20Sales How to Scale Into Enterprise Effectively and the Biggest Mistakes Made When Making the Move From PLG to Enterprise, Why Discovery Today is F & The Biggest Lessons on How to Do Sales Team Compensation with Sean Murray, CRO @ Greenhouse

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Summary Notes

Challenges of Moving into Enterprise Sales

  • Moving up into enterprise sales presents three major hurdles.
  • The first hurdle is credibility, as startups are often unknown to larger companies.
  • The second hurdle is determining if there is a genuine product-market fit for larger enterprises.
  • The third hurdle involves financial stability concerns, as enterprises are skeptical about the longevity of startups.

"The three biggest hurdles in taking that holy grail of moving up into the enterprise first, the credibility. No one knows who you are. The second is, do you have real product market fit for those big companies? And third, your financials, because as you move up market, they don't trust that you can survive as a startup for that long."

This quote emphasizes the importance of establishing credibility, ensuring product-market fit, and demonstrating financial stability when attempting to move into enterprise sales. These are perceived as critical factors that can make or break a startup's success in the enterprise market.

The Role of Sales and Marketing Alignment

  • The blending of sales and marketing roles is driven by the buyer's journey.
  • Sales leaders are now expected to contribute to demand generation and branding.
  • Marketers are expected to be effective at selling, understanding the customer's pain points, and driving business and personal value.
  • The effectiveness of a marketing team is measured by inbound generation, demand, customer journey metrics, and revenue accountability.
  • The sales process has evolved to focus on teaching rather than just selling, known as hypothesis-based selling.

"The marketer must be very effective at selling, and the head of sales must be very effective in marketing. And the primary reason why is because of the buyer."

This quote highlights the convergence of sales and marketing roles, emphasizing that both departments must understand and engage effectively with buyers to succeed in the current market.

Adjusting Sales Strategies in a Tight Market

  • The current market requires adjustments in ideal customer profiles, target accounts, and messaging.
  • Effective sellers are now focusing on teaching buyers about problems they may not be aware of, rather than just the obvious issues.
  • The change in selling is largely due to a shift in how people buy, with buyers spending very little time engaged with sellers.

"The best sellers right now, they are adjusting. They're just changing how they go into the market."

This quote indicates that top sales performers are proactively adapting their strategies to the changing market conditions, focusing on better understanding their target customers and refining their outreach accordingly.

The Importance of Content Marketing

  • Content marketing is crucial for educating buyers when sellers are not directly engaged with them.
  • Despite the importance of digital content, having a sales representative involved in the buying process reduces buyer's remorse.

"According to Gartner, Harry, 43% of buyers that had a digital only experience in purchasing have a 1.65x higher regret rate."

This quote underscores the value of human interaction in the sales process, suggesting that while digital content is important, the presence of a sales representative can significantly improve buyer satisfaction.

Determining the Right ACV for Sales Rep Engagement

  • The decision on when sales reps should engage with customers depends on the average contract value (ACV) and the potential for growth.
  • Even for lower ACV segments, human engagement is still prioritized to nurture valuable customer relationships.
  • There is an ongoing exploration of automation to facilitate self-service and renewals for certain customer segments.

"I have sellers where I prioritize the SMB segment... those customers are still valuable."

This quote reflects the strategic approach to engaging with small and medium-sized businesses (SMBs), acknowledging their potential to grow into larger enterprise customers and the importance of maintaining a personal touch in sales interactions.

Evolution of the Sales Discovery Process

  • The traditional discovery stage in sales has been replaced by a teaching-focused approach.
  • This shift aims to provide value by educating potential buyers about their own business and challenges.

"I took out the word discovery from the sales process and I inserted the word teaching, and words matter."

This quote signifies a paradigm shift in the sales process, where the emphasis is placed on educating the customer rather than just uncovering their needs. The change in terminology reflects a deeper change in the sales approach.

Discovery in Sales

  • The traditional discovery process in sales is becoming obsolete due to technology.
  • Sales professionals should educate themselves about the buyer's business and category before the sales call.
  • Sales reps should utilize available data to understand their buyer's needs and tailor their approach accordingly.
  • The lazy, uninformed questions that salespeople might ask can be researched in advance, allowing for a more informed and effective sales conversation.

"That's the discovery that is dead. Because technology allows you to understand so much about your buyer before you talk with them within minutes."

The quote emphasizes the obsolescence of traditional discovery due to technological advancements that allow salespeople to research their buyers in advance, thus making the sales process more efficient.

Specialization and Reframing Problems

  • Specialization in sales may be necessary to teach buyers about their business more effectively.
  • The concept of "reframing the problem" is crucial in providing insights to buyers.
  • Salespeople should aim to offer a different perspective on the buyer's challenges, potentially leading to innovative solutions.

"Do you need specialization on a vertical playbook basis then?"

The quote suggests the need for sales specialization to better understand and address the unique challenges within specific industries or verticals.

The Importance of Insights in Sales

  • Providing insights about the buyer's industry can differentiate a salesperson.
  • Salespeople should strive to bring new and valuable information to the table, particularly insights that the buyer may not have considered.
  • Sharing unique insights about the buyer's industry can build credibility and trust.

"I talk to 30 VC firms, and if I don't have some insight about the VC community that you might not be exposed to in the last month..."

The quote highlights the value of providing insights to buyers, in this case, sharing knowledge about the venture capital community that the buyer may not be aware of, thereby establishing the salesperson as a knowledgeable and valuable partner.

Storytelling and Sales Success

  • A sales rep's success story demonstrates the power of research and reframing the problem to make a sale.
  • The story of a sales rep who discovered a health issue affecting dental hygienists led to the successful sale of ergonomic drills.
  • By addressing a problem the buyer was not aware of, the sales rep was able to provide a solution that significantly benefited the buyer's business.

"If I can tell you a two minute story, I promise it's worth it."

The quote introduces a story that exemplifies effective sales techniques, such as research and problem reframing, which resulted in a successful sale.

Renewals and the Challenge of Consensus

  • Renewals are becoming increasingly difficult due to the need for consensus among various stakeholders.
  • Salespeople must now prove not only the return on investment (ROI) but also the time to value for the buyer.
  • The involvement of new personas and decision-makers in the renewal process adds complexity and requires a more compelling sales approach.

"Renewals are harder than they've been in the past. And what creates these renewals to be more difficult? There is a lack of consensus."

The quote discusses the challenges of renewals in the current sales environment, emphasizing the difficulty in achieving consensus among stakeholders, which is crucial for successful renewals.

The Necessity of Data in Proving Value

  • Sales teams must provide data-driven proof that their product or service is improving the customer's business.
  • The ability to anticipate and address the buyer's future problems is essential.
  • Sales teams may need to adapt their structure to meet the changing data requirements of customers for upselling.

"First, the data proof. You must prove that you are helping your customer get measurably better at whatever is the problem that you are solving."

The quote underscores the importance of using data to demonstrate the value of a product or service to the customer, which is critical for both initial sales and renewals.

Integrating Sales and Customer Success

  • The roles of sales and customer success should be combined to enhance the customer experience.
  • Sales teams should be involved in customer success to ensure a seamless transition and to identify upsell opportunities.
  • Founders should seek individuals who are passionate about the product and can effectively combine sales and customer success responsibilities.

"What I'm finding is that in customer success, you have fewer touch points with your customer, and the product must sing for you at some point, of course."

The quote suggests that while customer success teams have fewer interactions with customers, those touchpoints must be impactful and should also incorporate sales opportunities to maximize value for both the customer and the company.

Technology's Role in Sales Handoffs

  • Technology is crucial in ensuring a smooth transition between sales teams and customer success.
  • Founders should establish a clear process for securing new logos and managing customer relationships post-sale.
  • The separation of roles between hunting for new logos and customer-facing teams is vital for success.

"Our customers are leaving breadcrumbs throughout our product at all times. And making sure that we get the right sets of data in the right hands at the right moment is critical."

The quote highlights the importance of technology in capturing and utilizing customer data effectively to facilitate successful handoffs and maintain customer relationships.

Time Management and Opportunity Cost

  • Time is a precious resource for founders that cannot be recovered once lost.
  • Failed investments of time in product teams or initiatives are considered significant mistakes due to the irrecoverability of time.

"I am invest a year of their time trying to make it work, and it didn't. And so I can't get that time back. And with founders, that time is too precious."

The quote emphasizes the high cost of investing time in unsuccessful ventures, particularly for founders for whom time is an especially valuable asset.

Importance of Enterprise Logos for Credibility

  • Enterprise logos (e.g., Slack, Dropbox) provide credibility when selling to large customers.
  • Founders moving up market lack credibility, which can be partly remedied by showcasing successful use cases from recognizable companies.
  • Enterprise logos serve as proof points to potential customers that the product is capable and reliable.

"The reason why those logos do matter is I need to show you. So, Harry, you're my enterprise customer and you're looking at me like you can't do half the shit that you're talking about. But what I need to be able to say is, like, harry, look, I'm going to set you up with the folks at Slack, docusign and Snowflake, and they're going to tell you a story of how they use my product."

This quote highlights the strategic use of well-known customer logos to overcome credibility barriers in enterprise sales.

Leveraging Existing Customers in Sales

  • Incentivizing existing customers to act as references can be a strategic move when negotiating deals.
  • Concessions such as discounted renewals can be offered in exchange for customer advocacy to new prospects.
  • Structuring deals with "give and gets" is crucial when negotiating with the first few enterprise customers.

"So I do ask in advance. So when I'm moving up market, I make these concessions as part of my negotiation when I'm closing a deal, which is okay."

The quote discusses the tactic of negotiating future advocacy from customers as part of the sales process, to help with credibility and closing future deals.

Strategies for Discounting

  • Flexibility in pricing is key, especially in changing market conditions.
  • Discounting should be reframed as a trade for value, such as customer testimonials or promotional efforts, rather than just a price reduction.
  • The worst deals are those that take too long; it's better to move on quickly to the next opportunity.

"So I have been a big advocate of flexibility. Maybe not discount and reframing it a little bit, it's flexibility in negotiating terms."

This quote suggests that discounting should not be seen as merely lowering the price but as part of a strategic exchange for other forms of value.

Identifying Slow-moving Deals

  • Data-driven processes help in identifying slow-moving prospects.
  • Indicators such as required consensus and approval levels can signal a potentially slow deal.
  • Asking the right questions can reveal the true decision-makers and speed up the process.

"There's probably a list of about 40. The level of consensus that's required. The level of approvals that are required."

This quote indicates that there are numerous signs that can warn of a deal's potential to drag, and these should be monitored to maintain efficiency.

Competitive Selling

  • Competitive selling can be effective but should be done without disparaging competitors.
  • It's important to maintain professionalism and focus on the strengths of one's own product rather than criticizing others.

"What I will say about with the competition and selling against your competition is when I'm directly the seller is to not belittle or throw mud at my competitors."

This quote advises against speaking negatively about competitors during the sales process, as it can backfire and damage credibility.

Timing for Moving into Enterprise

  • Data should guide the decision to move into the enterprise market.
  • A full company effort is required to transition to enterprise, not just a sales and marketing change.
  • Testing the waters with a few enterprise customers can be informative before fully committing resources.

"It takes a whole company to rally around it. It's an entire company motion moving into the enterprise."

The quote underscores that moving into the enterprise market is a comprehensive effort that involves the entire company, not just the sales team.

Sales Rep Performance and Hiring

  • Sales rep performance can be assessed through a data-driven sales process.
  • Hiring sales reps involves eliminating bias and structuring the interview process around competencies.
  • Using software can aid in attracting talent and structuring the hiring process.

"I don't worry about hiring because I've got great software."

This quote implies that the use of software in the hiring process can significantly improve the efficiency and effectiveness of finding and evaluating sales talent.

Hiring Salespeople with Non-Sales Backgrounds

  • Many individuals without traditional sales backgrounds have been hired successfully.
  • Transferable skills from other professions can be beneficial in sales roles.
  • Teachers and professors have been recruited into sales due to their ability to educate and explain.

Yes, and I have, many, many times. I don't have a sexy answer, but what I can say is I've hired teachers before school, educational teachers, professors into sales. Wow.

The speaker emphasizes their openness to hiring individuals from non-sales professions, highlighting the successful recruitment of educators into sales roles due to their teaching skills.

Importance of Product Passion

  • Genuine interest in the product and problem being solved is crucial.
  • Candidates should show enthusiasm and understanding of the product's value.

ive, their passion about your product and the problem that you're solving. It can really be a choose your own adventure on what that take home test could be.

The speaker suggests that a candidate's passion for the product and problem it addresses is a significant factor in the hiring process.

Compensation Transparency and Structure

  • Transparency in compensation is key to avoid economic biases during negotiations.
  • A national pay structure is favored to ensure fairness regardless of the employee's location.
  • Pay is set at the higher end of the scale, but not the highest, to maintain transparency and fairness.

My biggest lesson for those that are up to negotiate at final offer. To me, that just creates a different economic bias that could come in into that process. So maybe someone's better at negotiating compensation than another, right? So maybe that filters it. But with transparency, look, I'm never going to be the highest paid shop in town. You can always go somewhere else to make more money. But I'm looking for transparency so everyone knows what they're walking into.

The speaker highlights the importance of transparent compensation practices to avoid favoritism and ensure all candidates are aware of the pay structure.

Common Mistakes in Compensation Negotiation

  • Underpaying or overpaying employees are the biggest mistakes in compensation negotiation.
  • There is ample data available to determine fair pay rates for various roles.

They underpay or they overpay. Those are the biggest mistakes. There's great data that exists about how much people are paid for certain roles.

The speaker points out that the extremes of underpaying or overpaying are common errors in salary negotiations, and emphasizes the availability of data to make informed decisions.

Sales Quota and Compensation Ratios

  • A five to one ratio is the best practice for sales compensation, adjusting as necessary in startups.
  • Quotas should be set realistically based on compensation and industry standards.

So best practice is a five to one ratio. If I'm going to pay someone 200 pounds sterling, I want them to have a million quid as a goal or as a quota.

The speaker describes the ideal ratio between compensation and sales quotas, suggesting a standard to aim for in setting sales targets.

Sales Rep Ramp-up Time

  • Enterprise sales reps typically require a six-month ramp-up period.
  • Performance should be measured during this time to ensure progress.
  • The full ramp-up to quota may take up to a year.

Yeah, so if you're selling into the enterprise, and let's just use an acv of want to let that rep ramp for about six months, move slow in order to move fast later, but don't wait those six months to measure their performance.

The speaker explains the ramp-up period for new enterprise sales reps, emphasizing the importance of ongoing performance assessment.

Impact of Sales Rep Churn on Organizations

  • High turnover rates of sales reps can severely impact a company's productivity.
  • Early assessment of a sales rep's suitability can prevent long-term issues.
  • Stage gates should be implemented within the first six months of employment.

It does if you let it. And the conversation we're having a little bit earlier, a piece of conversation we had earlier, which is in your sales process, you'll know within the first six months if this rep is going to cut it in the enterprise or not.

The speaker acknowledges the detrimental effects of high sales rep turnover and recommends early performance evaluations to mitigate these issues.

Certification Culture in Sales

  • Certification processes are embedded within the revenue organization.
  • Sales professionals are tested on product knowledge, narratives, and sales stages.
  • Early sales cycle performance is a key indicator of future success.

So I've always embedded a certification culture within my revenue organization. And so you're testing these sales pros, you're having them test on your product, you're testing them on your narratives, you're testing on whatever it is that you want to test them on.

The speaker advocates for a certification culture to assess and ensure the competency of sales professionals in the organization.

Forecasting Sales in 2024

  • Artificial intelligence is seen as the solution for accurate sales forecasting in 2024.
  • Technologies like Clary are providing machine learning tools for forecasting.
  • Reliance on technology is emphasized due to the difficulty in accurately predicting sales outcomes manually.

The short answer is artificial intelligence. That's how you're going to forecast in 2024. There's technology. Shout out to my friends at Clary. There's technology today that's putting a lot more science, using the machine learning into what's going to be the output 90 days out.

The speaker suggests that AI and machine learning technologies are the future of accurate sales forecasting.

Quality of Sales Leaders

  • The speaker believes that approximately half of sales leaders are ineffective.
  • The term "playbooks" is deemed outdated, preferring "sheet music" to signify a more modern approach.
  • Successful sales leaders focus on career pathing, learning, and development rather than outdated office culture.

I think it's about half are useless, half are very good. I listened to a bit you did about playbooks, and first I would refer to playbooks as sheet music. Less about playbooks.

The speaker expresses a critical view of current sales leaders, suggesting that many are not adapting to modern sales strategies and methodologies.

Role of Founders in Creating Sales Strategies

  • Founders are naturally good salespeople due to their deep product knowledge.
  • However, a professional with pattern recognition skills is preferred for creating sales strategies.
  • Sales strategies should be tailored to each organization, considering methodology, process, and behavior.

I would argue that that sheet music get created by a professional that has the pattern recognition that has seen it before. So I do not believe a founder should build that sheet music or playbook for how we're going to go to market.

The speaker advises that while founders have valuable insights, professionals with specific expertise should develop the company's sales strategies.

Intellectual Curiosity in Sales Reps

  • Intellectual curiosity is the most important trait for a sales rep.
  • It can be assessed by the quality of questions they ask during the interview process.

Intellectual curiosity.

The speaker identifies intellectual curiosity as a critical trait for sales representatives and suggests evaluating it based on their questions.

Sales Tactics and Interdepartmental Friction

  • Traditional discovery sales tactics are becoming obsolete due to information availability.
  • Sales often have friction with product and marketing departments due to unrealistic expectations.

Discovery. There's too much information that we can extract on our own that we should know a lot about our buyer before we engage with them.

The speaker notes that the discovery phase in sales is less relevant today and highlights common conflicts between sales and other departments.

Creative Deal-Winning Strategies

  • Creative strategies, such as offering seats on customer advisory boards, are used to win deals.
  • The focus is on building trust and providing value rather than just selling a product.

It's, it's not about discounting. It's about give and gets.

The speaker describes innovative approaches to winning deals that involve providing additional value to the customer.

Maintaining Morale and Goal Visualization

  • Celebrating small wins and reminding the team of the company's mission helps maintain morale.
  • Visualizing goals and understanding the deeper motivations of team members are essential.

It's goal visualization. Celebrating these small quick wins is very important because there are small wins that happen throughout the day.

The speaker emphasizes the importance of goal visualization and celebrating small victories to keep sales teams motivated.

Impressive Sales Strategies

  • VC firms that provide value and attract interest without hard selling impress the speaker.
  • The approach aligns with modern buyers' preferences for learning and making informed decisions.

Vc you I appreciate what you're building and I now want to because you're creating value.

The speaker praises sales strategies that focus on creating value and educating potential customers, leading to a natural desire to engage with the company's offerings.

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