So a little while ago Toast’s CRO Jonathan Vassil joined Sam Blond on SaaStr CRO Confidential on how Toast built one of the strongest but toughest rocketship in sales:  a lower gross margin, lower ACV ($10k), sales-led SMB sales motion.

The company now serves approximately 85,000 customers and 140,000 locations using Toast across the US, Canada, and the UK, and has reached over a billion dollars in revenue while still having approximately 85% of the market left to conquer.

It doesn’t get much harder in B2B sales that an in-person, low-ish ACV sales … but Toast has … crushed it:

#1. Field-Based Sales Model.  Even with SMB Sales.

Toast employs a primarily field-based sales organization, with 75-80% of sales reps working in the field, owning specific geographies, and acting as trusted advisors to restaurants in their area. This approach leverages the density of restaurants in urban areas, allowing for face-to-face interactions which play a significant role in their sales process.

#2. Strategic Segmentation by Restaurant Density

Rather than segmenting purely by revenue opportunity, Toast takes a unique approach by considering restaurant density. They assign territory reps to densely populated areas like New York City, while inside reps cover less densely populated areas. This model is enabled by Toast’s remarkable unit economics from their software plus payments model.

#3. Prioritizing In-Person Interactions

Toast’s data shows that potential clients who receive an on-site visit close at a 3X higher rate than those who don’t (45% vs 15% conversion). This massive benefit of in-person interactions drives their commitment to having sales representatives meet directly with prospects.

#4. Leveraging the “Flywheel Concept”

Toast utilizes what they call a “flywheel concept” – when they reach a certain level of density in a market, their win rates and sales representative productivity increase. Small territories can be more productive, enabling this flywheel concept to come to life as social proof and brand recognition grow within a specific geographic area.

#5. Strong Referral Program

One out of five deals at Toast comes from referrals, highlighting the importance of social proof in their sales process. Sales reps are taught to ask existing customers for introductions to other potential customers, making it easier to get in front of the right people. Eight times out of 10, customers know someone who might be interested in Toast’s product.

#6. Strategic Partnerships

Toast has developed robust partnerships with companies like US Foods, which provide valuable introductions and help sales reps get in the door with potential customers. These channel partnerships are an important aspect of Toast’s business, creating a network effect that drives sales.

#7. Data-Driven Territory Planning

The company uses data analysis to score and evaluate the potential of different territories, such as city blocks, and uses this information to inform decisions on resourcing, territory building, and compensation. This enables them to optimize their sales team deployment and maximize productivity.

#8. “Mayor of Their Town” Approach

Toast teaches their team to become the “mayor of their town” by being aware of existing customers, helping them succeed, and then asking if they know someone who might be in the market for the product. This approach leverages local networks and builds community relationships that drive sales.

#9. Sophisticated Lead Scoring System

Toast employs a scoring system to prioritize potential customers based on factors like the last time they bought a point of sales system, what they’re currently using, and the size of the restaurant. This helps the sales team focus on the most promising leads and use their skills effectively.

#10. Promotion from Within Culture

Toast promotes from within as part of their sales strategy, with 25% of the sales organization being promoted in the last 12 months. This creates a motivated sales force with a competitive yet humble mindset, driving continuous improvement. Some of their best sales reps come from non-traditional backgrounds such as teaching, the military, or the restaurant industry.

5 Things Toast Doesn’t Do:

1. Rely Exclusively on Digital Marketing

Unlike companies selling to desk workers who can be targeted through online ads and emails, Toast doesn’t rely primarily on digital marketing. They recognize that selling to non-desk workers like restaurant staff requires offline, field-based marketing tactics and in-person interactions.

2. Try to Be Everything for Everyone

Toast doesn’t attempt to target all market segments simultaneously. Instead of trying to be everywhere for everyone, they focus on specific verticals or subverticals, which allows for more targeted marketing and a higher likelihood of closing deals.

3. Use a One-Size-Fits-All Referral Program

Toast recognizes that referral programs aren’t universal solutions. What works for companies like Zenitz or Brex may not work for Toast. They understand that a program’s success depends on the product being sold and the target buyer, so they adapt their approach accordingly.

4. Prioritize Deal Chasing Over Coaching

At Toast, managers don’t focus on chasing deals themselves. Instead, they act as coaches, helping their team members become the absolute best at discovery, closing processes, and supporting their colleagues. This emphasis on developing talent rather than individual deal pursuit creates sustainable growth.

5. Allow Complacency After Reaching Quota

Toast doesn’t encourage sales representatives to slow down after reaching 100% of their monthly quota. Instead, they foster a culture where reps strive to achieve 200% or 300% of their targets. The company values a mindset of constant improvement and never being satisfied with current achievements.

Top 3 Mistakes the CRO Made

Some potential challenges or lessons learned from Jonathan’s experience:

1. Not Immediately Recognizing the Value of Market Density

In the early days when Toast was a smaller company with $20 million in ARR, they didn’t deliberately segment restaurants by type or focus on density-based territory planning. They later realized that when they reached certain density levels in markets, their win rates and productivity increased significantly. This “flywheel concept” became central to their strategy, but wasn’t fully leveraged from the beginning.

2. Underestimating the Power of Referrals Initially

Jonathan acknowledged that leveraging existing customers to acquire new ones is an area where most companies, including potentially Toast in its early days, underinvest. Even though referrals now account for one in five of their deals, there’s an implication that they could have emphasized this strategy earlier and more aggressively.

3. Complex Incentive Structures Requiring Iteration

Jonathan mentions that their incentive structure is a significant lever that drives behavior across the business, but also notes it’s a complex process that required iteration and learning to satisfy the needs of teams and the business.