Hi friends. Welcome to the win rate podcast. I'm your host, Andy Paul. Now that was Kevin Davis. And Kevin is one of my guests on this episode of the win rate podcast. Kevin Davis is the CEO at boogieboard. ai. My other guest today for this discussion about sales effectiveness, the buyer experience and improving your win rates is Hamish Knox.
Hamish is founder and CEO of sales for training, as well as host of full funnel freedom podcast. Now, one listener note before we jump into today's discussion, if you enjoyed the show, please do me a favor, take a second now before we begin to rate and review this podcast on Apple podcasts. It really helps us to get discovered by even more professional sellers, just like you are looking to take their careers to the next level.
So thank you for your help with that. And if you're ready, Well, 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 my guests, Kevin Davis and Hamish Knox 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 Apple podcast, Spotify, or wherever you listen to podcasts again.
Thank you so much for investing your time with me today until next time. I'm your host, Andy Paul. Good selling everyone.
Friends, welcome to another episode of the Winrate podcast. Joining me, two excellent guest panelists. Let them introduce themselves. Kevin Davis, we'll start with you.
everyone. Andy, thanks so much for having me. My name is Kevin Davis. I'm here in Austin, Texas, where I'm one of the co founders of a company called Boogie Board and we're an AI territory design platform. I've spent my life in direct sales, BDR, account management, you name it, eventually moved into sales operations and thought of myself into this co founder and CEO role of Boogie Board about a year ago.
Excellent. Excellent. Hamish.
Hamish Knox based up in Calgary, Alberta, Canada, where we are expecting snow a couple of days after we record this. I run the office of Sandler Calgary. So, I've been in sales since I was 19, mostly selling the premium level services to all different types of audiences. And at Sandler Calgary, we support our clients to sustainably scale their sales so they can eventually exit for their number, not the number they're told to take.
Yeah. Excellent. All right. So, Kevin, we're gonna start with you. Is, so I was curious about this, cause, well, tell us, first of all, tell us a little bit about Boogie Board, and then I'll ask my question.
Sure, if you've ever been part of the territory design process, you know, it's generally. Not a fun one. And one of the reasons for that is that the people that have to design territories usually have to do it manually in a spreadsheet. And so when we were starting the company, we thought, well, what if we could build a suggestion engine that takes in all of your market data and your team data and suggests different types of territories or lists so that you can make that process go a lot quicker and unlock the power of some of that market data.
So here's my question, my curiosity, is, given all the problems that exist in sales, why Territory Design? Of all the things you could have solved for, why that one?
I had, you know, I was trying to start a company, you know, I wasn't necessarily like called to territories yet. And I tried a few different things. I tried a Christmas tree company. That was a very stupid idea. I was
You should have been in Calgary for that one.
Yeah,
I was on Alibaba trying to order 50, 000 Christmas trees.
And I tried a few other ideas that proved that I had no idea what I was doing. And I started thinking about problems that had occurred in my. Life in sales at net suite and at Google
and territory planning. Territory design was just this like disgusting black box of hatred for everybody.
And so we got into it and you know, thought we could solve it.
And we started talking to people that were willing to pay us to do so.
For me as a consultant and also as a operator prior to that and so on. It's like, yeah, I go into a client company and territories are always a mess, right? Lots of like I called the first person in the door syndrome where all the good accounts are aggregated under one person or two people, typically, or rampant favoritism on the part of management.
How do you address issues like that?
You know, I think more like fundamentally, What is the purpose of a territory? What is the idea behind it? And the idea fundamentally is to focus your sales team, whether it be on a geography, a set of accounts that have certain attributes. And it's also a retention exercise for your team that you need to be able to measure them and give them opportunity to be successful. And so. When you talk about fairness or issues between reps, we talk about quantifying the starting line. It's okay that not every rep is going to have the same territory that you would
expect that they wouldn't. But you need to have an approach that you can measure over time, especially as the world of market data continues to explode, because it's ultimately your main style of orientation to the market.
So give me an example of market data you're referring to. In that case.
So it used to be if I have an ideal customer profile, it might be five bullet points long. I target companies in Calgary. They're in the oil and gas industry. They have between this many employees. Right now, that would be a kind of a dense lens to take, you know, where in Calgary,
where are they within oil and gas?
What roles and departments do they have? What technology do they use that we integrate with? What type of intent have they shown on our website? Right? The list goes on in each industry. Person. Each company has different data points that they're using. And if you look at a like an info graph of the providers that are in that space it's exploded and companies are having trouble handling and leveraging that huge market of data that they now have access to.
Interesting. Yeah, it's just, I'm, it, because it's, you know, I it's a matter of equity, I guess. As you said, they don't have to be the same, but people feel they're being treated fairly. And I think that oftentimes becomes the biggest problem. And if you could, yeah, mitigate some of the impacts of tenure and sales management favoritism, I guess, you know, people are people, you're never going to get rid of it, you can't legislate it that way, but mitigate some of that, it's great, yeah, I like it.
Oh, thank you.
So, question for you guys then, sort of different track altogether, but I was reading this LinkedIn post about this study from Sixth Sense that came out that I don't know if anybody had seen it, but basically it's a couple of key findings. One is it's saying that by the time buyers first contact sellers, that 80 percent of the time they already have a preferred vendor and that 80 percent of the time of that vendor is the winner. And there's a lot of assumptions there. I'm just curious of your take on that data, either one of you. You'll go ahead, Hamish, you want to start?
Yeah, thanks, Andy. So yeah, 80 percent of 80%. So I've seen other studies that show that to be largely disproven. And what I find is, even if the buyer has done 80 percent of their quote unquote research, and they've already got a preferred vendor. they've made up a story in their head. Like, we are the experts in selling our stuff.
Our client is not, or our potential client is not. And so, depending on the quality of the data that they can get on our website, or our social media, they may be making up in their head something that is completely different. And even if we get referred to somebody It's a game of telephone. So what Kevin told you about the work that we did together, you're going to filter that through your own hopes and fears and dreams and worldview.
And I've made the mistake early in my sales career where I got an it, where I got a referral and I was like, great, press hard. Third copy's yours. And we had a very awkward 30 day relationship before they fired me. This is when I was back in the corporate world and it was because I didn't ask those questions.
So. From my perspective, there are a lot of assumptions in there and those are all the great questions that a seller, whether they're a BDR, AE, whatever, could start to ask around where are you at, what are you thinking, and then I always want to find out how did my buyer get there. Like when someone tells me what their budget is for a project, I don't care what the number is, I care how they think about it.
And how they think about the money because then I can start to understand how do they conceive of money and how we can better frame a conversation around what they're eventually going to invest.
Yeah, Kevin, what's your thoughts on that?
I fundamentally agree with the notion that buying, Anything is mirroring consumer purchasing through e commerce. I think that's what that studies is trying to, like, say, in more simple terms is that people are doing research online before they actually are talking to sales. And
Which is not new, by the way.
Right. Exactly. And I think about an anecdote from my own life. Like, yes, I was buying running shoes today, and I whittled it down to three pairs. And then in the B to B world, I would have reached out to a salesperson. And so I think the role of that salesperson now has more to go on. In that journey, because more of it can be mapped in more relational to specific content that they could use in their arsenal. So I don't think that the role of the salesperson necessarily changes fundamentally, but I think the tools in their tool kit Are more relational to the customer journey are more relational to the content that they can use to help push them across the finish line. And so whether or not it's 80 percent that, like, totally changes the game.
I don't agree with that. But from a fundamental behavior perspective, I do think it can make the sales process a little more human. Yeah,
interesting comments you're just making. So I want to dig into a little bit of this, is I don't really see sellers, , aligning with the buyer journey of that, that well, right? I think one of the things that's still It sort of keeps it somewhat orthogonal to it is the fact that we've got these, defined, linear, sequential sales stages laid out in our CRM system, which bear no relationship really at all to the journey the buyer is on to make a decision.
And I think, to me, that lack of alignment is one of the reasons that really suppresses sale, seller's performance. And it, it's really sort of interesting is that, This idea of the sales stage is the way we talk about it today. It's really relatively recent, right? It's really been accentuated by the adoption of CRM because we can put those stages in CRM and monitor what's going on but Yeah, I looked through the bulk of my career prior to starting my own company Yeah, did fairly well and we didn't you know selling large strategic deals we didn't deal in stages at all Right not as we define them now, I mean we are more tomorrow Where's the buyer today?
But now it's always about where are we today? Right? And it's like, how do we get this, how do we really get this more aligned? Because I look at performance and sales pressure in general and think, yeah, this is one of the real obstacles to getting better. Is, sellers think they're doing one thing and buyers think they're doing something else altogether and they should be thinking they're doing the same thing.
Amen. I find from a CRM perspective, there's usually no clarity around what it means. And our brains are not wired for numbers, right? So I meet Kevin at a networking event, and he says, yeah, Hamish, maybe possibly something in the future I'd strongly consider thinking about maybe giving you an RFP.
And I'm like, awesome. 90% in the funnel. Whereas I have a colleague who has the same conversation with Kevin and he actually takes it down the path and he's even got a proposal in front of Kevin and he puts it at 20%. And so there's that disconnect there. And then the flip side of that is sellers are afraid to ask the questions because their pipelines are skinny and they're thinking, if I let Andy go and I don't keep him in my funnel, I'm not going to make my number and I'm going to get fired.
And so they don't ask those questions. And I've coached leaders and sellers to say around a question like, well, But if I bring that up there, they're going to start thinking about my competitor and I say they're already thinking about your competitor or if they're not thinking about it now, eventually someone's going to be like, Hey, why didn't you go get a second quote?
And I'm like, Oh, right. Second quote. And now they're going to, they're going to win a competitor. My credibility goes up when I bring up the things that my buyer is thinking, and it helps us get to the truth faster. And the truth might be. Not a good fit. We're a third quote. Great. Thank you very much for calling.
We declined to participate. We'll talk to you next time that you want to come and talk to us.
that's really I think that's a really good point is that we kind of think we're sim swimming in this sea of really rich data that we now have some of related to the customer journey, which is structured in CRM, which might not always make the most sense, but Hamish just pointing out that, we'll, we're now missing some of that unstructured data that we actually used to get from demanding more from our sales team. And so I think that's one of the curses of the belief of some of this intent data that Sixth Sense is talking about is that, oh, we already know what happened. We don't have to ask the hard questions. And when you couple that with the fact that you're in a database structure that isn't really meant to house this type of information, it can become, like you said Andy, like kind of over indexed on these stages.
Yeah, and that's the way we structure the stages. It was, again, one of my pet peeves is, you know, exit criteria for a stage. Yeah, for me, it's, I'm gonna, every time I interact with a potential buyer, trying to deepen my connection. I'm trying to deepen my understanding, what they're trying to do. I'm trying to deepen my discovery, right?
I don't finish discovery and put it to bed and say, okay, now onto the next stage. Because if I'm not continuing to learn about them, they may be talking to somebody else that may be having an influence on what they're thinking. And if I'm not on top of that, I'm gonna miss out, right?
To your point, Kevin, there's nothing wrong with CRM systems, but it's like we're using them for the, for that purpose, for the wrong way, right? I think about You know, Gartner's Buyer Enablement Study from 2018, which, you know, they have this famous diagram of the buyer journey.
Excuse me. And it's just, yeah. They call it the spaghetti diagram, right? It's like you took a handful of spaghetti and threw it on the wall, and the lines go everywhere, crisscross, and they keep, start again, and go back and forth, and so on. Yeah, I read, I looked at that and I thought, Oh my God. Yeah, from all my years of selling, you 7, 8, 9 figure deals, that's what they look like, right?
There was no linearity about them at all. And yet I haven't seen a, I haven't heard, I'm sure there's somebody out there, but in my experience, I've not heard anybody, or read about anybody changing their sales process fundamentally to say, this is what we need to align with. Right? We need to align, instead of having this rigid, you know, sequential process, we need to build in some ambiguity into this thing.
That's some adaptability on the fly that, you know, accommodates what the buyer's actually going through. Why aren't we doing that? That's, , it's too hard for my sales managers to manage? What's the, Kevin, you're in sales operations. It's, what's the view? It's like, well, why can't we adapt to this?
For me, the sort of the technical view and you know, this isn't gonna be a favorite of some of the CRM audience is that the infrastructure layer of the data are in the wrong place for as long as we have been drawing revenue architecture diagrams, Salesforce has been in the middle and everything else has been derivative of that
Which which forces their structure or HubSpot structure or whatever it is, onto everything else that we're doing. And so now with the disruption in the underlying data market,
companies like snowflake, you're seeing a new center of the architecture for revenue diagram. And so I think that's kind of how companies are starting to think about it is by making these points that we're grabbing along the customer journey. You know, the more anecdotal pieces that you were talking about from video recordings or whatever it is that we can then
also bring in, how do we make all of that usable in a more artistic fashion than saying. We have four sales stages. One is qualification. One is demo, you know, whatever they are.
So I, I do think the opportunity is there.
Yeah, and I totally align on Kevin's point about the technology because humans are lazy, like our brains are lazy, right? Our brains just look for path of least resistance. And so when we implement a CRM and it's like, Oh, easy stage one, stage two, stage three, stage four, got it. Unfortunately, what that does is discount the human being.
And we forget that we're still selling to human beings, at least for now. It's going to change. But we ultimately, we're selling to humans, and when we discount the fact that there's a real human being on the other end of the phone who has their own hopes and fears and dreams and worldview, and we're just like, awesome, you're at stage one.
I shall death march you through these questions. Well, now the person feels like a commodity and now they just want to slap back at us and say, great, give me a discount, give me a free trial, whatever that might be. The minute that we actually engage with them as a human, with where they're at instead of where we think they should be, that's when we actually have real conversations.
And that can be tied into the CRM at some point. A CRM shouldn't be handcuffs. It should be a guidepost.
Yeah. Yeah. Well, yeah. Unfortunately, it's used for more than that, right? Yeah, sellers look at us or command and control when it should be, ideally, a resource to say, How can we increase our odds of winning this deal? Right? What do we need to do? What's the buyer need from us right now that's going to help them make progress toward making their decision?
What form should that take? That, that information should be what is in the CRM that people are using in order to be able to help coach sellers to execute at a level that's not happening today. Right? It's, when you made reference earlier to thin funnels, see, and I'm sort of a contrarian on that, because I don't think funnels are thin at all.
Right? As long as Sellers, you know, SAS, on average, across all ACV segments, this was data that was, you know, 3 4 months old at this point, but, sure, it hasn't changed much. Across all 5 ACV segments, average win rates, 18 20%. Okay, you can't have thin pipelines with low win rates. By definition, 20 percent win rates, you have too many prospects. Doesn't necessarily mean you have the right ones, but you've definitely got too many. I don't know, I'm interested in your opinions on this. I just don't think that's the issue right now. The issue is, how do we do better with the opportunities that exist, in terms of qualifying the ones that we should be winning and should be working on, and winning those at a higher rate than we're doing? Because, this sort of a mindset that's set in sales, but, third party to a, you know, exchange was on LinkedIn with a, Private equity person, another sales expert who I respect is pooh poohing the idea of win rate should be higher than 20 percent because I only see, you know, 20 to 33 percent win rates on inbound on SMB deals.
I'm like, I've had dozens of high end sellers, enterprise strategic sellers on my podcast for the last nine years with 70, 80 and one, even 90 percent career win rate selling large enterprise, you know, six, seven figure deals. That's how you become successful. You learn how to win. Right? So,
that was my rant. Somebody pushed my button on something. But, yeah. Well, maybe it was about the pipeline. I don't think You know, it's hue and cry on LinkedIn these days about pipeline, but it's like Yeah, lots of opportunities there. You just gotta learn how to win them. I'm curious. Why aren't people I don't know why.
Like when this data came out about win rates 18 20 percent in SaaS. And this is not purely a SaaS issue. There was a study that was published as part of a book a few years ago that surveyed I can't remember, it was 12 or 15 industry segments around the world. B2B, average win rates, 17%. So, like I said, it's not a SaaS issue.
Exclusively, it's just a, you know, it tends to be who listens to the show. But, Why isn't that a hair on fire moment for companies? Is that, this is what's going on, it's like, you have these people on payroll, you've got sellers on payroll. You know, rather than hiring another salesperson or generating more leads, let's train these people, if they've got a 20 percent win rate, let's get them to 22 percent this year, or 25%, then we'll get them to 30 next year.
That's the most efficient way we can grow, but it just doesn't seem to be in the playbook at all. Kevin, Hamish, what do you guys see?
Yeah I hope it's a hair on fire moment for those companies. I think, you know, I'm, I, my world is SAS mostly right now. And
so one thing I do see that could inform that number a little bit is that it's now easier to build SAS products. And therefore there is an appearance of more competition. So that could drive that number, but I don't fully subscribe to that. I think the main problem with a lot of this stuff is that we lost some of our discipline in terms of focus on where we should be selling fundamentally, who is our customer. And I think part of this is that products got really technical.
And so salespeople removed themselves a little bit from truly understanding what it is they were selling. And therefore they were disconnected. From their clients and not able to provide like an advisory service. And so when I talk to customers, I ask them, how is your ideal customer profile implemented into your business? And they show me a Google doc or a Microsoft Word doc where these bullet points exist, but it's not implemented.
And so I think that kind of directional focuses is one of the problems that contributes that as people are aiming in the wrong spot.
Yeah. I agree. And I think it, it, in my mind, it sort of boils down to choices, right? And one of the things we're not training sellers how to do is, and this comes from managers obviously, is how to make the right choices about where to spend your time and your energy and your attention. Because you know, when I was running sales teams, yeah, my.
Question was if a seller wanted to say, Hey, I think this opportunity is, you know, a good qualified opportunity belongs in the pipeline. My question is always, well, tell me why we're going to win it. If they didn't have a vision as to the path for us to win it, why we were sort of uniquely suited or could be uniquely suited to win the opportunity.
Why did it belong in the pipeline? And I'm sorry. Go ahead.
Brilliant question, Andy, because that ultimately is that future state, right? Are we just stuff and things at the top of the funnel that eventually we're gonna quietly remove six months from now? Because we never actually had a shot at it. And ultimately I'm aligned with both of you. It's the leaders who need to provide the foundation.
Provide the guidance as to where we can aim these really amazing sellers that we have if we just let their energy go all over the place, where it's going to go all over the place and our win rates are going to shrink. I think another thing that that ties into this, I saw this stat recently, it was like 68 percent of enterprise opportunities and in no decision, like they just vanish.
Yeah, I've seen it go from 50 percent to 80 percent depending on some studies, which, yeah.
Somewhere in there, right? So then now let's merge these two numbers. And so now we've got, you know, the buyer who just vanishes, and then we've got the sellers who are not qualifying effectively. Because ultimately, that's what I see. And a lot of my clients are in product based, right? Being in Calgary, very oil and gas, very product centric, very technical type sales.
And, you know, They're not qualifying. They're going in and the buyer says, Hey, do you have valves? And like, yeah, we've got the best valves ever. How many do you want? And the buyer's like, awesome. Cut your price by 15 percent and I might consider you. Oh, I'm just going to stay with my incumbent so it's easier.
So when we don't hold our account, our sellers accountable to actually discovering why is the buyer looking for a solution that we provide? Why are they looking at us? When do they need it implemented? We're ultimately just quoting and hoping and then we end up at 17 percent or less. But unfortunately, people are probably making money at that number.
So that's why it may not be a hair on fire moment is because they're satisfied. Yeah.
yeah, that's a longer conversation about the difference between, you know, building a company and building an exit. If you're just building an exit, then, yeah, you may not care as much as, yeah, as you might otherwise if you're trying to say, oh, I'm trying to build something that's more sustainable.
There are I was having this conversation with a CRO of fairly good size software companies, about over a hundred million dollar ARR, and and I was sort of laying out, I said, well, you know, think about this perspective. This is, and their, I think their win rate is about 24 percent on average.
And I said, well, a couple of things that I've seen in working with companies and interviewing executives about this topic is that if they have a low average win rate is they don't really expect to win a deal when they get a new lead, right? If your average win rate is 20 percent or 24 percent in this case. As talking to, this is pretty well known, SaaS company, another one, let's talk to their, all their sort of three senior sales leaders, revenue leaders. And it just came across as like, Oh, my God, they don't really expect to win when they get new opportunities because the winner, it's in this case, the average that was averaged 18 percent across the board.
It's like a horrible place to be in right as a sales leader. You can't say, well, we're building a culture of winning. It's like, well, no, actually what you've done is you, what are you doing most frequently? No, we're losing, yeah. So we're building a culture of losing. We're learning how to lose really well, but we're not learning how to win. This is the part really, I find really troublesome, is that there's just, you know, not enough focus on winning. And it's not winning for winning's sake. It's winning because, We think we have a great product. I can't help my customer if I can't win their business. Right? Why are we in business? We're in business to help our customers get some value out of our products and service.
We think that, you know, uniquely suited to provide. I can't do that if I can't learn how to win their business. And this is just this huge gap that just sits there and just, probably the reason we have this podcast, but just it gnaws at me because people don't seem to be that concerned about it.
Yeah, if you think about the level of cancer that provides to a culture, it's huge because you use the valve example that came up earlier. Like you're You have engineering meetings that are focused and incredible expenditures on making a valve very precisely to solve a very narrow and specific problem. Your sales people are then talking to the people that have that problem and they're attempting to communicate it. What does it say if 20 percent of the time. They're successful in communicating that this valve solves that problem, right? Something is fundamentally off with that equation. And if your early days and that rate improves over time, that's a
great feedback loop that you're having with product.
But if you're seeing it go down, that is the opposite of what a company needs to be doing. Andy, to your point about durability.
Yeah, well, and also the point you just made, Kevin, is that you expect to get feedback from the field, right, about what we should be doing based on the experience our sellers are having. So, on one hand, we could have that feedback be coming from a sales team, let's say it's averaging a 40 percent win rate, or a 20 percent win rate.
Which one do we think is more accurate and more valuable to us over time? It's not the 20 percent win rate.
No.
there's all these markers, right? I just, it's sort of, I find very curious that don't really you know, get people curious to really understand is for instance one, which I have some preliminary data on, but I don't have conclusive data, I'm working on that, it's a longer term project, but yeah, I believe that on average that the renewal rate on deals won by high win rate sellers It's higher than those deals won't be people with low win rates. Better business. If you need an incentive to help your people improve their win rates, you know, two things happen when you improve win rates. You do bigger deals and you do better deals. And, you know, if you have any, as I said, if you're sitting here as a sales leader or revenue leader and thinking, well, what can we do to sort of help our, you know, our revenue engine? Have your sellers be better on the front end. That's Makes a huge difference. And, yeah, I'll ask a CRO, I'll say, So, tell me, What's the impact on year 2 and 3 of every 1 percent increase in your win rate this year?
Never had one be able to answer that question. And they should be managing to that. They should be managing to that. Because it's not improving win rates for the sake of improving win rates. If I improve my win rates, it has an impact on my revenue in years 2, 3, and 4, and 5.
That ties into your comment about are we building an exit or are we building a company, Andy, right? Because if I'm, if all I'm trying to do is hit 36 months and then there's the event that my my funders want, well, I'm going to be focused narrow short term. To your point, if I'm looking to build a sustainable business over the long term, then I need to start caring about what are those long term things and not just beating my sellers to, did you make 20 dials today?
I can make 20 horrifically bad dials very quickly, and it's not going to actually put me in a position to win because all I've done is promised a free demo to someone who's like, yeah, fine, I'll do a demo. And by the way, they're probably going to ghost me. So when we can coach our sellers to be that much more effective at the front end and really understand why are we having this conversation with this buyer before we even drop it in the funnel?
Then we can start improving those wind rates because the things that are going into our funnel are much better. A funnel is a funnel, it's not a filter. What you put in is what's going to come out. Crap in the top is going to be crap out the bottom.
Well, if it gets to that point, yeah. Yeah.
gets to that, 20 percent of the time it's crap out the bottom.
life. Yeah. Yeah it's, yeah, curious sort of what we measure. One thing I'm concerned about is Slightly different, but related is so, for years, I was running sales teams where we measured based on productivity. So basically what we were doing was measuring what was your revenue generated per hour of selling time? That's what I want to know. See, I, we didn't really have quotas, right? Because what I was concerned about was how can I help them become more productive. And it wasn't productive. Yeah, I had this argument with somebody on LinkedIn a while ago where I was saying, you know, my belief is that using that measure of productivity, sellers today are not as productive as they were 20, 30, 40 years ago. Different world, different product types people are selling, you know, more recurring versus products and so on. But I think even on the revenue, based on some work that we've done, it seems to be true. But I get pushed back. Oh no, I can send 100 emails in time that, you know, I couldn't have done 10 years ago.
It's like, sure, but is that productive? To me, if you can't, if action doesn't lead to a, an outcome, is it really productive? And, you know, I think we miss are the argument is like instead of sending 100 emails and hoping to get one response, what if we learn how to send 10 and get one response?
Wouldn't that be? That's more productive, technically. I don't know what are you guys feeling on this? Because I think the argument on, or the discussion on sales productivity has really lost the plot.
It's a great point on sort of the the influence of management there because in a lot of companies, whether or not you hit your quota is the end all be all. And it is to an extent on your paycheck, right? But how you got there is a big piece of the puzzle.
And I had a leader at Google, a guy named Josue Gonzalez who always said you're not a sales manager.
You're a people manager and sales is part of your responsibility. Wanted to take out of the job that, you know, your primary responsibility was just to hit that number. That was relational to quota, but I'm also sympathetic to the fact that is , challenging to implement at some organizations because then you do have, you know, the potential for dueling metrics in a way, if you measure too much on activity that will get gamed and then you might lose focused on revenue.
So I like what you're saying conceptually about it's still the revenue, but it's a revenue with a productivity component.
Well, where it came from is I was hired to start a commercial division for a company that was a defense company. So when you're a defense company, you have, everybody has to track hours. Because you calculate an overhead factor that gets applied to all your bids. Solve your Non direct charging people gets aggregated into an overhead. And so, my sales people were charging to an overhead account. And so I went to accounting and said, well, let's just start assigning job numbers to qualified opportunities. And then, for the sellers, as well as anybody in the organization, that on that project, they charged their time to that job number.
So I knew, you know, Exactly how much time it took a seller to generate a certain amount of revenue.
hm,
And we calculated productivity factor on that. And I also knew, okay, well this guy maybe took the same number of hours of his own hours as the other person to generate, let's say, you know, a million dollars in new revenue. But this person took a hundred hours from the rest of the organization and this person took 10. What's that tell me? Well, this person, we've got to work with this person and be able to help them become more sufficient. In terms of whether it was technical understanding, customer understanding, you know, we could start slotting in pretty clearly and say, okay, what's the support this person needs, so that, you know, the actual number of hours required for us to invest to generate a certain dollar of revenue went down. Well, as an organization, if you know what that revenue factor is, per seller, well then I can calculate how much we're going to sell next year. I could guess at a quota, but I'll know. And so what I would do is say, well, I want to make them each become more productive with each interaction they spend with the buyer.
If I can help that, and more productive meaning, help them ensure that as a result of this interaction the positive buyers make progress, start making a decision.
right.
The more I could do that Yeah, go ahead.
Andy, as I'm listening to that, what I'm thinking is some of the listeners are saying, but Andy, that sounds hard. And right. And so then let's go to the vanity metrics. It's like, well, look, we made a thousand dials this week. Like, awesome. Did that move the needle in any form or fashion?
And like Kevin was sharing , it's on the managers. It's what is the mountaintop we're ultimately trying to hit? Well, the ultimate mountaintop is revenue growth. That's the ultimate mountaintop. What are those mountaintops along the way that. The actions of our sellers will get there eventually.
So, like, I love making prospecting calls. I had a team member who, in their own words, could make friends with a lamppost. So they did way more networking than I did. The ultimate mountaintop was having unique conversations with decision makers and getting discovery calls. And then that was our map.
Those were our mountaintops that we could interpret progress. And then we knew that more discovery calls equaled more or more first appointments equaled more first appointments, and we could blend it out from there. So ultimately, it's going back to being lazy, right? Our brains are wired to keep us safe, which usually means stuck.
And so we go for those easy vanity metrics that we can point to and say, Look, we're doing our job as opposed to doing the hard work like you were just illustrating that actually moves the needle.
So I'm personally an advocate for getting rid of quotas. Well, so there's a mathematical reason why to get rid of them. So, there's, you know, back in the 60's, a british economist named Charles Goodheart developed this thing called Goodhart's law. It's quickly summarized as, when a measure becomes a target, it loses all value as a measure. Being because people optimize their process to achieve the target So it warps what it's really measuring and quotas are become that right because we set quotas in a way that I mean historically it's earth Somewhat good situation if they existed is Was really sort of self fulfilling prophecy, right?
We're going to give you a million dollar quota people can optimize their process to Sell a million, but if they were an environment where you could have said, well, set it a million and a half, people would have sold a million and a half, but we kept it a million cause everybody focused on that. So at least for me, I see a sort of you know, not very productive metric compared to just measuring, okay, what's it take somebody to produce a dollar of revenue?
Yeah, I think sometimes when you say something so practically, it shines a light on the weirdness, which with which we all just kind of operate without thinking about it. And so your example of, you know, you're in the defense industry and you have to do this. And of course, that's a better metric than just general revenue output.
What I think about, if you read the book on the Tesla production increases like, right, they're sleeping on the factory floor and they're trying to, they're trying to reach a production number. If at the end of that they weren't able to answer the question, how did you do it? And if their real goal wasn't to tweak the how of what they were doing the whole time, they would have never achieved, you know, results.
And the results would have just been the end all be all. They wouldn't have been to then inform that process and continue to grow as a company.
Yeah. One of my frustrations is that in general is I think that, Yeah, it takes technology. Notwithstanding, we fundamentally manage sales the same way we did the last 100 years. Right? We're still using quota. We're still, , people of territories. We're so it's like, yeah, I think we sort of perhaps reached the limit of it to some degree.
And there's lots of factors that play into what I'm about to say. We see the reports every year. Percentage of reps attaining quotas. Yeah. Really, when you track it from, I think I first started following the CSO Insights reports back in 2008 or something, but you know, they dropped year after year, and win rates are really low, and they just have all these assorted data points, it's like, okay, we're not really clicking on all cylinders, and again, it's not just SAS, it's B2B pretty much in general.
Let's do something different. You know, the company that I worked for, that I started that Program with, you know, they went on to become a very large company, and are a very large company. Best of my knowledge, they still don't have a CRO. They don't have a sales function, per se. This company, it's, you know, there's lots of ways to skin the cat, right?
We're just, we're seemingly just so stuck. , this other company, and they're very good. Lots of people have quote unquote sales responsibility. You know, not just sellers, right? So I know I just, to your point Hamish, people think it's hard, but the fact is we've got, , these massive consulting companies, you know, Deloitte and McKinsey and so on.
They all charge their time, they're all filling out time cards. Up and downs, this is, you know, this isn't hard. We still have people pushing back on, you know, Updating their CRM call records and so on, but it's like, my response is always that it's like, we want to get your paycheck. When I was a first seller, I couldn't get a paycheck every week until I turned in my expense reports.
You would think I'd have incentive to install my, you know, submit my expense reports, but no, they wasn't just me as all of us, the young guys is that we had to turn them in every week. We did that. We didn't get our paycheck the next week. It's like, It's just not that hard. It can be hard. I know not to downplay your point, but it's like we gotta do something different because it's just like we're look at things differently.
We're just we're stuck.
And the hard comment was very facetious because you're aligned with you that we just look at, well, what's Kevin doing? Oh, Kevin was good. Okay, great. I'm just going to take what Kevin did and put it in my company, except my company is not Kevin's company. So what got Kevin to where he wanted to go?
There's probably some bones of that there are good and but what we. Too often do is we rip off and duplicate instead of evaluating and innovating. We don't take that time to say, okay What actually worked what did kevin actually do? And then let's break it down iterate on that and put it into our own world.
And that's, we're human. That's what humans do. That's not sales managers or founders. That's a human thing. And so taking that moment to say, okay, let me learn the best practices, right? Well, just Kevin did a, had a great company. He scaled it. He exited. Awesome. What can I learn from that? Okay. Now, how can I innovate on that to make my reality work as opposed to just dropping in somebody else's system and keeping my fingers crossed that it's actually going to work.
Yeah. Go ahead, Kevin.
No I agree. And I do feel a little bit Hopeful right now. I feel pretty optimistic actually.
And I think it's because it's because the last couple of years have been really hard for a lot of people. And so I, I have now been an, as an entrepreneur been monitoring more of the forms and the communication of what people are chatting about.
And I do think salespeople as animals tend to be very adaptable. And so if the organization isn't going to orient into a way that's going to put them in a position. For success, I do think that they are starting to take matters into their own hands a little more than we might expect and, you know, learn to use new technology and innovate on, on, on new sales methodologies, because, you know, ultimately, if they're not bringing home what they had hoped to from an earning standpoint, like they're going to, they're going to get to work.
And so I, I just anecdotally feel like I'm seeing that type of
Oh, well, I'm encouraged to hear that. It was really one of the motives for me writing my last book, Sell Without Selling Out, the subtitle of which is a guide to success on your own terms, because I think that's such a big thing that got lost is, in the last 15, 20 years is a sense of ownership of your career, right?
You know, we have all these really rigid compliance oriented sales processes and sales methodologies that are really designed to take the spontaneity out of the sales process. Make them quote unquote predictable. And, I think sellers, that's why I'm excited to hear what you said, Kevin, because I think sellers felt like they didn't have permission to be spontaneous and I think then lost the ability to figure shit out when things didn't go according to plan.
And when does things ever go according to plan on sales, right? Rarely. I don't know. So, I, yeah, I'm encouraged by that, if that's what's happening, because, I was famous in my career for doing things the way I thought was going to be best. You know, not, it's not by not being a team player, but I'm still a team player, but, you know, It was my career, and I knew that if, you know, they could, a boss could say, you really should do this.
And if I really disagreed with it, I was like, well, who gets fired here if this doesn't work? Me or them? Well, it was me. So, I was willing to say, look, judge me on the results. Which I know wouldn't work in today's environment, because I'd, post about one of my clients earlier this year, that guy was Had been nearly 200 percent of quota the previous year, and he was already had completed all of 2024 in May.
But in March, they put him on a pit because he wasn't setting enough meetings, and then they terminated them. And people, you know, we had certain cadre of people writing, Oh, that can't possibly be true. And then I literally had three dozen people connected with me on LinkedIn telling me the exact same story. Right? This is people carried away by the wrong, managers carried away by the wrong, not understanding what's really important, right? So,
I think what you're getting at is like sales has this unique experience, especially, you know, direct selling or account managers to see the results of the experiment. You know, right? Like they're the one who has to say
what they're told to say or whatever it is, they have to manifest what the company is putting out there and get the result back from the customer. And when it doesn't come back as a thumbs up, it's pretty clear. And so they're going to know, they're going to know to adapt. They're going to know to reorient. And ultimately if they get fed up with situations like the one you just mentioned, hopefully their management listens to them.
Yeah, well I think last point and then we're sort of near the end, but I think the issue ultimately comes down to management, right? Is, I think we've, seem to have a point with management, I don't know if it's just based on the experiences I've had or whatever, is that don't feel comfortable relinquishing control. And so as a result, they don't. And you get things like, you know, this was actually the second client of mine that got fired for not setting up meetings, even though they're both above quota in this calendar year that I had heard about directly. And it's like, gosh, it's just not in your best interest as a manager.
You know, what's going through your mind thinking that, you know, You know better than the seller how many meetings they need to set because they're right. They were approved. They know what number they need to set because they're hitting the quotas. What makes you think you know better? That's, you know, I see these various processes that these consultants put out there that people are adhering to with the number. It's just like, sure, we need to win process. We need frameworks, but we need to give sellers the autonomy to operate within those frameworks. It's to achieve the way that's going to work for them and for us.
And it's not going to be the same for everybody. Yeah,
It's, we've taken the human out, it's, we've taken the human out of the seller buyer interaction, right? Because the, if the buyer's already done whatever percentage, it's like, well, okay, well, yes, thanks for calling, schedule a demo, send a quote, hope that we close it. And then we've taken the human out of the manager direct report experience, because we've got all this great data and we've got to follow it.
And as you said, Andy, frameworks, not handcuffs. The minute that those frameworks tighten down and they start to become handcuffs, productivity falls, turnover happens, and win rates go down because people now Feel beholden to get handcuffed to a, to something that doesn't necessarily even fit with how they want to communicate or how they want to go to market, but they're required to death march it to it.
So if we, I firmly believe if we put the human back in those contexts, I win rates are going to go up and productivity will go up as well. If we're more human.
You need to read my book.
Yes,
How about that for a plug? It's my show. I can plug my own book. But yeah, sell without selling it if you haven't read it. That's all it's about. Taking ownership and yeah, it's not, you know, it's not always going to make you popular. You had one One boss when I was working for a GM where I was the vice president of a sales organization.
He just finally got served. Frustrated with me. He said, Don't you ever just say yes to something? And the answer was, No. Because it's my career, right? This is my career. But, hey, if I don't produce, Sure, you do what you gotta do. So I put the pressure and the onus on myself to produce. But as a seller, you have to have the confidence that you can do that. confidence, you're in an environment, and that's sort of what this last book was about, is, you know, the tools you need to have that confidence. But do that. What a better position to be in than worrying about whether you're setting enough meetings. That's something I just never, again, never crossed my radar when I was, I knew if I was setting enough meetings I knew how many people, what I need to have in my pipeline.
I didn't, you know, I sold. , better part of a billion dollars. Over 20 years and man, you know, 6, 7, 8, 9 figure deals. You know, I knew how much pipeline I needed. Man, I didn't need to have a 5X coverage or whatever. It's, trust the sales people. I guess that really boils down to it. So, anybody else?
Otherwise, we're about ready to wrap up. Okay. Sorry, if I stop any conversation, I got carried away. One of my favorite topics. So I presume everybody can be reached on LinkedIn. Hamish, Kevin, that's where people reach out to find people or guests. And yeah, check out Hamish.
Hamish Knox's in North America. So if you Google Hamish and Sandler or Hamish and Calgary, I'm probably the number one result.
I have had another Hamish on the show though. Stevenson, I believe, based in New York. And, then also Kevin Davis, I've had Kevin Davis on, another Kevin Davis on my show a couple of times, a sales coach so, well hey, thanks everybody, and look forward to having you back on the show.