We’ve recently been posting polls on SaaStr’s LinkedIn account to get a feel for what SaaS companies are doing in the current environment. Jason did post briefly about the results in two posts (here and here), but at SaaStr Europa, he did a deeper dive into 16 of the surveys. In the video below, he discusses the results and where he thinks SaaS companies are on track or need improvement.
#1. Your best sales reps can close so much more than your average rep. Move the bottom 10% out and give the best leads to your top performer, and watch sales go up 20%. More here: Why a Great Rep Can Close 9x More Than a Poor Rep, and Even 2.5x More Than a Good Rep.
#2. If your best reps are leaving, that’s a red flag. The best VPs of Sales design comp plans so the team never wants to leave. If a salesperson has a good manager and is making good money, she’s unlikely to leave for an unknown entity where she may make less. You should be striving for zero voluntary attrition on your sales team. More here: The Beauty and ROI in The Zero Voluntary Attrition Sales Team
#3. The Number One thing you can do to grow this year is to assign your leads to your best rep. The Number Two thing is upgrade your weak VPs. You already know who they are. A great VP of Sales, Marketing, Engineering–any great VP–will move out anyone who isn’t a good fit and also will be able to bring great people with them. They’ll find a way to move the needle from the very beginning. Don’t expect miracles, but you should see some improvement. More here: If Your VP Sales Isn’t Going to Work Out — You’ll Know in 30 Days
#4. There is no perfect order for hiring VPs. If you find a great one, hire her. Sure, there is a suggested order, but any great VP is accretive. More here: At About $2m in ARR, Every Great Hire Will Be Accretive.
#5. Any new VP has to bring good people with them. This is particularly important for a VP of Sales. If you ask, “Who are you bringing with you?” and their response is, “No one, but I’m going to hire a recruiter,” that candidate is not VP material yet. Any VP role is 50% recruiting and waiting a quarter or two is just too long. It never works out. More here: 10 Great Questions to Ask a VP Sales During an Interview
#6. Make sure you focus as much on logo retention as on NRR. High NRR makes Customer Success teams lazy. You have to track logo churn because behavior will change according to what you deem important. No one buys SaaS products for the fun of it. If you lose a logo, it’s because you failed them in some way. More here: Why NRR is Probably The Wrong Core Metric for Your Customer Success Team
#7. There is a lot more elasticity in pricing than one might expect. But you have to provide real value to back up an increase. If you try to increase your prices and no one is willing to pay, that’s a flag that your product isn’t providing enough value. You also have to be very careful about raising prices for current customers. It can provide a quick revenue boost, but it only works one time and you’re taking a chance on losing revenue by angering customers who made a bet on you. More here: 5 Reasons Not To Raise Prices on Existing Customers. And 2 Better Ways to Do It Anyway. and On Your Next Big Deal? Double Your Pricing.
#8. Some budgets are down, but even more are up or unchanged. Even if some of your customer segments are impacted by the recent downturn, you can focus your energy on the segments that are growing. Don’t accept excuses about budgets from your sales team. More here: What Really Happened to SaaS in the ’08-’09 Recession
#9. Variable Comp Plans work, but you have to get the KPIs right. Mid-year is a great time to revisit your comp plans for your whole executive team. Pay more for better performance and less for weak performance. Behavior follows incentives. Tweak your comp plans now to make sure you get the results you want for 2022. More here: A Basic Structure for a VP, Sales Comp Plan: 50/50/25+ (Updated) and Your Variable Comp Plans for Next Year: You Probably Need More of Them
#10. Your sales team should be experts on your product. Until your brand is so big your product sells itself, move on from reps who can’t sell your product. Every member of your sales team needs to be an ambassador for your product. That’s not possible if they don’t even know what it does. Your customers and potential customers deserve an expert who will make a phone call or demo worth their time by answering questions and providing value. More here: You Have to Train Reps 3-100+ They Won’t Train Themselves.
#11. If you’re not reading emails or listening to Gong or Chorus recordings, your sales team is worse than you think. If your VP of Sales isn’t reviewing emails or calls, they’re not doing their job. If you find reps are giving bad answers or (related to #10) they aren’t experts on your product, you need to improve your training immediately. It’s better to have a product expert who is a decent closer than an amazing closer who doesn’t understand the product. More here: 15 Ways to Help Your Sales Team in 2022
#12. The best SDR leaders aim for 15-20 qualified meetings per month and generate $2M in pipeline per year. Don’t hire an agency that doesn’t know your product and company. Hire 2 or 3 quality SDRs, dial in your process, and outbound will always work. More here: Outbound Always Works. If You Do It Right. And You Put In The Time.
#13. We’re past the age of the full-stack AE. If you don’t have SDRs yet, start that recruiting process and get your AEs some help. Your mileage may vary, but the prevailing wisdom seems to be 1 SDR for 2 AEs. More here: After $2m in ARR — Start Specializing Your Sales Team
#14. Most Founders make the mistake of hiring a junior person to lead Product rather than hiring a VP of Product. A manager is not enough. Someone with only one or two years of experience at a big brand can’t make the cut. Hire a VP of Product who has supported customers, who has worked with a company of your size, and your NRR will soar as they provide more value. More here: The 1 Simple Test to Know if You’ve Hired a Real VP of Product or Customer Success … Or Not
#15. If you’re winning every deal, you’re not in enough deals. If your marketing and outbound are working, your win rates should go down as your company scales. You should be participating in more conversations, competing against more companies, and losing more often. More here: Beware of the Confidence of High Win Rates
#16. You can’t grow if you freeze hiring in Sales. You’ll need more reps than you probably realize in order to hit your plan. Most Founders get this math wrong by about 50%. As you scale out of Founder-led sales, you will need bodies to hit the plan. They’ll have to be good, but even the best can only scale so much. There are no efficiencies in Sales, but great sales reps are accretive. More here: How Many Sales Reps Do I Need To Hit The Plan For The Year? Hint: ~2x What You Think