at a higher rate of success, but that's just, that's my thought about it. You can disagree. This is no, no disagreement.
No don't,
I'm sorry. What?
I don't have any comment.
Uh, well,
Well, I think productivity is, and the reason I focused on it, it's just, I don't think anybody really looks at real productivity and sales for the most part. You talk about with Clary, you're looking at the number of meetings and so on and so forth. But, yeah, my belief is, you know, if you have a meeting that doesn't lead to an outcome, then it's inherently unproductive.
that's why you
Or any
into that. That's why you need to That's why you need to dig deeper into just the actual, that you'd spent an hour on an email or spend an hour in a meeting and actually understand what that person did within that hour of, was it a kick ass email and what themes led to a successful deal versus, Oh, look at all these ones that didn't close very well.
Like let's stop doing that. So you do need to look at the losers just as much as you look at the winners to, to see red flags as well as green stripes.
Yes.
And then the Like, if you like the morally hard part is saying, okay, guys, it looks like this is a good deal in stage one here, but it's characteristics are such that I'm pretty sure it's going to, you know, flame out in stage four.
So, so quit now. And that takes a lot of nerve to, to dump a deal, especially when you're low on pipeline, it takes a lot of nerve to cut a deal, which wouldn't be losing because
But isn't that where, isn't that where we need to head with this technology though? Right? I think one of the things that, the opportunity that exists is to say, and I'm, you know, a big soccer fan. I, you know, one of the big stats is expected goals. Yes. I don't know if you're a football fan, soccer fan, but yeah.
Or they said judge an attempt on goal based on give it a score is gosh, what if we had something similar in sales? Right. As if I'm going to take this next action, what is going to be the impact on my probability of winning?
Oh yeah. That, that is where the, that's where the money's at. That's where all the big thinking's at. I think there's a lot of, but you need a dope data source for that, and I don't want to share my data with the other guys. Thank you very much.
We'll understand that, but it has the success has to be based on. Experience that wins more often than it loses.
that's where I disagree because you can see, because you're looking strictly at the sales at the seller versus the customer. I would say that it's more about the customer and less about the seller. And so it's
early, but it's concerning who's the customer in the first place, not how sweet is this seller.
I agree a hundred percent, but they're not, they are connected at some point. Right. If you look at the reasons why do wind loss analysis, right. And you look at studies have been done and
Yeah. Customer went dark. Reason number one.
customer went dark. No customer made a decision on you, right? Do you weren't worth any more of their time? Thus, they went dark. They didn't go dark. They went
Well, again I'm just I'm just saying the data is not very good. Even the places that record have been lost recently.
well, I think if you do it. you do it in a professional method, manner, and you're actually hiring somebody that knows how to do it and go out and do it. You know, it's a company in Australia. I don't know if you know, Trinity Perspectives run by a guy named John Keon McLaughlin and they've the last dozen plus years, they've done thousands of in person interviews with enterprise decision makers, and he's, I've talked about this on a show a lot, cause I think it's brilliant.
What they did is they summarized all the interviews into two slides. Nine reasons why you win deals. One slide, nine reasons why you lose deals based on all those interviews. And yeah, none of it was about product or price. It was all about the seller and the connection they made with the buyer.
I know a company that I know a company that does win loss analysis as well. And I caught up with them recently. I said, hey, you've now done this. For thousands of different organizations, you know, what are your 9 and 9 that you had is very similar. It was ultimately, like, the salesperson thinks they don't have as.
The salesperson is a lot bigger impact than they expect and the product probably matters less than they expect. The way you sell had a huge influence and I agree with that. 100%.
yeah. And Trinity Perspectives slides, price was mentioned once. And it's because the price was too cheap, not too expensive, it was too cheap.
To this whole idea that we got to be able to unqualify much faster to get stuff out of our pipeline so that
I tried to make a kick to the curb number. I tried real hard to find them. It was called K2C, kick to curb of To, to measure people's, because unfortunately you don't know if you killed them and they were going to be a good deal or if you kill them and they're a bad deal. It's really hard. You almost want somebody to say, okay, I would have killed them right now, but I'm not going to, and then see how good that, like, I would have bought Apple stock.
You know, that game, that horrible game. We could encourage reps to say when would you have done it if it was your choice and then find out who the best choppers are.
That ties to this whole issue of, which one of my pet peeves is, you know, no decisions is, you know, you read what people are writing about no decisions and they think, oh, that's made the decision to stick with the status quo. And that's not what a no decision is. A no decision is the decision not to buy from you.
Yeah. I like to say they can do nothing. They can fix it themselves or they can go with a vendor. And those are the only three choices in the world. They have to do one of those three things.
Yeah, but sticking is not sticking. You just didn't give him a reason to buy at whatever level. And it's, you know, it's too often sales here to sort of pass off. Well, it's a no decision. It's like, no, that was a decision. That's a definite decision. There's a lot of information in there for us to learn from.
Might not be a permanent decision, but it might come back. It might
sure. Yeah,
Well, that's key piece. No decisions permanent. No, it's never permanent. So yeah.
Yeah. Everybody's open to change.
Andy, I want to go back to what you said on the, you said 2 things that are interesting and most of my experience is definitely shaped by.
anyway, go ahead.
earlier stage. You know, earlier stage companies, right? So I think I'm a little bit more narrow in my view, but, you know, you seem to be put a big importance on the wind rate being higher.
And then you said a comment that was like, hey, you know, if we just had a meeting and it didn't go anywhere. Now, that's a waste. I don't really agree with that because what I found from most of the early stage companies I've been at, oftentimes you're having a conversation. You're getting someone educated on a new way to solve a problem that maybe didn't exist or a new category that wasn't out there.
And some of our best deals at heap and even some of our best deals so far at Champify, there are people we met 12, 18 months ago that like, sure, maybe this could have been happening in a marketing, less, you know, high paid salesperson. But, like, I don't look at a lot of the early meetings that don't go anywhere as losses.
I'm like, educate them, make them realize that we're smart and have a point of view. And they're going to be deals in 12 to 24 months, 36 months, whatever it
Yeah. And I was really talking about more established company in that regard. You know, we've had focused on activities because yes. And again, I've had this dispute with people online who don't like this idea. When I talk about win rates being at 50 percent or higher, because they said we're not having enough conversations of this case.
I said, well, look, yes, when we go to market and I've worked early stage, I've been first guys in the door is we have, we talked to everybody. We cast the nets wide. We're going through a go to market learning curve, but when we get through the learning curve, we dialed in on what people are prepared to pay us to do for them in our ICP.
If you're having conversations outside that. You're fucking up. You're wasting time. Those are unproductive conversations. So yes, there's a time and a place, but once you get to that point, be more focused because you'd be more productive. You're going to not only think you increase your win rates. My experience has been as we all then also learn to sell bigger deals.
Yeah, that's how we approach it. I said to the reps on our team. Hey, they're in the sweet spot. That's why we're spending all your time. We do get inbounds from fringe fits or people that may be a good fit. And that's where I spend a lot of my time trying to see what's there, you know, and it's a different conversation, right?
It's not a, it's
Absolutely. Absolutely. Yeah. So yeah, that was time and a place, but I didn't mean that. Once you're established, right? Cause yeah,
yeah, understand.
this learning curve thing is so important. And sort of last topic is cause you wrote about that post. You talk about, you know, you're not enterprise ready, but one of the problems I see with a lot of startups and SAS in particular, but it's true in startups in general is they do this dance step while we're going to start at SMB and work our way to mid market, and then we're gonna go to enterprise. My experience was, and I was, again, I was, we were selling stuff. That was multiples of our revenue. Is you want to sell enterprise, go sell enterprise. If you think you're going to be at enterprise, ultimately go sell to enterprise. That's how you learn how to sell to them. That's how you learn what's required to support them and to make them successful.
You may not have all the resources up front, so you gotta be careful. You don't want to chase ones that are going to kill you, you know, you don't learn anything about selling to enterprise by selling to SMB. Fundamentally. So if you want to be there, sell there
it.
anyway, that's me. All right, gentlemen, this has been fantastic. I had a list of questions and we didn't talk about any of them, which is fantastic. Sign of a good conversation. And yeah, thank you everybody for being here is I presume people can find you on LinkedIn if they want to connect with you.
I don't know, Todd, you're very active on it. Mark, you are. Tom, how often or how active are you on LinkedIn?
I quit, I didn't get it, I just stopped, but you know, I'll, I should,
Well,
I'll get back on the bandwagon here.
if you really want to do a good job at it, Todd's got a guy you should talk to that could help you with that.
noted. Thank
Yeah. You might know someone.
There's a guy. There's a guy.
Yeah. The fact is my son has nothing to do with that, but anyway. So everyone, thank you very much. Look forward to talking to you all again.
Thanks very much.
Thanks for having me. And they say, take care.