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Thought experiment: What would happen if you put RevOps in charge in sales? Well, we spoke Ryan from QuotaPath who started in RevOps, and now also runs sales.
And there's a few interesting learnings you shouldn't miss
***
And there's a few interesting learnings you shouldn't miss
- (00:00) - Introduction
- (01:30) - Meet Ryan
- (02:02) - Transition from RevOps to Sales Leadership
- (03:52) - What we think sales is and what it actually is
- (06:35) - RevOps and Sales Alignment
- (08:13) - Advice for RevOps Professionals
- (12:49) - Sales Process and Deal Managemen
- (22:07) - Quota Design and Sales Team Efficiency
- (30:47) - Comp plans for CS?
- (38:13) - Final Thoughts and Conclusion
***
This episode is brought to you by Growblocks. Finding and fixing problems in your GTM shouldn't take weeks. It should happen instantly.
That's why Growblocks built the first RevOps platform that shows you your entire funnel, split by motions, segments and more - so you can find problems, the root-cause and identify solutions fast, all in the same platform.
***
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Creators & Guests
What is The Revenue Formula?
This podcast is about scaling tech startups.
Hosted by Toni Hohlbein & Mikkel Plaehn, together they look at the full funnel.
With a combined 20 years of experience in B2B SaaS and 3 exits, they discuss growing pains, challenges and opportunities they’ve faced. Whether you're working in RevOps, sales, operations, finance or marketing - if you care about revenue, you'll care about this podcast.
If there’s one thing they hate, it’s talk. We know, it’s a bit of an oxymoron. But execution and focus is the key - that’s why each episode is designed to give 1-2 very concrete takeaways.
[00:00:00] Toni: Would you ever hire a sales leader who's never been in sales?
[00:00:04] Ryan: I've never closed a deal before myself. I've never run demos.
[00:00:07] Toni: That's Ryan Milligan, the VP Sales and Revenue Operations at QuotaPath. In an unheard of move, he started as a Revopser before he became responsible for the sales team. Now he's bringing that unique perspective to the job.
[00:00:23] Ryan: I Know the math of a sale. I know how to forecast. I can be really pragmatic with you about if your deals are going to close or not. And I can rally the rest of the team to build what you need in terms of enablement and tools.
[00:00:34] Toni: In today's episode of the Revenue Formula, we talk with Ryan about how he made that transition, how he brings his revenue operations mindset to the role and how he builds credibility with sales. Enjoy! it's, it's, are you using Starlink? Maybe there were some like,
[00:00:53] Ryan: No, I mean, it's literally my box.
[00:00:55] Ryan: this is my, this is my box right here. It's like literally right next to me. So I, I have no idea what's going on. I, I, I really
[00:01:01] Ryan: apologize. This never
[00:01:01] Toni: perfect quality.
[00:01:03] Ryan: Okay, cool. All right.
[00:01:04] Mikkel: Well, now it's dying. And it's probably because you touched it too much.
[00:01:07] Mikkel: So can you maybe just move it? No, I'm messing with you. I'm messing with you.
[00:01:11] Ryan: I apologize.
[00:01:12] Ryan: That's, that's 100 percent
[00:01:13] Mikkel: we were also getting worried because we were so Maybe this makes the episode, actually. We just had some connectivity issues. It happens. And we were getting worried. Did we actually lose Ryan now? Is he not willing to join back because we were going too far?
[00:01:25] Mikkel: You know, you never know. I mean,
[00:01:27] Ryan: No, no, I love it.
[00:01:28] Ryan: I love it.
[00:01:28] Mikkel: how far we can take it.
[00:01:30] Mikkel: we definitely want to get deeper into your background story and how you RevOps mindset, bringing it into sales. We were talking before we started recording that you grew up in revenue operations and have Brought that mindset into sales so really looking forward to dive into that with you.
[00:01:45] Mikkel: I mean we've had sales folks and RevOps folks, but not in one joined this show. So how does something like that actually happen?
[00:01:52] Mikkel: Maybe let's, let's start there. How, how did, how did this come to be?
[00:01:55] Ryan: Yeah. So, classic growth stage, startup things move around. People have opportunities. It's kind of, it's kind of the gist of it.
[00:02:02] Ryan: So I joined QuotaPath to lead the revenue operations team about two and a half years ago, almost three years ago. And mandate and remit was pretty centralized around revenue operations.
[00:02:12] Ryan: When I joined, I realized we had a larger kind of like data story. analytics reporting challenge to solve additionally to kind of the core of RevOps functions. So stood up a lot of our data practices, data warehouse, pulling data in, processing, pushing to a BI data visualization tool for for reporting analytics of the business and kind of like health measurement of the business.
[00:02:34] Ryan: And I was in our RevOps team and kind of moved to take over operations more broadly at the organization. Probably about a year, a year and a half ago. And in that time there were Our sales leader, who is VP of sales, moved to go interested in doing more consulting work than full time VP of sales work.
[00:02:54] Ryan: And so in that transition, there proved an opening or opportunity for me to take over leadership of our sales team. The really interesting thing for us is that, Quotapath automates the process of calculating and paying commissions, right? So it makes it really easy for sales teams to understand their commissions, ops teams to build and deploy comp plans and finance teams to you know, automate the process of calculating at the end.
[00:03:17] Ryan: and paying the team at the end of the period. And so I knew the product quite well. So I, it's a very meta job. I use QuotaPath to automate the process of our, of paying our team's commissions. And so there was a natural fit for me as somebody who has bought a lot of software, is the target buyer, and knows the process quite well to step in and take over our sales team, to take some of the Scientific side of sales and some of the math and forecasting and process and pair it with a really great sales team in place.
[00:03:46] Ryan: So it was a great opportunity for me and something that I really enjoyed for sure.
[00:03:49] Toni: So, I mean, I did a similar jump.
[00:03:52] Toni: I went from RevOps to CRO and, you know, granted, I had like a VP sales in between that did most of the art, if you will, kind of that, that you're kind of talking about, but, you know, making this jump, like on a piece of paper, sometimes that looks extremely straightforward, but what were the things where you went like, ah, now, now I understand that's, that's why this was always a pain for me as a RevOps person to drive this into the sales team.
[00:04:16] Toni: Do you have like a couple of anecdotes where you're like, Hey, this is, this is, you know, as a RevOps, what do you think sales is? And this is what sales actually is.
[00:04:24] Ryan: Yeah, so we were joking a lot about pipeline hygiene a bit as we were recording early. I think that was one really big opportunity for me to put myself more in the seller's shoes, which is, hey, if I'm a seller and I'm focused on closing these five deals by the end of the quarter, Frankly, the other 25 deals in my pipeline, I almost go blind to and I'm so myopically focused on making sure that these five deals come in because I've made that commitment to the organization.
[00:04:52] Ryan: And so that was a place where I had to come from a RevOps leadership perspective and say, Hey, look, I know that you're focused on these set of deals that you have in place. At the same time, I have to, as a, Sales leader and ops leader start thinking about forecasts for, for next quarter. I have to present that publicly to the board.
[00:05:09] Ryan: I need you to be on top of pipeline overall. And this is what I'm going to do, knowing that this, this pipeline is clean and updated. So I think putting myself in the seller's shoes and realizing, okay, hey, there's a lot of stress and pressure at the end of a quarter to You know, publicly bring in what you've committed to the organization, pairing that with, okay, I'm going to, to help you realize why I need these sorts of things in place for, for board reporting and that sort of thing as well.
[00:05:37] Toni: And maybe one, one follow up on that is like, do you run your own deals here and there? Are you kind of, do you have your own well, maybe not quota, but do you, do you have your own opportunity set that you're running?
[00:05:47] Ryan: I tend.. I towed the line of it and played around with a little bit. I tend to give the, the pipeline to the reps because they are Quota carrying, and I don't want to have some sort of adverse relationship in which I'm taking pipeline that they could potentially run themselves. Now, I was able to build credibility with the team by closing some deals while my team was on vacation.
[00:06:08] Ryan: So there was a deal last quarter, pretty sizable deal for us 100 plus sales reps which is a good size deal for us as we think about the market. And Seller was on vacation. And so I went through and built the POC, ran a couple of the demo calls, sent out the contract for signature and closed the deal while she was on vacation.
[00:06:27] Ryan: And so I'm building credibility with the team by being able to step in and navigate some of those conversations as well.
[00:06:35] Mikkel: How do you, so, I mean, maybe also just thinking that RevOps has more responsibilities than just supporting sales. There's the whole retention side and marketing probably also as well. Like, have you found any struggles or challenges there and how have you made that transition work out? And
[00:06:52] Ryan: to think a lot about revenue operations in what we call kind of first team principles. So I sit on our management team and I. I put myself first as RevOps leader and sales leader who's responsible for the health of the business, the sustaining health of QuotaPath versus just driving towards a new business quarterly number.
[00:07:13] Ryan: And I have a great senior manager, Brandon, who sits on my team, who's been helping with a lot of the revenue operations work that we've done. But I have made sure to keep that focus of. Hey, I'm looking for net new ARR for the organization, not just closed one new business. So thinking through gross revenue retention forecasting, how do I make it really easy for my customer experience managers to forecast and understand their GRR, not only this quarter, but for the next couple of quarters, how do we make sure pipeline is in good shape and that we have a great message in the market and we can automate that process as well.
[00:07:46] Ryan: And so, yeah, it's tempting as a sales leader to get into that and you catch yourself like, I really need to close this deal right now to hit this number because I'm VP of sales, but I forced myself to zoom back and say, Hey, my peer set is not actually the sellers on my team. My peer set is my management team who are leading marketing and customer experience and all these different cross functional organizations.
[00:08:09] Ryan: And so that has proven fruitful for me as well.
[00:08:13] Toni: you know, from, from a RevOps perspective, Is there like any particular advice you would give a currently, you know, RevOps SalesOps sometimes, you know, let's just say someone that works extremely closely with sales. Is there any, any advice that you now would kind of give that person or your, your former self a couple of years ago thinking of like, Hey, this is probably what you should be doing differently engaging with the sales leader.
[00:08:36] Toni: Kind of, this is really where their heads at and their mindset is looking like. Versus what you're trying to achieve. Kind of, is there anything, anything where you can say like, Hey, this fundamentally just different. And I totally got it wrong.
[00:08:48] Ryan: Yeah. So the biggest thing that I've been pushing myself, or I would push my former self to do is ask the seller why they are not doing the thing that you necessarily want them to do. And they usually have a pretty good reason. So, there are just so many instances in which a RevOps team is pushing a seller to make sure that this email is sent and make sure this process is filled out and make sure that this required field is filled out to move an op to a next stage.
[00:09:16] Ryan: And oftentimes run into roadblocks with the seller. And I think it's because the seller. doesn't know why they fundamentally are required or should be interested even in doing these practices. And so from a RevOps perspective, I think it's really important for RevOps teams to actually shadow the process of a sales process and sit alongside a seller throughout the entire journey.
[00:09:40] Ryan: What you'll see is they're constantly tabbing between different Tools that you bought in a zero interest rate market. They're, you know, juggling from spot to spot to spot to try to update all these different components and they feel like they're being asked to do things in a very repetitive fashion over and over again, and so if you sit with the seller from point A all the way through closed won, you can see the points in which they're running into snags and try to be much more empathetic in your process.
[00:10:07] Toni: I, I love that. And I think it's so true. I think when you're a little bit removed, either because you're not sitting close to, you don't have a good relationship with the sales guys, or it's maybe you're sitting remote in general. I think you very quickly as a sales ops, rev ops person, you go into this.
[00:10:24] Toni: Or they're not doing it because they don't want to and they're lazy. you attribute all the things to malice. but really, really that's just not the case. There's an actual good reason why they're not doing it. And I think you're, you're, you're you know, hitting it on the hats here by like, Hey, just, just ask them.
[00:10:38] Toni: Come on. It's not that difficult, mate. Just go and ask them and see what the answer is. And sure. Some people, you know, some sales guys, you know, they're going to have some fun with you. but generally speaking, they're also just trying to make their lives better. Right. And they also see you as a, as a way to potentially achieve that.
[00:10:55] Toni: Right. So kind of making that step forward, I think is really good. And for the CROs listening, kind of, this is the stuff you should be encouraging your RevOps, SalesOps folks to actually be doing, right. Kind of just, just ask them why they're not doing this stuff. And maybe you'll learn something that, that might help you to, to improve things.
[00:11:12] Ryan: I think it's really important to push your team. Constantly to be empathetic with the teams that they serve, especially from a RevOps capacity. And I've been super guilty of this myself. I mean, I've, we, we had processes historically where, you know, you could auto close an opportunity if next steps weren't filled in a period of time.
[00:11:32] Ryan: And that like, that was a super classic RevOps bandaid to a true problem, right? You're saying, okay, we're going to say if a, if an opportunity doesn't have next steps in the last four weeks, we're going to auto close it because The rep isn't maintaining their pipeline and opportunities in the way that they should be, and we're dragging out our time to close, for example.
[00:11:52] Ryan: Looking back on that I laugh and I say, okay, well, why was I actually putting that system in place? The truth is it's because the seller wasn't really sure if these were really real opportunities, and they weren't prioritizing them effectively, and they didn't know why they needed to keep that stuff up to date and where that was going elsewhere to an email to the board to quarter's pipeline.
[00:12:14] Ryan: What have you. And so that's. It was a good learning for me personally to, to make sure that I'm constantly being empathetic with an individual seller. And I think there's a, there's a path for RevOps leaders who, who want to run sales teams. I'm, I think it's going to be more and more popular as the, as the years come on.
[00:12:30] Mikkel: also wonder, kind of, one of the things we, we spoke about off air was this bringing the art and science of RevOps into sales, which I also think is kind of unique. So I'm, I'm really wondering what are kind of the things you've, you've brought into sales now that you're in it versus, you know, not having sales under your remit before?
[00:12:49] Ryan: So there's two things that I've really thought a lot about as a new sales leader. I think the first is just documented, clear, understandable process of like what a great sales cycle looks like. Hey, what is, what is a demo look like? What is a person actually trying to achieve? Don't have 30 slides. What are the two slides you need up front?
[00:13:08] Ryan: What should QuotaPath are how the product works is always visually helpful to understand, and what are the pain points that customers typically find when they come to the product and look to solve. So we do two slides up front and then have a very clear process of that cyclical, how it works, then how you're going to walk the buyer through the product, you're going to show them building and deploying comp plans.
[00:13:30] Ryan: You're going to show them the reps experience and how they can forecast their earnings and gamify. And then you're going to show them how it's really easy at the end of the period to pay your team. So there's a lot of process stuff that we brought in really early on. What does a good next step email look like?
[00:13:44] Ryan: What are the times which you want to do X, Y, and Z? So there's been some process stuff up front for sure. And then I think the other piece from an ops perspective is really taking off the rose colored glasses of the health of a deal. Now, There's so much software that tells you, hey, this deal has a health score of 38 or 42 or what have you, but the average seller, candidly, doesn't really interpret that super well, like if this deal has a 42, what does that actually mean?
[00:14:10] Ryan: And so where I've come in is to say, well, actually, you have no C suite leader. Championing you in this deal, or you are completely single threaded. If this person decides to take a new job or leaves or what have you, you've talked to no one else at the organization. And so taking that kind of health score concept and really breaking it down into the specifics of you don't have any senior champions and you're single threaded and you haven't had a call in two weeks and just being really transparent with the seller about.
[00:14:39] Ryan: Hey, I know you want this deal to close. I know you're saving for a new car that you want to use this commission payment to go pay for. But the truth is this deal just will not close and being able to approach that from a completely non emotional way and a non, and just a purely mechanical understanding of the deal.
[00:14:57] Mikkel: I think that's that's really interesting. I also wonder like if, if there's, let's say a CRO listening right now and wondering, hmm, should we consider our RevOps or become also the, the salesperson? What are kind of the things to look for? Because I also imagine it's not for anyone to kind of take that jump.
[00:15:14] Ryan: Yeah. So I think there are a couple of things I would really think about. One that was nice with QuotaPath is I had a ton of product familiarity. Right, so I knew the product as well as anybody in our sales team, if not better, because I use it all the time. And so, that piece is really, really helpful to be able to gain credibility really early on.
[00:15:33] Ryan: You have to understand what is the way in which you're going to get your RevOps. team member to build credibility with the sales team member, whether that's through product knowledge or being able to jump into a deal. And then I think the second piece is how analytically minded and measurement focused your RevOps team is.
[00:15:52] Ryan: Now there are all sorts of different flavors of RevOps teams. The one that we've been focused on building here is really focused on Pipeline measurement and just overall business measurement and knows those numbers really, really well, are qualified of demo rate, our win rate of demo, our ASP over time.
[00:16:09] Ryan: And so it can speak to a lot of the forecasting and provide a lot of incremental value. And then of course, the RevOps leader has to want to do it, right? There are, there are plenty of RevOps leaders Brandon on my team, for example, like is, is, is not interested in, in being part a sales leader, which is great.
[00:16:23] Ryan: It's good to know, wants to progress from an operational perspective, which, which makes a lot of sense in a RevOps capacity. So I think you also have to know, you know, does that person truly want to take on this broader remit, which is also the sales side of the house.
[00:16:37] Mikkel: Yeah. I'm just wondering here, like, Once you got the role and kind of said yes, signed the paper and everything, what was like the onboarding? Like, because I can imagine if it was me going, Hey, now, Toni, I'm going to be a sales rep for a new title on LinkedIn. I'm going to be a sales rep now.
[00:16:54] Mikkel: I've not done a lot of software selling. In fact, I've not done any, right. And sure, conceptually, I know some of the processes, but I don't really know it, know it, if you know
[00:17:04] Mikkel: what I mean. So I'm wondering what, what was that kind of journey like for you?
[00:17:08] Ryan: Nor had I, right? So I had never carried an individual quota in my life. And so building credibility was massively important, right? You're not just going to come in and say, Hey, these are the new policies. These are the new processes. Like I'm in charge now. I mean, people would laugh you out of the room, right?
[00:17:24] Ryan: And so the first thing was a lot of call listening, a lot of email reading, a lot of just sales process review, and a lot of talking to the team. Hey, where are we? What do we think is going well? What do we think is not going well? And where do you need help? And so a lot of my initial process was in an enablement capacity.
[00:17:44] Ryan: So what are the types of visuals and slides we want to build? What are the types of email templates we want to build? How can I support the process that you have already? And then that transitions naturally to here are some suggestions that I would make for you. The one thing I would give the RevOps leader a little bit more credit on is they've been the buyer of a lot of software.
[00:18:04] Ryan: So, you know, that bad demo, like that truly terrible demo you've done of a piece of software where you were like, I thought I wanted this thing. And then I went through the sales process and you convinced me that I don't basically. And so, and then, you know, a truly amazing sales process where you went through a buying process and you said, wow, this was really well done.
[00:18:22] Ryan: Very well multi threaded. I felt very supported along the way. And so I think also it's bringing in some of that. expertise in buying software historically, which has proven to be very helpful for me early on. But yeah, it's, you have to be really transparent. You can't lie to sellers. Look, I, I would go in at the beginning of the process and say, hey, This is what I don't know.
[00:18:42] Ryan: I've never closed a deal before myself. I've never run demos. I've never done X, Y, and Z. But here's what you haven't done that I can do quite well. I know the math of a sale. I know how to forecast. I know I can, I can be really pragmatic with you about if your deals are going to close or not. I have a pretty good understanding of what's going to happen and I can rally the rest of the team to build what you need in terms of enablement and tools as well.
[00:19:06] Mikkel: Have you actually found, I wonder, one of the things we've talked about in previous episodes at least, is the whole, sometimes revenue operations can get very stuck at their desk, in their little world of building whatever needs to get built, right? But all of a sudden, you being, you Customer facing, you hear a lot of things from the horse's mouth, be it the seller, obviously, but I'm thinking particularly around the customers as well.
[00:19:29] Mikkel: And I get you've been, you know, a user and a customer yourself, but has that actually changed anything from you, just hearing from folks, hey, actually, because I can't do that, or something else is like, I'm out, like, has
[00:19:42] Ryan: Oh, Totally. for you, whether it's in the sales enablement or something like that?
[00:19:46] Ryan: I think in terms of product roadmap, for sure. So I, I always would You know, kind of beat the drum on some things that I felt were super important from our product roadmap. We had a big feature release earlier last week around kind of multi level approvals, making it easy to approve, have multiple people approve the commissions process from rep to sales leader to VP of finance like, and tracking that approvals process.
[00:20:09] Ryan: We released a Salesforce app, a number of different things that had In my mind for a long time as an ops leader. That said, seeing it on the sales side of the house really helped me galvanize internally a lot of that product feature set. And so we have a nice process here in CRM. A team member can log, Hey, this customer told me this thing that they're looking for, they can put in that feature request.
[00:20:33] Ryan: It goes right into product board, which is what we do for kind of product management roadmap planning. And then we can roll up the new business and. Current customer projected revenue impacted by that feature. And so I had been kind of shouting for a couple of these features or kind of motivating for a couple of these features for a long time, but then getting the sellers and it's the same thing.
[00:20:57] Ryan: Why isn't a seller putting in more feature requests? They think it's going out into the void. I then would go back to sellers and say, Hey, look, the more feature requests you put in for this thing, for a Salesforce app. The more revenue gets tied to it, and then the more likely it is that we're going to build it.
[00:21:13] Ryan: And that's a really big aha moment, and they get galvanized behind that and get going, which is great. Yeah,
[00:21:21] Toni: in terms of just quotas in general, right? Kind of hotly debated topic across the board. We can take this in all kinds of different directions. And obviously you as RevOps and Sales Leader add quota paths. We're like wondering, I mean, who, who else should we ask?
[00:21:35] Toni: You know, what's, what's going on out there? He's a user and a seller. And a receiver. I'm sure you're using Quota by yourself as well.
[00:21:42] Ryan: yeah, yeah.
[00:21:43] Toni: But, like, what's the you know, what's the, it's almost like what's broken the most with Quotas out there? Kind of what's what's, you know, from, from your perspective, kind of looking at this overall problem, right?
[00:21:54] Toni: Kind of what, what do you actually see kind of most of, most of the folks struggling with? And, and not only, From a pros perspective, failing with, but like completely getting wrong. It's like, Hey, you shouldn't be doing like this in the first place.
[00:22:07] Ryan: Yeah, so the, the classic answer to this is having too large of sales teams. I think people forget They just assume that 80 percent attainment in a financial model, they can just drag that out into the future and then just grow a team from five sellers to 30 sellers, and they'll just continue to hit 80 percent attainment without any concept of modeling demand or the impact.
[00:22:27] Ryan: And so I think we saw that pretty clearly in, in 22 and then reductions we saw in, in 23 as well. But I think in terms of quota design, and the reason that is just to be clear, Is that people forget about your carrying salary plus variable. And so your sales to earnings ratios, you would much rather have a five person team at 80 percent quota than a 20 person team at 20 percent quota attainment, even if they are the, the, you know, same overall revenue because you're paying a bunch of different base salaries, like you want a smaller, more efficient, leaner sales team in order to be successful.
[00:23:02] Ryan: Sorry, you were going
[00:23:03] Toni: Yeah, I was kind of actually jumping in. So this 80 percent quota attainment dragging out into the future, you know, we've been beating that horse a long, long time ago and we kind of continue to do that. I think it's completely dead by now, but actually my question to you seeing this in the market all the time.
[00:23:20] Toni: Is that still the case? Are people still thinking about the world like that? And, and I don't mean the you know, overeducated LinkedIn echo chamber. I mean, everyone else out there, are they still thinking about the world of like, Hey, I've my 10, 20 reps doing 80%. Next year's plan. I'll just kind of drag this up and you know, easy peasy only to hire another 10 sales reps.
[00:23:43] Toni: Is that still how many folks are thinking about this? Or do you see that that has turned?
[00:23:48] Ryan: I think still some are. Or candidly, they're not ready to come to the realization that they have too big of a sales team. They think that, okay, they're going to be able to turn the corner when they, when they clearly aren't. And so I've had a couple of conversations in the past couple of weeks that have been around, I have a 30 person sales team that's averaging 50 percent attainment.
[00:24:10] Ryan: What should I do? And, and the truth is you don't have enough demand to. You don't have enough demand to support those people. You either need to turn around and figure out exponential demand growth, or come to the realization that you, you have a team that's too big. I like small, efficient sales teams.
[00:24:24] Ryan: I think they're the future for the market. We're a six person sales team here at QuotaPath. We've been at a hun since I've taken over the team, we've been at a hundred percent plus attainment the past three quarters. So my focus has really been on, on kind of small, efficient teams because It's cost effective for the business, but then it also is very good for morale, obviously, within the org.
[00:24:45] Ryan: Um, From
[00:24:47] Toni: you, I was cutting you off
[00:24:49] Ryan: You're good. You're totally fine.
[00:24:50] Toni: number one is 80 percent quota attainment. Then number two, I think was design itself kind of
[00:24:54] Ryan: Yeah, so from a design Yeah, so there's a couple design things I would think about, or that people are having problems with. I think one is in their rates and how they think about acceleration. I think that a lot of people are putting accelerators at very, very high levels of quota attainment that they're not seeing from their team, which is actually super demotivating to reps, right?
[00:25:17] Ryan: So if you have a group of reps who have only on average hit between 70 and 90 percent quota attainment and you have an accelerated rate at 150 percent plus, for example, you know, no rep is ever hitting that. And so if anything, you're kind of mocking your rep by. Giving them this accelerated rate that's basically you've shown is unachievable.
[00:25:38] Ryan: So I think from a business perspective, you have an opportunity to potentially decelerate your rate at a lower amount of attainment. So we're seeing a lot of businesses say, Hey, if you end a quarter sub 50%, for example, you're only going to earn half your rate or three quarters of your rate to protect the cost of the business from a sales to earnings perspective.
[00:25:57] Ryan: And if you do that for like a win for the math of the business, then you pull down your accelerators. So maybe you say a hundred to 110% is one accelerator and then 111% plus. So these are actually like things that a rep can, can go hit truly versus pie in the sky. Accelerators for 150%. I think the other thing, and this is just more thematic that I'm seeing that people are struggling with, is aligning, and I talked about this at Rev Ops AF.
[00:26:25] Ryan: Is really aligning all of these different comp plans to whatever the true metric of the business is that's important to the business. I talked a lot about at, RevOps AF, you know, gross revenue retention is a great example of a, of a metric that people are caring a lot about, right? Boards are starting to push more on it or have been for, for a year plus now.
[00:26:49] Ryan: And it's a metric that leaders are caring a lot about, but then they're not taking. That gross revenue retention, that's like the key metric and then funneling it down into the comp plans of their team. So my advice in conversations is what is the key metric that dictates if your business is successful this year?
[00:27:08] Ryan: So if you look at your financial plan and say, okay, we have to improve our NRR or we have to improve our win rate or our ASP or just the math of like, what is the metric you really have to improve in order to be successful for your business this year? Take that metric. And put it into every component of every single person's comp plan so that you align them all around some sort of change for the business.
[00:27:31] Ryan: And so happy to talk more about
[00:27:32] Toni: So I've, I've I've seen that. Oh, we had that conversation actually with Mark Roberge on trying to give sales reps kind of a churn upsell component. Not saying that they should be carrying the existing business side, that that is a kind of whole different kind of worms, but have you seen a good application, like a good way to actually, create that incentive for a solely newbiz sales rep that
[00:27:55] Toni: suddenly starts caring about gross retention, right?
[00:27:58] Ryan: Oh yeah. I mean, a couple ones, right? One is give extra points for an ideal customer, ideal customer profile, right? So if you have a very clearly defined ICP, your ICP is a function of customers who are going to have higher retention. Right? I hope if you've built your ICP, it is customers who have high win rates, high NPS, and high gross revenue retention.
[00:28:19] Ryan: So give a rep extra points on their commission if they bring on an ICP customer versus a non ICP customer, or do the reverse, decelerate their rate for non ICP customers, because then they will be So focused on driving ICP customers to close and bring them in the long term. And then the second is it's all about contract length, right?
[00:28:40] Ryan: So if you know that it takes your system a while to get up and running and embedded, and that year one renewal is super risky for you because you have. A 90 day implementation, so a quarter of the contract's in implementation, then accelerate a rep's rate for a multi year deal, a two year, a three year.
[00:28:57] Ryan: Give them, give your customer experience or account management team more time to solidify the state of the business and then you know, pay the rep accordingly. So those, those are the two that I tend to see be really fruitful for, for customers of ours.
[00:29:09] Toni: And the reason why this is, and maybe some, some are not catching this like, well, why don't you just do, you know, GRR component? Well, the thing is, it's super delayed, right? Kind
[00:29:17] Toni: of you, you close the deal today and you have an annual contract. And then only in a year from now, you will get a ding or like an accelerator.
[00:29:24] Toni: That is usually, this goes against a lot of incentivization principles, you know, it should be as immediate as possible. Right. But it also might create like an awkward incentive for a sales rep to either stick around or to not stick around.
[00:29:36] Toni: Right. And it's like, so that's why it's actually not so super trivial to solve this.
[00:29:40] Toni: And I, I love the, I love the ICP approach here. So I think this is for everyone who's taking notes on their phone right now, you should kind of key this in, kind of give extra points for ICP deals.
[00:29:50] Ryan: up, right? So give your marketing team and your BDRs extra dollars for ICP demos and ICP pipeline. And then give your customer experience or AM teams or success teams Extra points for converting contracts from one year to two year, or for you know, you know, signing longer term agreements or bringing on more ICP customers, like have that funnel through all the way to every single person who earns variable comp.
[00:30:17] Ryan: And then you'll see that the lift in the metric that you're trying to
[00:30:20] Toni: And, and I'm sure, and I'm sure, you know, a quota path, you know, wants everyone to kind of run on commission, but actually is there a is there kind of also a push in the market, maybe not to do that? Is this sometimes an objection you get where someone says like, you know what? I actually don't want the CSM to have a commission.
[00:30:36] Toni: I don't want the marketing folks to have a commission or, you know, incentive, whatever, or bonus or whatever you kind of call it, some variable comp. Do you see that sometimes happening that people basically. You know, push against that urge.
[00:30:47] Ryan: We see it a lot in CS, you know, people say, Hey, I want this person to be solely an advisor, a trusted advisor, You know, a technical support person. Here's why I don't love that. People have different opinions. Two things happen. One, CS becomes a cost center. So it becomes massively devalued in the organization because they're not tied to revenue in any capacity.
[00:31:12] Ryan: And so you find yourself tempted to. Go cheaper and cheaper and cheaper and ultimately sully the customer experience. And then the second is you end up with this really weird relationship for me personally, as a, as a consumer of software where you have your technical person. It's like a good cop, bad cop kind of weird thing where you have like a CS person who's there to help you and answer technical questions.
[00:31:36] Ryan: And then anytime a single penny comes up or anything, they always pull in this random person who frankly, I never speak to. And is always emailing me asking, there's a contract, there's a tool that I work with, which I won't name, but the, the, the account manager is constantly emailing me about expanding seats.
[00:31:58] Ryan: They provide me no other value. They're just like, do you want to expand your seat count? They, they, they, they don't know my business. They never really been particularly helpful, but it's because it's their job. Right. So you have cost center and then revenue center split. And so I really like working with the CS person.
[00:32:14] Ryan: And then this account manager is constantly just trying to get me to expand, and it's a really kind of jilted relationship, transparently. We, we went through this transition at QuotaPath about a year ago, where we had a kind of CS implementation team and then an account management team, and we combined them.
[00:32:29] Ryan: And it's worked great. You know, I think at the end of the day, if you go to a CS team and say, hey, you can own revenue. You know, you're going to be a little nervous about that. You can also earn a lot more money, variably, you know, becoming this person. And for the customer, it's a better experience. You, at QuotaPath, you sign a new business contract.
[00:32:47] Ryan: Once you do that, you then get handed off from the sales team to the customer experience team. One person is your point of contract who runs you through implementation, renewal, renewal, renewal, expansion, everything from there. So you don't have contact switching. You don't have weird handoffs and it works great for us, honestly.
[00:33:05] Toni: I, I actually don't disagree with this. I think the You know, commission or not, it's like a it's a, it's a down path decision from AM and CSM combined, right? Kind of, you know, once you make that decision, then, you know, it will be much easier for you to kind of figure out, Hey, do I do, should they be financially incentivized as well?
[00:33:26] Toni: I love that. I think we need to start looking at the last question here, Mikkel, and I want to give it to you. Oh, thank
[00:33:32] Mikkel: you. So I, I actually had one question left. It's not about quotas and it's still on point. It's not going to be, I'm not going to go completely off now, but there was just one thing on this whole RevOps plus sales I wanted to double back to, and maybe this is going to be a good end.
[00:33:48] Mikkel: Let's see. One thing I've experienced as a marketing person, there's always A funny relationship with sales. And I just wonder what was it like all of a sudden going from the RevOps, you have to, you're kind of the neutral party supporting everyone to all of a sudden, hey, now you actually have sales there.
[00:34:09] Mikkel: How did you manage that internally with, with all the other heads off or leads or whatever
[00:34:14] Mikkel: to kind of make sure, hey, no, I still have your back. We're going to be working together still. What was that like?
[00:34:19] Mikkel: Yeah,
[00:34:22] Ryan: it's a great question..I, two things that I did first was I had Brandon on my team. I was like, look, you have to be still completely neutral and you have to be pushing me when I'm being not neutral. I think that was really helpful for me. When I started to think to sales first and Hey, on things like attribution or, you know, the, the smallest things where there's tension involved.
[00:34:46] Ryan: I think the second thing that we spent a lot of time with was Bringing our marketing and sales teams together very consistently around the goal of new revenue and expansion revenue for the business, meeting consistently on what's the quality and shape of pipeline. We're fortunate. We're a pretty heavily inbound org here.
[00:35:06] Ryan: So marketing is, is very highly regarded in terms of ability to generate pipeline and support the team in closing. And so I think those two things were super fruitful. One being, Hey, I still need this neutral arbiter who, you know, Tells me, hey, look, you're getting a little sales first versus versus, which is a natural thing that happens, right?
[00:35:24] Ryan: I'd be remiss to say it doesn't happen. And then bringing the teams together and say, hey, The RevOps function is here for marketing, sales, customer experience, product ops, pricing, what have you more, more broadly, we're still serving all these different capacities. I think bringing RevOps closer to the selling process will actually help them learn more about what types of tools they can recommend, what types of processes they should build.
[00:35:49] Ryan: And so it's been a net win for us, for sure.
[00:35:52] Mikkel: So I think we found a pretty cool maybe even non obvious potential career path for some of the RevOps listening out there. We've talked about RevOps becoming CRO, but an intermediary step could be to add sales in there and also carry some quota.
[00:36:07] Toni: Yeah. And so this is what I sometimes refer to as an enlightened VP of sales. It's not a joke. It's not a joke. And some people kind of listen, they're probably going to get extremely offended. But basic kind of a VP sales that obviously understands, you know, the, the, the, the job at hand for him or her is like to close business today. Thank you very much. But also at the same time has the awareness to understand that, Hey, there's more than just that stuff happening.
[00:36:32] Toni: Right. And I think from someone RevOps, you know, jumping into sales, I think that automatically creates this enlightened VP of sales, which I think is a is extremely awesome. And I'm going to have a chat with AJ later I think next week, by the way. And I'll just say like, Hey, maybe you need an enlightened CRO as well.
[00:36:52] Toni: You know, maybe, maybe Ryan just needs to take the step up here, but I think ultimately, ultimately that is then the path actually, right? Kind of where, where this whole VP sales to CRO actually makes sense. Because the VP sales actually has proven already, not only being, you know, being able to lead, carry a bag and all of that stuff, but also understands the bowtie through and through and is able to step up.
[00:37:12] Toni: But I
[00:37:12] Mikkel: got to say though, Ryan said they're mainly inbound led and marketing is high regarded. So maybe they could also look in marketing. I just want to, I want to say.
[00:37:19] Ryan: I mean, everybody's having the exact same conversation. It's like, who's going to be the CRO and
[00:37:23] Ryan: why, you know? I think my take on it is a CRO is somebody who's sitting at the management level who cares very deeply about the outcomes of the business. And they know that if gross revenue retention is not where it needs to be, or net revenue retention is not where it needs to be, or win rate, or like any of these variables aren't where they need to be, then the business doesn't do well.
[00:37:49] Ryan: And they don't want a highly performing sales team, but then the rest of the organization not doing super well. It just doesn't work. And it's not good for, for the For equity valuation long term, it's not good for sustainability. It's just a lose lose all around. And so I'm hoping that as more VPs of sales, or as they continue to make their, their path into CRO, that they are starting to think, okay, it's not just me and my team.
[00:38:11] Ryan: It's us more broadly,
[00:38:13] Toni: So Ryan, you obviously have the correct answer here and we're kind of wrapping this up and would have been a little bit more funny if we just, you know, Had like silence after Mikkel made it. Okay, Ryan, thank you so much. This was fantastic. Thank you Mikkel for, you know, putting all of this, you know, together and keeping me in line. And thanks everyone for listening. If you liked this, hit like, subscribe, follow, whatever you're doing. And yeah have a good day and have a good day Ryan. Bye bye.
[00:38:40] Ryan: Thank you all.