At Lock 8 Partners we spend a lot of time chatting with, and learning from, operators of SaaS businesses. It was in that context that I began trading notes with James Marshall mid-way through the pandemic. In addition to having an impressive track record of leading sales teams, James has generously shared with me his thoughtful views on the never-ending evolution of sales teams. It was on this topic that James and I recently collaborated; and he was kind enough to codify some of his thoughts. Thanks, James, for contributing the following post to the Made Not Found blog!
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Introduction:
SaaS sales leaders find themselves in a crucible chapter for B2B sales, as the pandemic has accelerated trends that pressure sales leaders to modernize. To outperform their competition, the best sales leaders will embrace both the 1) digital transformation of their sales organization and 2) the evolution of their sales processes. Although these may sound like daunting endeavors, there are a few easy wins that can have an immediate impact.
Covid-19 and the Battle for Talent:
A limited talent pool and increased competition for candidates is driving sales into a stage of discomfort. Prior to Covid-19, the recruiting battle for sales professionals was already stretching a limited pool of sales talent; and the pandemic has greatly accelerated this trend. Through the normalization of remote work, North America’s hottest tech centers are now empowered to recruit outside their city limits for perhaps the first time in their existence. Fueled by historically sky-high valuations, tech companies from North America’s hottest startup zones have an edge in the battle for a limited talent pool. Put simply, that enterprise sales rep in Knoxville, TN who could historically be recruited by their local startup ecosystem for a $225k OTE (on-target earnings), is now entertaining job offers from Silicon Valley and Austin, TX for $350k OTE.
Technology companies everywhere are being forced to compete for this talent and increase wages for salespeople. However, sales productivity metrics aren’t changing nearly as quickly as a reps’ base salaries. We all know that high OTE’s mean correspondingly high quotas. Studies done by Salesforce have shown that more salespeople expect to miss their FY sales quotas than attain them. According to Gartner, only 6% of Chief Sales Officers are extremely confident about meeting their revenue goals in 2021.
Sales Productivity Must Increase:
It goes without saying that against this backdrop, sales productivity must increase. Fortunately, there is some fruit — while not quite low hanging fruit — that is within reach for businesses that take the time to revisit their sales process. These advantages are found through unlocking the combined benefits of sales technology platforms and sales process innovation.
Platforms: The Digitally Enabled Rep
While it’s often said that today “every business executive is a technology executive,” too often sales leaders have lagged behind their peers. Whereas 84% of marketing teams leverage AI, just 37% of sales teams do. And of that 37%, I commonly observe sales teams with access to a wide array of tools (e.g. an outbound automation platform, a contact database tool, a conversational intelligence platform, Sales Navigator, a video prospecting platform, and a myriad of great plugins for their CRM), but where team productivity is undermined by low user adoption.
Yet the data is clear: companies that leverage AI-driven sales platforms outperform those who don’t. Whereas 57% of top-performing sales teams leverage AI-empowered sales platforms, only 31% of moderate performers and 20% of low-performers leverage AI in their sales process.
Contributing factors to this low-adoption stem from leadership’s comfort level with sales technology. We commonly observe that sales leaders themselves haven’t made the jump into tech-enabled selling. As a result, many 1) don’t feel comfortable coaching their teams to utilize these technologies as part of their sales processes, and 2) purchase technology without accounting for the sales rep’s user experience.
The great news is that SaaS ecosystem for sales has innovated well beyond the current state of its user community. The best sales leaders will evolve their sales processes to support robust utilization of these products, which will bolster their sales reps’ productivity. The return on this investment is swift and certain. More on this in a future post.
Modernize the Sales Process:
The typical B2B SaaS marketing department has evolved to be the data-driven, tech-enabled functional area that it is today. Conversely, the enterprise field-sales process has evolved very little since the industrial age. In the late 19th and early 20th century, John Rockefeller’s Standard Oil ran a large field sales organization where geographically based salespeople opened new accounts and grew existing ones. Unfortunately, the pace of change in our complex world makes it extremely difficult for today’s reps to “do it all,” as their predecessors did. If that sounds like your company’s sales process, I rest my case.
As an alternative, many successful companies divide the sales responsibility into two and three parts (BDR, AE, and to some extent Customer Success). However, even these models fall short of 1) breaking down the motion of sales-led growth into its simplest parts, and 2) assigning those parts to the most competent and cost-effective people and platforms to execute them.
As a quick illustration, let’s look at how a salesperson spends their time and assign a dollar value to their daily tasks. For the sake of argument, we’ll say that this is a “Field Salesperson” who is receives $250k of annual compensation in exchange for 45 hours of their time and attention each week. At $115 an hour, the business has no doubt hired this person for their ability to sell large deals. Yet in 2018, salespeople reported spending just one-third of their time actually selling. The culprit? Data entry is certainly one of them; and in the case of our example rep, date entry comes at a cost of nearly $700 per day. And, that figure comes before we’ve started analyzing how much time a rep spends on building lists, outbound prospecting, creating sales collateral, etc.
By neglecting the work of sales process innovation, companies are overpaying for customer acquisition. We’ve found that clearing the calendar for even one day of planning often allows sales leaders to identify targeted areas for process improvements that shorten the sales cycle and / or lower CAC.
Many startups and small companies will argue that while this kind of role-specialization would be ideal, they are too small to capitalize on it. Fortunately, the white-collar gig economy is stronger than ever through websites like Upwork and Fiverr. Through some simple privacy accommodations, startups are able to utilize this outsourced talent pool, while quickly segmenting their sales process and increase their effectiveness.
Conclusion:
In this environment of increasing expectations, sales leaders have two levers which are well within reach. Sales leaders will gain a competitive advantage by 1) driving user adoption from the rich ecosystem of sales automation technologies available, and 2) analyzing their sales process for opportunities to innovate. Today, it’s not hyperbole to say that any startup or midsize SaaS company is just a few tweaks away from unleashing a force of digitally enabled salespeople who are focused on executing their highest-impact revenue activities. When that happens, everybody from salespeople to investors win.
