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The world's best conversations about B2B selling happen here. This exciting new podcast from Andy Paul, the creator and host of the Sales Enablement Podcast (with 1200+ episodes and millions of downloads) is focused on the mission of helping increase your win rates by winning a bigger percentage of the deals in your pipeline. In this unique round table format, Andy and his panel of guest experts share the critical sales insights, sales perspectives and selling skills that you can use to elevate your sales effectiveness and create the buying experiences that influence decision-makers to buy from you. Host Andy Paul is the expert on modern B2B selling and author of three best-selling, award-winning sales books, including his latest Sell Without Selling Out. Visit andypaul.com to subscribe to his newsletter for even more strategies and tips to accelerate your win rate!
Hi friends. Welcome to the win rate podcast. I'm your host, Andy Paul. That was Michael Litt. And Michael is one of my guests on this episode of the win rate podcast. Michael is the co founder and CEO at vidyard. My other guests today for this discussion on topics such as how to get sales leaders, more personally invested in the success of their individual sellers.
And how to develop sellers who can operate more confidently in complex sales environments are Wesleyan Whitaker. Wesleyan is the founder of transformed sales and the host of the transformed sales podcast. Also joining us as Karen Kelly. Karen is founder of the K2 sales academy and host of the K2 sales podcast.
Now on the listener note, before we jump into today's discussion, I want to remind you to subscribe to my newsletter, join the more than 60, 000 sellers and sales leaders who subscribe to receive a win rate Wednesday, each week on Wednesday, you'll receive one actionable tip to improve your win rates and a lot of other great sales advice as well.
You can subscribe by visiting my website at andypaul. com or you can subscribe on my LinkedIn profile. Are you ready? Let's jump into the discussion.
Okay, friends, that's it for this episode of the Winrate Podcast.
Okay, friends, that's it for this episode of the Winrate Podcast.
First of all, I want to thank you for taking the time to listen. I am so grateful for your support of the show. And I want to thank my guests, Michael Litt, Wesleyan Whitaker, and Karen Kelly for sharing their insights with us today. If you enjoyed this episode, please subscribe to this podcast, the win rate podcast with Andy Paul on iTunes, Spotify, or wherever you listen to podcasts again, thank you so much for investing your time with me today.
Until next time I'm your host, Andy Paul, good selling everyone.
Hi friends, welcome to another episode of the Winrate podcast joined again by another all star cast of contributors and panelists here today. We're gonna go around and let people introduce themselves briefly. So, Karen Kelly, let's start with you.
Hi. Thank you, Andy. Delighted to be here. My name is Karen Kelly. I run K2 Performance Consulting where I work with B2B. Sales leaders and their teams to bridge the performance gap and increase their win rate
Ah, look at those, using my favorite two words, Winrate. Michael.
Thank you for having me, Andy. Michael Litz. I am the co founder and CEO of a business called the yard, and we are building a buyer engagement platform includes everything from automated prospecting tools video recording tools that we use to create better relationships with buyers all the way through to digital sales rooms. And our objective is to use software and creative products that help improve win rates as well.
Ah, there we go. My gosh, we're all aligned. Wesleyan.
Awesome. My name is Wesleyan Whitaker. I am the founder and chief transformation officer of transform sales, and we focus on behavior based sales training and development for frontline sales managers and their teams.
And I always remember from our previous conversation, you talked about you're a reformed chemist, I think you said, right?
Recovering chemist.
recovering chemists.
So do you have to go to treatment for that, or is that just something You You do. You do. You have to learn how to not vomit product knowledge on people and learn how to listen. So yeah, I had to go through a lot of treatment to become a recovering
chemist.
Well, good. Well, welcome everybody. And I wanted to start this conversation with, it's fairly topical because there's been just in the last, well, it's sort of constant drumbeat, but there's been a number of things published in the last week about sellers and quota attainment. And gosh we hear all the data or see all the data, fewer than I think it's not fewer than 40 percent of sales reps hitting quota. I don't know is quota relevant anymore? If you have a target that so few people are hitting and we're going to dig into this, but I just start the first question. Is quota even relevant as a measure of performance anymore? Somebody start, Karen, you start. I
still is relevant yes, but I think when you look at anything That's the result. That's the end goal. And I think what's missing is the process, the Canadian term. The process is the journey to get there, the activities. And I think when we're only looking at the quota and yeah, not many companies are hitting it and then they're tacking on 20 percent for the next year, so they're making it impossible.
But I think it's like, let's look at the activities and the behaviors that go into this and really start isolating them and looking at where can we improve them that will ultimately get us to that. So it's looking, keeping an eye on the quota, but backing it up and saying, what are the elements that go into that, that we can control versus just as daunting number that we're hanging over people's head.
And it's even, when you look at people interviewing for new sales jobs and they're saying, well, you have the. Opportunity to make this amount of money and you're thinking, no, I don't because there's so few people making it. So I think it's lost it's it's trueness and that's my thoughts.
mean, Michael. Oh, go ahead, Wesleyan. Sorry. Good.
Yeah, so I think quota is still a thing. I think it's the way that we come up with the quota. That is the problem. All of the executives sit up in their ivory towers and they say, okay, these are the goals for the year. They flow it down and they say, Hey, frontline managers. This is what this is the number that your team has to hit and then they flow it down to their people And again, they're not necessarily looking at who has achieved what who has what kind of developmental factors What kind of territory this person is sitting in are they sitting in somewhere like texas where you know the economy?
We don't feel the current recession that Right? Like, so not even thinking about those economic factors or the personal, like anything. I think that's really the problem with the way that quota is set and why so many reps are not attaining it.
Yeah, , as one of those executives that Wesleyan referred to is how is this, from your perspective, as CEO is this an issue? cause that's one of the things that sort of, I think about is this problem has gone on for so long. and it certainly has become worse over the last 10, 15 years. And I sort of think, well, anything that changed has to going to change substantially. And from that perspective, has to change and start at the top. So, As a CEO is this an issue that you're even concerned about?
Yeah, absolutely. I think I'm a huge fan of Tom Tongues, who I think did a very interesting analysis about what will happen with quotas in 2024 and beyond in the context of software growth and how businesses ultimately compute that. One hand quotas come from this ultimate yardstick. correlates to the way a business is measured when I go sit in front of my board or sit in front of future investors or am measured as a CEO, it comes down to the growth rate and the performance of the business, which is a function of quota attainment. Now, the reality is, if quota attainment in a business is really poor, it's a function of the demand of the broader market, and the reality is, you might just be carrying too many sales reps. I think something that a lot of organizations have seen right now since the Sassacre started which was in, late 21 going into 22, we're two years into this decline for at least software and tech companies, is that pipeline numbers remained high, but the conversion rates started to drop. And so businesses wanted to purchase and wanted to be productive. But the final decision maker, the CFO at the end of that chain of command. Ultimately wasn't approving that budget, the business didn't have it anymore, and so that's when the quota attainment started to slow down. And that's when businesses started to kind of create spiffs and induce the opportunity or bring quotas down to maintain reps. We've seen huge volumes of layoffs in this sector. And we felt it as a business that provides products to sales professionals to better build relationships with their buyers. and so I think the reality is to get these To sales reps hitting quota, you probably need less sales reps as a function of the pipeline you're generating.
And the benchmark for the quality of pipeline you're generating has fundamentally changed through this period. Will it last forever? I don't think so. Jobs numbers came out today. I just saw a headline that Maersk was laying off 10, 000 people. And I always think of Maersk as a massive yardstick for a measurement of the global economy in terms of shipping and receiving.
So it's starting to feel like we're bumping along the bottom. But until there's a pullback in rates, I don't think businesses are going to be seeking growth. And so as a CEO, and what I would tell other CEOs in my portfolio of companies is let's make sure we're right sizing the size of the team for the opportunity that exists.
And again, back in the pandemic, a lot of businesses ultimately just overhired because money was free and available and everyone was chasing growth and being rewarded for it. This reset needs to happen, and when that happens, quotas will be more easily attained.
know, one of the things that that bubbles in my brain is I work with a lot more, I call them the dirty industries. So like manufacturing chemicals, like technology, hardware, and in those industries, the sales reps carry higher quotas. And they carry higher quotas and there are less of them. So one of the things that you said, it's sizing the organization, Absolutely.
So what are the expectations of the people that we actually have on the team? And do we, are we expecting someone to close a half a million dollars in business and be a mediocre salesperson? Whereas we could hire a much more experienced or a better salesperson to close 1. 5 million, right? And so in the industries that I sit in, that's typically what I see.
They have higher expectations. They have less people and that's how they really right size that organization.
Well, is there a danger that, cause we're in a cyclical. Business is cyclical that, that certainly in the software world, they just haven't learned the lesson that when things, go back to the way it was, suddenly we, because, as I, for me, the ultimate measure of effectiveness for a seller is their win rate.
And even during high growth periods, win rates were. good across the board in SAS, and you could tell, as I was saying for years, is we'll just wait till the tough times hit because no one really knows how to sell. Right. If you're in good times you can't close more than one of every five, your most qualified opportunities, it's not going to get any better.
When things times are tough, it's going to get harder.
Out, we'll see who's swimming naked. And I think the reality is, a lot of these businesses were formed after the Great Recession. Mine certainly was. And so, we've been operating in an economy that's largely been up and to the right.
So we haven't experienced the crunch and the pain, and in a growth economy that's investing in growth, there's always opportunity for companies to, recycle and reinvest in growth. So I think there was a lot of bad habits formulated through that process, and a lot of mediocre sales processes were effective in the context of experimentation and growth. But the first thing that gets cut in difficult , economic times is experimentation and growth. So the cream truly rises to the top. And I think that's what a lot of organizations are ultimately dealing with now.
Yeah.
And you had raised a point earlier, which I wanted to explore a little bit with. Everyone is there one you said and one I'll add on is this idea is that, Hey, when we get to the ultimate decision maker, things are falling apart. But what that's saying though, is that we really aren't very good at making the case for our product,
Right.
Because if there's a business case to be made for the product that generates a payback that meets the company's hurdle rates, you don't have times are bad. They're going to improve it. So it seems like that's the, one of the major gaps that exists in selling is these days. And certainly in the software world, but I think in general in B2B is, people just don't know how to make the case for the product, right?
And I wouldn't say the product, they don't know how to make the case for making a change. So I look at decision making as a two, two step process with companies. Before they decide, hey, we're going to buy something from Vidyard, they first have to decide, we're going to make a change in the way we're doing things. And we're going to make that change with Vidyard. Um. How do we address that? Because I want to sort of reframe this whole quota attainment from a different perspective, which is that it's not a fact that 40 percent of sellers are hitting quota. It's that sales managers have a 60 percent failure rate. And because they hire the sellers, they Train them, they coach them, they onboard them, they coat. Yeah, they're responsible for them. That's, the raw product they brought into it. Isn't really the focus should be more on sales managers in this whole thing. Anybody?
That's my sweet spot. I, I love talking about the challenges that we have with frontline sales managers. And there's so little training and development that is really focused on up leveling them. And. What is the front line sales manager? The top sales person. What is the top sales person? A selfish person.
So you take a top sales person that has been a lone wolf and you move them into a management role and they have that same lone wolf mentality. Or, they're trying to make everybody mini me's. And so the challenge is we're not upskilling and up leveling these frontline sales managers and giving them the tools and giving them what they need to really impact the sellers.
And you were talking about like, when they're getting to the end of the sales cycle, the end of the sales process, that's when things are falling apart, but they're actually falling apart earlier because if we have a proven and repeatable sales process, and we look at conversion rates from. Entry point at each stage and we see no, you're actually not converting these first meetings to proposals That's the problem Let's focus here And again not teaching our frontline sales managers to look at these things and to coach The sellers up on their actual areas of deficiency is really one of the biggest gaps that we have in the marketplace Yeah
I think you have to look at, and I totally agree, but the sales manager, again they're not coming at it from the training. They're coming at it usually, as you said, Wesleyan, the top sales rep. So that coaching element and that role playing and that deal analysis isn't taking place because it's never happening at the point where you think it is.
It's steps way before that. And so I think there's an opportunity for them to really train their team and that's not happening. I think a lot of it's also is they're pulling it across the line for them and they're pulling it anyone at, at any time. But I also think that when you look at, years ago, we were kind of order takers.
And so I, I still believe there's a fundamental. lack or gap in foundational selling. And I think when you look at, do we have the right people in the seats and the right amount of people, it's also like, do they have the fundamentals? Do they understand that this is a change manager management process?
And are they coming at it so that they're, gaining consensus along the way, like basic stuff from problem impact, is this the number one problem? And then, it removes some of the pressure off the sales manager because there's some ownership and understanding of the way in which these buyers go through the journey.
But that's missing because they were just taking orders and now that it's not that way anymore, it's revealed that there's a real gap here. And so if managers just come in and expect that, they're going to tell people to do things. That might temporarily give you results, but it doesn't give you the culture of learning and development.
It doesn't empower these sales teams to actually, get results on their own. It took
managing people, and I think that's one of the
Backwards.
Mike, I want to bounce an idea off you. Cause I. That's one of my favorite ideas at the moment how to fix this problem. You're an operator, so you can tell me whether it's completely out to lunch or not.
Is I think that if we want to begin to address this problem of quota attainment, assuming that we assume that this is a, we agree this is a problem, is, my suggestion is that we change the way we compensate managers. Up and down the management chain and the way we do that let's say you're a sales manager.
You've got 10 that work for you. So you've, I'm excuse round number. So I'd say you've got your base pay is 100 and your variable is another 100 is that you would get a flat fee at the end of the year, a bonus for every seller that hit quota. And that'd be the sum of your variable compensation based on. Yeah, you get 10K for every seller that hit quota. And I think
that would change. I think if managers had that incentive, and I think up the chain, directors and CRO level get something similar, I think the conversation would change. And I think the way people act would change.
yeah, I think it's a great comment. Think this has been said already, but I'll try to maybe put a bow on it from my perspective. The first thing that happens when businesses struggle to meet their targets, Is they look at all the metrics that provision or relate to those targets.
So outbound calls, a high impact meetings, and these are all factors of what worked in the previous 10 year period when sales could threaded care and use the term order takers. Now we're in a world where there's multiple champions involved. It's a very complicated. Sale. The term we often use is find more friends. And reps haven't really been trained to do that because they haven't had to do that. So what happens is an organization says, do more calls, do more outbound, book more meetings, do all these, just do more of everything. Everybody gets an inundated, close rates continue to decline, and there's really no solution to that of removing some sales reps from the process because there's just, there's too many sales reps doing too many things. And focusing on the sales reps that have the skills to truly go across an organization, get multi threaded in the process, truly build partnerships with buyers and emphasize value of what you're bringing to market to your previous point and that value piece comes down to ROI. It comes down to impact and that requires data. That requires customer testimonial. That requires a rich subset of information that's believable and truly translatable to the environment in which you're trying to insert your product or service. So all that said think your idea is really interesting. But if I was to go to my sales manager or VP sales or COO and say, Hey, I'm going to compensate you on the percentage of your AEs that are hitting quota. The first thing they would do. It's just eliminate all the AEs who aren't hitting quota, doesn't necessarily solve the problem of educating and helping those individuals go and hit quota. And the reason I say that it's a little bit facetious is I find in sales, specifically in sales leadership, the compensation package that gets put in front of a rep really defines the work they do. And so over time, you get these compensation packages to get more and more complicated because of these. Artifacts or these ideas that ultimately get implemented to try to improve an outcome. So obviously the easy answer there is, you have a number of sales reps, you cannot reduce that number, the percentage of that core number of sales reps that ultimately hits quota is how you get compensated.
So there's a way around that. What you probably
an interesting, to the point you mentioned before about, about them getting rid of the people. So what I'm saying is, look, You're going to get, let's say you have 10 sellers and your variable is 100, you're going to get 10k per person. So if you fire 5 of them, eliminating 50k worth of your compensation.
So, so it's like, that doesn't solve the problem for them because they still have to hire and onboard new people. They're going to perform at a higher level. And that's why I think this is a way to address the problem, whether this is the exact framework or not. Let's put the onus on where it really sits,
Who's bringing these people into the organization. I think we need to stop, I'll just say the equivalent of body shaming quota, shaming sellers, because they're not really responsible for the situation. It's really management
and if anything, it will make them more intentional in the hiring process. Because if someone's answer was, I'm gonna get rid of these people, that's a red flag in that, well, you had the wrong people the whole time. And you weren't willing to do anything about it. So I think once there's an account to build or they see there's a link there and they're impacted either negatively or positively, they're going to be way more intentional and strategic with who am I bringing on board?
Am I bringing a mix of, the, I don't like the words, the hunters and the farmers, but like, do you have a mix? And are you really intentional? And are you doing what you're supposed to do? Are you improving the performance of your team? Because that's when you hold the mirror up and you're like, if you're not, you need to be doing something differently.
Of the organization for me. Sure. We can make an argument about why it's not important to have more people hit quota if you're hitting your revenue number. But. I think, I, even though I worked at nine plus startups yeah, you still have to build a company, not an exit. Right. And so if you're just worried about the exit, you don't really care, but if you're trying to build a company that's sustainable over the longterm, then you would need to build your bench of talent. And you want to have as many people contributing to success as possible. And if you begin to do that, then you'll start addressing issues like churn and so on.
So I don't know. I just. I just think like we're not thinking innovatively enough within sales about how we begin to address this issue and certainly continue to do what we're doing. We've seen numbers since I've been tracking the last 12 years, CSO insights reports, and then other people's subsequent to that, 2010, I think it was like 55 percent of sellers were hitting quota. Now we're down 40. It's the trend hasn't been in the right direction. It's like. Why are we continuing to do this? Let's do something different. Let's try something. I want to change your point. Michael's point earlier. Let's experiment.
yeah. Now there's, it's interesting. We're in this beautiful moment where. Because selling is hot. We're in this moment where selling is hard, but there's also a slew of new technologies thanks to generative AI that can make aspects of selling much easier, which give humans leverage over their time to do things like build high quality relationships, find more friends and accounts, build more relationships with those other friends across accounts.
And the way I think about that is contact research, that's a huge amount of effort that people spend a lot of time doing on LinkedIn that's now available via generative AI, the type of emails that you're writing, to potential new customers using generative AI to retrofit your solution to a problem, they have based off of a public earnings report.
This is something that, would have taken three or four hours. And I can now do in two or three minutes, there's this critical inflection point where we can start using technology to enrich the capabilities of our individual sellers so that they have more time to be human. And I think that's something that I see a lot of organizations starting to really think through in this moment to really create efficiencies and potentially do more with less sellers, which ultimately impacts quote attainment as well.
if anybody has any other thoughts about this technology moment and what exists in the sales landscape.
Well, I think, yeah, I just saw a demo of something this morning that, a newer tool that's going to be coming out that's, yeah. Integrating a lot of AI functionality into it as a seller looking to approach an account and develop relationships on the account. Yeah. I had. Yeah.
Something I would love to have had back in the day. Because it just gives you more data points, right? I think that for me, the value of this, and this is unfortunate. I think the way many companies want to use this, use the technology to say, Hey, we want to substitute what we're learning for AI for the judgment of the seller. Right. And there's something that is very explicit about that. Hey, you don't have to rely on the judgment of the salesperson anymore. We're going to tell you what to do. Whereas I think the real power of it becomes is, yeah, how do we help, to your point you made before, Michael, is how do we help the seller become, give them more time to be more human and build more authentic relationships across the organization, learn how to really help people in their jobs, which is to, make progress toward making a decision.
And there's one, one factor here I'll just maybe really quickly touch on because I think it helps the conversation is like, in that period of time, you've been tracking quota attainment across sellers. The amount of stuff they have to do in their role that isn't selling has increased dramatically. So, filling in documentation, recording information in Salesforce, for instance, it's like the majority of their time is spent doing stuff that isn't hanging out, spending time, building relationships with clients.
And so it's no wonder quote attainment has declined because businesses are just trying to get them to do more busy work inside of the business versus outside of the business.
But there's a counterpoint to that, which is that I know there's a study that came out in the last year, if you had one of the analyst firms saying, yeah, what 35 percent of the time reps actually spend selling roughly a third to say how long I've been in this business, but probably longer than most everybody's been alive. That number existed 40, 50 years ago, same percentage of time sellers or spend selling. So the question is what are sellers doing with the rest of the time? Cause we know for like, to your point about CRM is, yeah, you can use tools like, scratch pad and a bunch of others automatically updates, Salesforce for you.
There are tools out there doing things. I think the more relevant measure is how productive are sellers in the time that they're actually spending with. With buyers, and I think we're not measuring that and, harking back to system I used to manage sales teams 30 plus years ago and moving forward from that is initially 30 plus years ago was, we measured how much dollars of revenue sellers generate per hour of actual selling time. So we knew exactly how productive sellers were. So I could have two cells for one, Joe and John and, John took, X number of selling hours, which could include selling hours, sales, engineering hours, management hours and so on to get a million dollars in revenue. And Joe took, 50 percent of that. So then you had some real information to say, okay, well, what's the difference between the two? What's one doing? The other isn't. And what it required was, and this is sort of an artifact is working for a company at the time. Initially, a defense company is we all need to keep time cards. So, yeah, I've joined the company.
It's like, Oh, in case I was charging overhead as a commercial person, but it sort of struck me as like, well, why don't I assign job numbers to my qualified opportunities? And then just had people charge their time to the job numbers they're working on. If you want to understand what sellers are doing, that's how you do it. It's not hard. We've got technology that can do that very quickly these days. And once you have that insight about how your sellers are spending time and how that generates revenue, then you understand what true sales productivity is. It's not a quantity of activities. It's how much revenue am I generating per hour of investment we're making in selling time.
What about the salespeople themselves having, like I, I spent 20 years in devices and software and I had a drive like no other that, and I also studied lean six Sigma. So I remember looking at things going. Why would you take 13 steps to do that? Like, why don't you just go to this person right here? And so I think, where's the onus and the hunger on the rep to go like, I got, we all have, X amount of time, but how can I use it more effectively to get the outcomes I'm looking for and that real hunger to win and to, make money and ultimately help people?
I don't know if that's, I don't know, maybe I'm wrong, but I don't see it as strong as it was.
Yeah, I, one of the things that I see or I notice in sales teams and the way that we even teach sellers is we don't really do like, we were taught in elementary or middle school where they teach to the middle of the pack, right? We have to realize that Most people are not A students. Most people are B and C students and they're okay with that.
And B and C students need a roadmap. And so even when you hire a new salesperson and you say, okay, here's your training, here's your onboarding, now go sell. They're like, what does that even mean? Like, how do I spend my time? How much time should I spend researching? How much time should I spend in CRM? So really being able to give people a roadmap, like this is how you should spend your day and then allowing that manager to hold the people accountable.
Because when you start strong, you finish strong. So if they come into an organization and you say, okay, this is what your first. Week of onboarding looks like now you're getting into your actual role and it's still a structured time Because whether you're out in the field actually going to physically see people or you're just sitting in your home office all day Not knowing how to spend your time.
That's literally probably 80 percent of your success And so that piece of what you said andy It's how much am I making per hour? Like where does this revenue get me? And it's literally how am I spending my time?
Isn't there another issue, at least in my perspective, there is, and I've seen this again, I think become more acute recently is, last 10, 15 years is sellers really don't know what their job is.
Yeah. Royal Clarity.
and so most salespeople think their job is to go out and persuade somebody to buy something. And yeah, I, my take is a job of a salesperson is to help. buyer make a decision to make a change and the, there are certain things we do that are selling motions that we need to do, but then they're also very distinct helping motions and sellers are by and large are focused on selling and not helping. And, cause job is sellers. Like I said, really understand things are most important to the buyer and then help them achieve that.
Right. This is. The help being the operative word and I, the sense of helping doesn't seem to be, very strongly built in most sellers cause they're so focused on what am I doing? What are the steps I'm taking? And this Gartner report that came out I know Michael, Nick from your organization sent a link to it, talked about Gartner research found that customers who perceive the information they receive from suppliers to be helpful. In making progress toward making a decision, we're 2. 8 times more likely to, experience a good buying experience, which is going to
lead to an order. It's a
simple mindset shift is I like to tell sellers, if you feel like you're selling, you're not helping.
I
say serve don't sell like that is what I want them to have in their brain serve When you step into a conversation when you're stepping into the buying engagement You're what should be on the top of your brain is not your quota Is not the questions you need to ask your ask is how can I serve you?
How can I enhance your life your day your moment your business, whatever? But it's serve don't sell and when we it's a mindset shift saying mind shift change like we have to Allow them to shift their perspective in the way that they even think about the work that they're doing They
often think about this is to both your points. There's this asymmetry of information availability between a buyer and seller. A buyer has a problem and understands that problem very innately. And the seller has a solution to that problem and understands that solution very innately.
And these two kind of bar charts overlap. And the seller's job is to understand that buyer's pain, that problem, and how the technology is going to retrofit to that pain and problem. And so it's an educational process. It's not a convincing process. And the best sellers will disqualify buyers who don't effectively have that problem.
And this is why we've started to think about generative AI in the sales process. Because organizations, Back to, quota being a problem, right? It starts very early in the process, before it even touches the sales rep. Right? When you think about BDR, right? BDR is, a fairly highly paid new grad comes out of, some undergraduate program and is now tasked to sell a complicated solution to the CMO or the CTO of an organization. And that new grad will never, like, without Lots of experience will never really truly understand the pain and the problem that CMO or that CTO truly has in their role. It takes time and it takes experience, but companies are having these individuals send out copy and paste emails on mass. And so that's why it's exactly why we built this prospector product because we're like, will AI do a better job of understanding the problem a CTO or CMO or CEO is having an organization?
And how a technology can retrofit that problem and selectively send emails, from myself, from a sales rep, et cetera, to try to position that and will that have a higher response rate than a BDR does because it's doing a better job of bridging this asymmetry of information I described earlier.
And the answer is yes, it does. It does work. It does do a better job. So, I think you're touching on a really important point here and we're dancing around it. The skill set of sellers today and how easy it was and how organizations have just, pounded dollars into pipeline generation without a consideration of the quality of the work that's being done there is the broad problem that surface can solve now.
But again, I think generally the AI and there's so many products that are now doing this, have a really big opportunity at bridging that knowledge gap.
Yeah. It's, I like your example you gave. Cause I think the, I would reframe the knowledge gap into an acumen asymmetry. And, we've got our least experienced, least knowledgeable people. I think all of us on this call probably were in that position. My first job out of school is selling computer systems to the construction industry. I was 21. I look 16. I knew nothing about business and yes, calling on CEOs of construction companies, guys have calluses on their hands and it's like, what the hell did I know? Right. But yeah, and there was a definite learning curve. I'm for me, the key of getting their time was showing up and being incredibly interested, curious about what they wanted to achieve and how I could help them do that. But yeah, that's sort of basic mindset we need to try to inculcate in people. And it, in the early stages, yeah, you're selling. You're selling to the problems. I think one of the gaps we have in sales is with our experience. People is that we're too focused on this whole idea of solving problems instead of selling to opportunities, right?
As in my experience, most of the companies I sold to as customers, they weren't solving a problem. They were reaching for a new market opportunity. And I think we've become too fixated on this idea in sales is that let's find their pain points as opposed to let's identify the upside for them. Because again, to the point made earlier, if we go to a CFO and say, look, here's how we can help you grow your top line in a way that you hadn't anticipated, and it's got this payback period on it, there's money for you now, even if the times are tight. So that's like, how do we sort of get this issue of acumen, right? That's, it's a tricky one is how do we instill requisite acumen in ourselves? So I think generative AI can help for sure in some of that, if they're actually learning from it.
think there's also an opportunity for reflection and just when we're trying to always invite our sales team to serve to, be others focused buyer centric. Everyone's using the term, but they're not actually doing it. But what about looking at the reasons in which they lost? What about looking at call recordings and saying, Oh, wow, I over spoke there.
They're about to say something. What about actually having the customer come in now that they are customer and share that journey they went through in dealing with companies and saying, the reason we chose you and it might not be you was, but the other organization really unhinged the emotional impact of the cost of inactivity.
Whatever that is. And when you can hear it, and I think what you said, Michael, that asymmetry is huge. So that young BDR who has zero experience and has never done that job, but can hear from the source itself, what happened, what their day to day life was like that before state, they can now share that story with others, even though it wasn't them, they heard it and they can make it their own, they can be more believable, and they have a sense of conviction, where there's not this imposter syndrome.
So I think there's a huge opportunity to really leverage that. The experiences we provided for our customers that we may not be aware of a lot of times It's I think we won because of this or it's our it was our relationship It was the product and it might be something completely different.
So how can you repeat it? How can you know outbound that into future prospects if we have no idea what we're doing that's either supporting us or hurting us
critical, right? Especially in this day and age where more competitors than ever in most market segments, is, yeah, understanding why you won and why you lost. Closed did a study, and it was a really fascinating study, where they talked about here on the show before Is they tracked the answers that AEs put into the CRM salesforce or whatever about why they lost a deal. And then they went and talked to the customers and the sales reps were only right 15 percent of the time.
don't ask
the reasons why they lost, they were sales reps are only right, or like put it the more drastic way, they were wrong 85 percent of the time. So now you could say, okay, well, they're protecting themselves, putting, not putting the right, what really happened in their disposition because, they don't look bad, but regardless, think about that, what's, what's it say about our sellers and our managers in understanding the deals, if we don't understand why we won or lost 85 percent of the time.
Yeah, it shows the big gap that we have with they don't know because they don't ask they just think they're assuming right
Well, but also means that I think more importantly for me and my perspective, what it says is, and I've often referred to Sass in the last 15 years before the Sassacre as Michael, I hadn't heard that. I thought that was very clever talked about is just been a big casino game, right? We don't, we have relatively low win rates, but if we generate enough pipeline, even at low win rates, we're going to grow. And I think it was one of the fallacies of predictable revenue was that it inherently wasn't predictable. It's predictable in aggregate, but it wasn't predictable at the deal level. And that's, hugely problematic as we're encountering now. So, yeah, people, unless they were just sort of playing the odds, we could be okay.
And we knew if we had sufficient pipeline, we're going to grow at a certain rate. It doesn't work anymore, or at least not in the current environment.
Yeah. The
All right, so,
think, Oh, I'll just add
Go ahead.
one quick thing, let's think about is when I first started selling, a mentor told me two ears, one mouth, use them in that order. And, when you, when I look at gong recordings, the first thing I look at is, what portion of that bar was our rep and what portion of that bar was the customer.
And that's a, there's a massive correlation there. And I think Karen commented on this of. A discomfort with awkward silences where, the seller, there's just so much pressure on these sellers that they're not going into these conversations with the level of curiosity to do the work, to understand the asymmetry of information that they hold, to truly educate, find the opportunity, drive the awkward pause, Listen for the real pain, hear the competitive intel, and really put the chess pieces in order.
And I think Andy, you just totally touched on it. The grind that became the sales motion, at least in the SaaS industry disincentivized sellers from doing that work. And we're in an era now where that has to, it has to change. And I think buyers are going to benefit from this.
Because Oh, yeah. more sincere, more valuable conversations with people that are doing the work, are listening and and hopefully have the best intentions for that buyer as well versus, getting the paycheck and getting the deal done.
And one of the solutions we've sort of danced around earlier in the conversation to that is, again, from my perspective is less pipeline. If your win rates are 20%, you can't complain that you don't have enough opportunities. You've got more than enough opportunities. The problem is in pipeline. Now may not be the right pipeline, but you're not gonna know if it's the right pipeline to get your win rates up high enough. Do we fix that? Because it's, and I just made a question to you, Michael, I don't know what you guys are doing in this regard at Vidyard, but yeah, I see this company after company and we're still seeing discussions online and LinkedIn is, people fretting about pipeline and I look at, ask companies I'm working with on, win rates.
It's like, yeah, this year was not sufficient pipeline. Issue is execution
Yeah.
and, if your win rates are 20%, 30%, I would argue, it's not unclear you have product market fit.
Yeah. Or your qualification criteria on pipeline is just totally wrong.
Yeah, well, absolutely. Right. It's, I think one of the things that I've seen is working with interest in everybody's opinion. This is I, for me in my career, I always made a deliberate choice. This is how I was taught is you choose who you're going to sell to. Right? There has to be a reason why you're going to invest your time, and attention, and energy with an opportunity. But in conversations I have with sellers, these days, they certainly haven't felt like they really have a choice. That if there's an opportunity presented, if there's a lead, they're sort of expected they're going to follow up, they're going to try to sell to it, and it's hard for them to make that choice.
Yeah, the pressure is coming from above, right? It comes from their managers, and their managers are getting pressure, and so they are not, they're disincentivized to early, to disqualify a lead early on, right? They are more incentivized to, Just go down the path and keep pushing, even if they're not pushing the right way, because it's a numbers game.
And that's what everybody has been taught. The more activity you have, the more calls, the more meetings, the better it's gonna be. But it's more about the quality than the quantity. So if we start having better meetings and better qualification and better on the front end of the process, that informs what our, how our win rate increases or decreases.
Yeah.
performers on this show and previous show or ask the question. And yeah, they were at 60, 70 percent win rates and carried 1. 5 coverage on pipeline. Now, not everybody can necessarily perform at that rate, but that's certainly what you're aspiring to. I would think that's, when I was running say a startup sales teams, we focused on, geez, yeah.
How do we learn how to really sell what we have? Right. And let's double revenue. With the existing team, if we can do that, then we'll have proven to ourselves we really know that we're solving a problem or creating an opportunity for buyers that really fits a need. And if we do that, then we can scale that instead of, as most SaaS companies did, is we don't really know what we're doing, but let's go scale that team anyway. Okay, well with that, we're sort of almost out of time here. Any final comments or anything before we wrap up? Well,
the sales manager is when you're looking at these reps and what they're doing and the calls and the awkward silences. I think the managers are always hitting the more button, but they're not showing them the how. And so a lot of times they don't, they truly don't know what good looks like.
So I don't get mad at the reps. I get mad at the one and two above them that are not setting them up for success because if they've never done it or they don't know how to embrace the pause, like what are the styles, what can I be doing? So I think we have to give them a paint by numbers. Otherwise we're going to be in this perpetual cycle of the number coming downstream and us just hitting them with that.
The more button and they're just going, but how, and we're never really going to get out of that. And even like how to effectively disqualify earlier on. And even if they're not doing it, the coaching why are hanging on to this? Where's the scarcity coming from and really getting to the root per each individual as to what's happening.
And then fundamentally we can start building a culture that is based on a continuum of learning versus just selling and pitching.
it raises an interesting question we've talked about is one that I think about a lot, but again, I think is missing from most salesman is this idea of building confidence in sellers,
Right? Is how do as human beings, how do you build confidence in doing something as well? You achieve success at it. And yet. I would argue that, a large part of our churn. Amongst sellers due to the fact that they lack confidence in the situation they're in and lack confidence that the manager can help them Gain that confidence, right? It's the simple thing is I remember reading a few years ago about this program that the Chicago public schools Who've had a high dropout rate problem in high schools? What they did is they created this program called student on target or freshman on target, excuse me, and basically With their new students, they refused to let them fail. They gave them additional assistance to ensure that the freshmen experienced academic success. And by doing that, they've drastically reduced the dropout rate among the high school students in this, very difficult educational environment. It seems like we should do something similar with sellers, right? Is let's have tiered quota systems. Let's, be more individualized and personalized and the targets we set so that, once people experience success, what do they want to keep on doing? They want to keep on experiencing it. And I think if you can build that con sense of confidence within an organization and your sales team, you reduce turnover, you get greater productivity and performance out of people and the company benefits, but it's. We don't, we're not really focusing on just sort of that, sort of, in my mind, the basic sort of human aspect of how do we build a confident seller?
I actually recently got a call from my youngest son, the assistant principal, and he told me that he was referred to the office for a positive behavior.
And so, and so he and his teacher gave him accolades and said that she saw him doing X, Y, Z. And I think that is a key component that is missing within our organizations.
If somebody's doing bad, they know they're doing bad. But when somebody has a good call, how often do we say, you did this really well, keep doing that and continuing to build on the things that they were doing positively. And so they do more of it. And if we have, if we reinforce the positive behaviors that we want to drive within the organization, that's how we build those confidence sellers.
That's how we get them to be like, I can do this. Okay. I did it right one time. My boss said I did a good job. I want to do more of that. I want to get more accolades. I want to keep winning. I want to keep moving. And so it's those small moments. It's not just, Oh, you won a big deal. It's where in our sales process can we reinforce the positive behaviors that they're doing and not just say, you talk way too much that let me coach you out of that.
Like reinforce positive.
Well, I think that's one of the pernicious things about low win rates. Yeah. I, again, my career personally and the groups I've coached, the standard rule is you won more than you lost. That's it. Yeah. Then you'd spend a whole episode talking about how we built those standards and the steps you have to take.
But yeah, I think I see this in sellers that may be hitting their number or closing the number, but the win rates are low. That doesn't inspire confidence. I
want to build a career, even if you're hitting your number.
And certainly compound that with people that just aren't able to hit the number cause they're in this environment. Karen's point early on is number keeps getting raised, even though nobody's hitting it. I spoke to a group of CEOs that are portfolio companies of a private equity firm. And this is a couple of years ago. And I said, well, okay, well, sort of curious. Is that this time of year is in November. And I said who's playing a raising quota next year? Man, everybody raised their hands and I said, okay how many years I thought I was hitting quota and it's a little more than 50%. So, okay. How much playing and raising quotas by. And yes, sir, came to like 15 percent of them was, I said, Oh, great. So how many of you have invested in your team to ensure that they're 15 percent more proficient?
Good.
And the answer was nobody.
yeah,
the quotas. You understand the imperative to do it, but why you'd want to continue to grow, but you have to do the. You have to build the building and the structure and the foundation in order to support it. And yeah, and that group of companies, they all sort of looked at each other.
It's like, Oh, well, I guess that doesn't make a lot of sense, does
it?
Let's
Something
it anyway.
Something I'm reflecting on as part of this conversation, thank you all for the amazing contributions is, we're in a bear market. And I feel like, fortunes are built in bear markets and harvested in bull markets. And so there is such an amazing opportunity now to focus on the skill building in a bear market that's going to pay huge dividends in the bull market.
And. The other factor here is, I keep talking about generative AI, I'm obviously very excited about it, but to do whatever you can as an organization to offload the work your reps are doing that is like repeatable and something that AI could do to give them the time and bandwidth to learn these skills, build better relationships.
That's exactly, like, really quick story here when we built Vidyard. My job was as the very first sales rep, and we built this crawler, scanned the DMOZ found 80, 000 businesses with videos on the homepage, and I cold called those businesses every single day. I did a hundred of these a day.
It was grinding work, and it was very hard to also have good productive conversations with businesses. And so we've now gone ahead and built that product. It's called Prospector. And so. So all of our AEs are able to now do their outbound prospecting while they're going through call reviews and executive call reviews and preparing for the meetings that are ultimately getting booked for them because this tool is doing a better job.
Implementing scratchpad, note takers, do whatever you can to put technology into the business to give those reps time to build those fortunes in bear markets. And don't let anybody fail because you're putting the resource behind them. That's what I'm taking away from this. So thank you.
Yes,
it. Why we're going to end there. That was a great way to sum it up. Thanks, Michael. So I would ask everybody, I normally do, I don't know why I continue to do this, ask people how to get in touch with you, if they want to, and it's, I presume it's LinkedIn for everybody, right?
It's my best
absolutely.
best way. Okay. LinkedIn. Yeah. Save myself,
save you the effort of having to answer that question. And yeah, I appreciate everybody contribution on the show today and look forward to doing it again.