High Performing Sales Highlights from Ambitious CEOs and CROs – EP.258

Hood & Strong LLP – One of the nation’s premier full-service public accounting firms, Hood & Strong LLP provides buy- and sell-side quality of earnings, due diligence, assurance and tax services to search funds, private equity firms, and business owners and investors. The H&S Advisory team helps expedite a smooth, cost-effective transaction process that maximizes value and minimizes tax impacts for both buyers and sellers. To learn more about how Hood & Strong can support your M&A objectives, please contact Transaction Advisory Group Partner Jerry Zhou at [email protected].

Oberle Risk Strategies– Oberle is the leading specialty insurance brokerage catering to search funds and the broader ETA community, providing complimentary due diligence assessments of the target company’s commercial insurance and employee benefits programs. Over the past decade, August Felker and his team have engaged with hundreds of searchers to provide due diligence and ultimately place the most competitive insurance program at closing. Given August’s experience as a searcher himself, he and his team understand all that goes into buying a business and pride themselves on making the insurance portion of closing seamless and hassle-free.

If you are under LOI, please reach out to August to learn more about how Oberle can help with insurance due diligence at oberle-risk.com. Or reach out to August directly at [email protected].

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(00:00:00) – Intro

(00:04:22) – Tim Strickland on Sales Team Structure

(00:07:42) – Mahesh Rajasekharan on Scaling Sales Teams

(00:18:56) – Michael Coscetta on Pricing and Sales Contracts

(00:25:40) – Dennis Dresser on Cross-Team Collaboration

(00:26:17) – Effective Strategies for Involving Executives in Sales

(00:28:06) – Understanding the CRO Role and Responsibilities

(00:31:40) – Hiring the Right Salespeople: Insights and Strategies

(00:35:17) – Characteristics of a Good Sales Hire

(00:38:32) – From Good to Great: Identifying Top Sales Talent

(00:41:44) – Keys to Effective Sales Management

(00:46:26) – Coaching Salespeople for Success

(00:50:21) – CEO Involvement in the Sales Process

(00:53:05) – Conclusion and Final Thoughts

Alex Bridgeman: For all you searchers and CEO listeners of this podcast, there’s an event coming up in Dallas. I think you should all be going to, it’s called SM Bash. It’s gonna be April 2nd through the fourth. Uh, whether you are searcher or CEO, there’s gonna be plenty of content, 30 speakers and two tracks, one for searchers, one for CEOs.

It’s gonna feature speakers like Brent Bishore and Moses Kagan, both of whom have been on the podcast. And we, in fact, did a couple of live podcasts at this event in years past, and it’s a fantastic event. I always learn a ton from, uh, folks running businesses of all kinds, of all sizes. Um, and it’s super fun, and I hope to see you there.

If you want to get a ticket, it’s at smbash. com. Go check it out and tell them Think Like an Owner sent you.

Hello, and welcome to think like an owner. I’m your host, Alex Bridgman. And this show is all about how ambitious CEOs grow great companies. A couple episodes ago, we did an episode that was a compilation of clips all about buying other companies and M& A. And we had five or six CEOs and talking through different concepts of M& A and got a lot of positive feedback from that.

And so I wanted to do a similar style episode on sales and looking back through our think like an owner guests that we’ve had over the last couple of years. Um, we’ve had a lot of fantastic sales oriented CEOs and then, uh, CROs, chief revenue officers. We’ve had multiple. And so I went through and found what I felt were the most influential clips about building sales teams, um, hiring, setting incentives, contracts, structure, everything in between, and put those episodes or those clips together into this episode.

And so if you’re curious about sales as a CEO, or you’re curious about running a sales order, like this episode is for you and it’s going to have. A whole bunch of great nuggets from fantastic CEOs that, um, I admire a lot. Um, so for this episode, we have five folks joining, uh, these are clips from previous episodes we’ve recorded that we’re pulling in and the five, uh, guests that we’re pulling from are Tim Strickland.

He was the former CRO he’s now an operating partner at Summit Partners. We have Mahesh Rajasekaran. Um, he is the CEO of Clio. He’s episode 195. Tim is, uh, 206. And then we have Michael Cassetta. He’s episode 155. He was the president of Muse. Um, and at the time of our episode, he was the CRO of Paxos. And then we have fourth Dennis dresser.

He is, uh, episode two 14. He’s been a CRO for multiple companies. He’s now an operating partner at WCAS. And then finally, we have Ben Tago. He is the CEO of Objective Management Group, and that was episode 181. So across these five folks, we’re going to hear all kinds of, uh, fantastic takeaways. And I’ve broken up the episode into kind of two, uh, primary chunks.

First is going to be around structure, and that’s going to be all around Um, we have clips about the two primary roles of a sales organization, uh, structure and growth of that sales organization as the company grows. And then we have a conversation on contracts and, uh, structure of contracts. Um, and then collaborating is another topic around collaborating between the different groups within the company or different teams across the sales org.

And then finally, we have. Um, a section or a conversation about, uh, the CRO role itself and what it looks like and what that person is in charge of doing. And so that’s the first half is structure. The second half is about more hiring and coaching. So that’s a lot of conversation around what is the hiring profile of different levels of salespeople.

So from, you know, an account exec to sales manager to CRO, what, what should you be looking for in any of those hires and then also how to coach those, those hires as well. Um, Ben has two great clips about, uh, key factors for hiring a sales manager and then coaching salespeople that are really interesting.

And then finally, we end with how can the CEO be involved in sales more directly? What are some ways that that, um, that role can connect with sales on a very deep level? So, um, first half is structure. This first clip. Starts off with the two primary roles of sales. And this is Tim Strickland. Uh, Tim joined zoom info and grew at a time.

It was a It was a huge company when he got there and even bigger when he left. And so he has a ton of experience building out that sales work from a very large vantage point. But, um, here he talks about the two primary functions of sales and how they’re often the same early on and then they break apart.

And so I’ll let him jump into that and then go to the rest of the clips here. You define those two focuses for a sales team and kind of how they interact with each other.

Tim Strickland: Yeah, it totally depends, I think, on company stage and on company size and on talent. And I’ll give you two examples from my prior experience.

At ZoomInfo, we had two delineations of sales organizations. One was entirely focused on new logo acquisition, following up on inbound leads, calling them, closing them, demoing them outbound leads right on new logo, which was Hey, we need to we need to go crack into a company that’s maybe never heard of us.

And so we’re going to prospect into those organizations and find somebody to take a call and a demo with us. That organization was completely separate from my install based sales organization, which was called account management. Which was focused purely on revenue generation inside of the install base, right?

So renewal rate upsell rate price price premiums multi year contracts new product sales And we we quoted those organizations very similarly Their processes were slightly different, but the mentality that I think that we built in the culture that we built was very similar between the two. And we hired those personas very exclusively in the install base, most of whom had a lot of new logo hunting experience, just inside of kind of a name to count territory that was their responsibility to take from, you know, 1 to 1.

20 over the course of a year. In the organizational structure, it was set up completely separate at ZoomInfo. At Marketo, based on the business segment, you actually, in our, in our large business sales organization, you had hunters covering customers as well, right? And then in our small business segment, you had it completely delineated the way that I just Describe zoom info as where you had new logo hunters and an existing customer and kind of farmers, if you will.

And so I think it depends on the business stage again. I think it depends on the sales talent that you have in an organization as to which one you choose at which time I think as businesses grow, they need to get more specialized. And so, you know, at 500 million wherever we made the switch at zoom info, that was the right thing for that business at a five.

10 15 20 50 million dollar business. It may not make sense. And so that’s in my role today as an advisory partner at summit partners, which is a private equity firm. That’s what I kind of help companies think through as a part of their overall strategy is role and responsibility and how to resource the business.

Alex Bridgeman: All right, so we just heard from Tim all about the different roles of sales. Now we’re going to go and hear from Mahesh Rajasekaran, the CEO of Clio. This is from episode 195. And here he talks all about the growth of his own sales team at Clio as he grew the company over the past few years. So I’d love to dive into, uh, your sales organization in more depth, but what did it look like initially and what, what changes did you make to your go to market and sales teams in that first year or two of Clio?

Mahesh Rajasekharan: Yeah, it is really, you know, you know, crawl before you, uh, walk before you run sort of thing. Step one was basically I did really two things, very structured. Pipeline review, which deals in the pipeline, what stages they are, are they accurate and had a simple close plan, which is who’s doing what in the organization, who’s doing what the customer organization and what are the dates in terms of M M D D Y Y and made sure that there was tremendous rigor.

In executing on a closed plan. That’s all it is. Pipeline review closed plan. That started to accelerate sales. What the company was selling in, you know, two, three, four quarters, we started to sell in one to two quarters. Then the next step was now we are exhausting the pipeline. Okay, now we needed a demand generation organization to be put in place.

When we first started, the demand generation organization is all outbound. We had sales development reps. Who focused on calling customers, right? And then we created pipeline with the sales team worked on as part of the evolution. There are two other things we did. One was bring in a sales methodology. So everybody has the same language.

So all the stages in Salesforce, so we can track performance of salespeople. Um, and we can perform progression of the sales sales cycle. And then on the marketing side, we started augment outbound and inbound. So we started to create more digital assets. So customers started to come into Clio. So we were trying to, you know, expose business challenges customers face so that they came to our website to find out how to solve the problem.

And through that, we got to, you know, we got the leads and over time we took a very vertical focus. And this is, this is an advice I’ll give to most CEOs, even in horizontal organizations, they’re nothing but a series of verticals. So we decided very early on that you’re going to be supply chain focused.

While B2B integration applies to health care, B2B integration applies to financial services, we said we’re going to become maniacally focused on supply chain verticals, which is manufacturing, logistics, and wholesale distribution. And even specifically within manufacturing, we started to get into sub segments and micro segments.

Like food and beverage companies like, um, uh, CPG companies, right? Get into logistics and look at what third party logistics companies care about, what carriers care about, what do the freight brokerages care about? Um, and by doing that, we really started to build vertical knowledge and vertical use cases, which made it easier, both from a vertical go to market and selling.

And demand generation. So this is sort of how we evolved. And now we’re evolving more into working with system integrators and bringing on a an indirect channel business, which can further scale up our direct go to market.

Alex Bridgeman: And how did the the leadership team for your sales team evolve over time? Were there, you talked about pivot points to open our episode, what pivot points in the Team composition, like who’s leading the sales team?

What pivot points did you see as ARR grew over time?

Mahesh Rajasekharan: So initially I was overseeing sales and we, we had a VP of sales, but I really came in with a, with a very clear focus on solution selling and a large account selling. So initially it’s about. Me coming in, looking at all the deals, doing deal reviews, understanding customer value proposition, being able to make sure the methodology is followed.

We implemented Salesforce, implemented solution selling methodology, and I used to train our methodology to all the new salespeople and about four years into it as we scaled. Right. At that point, we brought on a head of enterprise sales, and I was still running sales as CEO, but I had a head of mid market sales and a head of enterprise sales.

And by 2016, we got to a point where it made sense to get a senior VP of sales. Who managed both mid market enterprise and then we started to grow into Europe and we brought in a VP of sales for Europe and then by 2019 we took a sort of a basically we wanted to break the sales organization into a net new organization.

An installed base organization and further look into it in terms of net new commercial segment, which is a mid market segment and net new enterprise. And similarly, we looked at the installed base business as net new, uh, uh, sorry, as, uh, commercial installed base and enterprise installed base. And now is it evolving?

We’re not fully done that yet. We are now evolving into a vertical sales team. One thing to know, Alex is as you become more and more vertical. Um, there could be inefficiencies if you don’t scale correctly, because now a salesperson only look at manufacturing deals and cannot work on logistics deals. So it’s just a timing where there’s enough critical mass.

That you can bring in experts, and one of the things we do to get around the problem is we bring in industry experts or industry black belts and logistics and manufacturing and distribution who are embedded in the sales organization. So we still have a VP of net new enterprise sales, but he has a VP of logistics who can provide guidance and credibility.

On a large logistics deal versus manufacturing business where we bring in a, uh, VP of manufacturing solutions who brings in the credibility. So it’s very, very important to to make sure the sales organization scales in an efficient manner. And there are different pivot points. So we are at a point where maybe in a year or so we’ll break into true enterprise, um, and commercial VPS of sales for the different industry segments like manufacturing logistics and do the same thing in the install base as well.

Alex Bridgeman: You said that, um, you, it’s important to scale a sales team properly. What would an impro, what would a badly scaled sales team look like and what are some things that you can do to avoid that?

Mahesh Rajasekharan: Um, most importantly, I believe in having pipeline built ahead of sales. There’s no point in hiring a lot of salespeople when you don’t have, you know, a good pipeline.

So it’s very important to build a lead general organization, which is world class. Having said that, in the Legion organization, you have SDRs, BDRs, or, or junior, quite frankly. And so we need to make sure there’s a very strong alignment between the lead gen organization and sales organization to make sure the right deals are quickly qualified and acted upon.

Um, the second most important thing is it’s really important to hire sales people who, who are the right culture. Who fit into the organization, especially in smaller companies, you need people who are smart, who are very intelligent, who are not depending on the street cred as an organization. For example, if somebody works for IBM or works for Oracle, they’re large organizations and they have a lot of street cred.

And because you’re an Oracle rep, you get people to return your email, pick up your phone call. That doesn’t happen in smaller organizations. So we need salespeople who are fearless. We’re intelligent with the right attitude and aptitude who can quickly learn and who can truly differentiate themselves because of their ability to truly add value for the customer, right?

Not just, uh, not just report the news. We always use that slogan. It’s about not just, you know, reporting the news, but creating the news. It’s very easy for a salesperson to say, well, you know, uh, it’s not a, it’s not a question of, uh, if, but when. Yeah. Yeah. Yeah. But for us, every quarter makes sense. Time kills deals, right?

Whether you can close a deal in the fourth quarter of 2023 versus the first quarter of 2024 is huge in terms of growth rate and momentum. So you need salespeople who are very resourceful, who are willing to tackle the issues early on, who can bring it, uh, bring to the attention of the company and get everybody else involved.

To close. So that’s so that’s the culture becomes important methodology becomes important. We need salespeople who can follow the methodology so that we know when they are having a problem. For example, some salespeople are very, very good and quickly qualifying a deal and then they struggle to progress through the sales cycle.

There are some other people who are very good in, you know, um, um. Progressing the cycle. But they may take time to qualify. There are some other people who may get to the finish line, but they’re not able to punch it in. So we need to then know how to the sales leadership becomes extremely important. So it’s not just the sales reps.

The sales leadership in smaller software companies should be able to step in and close deals while mentoring and coaching the sales team. Because we also have this other dynamic where we have VPs of sales who can get deals done, but the sales reps won’t develop with them. What we really need is great frontline sales managers who can step into close transactions, all the, all the while coaching and bringing the sales people along.

So that that that’s why I mean, it’s very, very important to build a sales efficient organization. And the metric we look at is essentially a very, very simple sales efficiency ratio, which is the basically the CAC, uh, divided by or the new ARR divided by the total spend in sales and marketing. And you want that metric to be closer to one.

It doesn’t have to be a one, but you want to want to approach one and you need to make sure the pipeline, the ASPs and you get the ASP that average selling price based on the value proposition, right? So you’re selling based on value. The ASPs and the speed of sales cycles time have to be managed. So you have a very predictable sales organization.

Alex Bridgeman: All right, we just heard from Mahesh. Now we’re going to jump into a conversation with Michael Cassetta from episode 155. And here I ask him about, uh, structuring contracts and pricing, especially multi year. Uh, that’s something I was actively thinking of while we recorded this episode. And so I was really curious to hear.

And I think he has a lot of interesting insight from, uh, contract structuring that we’ll dive into here. So let’s hear from Michael. I want to dive into actually pricing and sales contracts a little bit. That’s an idea that’s been kind of top of mind for me recently. What are some principles you’ve learned about building?

Valuable sales contracts. There’s a episode we did a little while ago with these two entrepreneurs from Austin who bought a landscaping business and they affect they went to a competitor or not competitor and acquire and just ask like what in our sales contracts would make our company more valuable and then just took that playbook and there’s like things like price escalators that they did and a whole bunch of other things.

But when when you go to build a High value sales contract. What types of structuring in terms do you use in that contract to make it more valuable for you and potentially for the customer to

Michael Coscetta: depends what stage you’re at and what you’re trying to show. So, for example, if you’re an early stage business and you’re raising money and you’re in a very challenging V.

C. Environment like you are now front loading cash. Is going to be much more important and you may be willing to give a discount to get cash in the door so that you could push the window out of time for when you may have to raise money. That’s a very selfish thing of the business, but it’s probably important for sustainability and longevity of that business.

I would say second, if you’re trying to show lifetime value and you’re trying to show that you have these. Long predictable revenue cycles and revenue streams coming in then elongating. How do I get this customer to commit to two three? Four or five years and make it worthwhile for the person today to be able to make that decision and some companies Will not allow someone to sign a two plus year or three plus year deal But that’s a big one.

And the third is on a tactical level, make sure that all pricing is, is mutually beneficial in the sense that you really want to benefit from their growing, but they should also be very excited to grow. So make sure that you understand and do that economics on their side of how you’re pricing, because if you price something to a place where they’re afraid of growth on their side, well, they’re going to be looking to replace you at every step, or they’re going to need to replace you at every step, because at some point they just may not be able to pay you.

There’s a podcast that I heard a long time ago about a very large customer of Stripe. And the person’s comment was, Stripe built a product I needed, it built a product I couldn’t get off of, but it built a product that I never wanted to get off of. And I was like, that’s such an interesting concept of, I can’t do without this product embedded in my ecosystem, but they’ve also built it in a way where I can continue to grow, and the unit economics don’t get worse over time.

So it really depends what you’re trying to accomplish at that stage of your business, but I would say all pricing should look mutually beneficial and neither side should be afraid of the other side growing very aggressively because that that should be a win win and I don’t think enough people approach contracts that way.

Alex Bridgeman: Yeah, and you kind of touched on it a little bit, but building a pricing matrix for different size companies with different enterprise products is, sounds like more of an art than a science. And there’s, there’s some founders I’ve gotten to know who have built these matrixes for enterprise software and they, they’ve refined it for years and they still don’t feel like they’ve really nailed it.

Are there any good processes or strategies you’ve developed for kind of finding that right pricing matrix arrangement?

Michael Coscetta: You have to be willing to ask the questions on their side of how their, how this price fits into their margins. And some will be willing to share, some will not. But that insight and just knowing where this cost is being applied is really critical to being able to understand how they’re going to view this in the long term.

And what, what are they going to be willing to do in the short term to even get this product in? Get this contract or whatever it is off the ground, especially when you’re in a world of adoption or consumption economics where there may be some different shaped price curve that happens based on how much they grow, how much they use.

Those are becoming much more common as well. I found customers want some level of predictability, right? They want to have certainty around what they know they’re going to pay for a certain time, but then they also want to be able to say and how to model the upside and downside around that. So walking them through.

Some of these different kind of thought patterns is really critical and like seeing how they react and getting their reaction on their side of what would happen if and almost building these scenarios in place for yourself, but really, you’re walking them through what are they going to say and what are they going to do when they hit these scenarios so that they’re not shocked or they’re not kind of hitting a wall when that does happen.

Another aspect is to ask, like, how how long are you able to sign a deal for and getting kind of that maximum threshold or finding out what is their upper bound for dollars? That they’re able to get sign off for because sometimes you want quick transactions. Sometimes you want it to be on the CFO’s desk because you need that level of visibility and you want it to be that sticky.

So you want to handle those objections as early as possible so that the CFO doesn’t come in eight months later and just take a hatchet to be agreement and say, well, it’s nothing. It’s either this or nothing. Those type of catastrophic scenarios you want to be able to avoid. At all costs, not just because they look bad, but they again, they don’t put customer vendor relationships on a partnership plane, which is where they should be and.

If you’re constantly being looked at as just a supplier, well, eventually with all suppliers, you’re looking to squeeze them. And that’s not, again, that’s not a positive scenario to be in either side. So trying to get ahead of those conversations and those questions. And last is no, just know when their budget cycles are or when they’re purchasing cycles are, because that can really dictate when they have guaranteed money that has to be spent.

And if they don’t spend it, they might not ever get it again, or they might not get the budget next year. So if you don’t get it in, then you may not get nothing from them. And when you’re in a macro environment like we’re in now, where people are really starting to shore up their financial defenses and firm up their balance sheets, that if that money is available, you’re going to want to do something with it.

And it’s a lot easier to convince a CFO and an accounting team. To extend the contract versus to sign something brand new in an uncertain environment. So getting ahead of those aspects, I think is really critical to anything. On the revenue management side of sales or, or partnerships.

Alex Bridgeman: All right. So we just heard from Michael here’s Dennis dresser from episode two 14.

And here, Dennis talks about how different teams within a company can collaborate with sales and see into the sales picture and pipeline and role in the conversation salespeople are having so that folks on product or marketing or customer success can hear that same feedback. Um, it’s really interesting.

So let’s dive in. So you kind of touched on an interesting point there, which is how do you bring other folks from the rest of the team, rest of the company into sales so they can kind of, can all get a peek into what that process looks like and what prospects are saying and whatnot? What are, what are some effective ways to do that to involve other folks from, you know, the rest of the organization on a, on somewhat of a regular cadence?

What’s been working?

Dennis Dresser: Yeah, there’s two ways that I’ve done that historically. One is through an executive, um, sponsor program. So when we kick off a quarter, we identify the top X amount of deals that are sort of what we call must win deals. And then based on the profile of the company. Or of the buying executive, we would like to, we would map, um, our executives right across function.

So it could be marketing, could be product, could be finance, whoever. But ideally you assign a couple of key deals to each of our C suite. And then from there we would have, as I said, a monthly cadence. Where we would then do a deal review and those executives would get exposure to our wind plans and then they would have a role engaging the prospect at certain points of our sales process and they would feel accountable just like the sales rep felt accountable.

So we drove accountability across the whole C suite on specific deals. And then the other, of course, benefit is that they get exposure into the market dynamics, right? Whether it be competitive dynamics. Um, whether it be pricing dynamics, um, whether it be kind of product gap dynamics that we have, um, that then helps them formulate, um, their key initiatives in their functions where they need to prioritize to help us obviously win in the marketplace.

Um, so it really is a great process that to institute is this executive sponsored program and then kill key deal review, um, cadence that that would be a, you know, an important outcome from that.

Alex Bridgeman: All right. To wrap up our conversation around structure of sales teams, we’re gonna hear from Tim Strickland again on the CRO role itself and what that entails and what that person’s responsible for and how that where that role makes the most sense in a company.

So let’s hear from Tim. You define what the CRO role entails and what are the different components of it. Obviously, there’s the sales piece and CRO is chief revenue officer. So that makes a lot of sense. But CRO kind of encompasses like a bunch of different pieces to like that account management and customer success.

You also mentioned to, yeah,

Tim Strickland: if you, if you think about the pillars of my organization and the things that I had direct ownership over, it was new logo sales in that role, it was account management, it was sales development. Which is, you know, a lot of people think of SDR or BDR, sales development rep, uh, business development rep, the outbound and inbound functions of actual lead management to opportunity.

Those, those people resources were under my charter. I had the channel business. So, so making sure that we were going out and building partnerships with companies that could drive new leads into our funnel, both on the new logo side and on the customer side, I had sales enablement. Which is, hey, we’ve got 1200 people that are supposed to be talking to our customers and to our prospects about things that we’re doing and products that we’re selling, and those products and those capabilities are changing almost every day.

How do we make sure that our people know how to continue to compete in the market as we continue to grow and do more? How do we reposition ourself as a business? How do we make sure that we’re hiring the right personas? How do we make sure that we’re, um, that we’re ramping those new people coming into the organization faster and better than we have in the past?

And so really, it was those kind of five things that I was responsible for. Now, kind of outside of that, I was meeting with our demand gen and our marketing organization multiple times a week. I was meeting with our product organization multiple times a week to make sure that I knew when new products were launching, which of my salespeople were going to talk about them, which of them were going to carry quota for them.

Were those new products going to be fully integrated into our Current product suite. Do we need to package it and price that capability different differently or should we Um, you know fold it into our current, uh into our current packaging model I was meeting with our finance team multiple times a week to make sure that Not only were we selling on the top line that we were but that we were doing it in the most efficient way possible which means we were selling inside of our cost envelope.

And, you know, so cross functional time spent, um, was a huge part of it. And then I was hiring. I was hiring almost every day for different roles inside of those organizations because when your business is 500 million in ARR one year and it’s 900 million in ARR the next, you’re basically running two different businesses from year to year.

And you need. the right people who know what it takes to get the organization to the next level in the business at the right time in order to continue on those growth paths. So that’s kind of the way that I characterize the role. All

Alex Bridgeman: right, so those five clips were our structure section of the episode.

Now we’re gonna jump into the hiring and coaching section of the episode. And to start off, we’re gonna hear from Mahesh back at one, at episode 195, um, around the hiring profile for, for salespeople. So let’s listen to Mahesh. What have you learned about hiring that profile of salesperson, that person who’s hungry, curious, smart, and can move deals through?

How do you, what are some effective ways you’ve found at finding that person and identifying them?

Mahesh Rajasekharan: Quite frankly, it is not easy. I think as you alluded to it, um, great salespeople, uh, are tough to find because they’re doing extremely well. Right. And every intelligent organization is going to, uh, do everything to keep that, right?

They’re going to be, you know, getting more, uh, going to get paid more. They’re going to be, they’re going to be celebrated. So we do a couple of things. One, we have built a farm system within Clio, where we look for athlete model and in the SDR hires, in the sales development rep hires. So you look at people who have played, uh, you know, college sports will be at YMCA.

People have done, you know, run summer camps in athletes with the right attitude and aptitude and we bring them in, you know, we do some sales competency tests, et cetera, aptitude tests. And then we really coach them very rigorously during the SDR process. Our model is very much, uh, you know, one to two years, you’re going to get promoted into someone within Clio.

One path is a sales path, become an account exec, another path could be to become a customer success managers because some of them love sales, they love, uh, working with customers, but may not want to take the pressure of a sales quota and they do phenomenal job as customer success managers. But your question on AE is We actually, even when we hire, we have become so good in our internal analytics that there are some people we think they’ll be an okay SDR, but will be a great salesperson.

We’ll know them. We also know people who can be amazing SDRs, who can be okay AEs. We’ll still hire them. And so that’s a dominant path of the form system. But along the way, we also celebrate sales as a function, that as we grow and promote people, our competitors look at what Clio does. And then there is this natural excitement for what we do within the sales organization in terms of how quickly we progress people, how quickly they improve their competencies that we then we start attracting people from outside, right?

So that’s sort of second. And the third thing we do, we talked a lot of people. Right. We constantly have an antenna. What is the sales talent outside? We actually have a calibration of some of our competitors on where people are. And we may or may not have the budget, but we know who’s out there. And so that way we, we have the relationship, we have the network.

And if we find somebody great, we find a way to get them into the company as well. Even if there is no role, because we know great sales talent is tough to find. And when you get great sales talent, they will absolutely earn the keeps. So, so that’s kind of how it’s a sort of a three part model, which is a farm system, um, creating a great sales culture.

So people want to come and work for you, but also have this broader network of, you know, VPs of sales, directors of sales, you know, competitors and adjacent companies that we have respect for and know who they are. And find ways to get them.

Alex Bridgeman: All right, that was Mahesh. Now we’re going to jump into a clip from the episode with Michael Cassetta talking about the characteristics.

That was a similar discussion, but his own, uh, color and version on characteristics of a good sales hire. What types of different personalities or sets of characteristics are good fits for various roles within sales? Like, do you have a couple of different buckets of people that you tend to seek out to fill different parts of your sales team?

Michael Coscetta: If you’re in a world where it’s a complex product or it’s a new industry where I find myself in a couple of those along the way, I think you almost have to hire for curiosity. You have to hire more generalists than, than people with a specific set of expertise that might not be relevant in this new world or this new paradigm.

Sometimes you even find that people with certain experience are bad for a role because they carry all these suppositions and all these pathways of doing things. But meanwhile, the company you’re in is actually trying to disrupt the exact industry. Right that they’re coming from so that that mapping doesn’t always work.

Yes, they understand the lingo. They understand the personas and who’s in the industry, but they don’t understand how to actually go now bring a new technology forth to go solve that. So what type of persona is good at something? Well, someone who’s going to ask a ton of questions, someone who really wants to learn.

Something new and someone who can learn very quickly. I love generalists in the sense that they can bounce their brains to different sectors and different customer types and customer sizes in different geographies. And that allows them to be more versatile as a sales organization will start to morph over time.

Go to market team has to be probably the most agile team in the company because they can pivot faster than a product team can and certainly faster than an engineering team can and that pivot is important because you got to be able to pay attention to the changes in the space. So salespeople are much more about listening to what’s out there and again, prescribing a solution that solves a problem.

But if you can’t listen to what’s out there and you can’t put the pieces together to form a picture, then you’re actually not solving anything. You’re just spewing information that someone could read on a website. So that ability to figure out what’s the shape and size of a key that will turn this lock.

So again, people ask a lot of questions. People have that natural hunger and desire to bring on something that new people who also want to spend time talking. There are plenty of introverts and extroverts who actually don’t like to talk to other people. And that’s probably not going to be a good fit for sales.

And I think you get a pretty good glimpse of that when you speak to someone briefly in an interview. It’s like, is this a natural dialogue or is this forced? Is this being coerced in some way because they think they have to do it? And over time, those things tend to tease themselves out. So a natural social personality doesn’t hurt.

And by the way, some of my best salespeople of all time have been like pure introverts. Being an introvert doesn’t mean you can’t be a good salesperson. It may be the opposite, because maybe they’re incredible at listening and incredible at finding those nuanced ways of delivering information that that customer really needs and wants to hear that’s just as valuable someone who’s garrulous and affable and And loves to get out there and drink beers with a customer.

Both sides can be, you know, incredibly valuable.

Alex Bridgeman: So Tim in this next clip talks also around a similar topic of the right characteristics and profile for a sales hire, but specifically identifying, how do you identify the good sales hire versus the great sales hire? What is the difference there when, um, things start to get a little fuzzy?

Um, Tim is really good at identifying this. So this is a really good clip from him. What distinguishes a good SDR from a great one? Like, how do you make that, that final like 10 15 percent leap into greatness? And then maybe for kind of a, maybe a sales leader profile too.

Tim Strickland: Yeah, that’s a really good question.

I think on the, on the SDR side of the house, I think when, when you, when you see The reps inside of a business that are supported by a particular SDR where win rate makes gradual or sometimes substantial process what you know about that SDR outside of their ability to work, right? What you know about that SDR is that there they are.

Further qualifying those leads in their part of the process and doing a lot of that upfront work on the discovery side that a rep normally has to do in their cycle. If they can do that piece of it, teaching them how to close is the easiest part. So, And, and on the flip side of that, if you see reps getting higher win rates as a result of kind of the SDR that’s supporting them, it tells you that story, right?

These guys are getting sales ready leads that are ready to close. And that’s where they’re spending their time. So I think it’s all about qualification and win rate. If I were to put it, tie it to a metric. Um, On the management side, I think it’s that’s a that’s an interesting question because it depends on the level as a frontline manager.

If if I’m managing a group of reps directly, what what I want to make sure that people can do in order for them to get to the next level is. Is higher really well and make sure that they’re managing a really tight forecast, right? Like you can’t show up and miss Your number by 20 If you’re managing eight reps and you can see every deal in your business, right?

If i’m thinking about Uh, kind of a director that wants to get to a VP level inside of a business. What you’ve got to be able to do is look at the business and manage it from a metrics perspective, both tops down and bottoms up and start to identify macro trends that you’re bringing to your VP where that person can make resourcing decisions and potentially strategic decisions on how we run the business from there.

So it’s, it’s slightly different skillset, but those are the things that I look for on the management side.

Alex Bridgeman: So we just heard from Tim about good to great, and now we’re gonna go listen to Ben Tago talk about, uh, keys to a sales manager role, um, both in hire and what that person needs to be doing, um, and Ben’s, uh, Ben’s company, uh, coaches other sales teams.

So he’s, uh, quite, he’s the perfect person for this conversation. So let’s, let’s hear, hear from Ben here. If being an individual, a strong individual sales contributor isn’t a prerequisite to being a good sales manager, what other skills or abilities have you found do correlate with effective sales management?

Ben Tagoe: Great question. So there are a couple, one is there, there are kind of a couple of like foundational pieces. One I would describe as like, it really, really helps if you have a passion for being a manager, for being a coach. And you can see this, this is not a sales specific thing. You can see this in other job functions as well.

There’s some people who their real passion is helping to develop. other people and like make them very strong at whatever that, that skill area is, whether that’s a technical engineering or finance or whatever. So having a passion is, is, is we found has been a, like a big splitter in terms of strong managers versus not strong.

Relationship building with the individual salesperson is also really important because the manager salesperson relationship, you can think of it kind of similar to the, like the client sales relationship or prospect sales relationship. You need to build trust, you need to be liked, you need to be respected, they need to respect your skills and your ability, and they need to trust you, they need to trust that when you are, they need to trust you because sometimes you’re going to tell them things that make them uncomfortable, or you push them into an uncomfortable place because you’re trying to get them to make a breaking change, uh, to be better, and they need to trust that when you’re delivering That message that makes them uncomfortable, it’s coming from a place of good intention and not ill will.

So like when I tell you, Hey, we made a joint commitment that you are going to reach out to X number of prospects or that you are going to not give away this amount of, of price, you know, of margin within, within your pricing discretion, and you’re breaking your commitment, Alex. What’s going on, right? I need to be, I need to be able to deliver that in a way and you need to be able to receive that in a way where like you don’t, you know, like your back doesn’t go up against the wall and you’re like, well, no, I’m not.

What are you talking about? Because then you don’t develop, you don’t change, right? So trust is super important. And so those are the foundational pieces. Passion, respect, trust. And then beyond that, it’s, there’s a real question around like time allocation and frequency. Managers who coach daily. Are dramatically more effective.

Their sales teams are dramatically more effective than the managers who say that they only coach on a weekly basis or who say that they only coach on a kind of as needed basis. And then the last piece is like the tactical stuff. Like, what are you actually coaching on? And one of the things that we found is.

Most predictive of, of the team success is, is the manager, does the salesperson say that their manager is coaching them on helping get a commitment out of their prospects? And what I mean by that is basically, are they getting the prospect to the point where the prospect agrees that this is the right product for them, that they have the budget for it, and that essentially they are ready to.

To move ahead. You know, kind of talk to the right decision makers or stakeholders and that they’re ready to move ahead. And, and I think part of the reason why, like, that’s kind of so predictive of, of success is because Good Getting the commitment requires coaching to a bunch of other skills, right? You have to, we talked about staying in the moment, you have to have trained your salesperson to have very good listening skills, active listening skills, where they’re not just hearing, like collecting data, but they’re.

Asking the right questions to uncover why would this prospect by why would this prospect make me make a commitment to me? Yeah, and basically in if you get to that end point you you have effectively trained or coached your salesperson Through an entire sales process Which, which takes quite an investment.

Alex Bridgeman: We just heard from Ben now we’re going to go to a different clip from that same episode, um, but on coaching salespeople, this is kind of like finishing out our hiring and coaching section of the episode on, okay, we’ve got the. person in place. We’ve got them hired. We found the right person. Now, how do we coach them and encourage them and build on them?

So here’s Ben again for coaching salespeople. You’ve of course looked at millions of case studies of individual salespeople and tens of thousands of organizations. What are some common themes you’ve seen from all these different case studies and work that your partners have done with, with clients? Is there anything commonly interesting across lots of case studies or lots of examples that you personally have enjoyed reading about or studying and observing?

Ben Tagoe: Yeah. So we just did a kind of a big piece of research on frontline sales managers. And one of the kind of common themes that we saw sort of across Industries and across size of company across geography, managers don’t really spend enough time coaching their sales reps. And when they are coaching their sales reps, or when they, when they report that they’re coaching their sales reps, they’re not really doing the things that enable like a very effective sales team often.

So what I mean by that is they’ll say, you know, when I’m coaching, I am helping my salesperson to sell a deal or when I’m coaching, I am giving my salesperson positive encouragement or I’m reviewing their pipeline and what they’re not doing is, you know, often what that, what that means is. They’re helping them sell the deals.

They’re probably, they’re probably rescuing the salesperson, the salesperson struggling to sell the deal and the manager who very often is like, uh, kind of one of the top salespeople themselves. They, they go to like the, their own sort of natural sales muscle and they just jump in and they sell the deal for the salesperson and they hand it back to them.

Which is great for the company. Cause he sold the deal, but is also terrible for the company because. That’s a very inefficient way to enable the salesperson itself. They didn’t learn anything in that process, right? So that’s, that’s one that we, we see a lot. And I think part of it is because what I said earlier, very often, the way you become a sales manager is by being a very good sales independent contributor.

And I think what a lot of organizations miss, and fortunately, they’re, they’re kind of building more awareness around this, is That’s a very different skill set being an elite salesperson is a totally different thing than being an elite manager and one can do the other, but you, you have to enable them with like the right training and the right tools.

You can’t just say, okay, you crushed your quota 2 years in a row. So now here you go. Here’s a team of salespeople help them crush their quota too. They’re going to fall flat on their face.

Alex Bridgeman: Are some of your assessments designed for the contributor and manager? Like, do you have assessments built for both?

Ben Tagoe: Yes, we do. So we have evaluations for individual salespeople. We have evaluations for the manager. And I think one of the things that I really, like, love about what we offer is if you buy the, the sales team analysis that we, that I talked about at the beginning, the SCIA, We, we show you a bunch of analysis analyses about what the sales manager says about their sales people, what the sales people says about their sales manager and essentially measure like the effectiveness of that manager salesperson.

Alex Bridgeman: Okay, we just heard from Ben Tago twice and we’re going to wrap up the episode with. A clip on the involvement of a CEO with Michael Cassetta. Um, he, I asked him about, okay, if I’m a CEO who’s really sales motivated and ambitious and I want to show that I care about the sales process and my company, what are some things that I could do?

And Michael here goes through a whole bunch of ways that. A CEO can be involved without being, um, seen as micromanaging or, um, doubting the capabilities of that team and compliment that team really well. So let’s hear from Michael. If you’re a CEO who wants to get more involved in sales or just at least learn a bit more about that process within your company, what are some helpful and productive ways to take part in the sales team and sales org without being Distracting or disruptive or affecting a process in a negative

Michael Coscetta: way, the simplest is to shadow and sometimes bring the CEO on a call can be, uh.

daunting. At the same time, it could be incredibly distracting to the customer. So we actually sometimes used to have, um, pseudonyms for our CEOs joining certain calls, especially when your CEO was Jack Dorsey. You know, or sometimes we would put Jack on and say, Hey, Jack Dorsey’s on this call with us and he wouldn’t say anything, but customers would sometimes be starstruck on that call.

But I think shadowing is such a critical element. We also used to have the board shadow calls. And there was a very senior member of the board who was 40 years experience in tech who literally looked over to me after finishing a shadow called a very junior salesperson and said, Holy shit, this is really hard.

And it’s like, wow, yes, it is. It is. It’s really complicated and not every call is positive and. We actually had the co founder of Square on a call where the customer was complaining constantly about something and he’s like, this is all really valid. He’s like, I hope we’re doing something about this and you don’t have a board member say that I think is not only validating to the salesperson, but it’s levels of insight that they’re never going to get on their own.

So shadowing, I think is key. I think the second half is from a CEO perspective. Specifically, what are those key strategic metrics? And if you don’t have them, that’s a big wake up call for the business anyway, whether you call them KPIs or if they’re embedded in OKRs. Those are the questions that the CEO should be able to answer at all times through data, and the sales team should be able to provide data into those KPIs and metrics at all times, and getting alignment there to make sure that what the sales team is doing aligns with what the CEO thinks the business should be doing is simple, but I don’t see enough of it sometimes, and That alignment is where market teams start to fall apart when that falls, you know, out of alignment itself.

Alex Bridgeman: Okay, that was our compilation episode all about sales within ambitious growing companies. Uh, thank you for listening. I would love to hear if you, um, found this useful or interesting or want to see more episodes like this on different topics. This was a ton of fun to put together. And I get a lot of joy from like seeing all the different insights and keys that other guests have shared and putting them together in a single episode like this.

So if you’d like to hear more like this, I would love your feedback and then even ideas for. other topics that you might want to hear compilation episodes about. So thank you very much for listening. I hope you enjoy Think Like an Owner and check out other episodes of ours. And until then, thank you for listening.

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