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The world's best conversations about B2B selling happen here. This exciting new podcast from Andy Paul, the creator and host of the Sales Enablement Podcast (with 1200+ episodes and millions of downloads) is focused on the mission of helping increase your win rates by winning a bigger percentage of the deals in your pipeline. In this unique round table format, Andy and his panel of guest experts share the critical sales insights, sales perspectives and selling skills that you can use to elevate your sales effectiveness and create the buying experiences that influence decision-makers to buy from you. Host Andy Paul is the expert on modern B2B selling and author of three best-selling, award-winning sales books, including his latest Sell Without Selling Out. Visit andypaul.com to subscribe to his newsletter for even more strategies and tips to accelerate your win rate!
Hi friends. Welcome to the win rate podcast. I'm your host, Andy Paul. Now that was Nabeel Alazam and Nabeel is one of my guests on this episode of the win rate podcast. Nabeel is the founder and CEO at Forma. ai, which is a leading sales compensation software platform. My other guest today for this really interesting discussion about sales effectiveness, the buyer experience and increasing win rates are Frank Cespedes.
Now Frank is senior lecturer at Harvard business school. He's also the author of several excellent books about sales, including sales management that works, how to sell in a world that never stops changing, as well as aligning strategy and sales, the choices, systems, and behaviors that drive effective selling.
Also joining us today is Drew Neisser. Drew is the founder of CMO Huddles. If you're a CMO listening to this, this is an organization you should really consider joining. Drew is also the founder and CEO of Renegade Marketing and the author of an excellent book titled Renegade Marketing. Now, two quick items of business before I jump into the conversation with Nabeel, Frank and Drew.
And that is, first one is I have a quick favor to ask. If you're enjoying this new podcast, could you leave a quick rating or review for the show on Apple podcast or Spotify? Now receiving this feedback is very important to me. So I'd really appreciate your help with this. And I thank you in advance for doing so.
Second, over 50, 000 sellers and sales leaders subscribed to receive my weekly newsletter. Perhaps you should as well. It's called win rate Wednesday and each week you'll receive one actionable tip. to accelerate your win rates, as well as a bunch of other great advice. So to subscribe, just visit andypaul.
com. You'll see the subscribe button right at the top. All right. If you're ready, let's jump into the discussion.
Okay, friends. That's it for this episode of the win rate podcast. First of all, I want to thank you for taking the time to listen as always. I'm so grateful for your support of the show. And I want to thank my guests, Frank Sestadis, Drew Neisser, and Nabil Alazam for sharing their insights with us today.
If you enjoyed this episode, please subscribe to this podcast, the win rate podcast with Andy Paul on iTunes, Spotify, or wherever you listen to podcasts. Also, don't forget to subscribe to my weekly newsletter. It's called win rate Wednesday. Each week on Wednesday, you'll receive an actionable tip that you can put to use in your selling to become a more effective seller and to accelerate your win rates again, thank you so much for investing your time with me today.
Until next time, I'm your host, Andy Paul, good selling everyone.
welcome everyone. And I want to spend a few minutes, have our guests do some introductions. We'll start with Drew.
Hey, Drew and I are the founders of CMO Huddles a community of 150 or so chief marketing officers where we're inspiring B2B greatness every day of the week.
Wow. Love that mission statement. And prior to that, you ran a branding agency for a long time in New York,
Yeah. Renegade. 30 years.
Very impressive. And Nabil, tell us what you,
Al Azzam, founder and CEO of Forma. ai. Forma. ai is a sales compensation platform that's unifying the design, execution and change of comp to better mobilize sales teams and ultimately increase the effective effectiveness of go to market functions.
yeah, we're going to get into that. Frank, welcome back. I mean, I say welcome back. This is a brand new podcast, but you've been on my other show many times. So, tell us what you,
nothing exotic. I was a professor at a business school. Then with some others, we started a firm grew. It got lucky. I can spin this as Andy knows. I can spin this a different way when need be, but it was dumb luck. We sold at the right time. And now I'm a professor again at a business school.
Harvard business school. And what was the name of the firm you guys built?
The Center for Executive Development. We had learning management software, which was an excuse for all the services where we really made.
Got it. All right. Well, so Frank, I'm going to start with you. And we, so you recently and authored a coauthored article in the Harvard business review about the rebirth of software as a service. And I have first question is just why does SAS need to be reborn?
Well, I mean, the the premise of the article, andy is, there was what we now call the sass crash and there were a number of people, Andy Paul among them who, I consider the loyal opposition to that sector for some years, but the reality is when interest rates were basically negative.
When you had a investment community where if you were starting a business in that sector, you basically had a duck to avoid having money thrown at you. It lasted a long time, but it was clearly a bubble. Then it crashed. And a number of people responded to that and said, see dumb, stupid business model.
No, there were many things that SAS managers did, especially in sales. And knowing you, Andy, I know we'll get into this many things they did that were stupid, but subscription businesses are real and will be real going forward. And there are lessons to be learned from both the good and bad things that happened there.
That's what we mean by the re rebirth of a software as a service.
Yeah. I mean, we chatted about, cause you had written in there about a paradigm shift from quantity to quality, for instance, in, in lead generation. And I sort of pushed back a little bit on that as I tend to do on these things. Is that really until SaaS are fundamentally changes from sort of a low win rate, product driven sale to something a little more focused on effectiveness, let's say solution for so excuse me, solution focused they're always going to have the certain demand for large top of funnel, right?
And it's going to lead to sloppy practices for,
Yeah, but I,
leads that are being generated.
but this is where I think. To be honest, the world that world is coming around to a point of view that I know you and I share the reality, and this is the current reality and knowing what Nobel does. I think he should comment on this as well. The reality is that when interest rates rise and cost of capital increases.
And selling cycles lengthen as they are the cost of false positives in your sales pipeline increased geometrically and SG& A can kill you. So, in fact, there is more focus on lead quality, not simply quantity, and it's an area where, in my experience, and here I look at Nabel, I do think. Technology helps with what technology is doing now with lead gen and lead qualification is not perfect, but it's darned impressive.
100%. I couldn't agree more on the point that you just said around the lead quality. Is way more work because you're going to spend not only the sales cycles increase, you're spending more time. And you actually have all the data. Now, the interesting thing is this is one of the reasons why I found it for us is I saw sales compensation was so static.
You roll out a comp plan. You don't change it until it's so broken that you have to change it years later. When in reality, what you want is you want your rep to wake up in the morning and be notified. If you don't close this deal in two weeks, your commission rate on this deal drops by 50%. Why?
Because we have the data, the telemetry. That tells us that if the opportunity doesn't close in two weeks, the likelihood that the deal is lost me enough that I want you to focus less on it after two weeks. And I want you. To focus on closing it in the next two weeks, which means I'll give you a kicker of 1.
5 if you close it in the next two weeks and sales compensation is not thought about that way, but it is a very powerful lever and driving behavior within sales organization. So it's interesting you bring up like lead quality and. And where you, where you can be more efficient and effective in allocating resources in the sales cycle.
But let's take the example you just gave though, is so. Yeah. Let's look at the Gartner report. This came out a couple of weeks ago in Vegas talking about, Hey, these are the primary factors that influence vendor selection and they're all about the buyer's experience with the seller, right? Trust being trustworthy, being number one on those lists.
Of the nine reasons, to sort of warrant experience related, but the rest were seven of those. So, and there's been other research replicating that fairly closely. So if you tell a rep, Hey, you're on one five, 1. 5 X. Yeah. If you go close to the next week, that's not creating an experience. So the buyer is going to find enjoyable and really it's never really been proven that increases your odds of winning the deal.
In fact, you could perhaps make the case that it decreases your odds of winning the deal. Anyway, what do you think?
I agree. That's a very, it's a very valid point that there are
wasn't the right answer. I
so, so no it's a very valid point. And if you think about in sales comp, you're always designing an incentive that when gamed or when the behavior is produced, it's driving the right outcome. And I, the, in the example that I gave, if it is a, if there's a clear. If there is clear process guidelines to the sales organization and training where we are confident in the behaviors that they do are going to be aligned with the customer journey that we want to have experienced, then I would argue that incentives play a role of prioritization because when a rep wakes up that morning and they're planning the amount of work that they're going to do in the next two weeks, they're basically allocating their resources amongst the various deals.
And so if you leave it up to incentives to drive your customer journey. And not through enablement through training, through tracking all the data in a sales process that, that we can collect and using that as a coaching tool, I think there's always a danger in having a bad outcome from a sales process.
but the way Andy, the way that I'd add and sort of frame what the bell is saying is the assumption is we've got and I think this is an assumption that is increasingly true that if we've got our act together and we've got the right tools, we've got data to say something. About who is and who is not a real prospect.
And I think about when you say two weeks, that's arbitrary. It depends on the selling cycle in the business. So you're right, Andy. That's not exactly conducive to a good buyer experience. But I think what Nabella is saying is I wouldn't have been a buyer anyway. And the reality in sales comp, here I agree with you.
If you look at the vast majority of sales comp systems, the incentive for the sales rep is very clear. There is no such thing as a bad lead. There is no reason for me not to chase that pony forever. Now I think there are other reasons, and we can talk about that. I think there are other reasons why sales managers Stick with the devil they know, but incentives are certainly one of them.
Right. But when we look at sort of, data in the industry, right. Is quota attainments and falling year over year, the last decade or more. And obviously it's a complex topic, how quotas are set and so on. But anyway, just a data point. Yeah. Win rates are falling. Now average win rates, say according to the study that was done, those done a couple of years ago, like 17 percent in B2B.
Is so, and buyers are generally so unhappy with the buying experience that, 75 percent of them are reporting, I don't even want to talk to a freaking salesperson comp plans working and central plans working. They don't seem to be working to do that, or we're just, we so disconnected the outcome from the plan itself.
And so I guess one of the questions I have for you. Nabeel is, are you seeing people doing anything innovative in compensation plans to sort of approach it from a different tact?
Yeah. I mean, I. Just to step back and your point on, are they working? Is this a trend? I would say one of the biggest things that's happening is that the velocity of which the business moves and the amount of the velocity in which we have access to new information has far exceeded the velocity at which we adjust incentives. And that's the biggest problem is that you're driving a behavior based off of what we knew the world to be like. 18 months ago and a perfect example of this is the number of fortune 500s that had the same comp plan incentivizing their sales team in November of 2022 that they designed in November of 2021.
The world did not look the same and yet no one, very few, it was less than 1 percent of the customer base that we actually got to interact and see, modified their comp plans. And that is the part that to me is, if I step back and I think about. What's wrong is we're collecting all this data everywhere else in the sales process, everywhere else, from intent data upstream, all the way through to what our customers are engaging or prospects are engaging with our sales team.
And then we're not collecting the data on the incentives and how they're actually driving behavior. the problem then is anytime we think we need to make a change. That conversation becomes an emotional discussion because there's always going to be a cost of making a change mid period or adjusting a comp plan for a rep. But if you don't know the cost of not changing it, you're always going to weigh on the side of, okay, I'm going to, change is difficult as humans were, naturally designed to not want change. And so, I have seen things that have been very innovative and there's organizations that are basically leveraging.
If you think about it it's leveraging the data they're collecting through the sales process. As leading indicators as input into, comp structures, not for the majority of comp, but at least a portion to create small, short term rewards that create this behavioral pattern within a sales or the sales organization.
And what we found is those are extremely powerful when onboarding a sales rep to your team. And so a perfect example of this is,
example, please.
Yeah, I'll give you a simple. So, so for example, is. In most organizations today, you onboard a new rep and you want them to, you want to bring them onto your sales process.
You want to get them confident. You want to get them winning. What do you do? You put them on a normal comp plan and you give them a ramp up period where they get a draw. So right now we're not, as soon as the draw is done, either the reps going to leave because they're not confident in their pipeline they've built or now, they like they struggle for a little bit and they're demotivated.
Instead of actually giving them a different comp plan, the first six months you're part of this company, your comp plan is actually not tied to the overall outcome because our sales cycle is eight to 12 months. And so we're going to give you a comp plan that actually pays you for specific metrics that we believe are leading indicators of successful rep onboarding.
Such that you could be successful in 12 months, and those are some of the innovative things that we're seeing that are driving a much faster adoption, a much higher retention of, or at least adoption of higher performing reps and retention of reps that join these organizations.
I mean, there's simple things that, that companies haven't been doing, have not been doing for so long. I mean, this is, a great example, right? Is a just comp for people that are new, building them and viewing them a sense of confidence that they can do the job. Yeah. Increase their targets as they move through it.
I mean, I remember being inspired by this article or a couple of years ago about the Chicago public schools, which, people widely consider to be somewhat of a disaster, but they've had some great successes and they started this program called freshmen on track. And they knew that their freshmen accomplished, these, I forget what the exact metrics were.
But you know, complete X percent of their assignments and certain reading tasks. That they were going to graduate, the odds of being, and so they just invested the money in the freshmen. And it's like, we can do the same thing with new reps, right? And this, if we, this, I think sounds like part of what the company is doing is, yeah, how do we bring them along in a way in a, in structural compensation and so on.
So I said, we build that confidence and they'll stay longer. They'll, hopefully grow within the organization and so on.
Exactly.
this. On this very subject in, in that if I'm eating brand in the category, , my win rate, just because I'm the leading brand in the category is going to be a lot higher than the fourth brand in the category, the 10th band in the category and and my win rate could be 80 percent because I'm the leading brand in the category and I'm just I'm better.
How does compensation adjust for in that scenario? Because don't if I'm a salesperson, I can work at a company where they just win all the time versus the one that wins one out of, back at the average of 17%. How does that work? I just don't I'm really
curious.
know how that works. I mean, look Drew, think of it this way. There's a pandemic that comes. You happen to be selling for a company called Zoom. Have conditions change that help you make quota. You bet. You're not really selling. You're doing order fulfillment. The way you adjust the comp plan is to increase the bogey.
To increase the quota. I mean, and conversely, it's not your fault if we have a recession that I think we adjust. I do think there's one other issue here, though, that is important, and I think you would agree with me. It's not as though problem here is a lack of IQ. I do think, however, the problem Is managing change and transition.
And the reason goes beyond sales. We have to step back and remember how fundamental sales is in any for profit organization. So many other resource allocation decisions depend on the sales forecast and the ability of the sales force to meet it. The metrics therefore put in place in sales tend to be those short term metrics.
And you're exactly right. Faced with the transition. They tend to stick with the double. They know. I always remember one of the very first case studies I wrote it at Harvard. I'm fresh out of graduate school. I meet with this sales VP. He immediately, he can smell who I am. And I'm asking all these questions about strategy and long term.
And he finally looks at me and says, kid. In my line of work, if you don't survive the short term, you don't have to worry about the long term. So I think there's a larger organizational context. And, again, here's where I think data is relevant because now the CFO is seeing a lot of the data, Nabil, that you're talking about.
And I do think it is a trend, but it's not the majority of companies, Andy. It just isn't, because they still have to come up with next quarter's numbers.
Yeah. Well, I've, well, go ahead,
I was going to, I was going to, I was going to, I was going to one thing and so 100 percent agree. Right. I think that the fear of change and it's the big driver when you have market events that shift, but. One of the things that we don't see as often and best in class companies do is Measuring and truly understanding the impactable portion of your revenue versus the carryover or the revenue, lift from other aspects, your asset,
As Drew says, from the brand equity or whatever. I would agree with that.
exactly. And so, so when you're building quota and when you're setting quotas, you should always be thinking about the impactable because that's the part that's really the sales salesforce is ultimately driving through their process.
I agree.
So trigger a question. Is quota still relevant? Why do we need quota?
I mean, quotas are, there's, they're relevant for
Let me provide context on that. So if you have a, an effective sales compensation plan, I would say, well, really, why do you need quota? Because yeah, you can act like GE and every year, right? They cut the bottom 20%. need quotas, people are going to perform. They have the incentive plan.
They don't need that artificial constraint to the quota. In fact, you could make the argument that the quotas actually constrain sellers and limit output because, if you're familiar with Goodhart's law, when you make a target, a measure or make a measure, a target loses all value as a measure because people optimize their processes to achieve the target.
So we're going to have all of our sales teams instead of saying, look. Go sell. We've got this great compensation plan, the bottom 20 percent you're gonna be gone next year because that's incentive to be good there. Right. And then they're not constrained by orienting themselves to this artificial top level performance.
So there's an interesting, okay. There's an interesting part here. I would say are almost more important. The targets are more important than the actual incentive structure that you have. And one of the key things that we want to do in an account plan in an ideal world is you want to pay your top performers significantly more two to three X the average rep, and you want to pay your bottom performers as little as a third or even less.
Why? Because you want the bottom performance to leave. You want the best performers to stick around. And to do that, you need a benchmark of what good performance is. And so the more accurate you can be in your quota setting, the more aggressive I can be in my pay curve. Now, if you can't be accurate in your forecasting, for example, it's a new product to launch.
Then I agree with you. You're actually better off not setting targets and creating. There's a variety of incentive plans that can be rolled out where depending on where you are in the leaderboard. Depends on where you're going to get paid out. And so you effectively create this, kind of, this is the pool of money we're going to pay out and it's going to be allocated based off where you are in the leaderboard.
And that could be a, a great construct if you're not confident in your quota setting. The problem there then becomes that you need to be very confident in your capacity coverage, because if you're treating everyone the same, the bottom 20 percent versus the top 20%, you need to know that everyone has an equal opportunity.
To perform. And so again, it goes back to quota. If you're not equally distributing the capacity, then you need to set a target, at least even if you don't share with a rep, so, if they're a good performer or not,
Assuming quotas is the only way to know to measure.
Well,
that's true.
the just, one of the historical justifications for quotas, I think it was two. One is I need a number that tells me. The manager in the company that this person is paying the freight. They're covering their fully burdened cost. That doesn't really answer your question, Andy, which I think is a legitimate one.
The other one I think is motivation. It's a, it's an assumption about human psychology. Why do we have leaderboards in sales? We have leaderboards in sales because we're social creatures. Human beings compare themselves against each other. And, quoted does that. As well, but it also, to your point, has many other unforeseen, perverse effects.
I would have said, before I ran a business, I'd have said, Andy, a question like that is stupid, of course you need quotas.
Many people still
say that. I think it is a legitimate... Real question and it's kind of the answer. I think it's context specific.
I mean, there are other ways to measure, right? I decades ago ran sales teams. We didn't have quotas. We measured people on productivity. We were, we wanted, we were able to develop factors. How much time were they taking to bring an opportunity from initial point of interest to a close much resource and how much resources did they consume of the organization on doing so?
Do all you guys know the famous story about Ross Perot when he was at IBM in the early 60s, year one, he makes his quota by July 4th and the way the comp plan worked. He had no incentive to sell more. So he saves the orders for the next year. Year two, he makes his quota by St. Patrick's day, year three, by like January 3rd, year four, he's left.
He started his own firm.
Well, I got to shift a little bit here. Cause I mean, I could go all day on this incentive stuff. Cause I think one of the things we don't do with incentives is really calculate. Yeah. Is there, is this really achieving a return that we really want? Especially in what I consider low wind rate environments.
Right. And by one to shift and give drew something to talk about here, I don't want you to be ignored over there. And it's sort of the same thing. I was just talking to a CEO of. Probably gnome outwardly very successful, the company high profile, he's saying, and they're selling, enterprise software, win rates, average 20%.
So let me ask you a question on this and I can
well, let me do that. Let me do the question first for you is, and then go to yours is, and yet we hear all this talk about need more pipeline, we need more pipeline. I'm like. If your win rate's at 20%, you got more than enough pipeline, right? In any sort of real sense. So. Is marketing contributing to that problem or are they helping,
Well, and this is where my sort of question comes in, and maybe there's an answer in here too. The thing that is enlightening in my mind is if we can separate demand generation from demand capture, okay? And if we look at demand capture, those are people who are actually in the market. But if you look at a lead pool, a hundred of those leads, five are in the market, maybe.
Because we misidentify leads and again, this gets to your comment about what's marketing doing. And, the, if three years ago, if I was talking to a group of CMOs, they would be talking about coverage, and saying, alright, I need 6x sales qualified leads for every rep. And they, and that was their sort of way of building a predictive model, because if I did 6x and we closed one, or twenty, thirty three percent, we're gonna hit our numbers. It's just so problematic right now because the result of that 6X is a lot of this funnel that we're talking about. And CMO's not having time, and everybody else in there doesn't have time. And if we look at the problem CMO's are facing, it's that... If they concentrate just on filling the funnel, they're missing out on a lot of things that they could be doing to really drive the company forward.
And so, I don't know, what your question exactly fits, but it ultimately... Marketing. I'll give you one example that's really interesting. So one of the folks in our community shared, they did a track of their one customer. 137 touches before the close. A hundred of those were marketing. And so you again go to 15 people on the buying committee, the CFO wants to go in and use the ROI calculator, the security guy wants to make sure that there isn't a problem with GDPR, the, all sorts of, or a compliance person, and they all went in and they're all going in to sort of find the answers that they need and, the enlightened marketer is obviously thinking about that, And in what we're now, everybody has to call value enablement.
No more sales enablement. Nobody wants to be sold to its value enablement. And once we think about it that way, there's a chance that marketing and those 100 out of 137 touches will move things forward, right? I keep wondering in this world where everybody wants to self serve, even at an enterprise level, what role sales is playing because Marketing is answering every one of those questions right now that the every single if they are, then the buyer is ready to buy.
And now they're saying, Okay, we already made our shortlist. We didn't need your help. We've got four people on the shortlist. Thank you, salesperson. But I really want a technician who's going to come in and show me how it's going to integrate. I really want a security. I want a product expert to talk to. So anyway, this is the sort of the other side of the world that I live in is where Yeah, sales are closing very, at a much slower rate, but it, I think it's because they're talking to too many frickin people and not the right people.
Yeah.
Okay, that was a lot of stuff I just threw out there. Feel free to parse it
Well, I mean, sure. Yeah. We here, I'll see the data, 75 percent of buyers want to do self service or don't want to talk to salespeople. And I, yeah, my first reaction to that stat is always, well, that's so wrong, it's a hundred percent of buyers don't want to talk to salespeople. It's not 75%,
but.
talk to salespeople until they need to.
Well, that, that was, you took the words out of my mouth, but they need to, right? I mean, I think that, I think it's this, I think it's really overblown and not to accuse you of being overblown true, but it's this idea that, people are making a purchase decision, a really know what they want or really even understand their problem, their challenges.
Yes. They can sort of figure that out themselves internally, but yeah, my experience has been for a long time is that those more self aware organizations. No, they need to talk to somebody who is not part of the inner circle. This whole sort of strong ties, weak ties idea and social network theory is that I need to talk to somebody that I have weak ties with.
They'll ask me the questions I don't know to ask myself, right? This is part of how we learn to help define our challenges and understand our challenges and define what the outcomes are we can achieve. And so I think if, and this, I think this marketing sort of helps propagate this myth about, buyers are 75 percent away through their buying process where they talk to a salesperson the first time. If you buy into that salesperson, you're gonna come in and what you're gonna do? You're gonna pitch your product and you have no understanding. You have no understanding what the buyer. Is really trying to accomplish or really a no understanding of the help they need you to give them.
I think there's a difference then this may go back to what Frank was talking about at the very beginning. If I'm a replacement shopper, I've got Salesforce and it's just not working. I'm going to look at HubSpot. I'm just replacing one thing for another and I know what my problems are. That's some percentage of purchases right now.
And by the way, it's a lot more percentage of purchases right now because CFOs or CFNOs and so all they're doing is either replacing Something they have for something cheaper, ideally. Or they're buying something that will save them money in a very short period of time. Otherwise, they're just kicking everything down the road, which is why sales cycles are so long.
So if I'm replacing, don't I have a much greater understanding of what you're talking about than if I'm buying something new? Like, Nabil is selling something new. He's got a long sales cycle. He's gotta convince them to get over the thing and say, You need to look at this problem, because you're not.
And so the salesperson in that case, though, that you're given is let's say it's Salesforce is being replaced is that's your account manager, right? That's not your, we're not talking about net new business acquisition. We're talking about customer retention at that point. And
Well, not if you're HubSpot if the incumbent in Salesforce and HubSpot's coming into the room,
that's new.
Sure. That's new
that's a new sale process, but it's not, you don't have to tell the person what this category is about, how to use it, what you're going to try to do is say, if you use ours, instead of here, you're going to get this kind of benefit.
That's a very easy conversation. It's when you're trying to sell something new, which is a lot of software service. That's when it's really hard. And it's really hard right now to sell something new.
Yeah. But is it, I would just add the following drew to what you're saying. 'cause first I completely agree with, your example, we've got the 130, but you know, a lot of that is some email list that has nothing to do with us. I'm on, I am on the board of a company and I use this example haltingly because I'm not sure Nabeel whether we compete with you or not, but we basically, we use ai.
to do lead gen and lead qualification better. And what we
No, yeah, we don't compete,
okay, but what we find again and again is exactly what you described, Drew. And that is, guess what? If you had these 50 good leads, your win rate would be so much better than the 150, and not only that, the selling cycle is shorter, et cetera, because of the fit, Marketing 101.
The fit between your value proposition and that target market. And now the data with the right tools can tell you that. The CMO gets it. But this gets back to what Andy and then Nabeel was talking about with comp. And I think it's a longer term trend, Drew. What I see going on, both in terms of budget and what I would call internal organizational power and influence.
Sales rises, marketing's down. And the CMO then says to us, Yeah, I see what you're saying, but the people in sales want me to give them lots of leads. The thing Andy Paul has been hitting the drum on. So I think that, again, there are larger issues here that go beyond simply, IQ. The level of IQ in sales and marketing is not the issue in my experience.
Yeah, no
That. I think it's a cultural thing, though. I mean, I think that there has not been, and Frank knows I beat the drum on this, is there has not been this emphasis on, look, if we get a sales qualified opportunity, if we think that it belongs in my, if I'm an AE, if I think it belongs in my pipeline, I'm going to invest my time and effort to sell to you. I should have the confidence that I can win it more than one of every five times. Otherwise you have a problem. One of two problems I would suggest either you don't have product market fit or you just really suck as a salesperson. And so, and not, I don't be harsh about that you room for improvement.
So, but yeah, we seem to accept that and the sort of lack and I call it effectiveness, this lack of sales effectiveness is, and again, there's examples, companies talking to them, 20 percent win rate, it's like, Seriously? I mean,
but is it 20 percent win rate
win rate is on opportunities into the eighties, into their forecast.
Look, I was working 10 opportunities this month, 10 closed. I want two of them. That's 20%. That's the win rate. Not talking about from top of funnel. We're talking about win rate.
from opportunities? So, so,
right?
yeah. So, but I guess my point is like the 20%. Is total win rate, maybe only 30 percent of those opportunities actually made a decision. I think that's the other piece is I think you need to split out the no decision, which I would actually argue, maybe we haven't enabled the sales team to, to create that compelling event.
I mean, you're right. It could be product thing. It's not
noticed, I noticed
to drive. It's still a loss. It's still a loss
It's a loss. There's
But
People want to say no decisions, customers deferring doing anything. No, they made the decision not to buy from you. It's an affirmative decision. It wasn't, oh, we're wishy washy, we're going to stick with status quo. No, we're not buying from you and you, and that's a loss.
yeah, and I would argue, and this is something that I hear what, when I ask a CMO, what's your biggest challenge right now is that we're getting a lot of at bats, but then they're not buying at all. And so again, to me, is that an economic macro issue? Is that just you didn't do a good job at saying you need this now?
And again, I think we're in an interesting moment. You need this now to move your business forward. Period. And a lot of brands are sort of in this place where it's nice to have. I'd really like to have that information. That'd be really cool, but I don't need that now and it's not going to change my life and the speed to hero as a concept, you and I have talked about Andy, the speed to hero is really slow and that's a problem with an enterprise sale, right?
I'm not going to look good for 18 months. Well, jeez, I don't know if I'm going to have a job in 18 months, so I'm not, but how then, going back to your point, how do you get to an insight that, oh, these guys aren't going to make a decision? They don't tell you, they don't, is there behavior that you're going to see, so that you can pull those guys off the list?
of course they
I mean, it's interesting. Yeah. It's interesting. I that's where
question, go ahead. I'm starting
gonna say is depending on, yeah, the point I was gonna say is it depends on what you qualify as an opportunity. And I think a lot of the times we qualify opportunities that shouldn't actually be opportunities.
They're still in a developed stage to put it in an active sales cycle. And that's where I think, the 20% loss is, It might not be the sales performance. It might not be the product. It just might be that we're over qualifying things that don't deserve to be labeled opportunities.
There is something that you said earlier, drew that I think I want to touch on. And the whole question of, is there, like what's marketing job with sales job and our sellers really doing anything that kind of that comment me, like, it's interesting. Cause you look back to, you look back to, you look back to the go to market function historically.
And, maybe 50, 60 years ago, you could have a seller, like a single seller that was doing the entire gamut of the go to market. They were educating the buyer and the brand. They were going through the entire process and being a technical expert on that trinket or widget as they're going around a country tour selling this product. And so all we've done is just allocated or basically created specialization in every part of this funnel. And so I agree that , when you think about the account executive or the account manager, whatever the role that you define as. To me at this point, we've just separated out the role of that quarterback.
And if they're doing anything else other than quarterback in the process it's difficult. And to Andy's point on, they're asking the qualification questions. I don't know, Andy, it's maybe in five years from now, there's enough telemetry to tell us that when a lead comes in, you've almost pre qualified them to the point where you're not, you don't have to answer any questions and you can, that quarterback role now starts to become the role that's, owning the very late stages of the sales process because that customer is ready to buy, but I think it's a constant evolution and
I'm going to give you two thoughts on that.
Yeah. Last thoughts. We're gonna have to wrap up with that.
So, here's what is sort of the light in CMO right now, is they're saying, I have one metric and it's the same as sales. With, there is no such thing as a marketing qualified or a sales qualified. There's a company qualified opportunity. And that has budget attached to it.
So that's one of the things, the qualifications, there's not, they know, and I don't know how they confirm that, but a company qualified opportunity and marketing sales are presenting together. The data and being judged on the same metric, so that doesn't matter. So my earlier point of do you need it, obviously you need them both,
Yeah, so yes, yeah,
but they need to be judged all the way through, together.
All right. Well, cool. Well, hey, John, unfortunately we got to stop right now, but I think we'd be gone for a long time. This was great. I really appreciate everybody's input. So go around the room here, Nabil. How can people get in touch with you?
You can reach out to me on LinkedIn or go to forma. ai and connect with me directly.
Perfect. Drew.
Sure Drew Neiser on LinkedIn or visit CMOHuddles. com if you're a B2B CMO.
Yeah. Good organization. And Frank.
LinkedIn. I have a website, although I confess I haven't even been to the website in a couple of years. There's also the faculty page at Harvard Business School where I think they say, here's the email address, etc.
Yeah. And yeah, go search on Amazon for Frank's books. Very good
books as well. So highly recommend. Yes. And you can go listen to my episodes on that past podcast Sales Enablement Podcast, where we talked to Frank about his books in depth. So everyone, thank you very much and look forward to having you come back.