A little while ago, Amanda from Lattice Engines interviewed SaaStr on Sales and Marketing Alignment and related topics.
While I hate the term “alignment” from my days as a F500 VP, if the term every were to be used in a useful way in a SaaS start-up, it’s the way your VP Sales and VP Marketing should be joined at the hip. They should be the Mom and Dad of marketing (no gender attribution intended). If they don’t work together like a well-oiled machine — and surprisingly, often they don’t — you’ll have a real problem on your hands trying to scale.
The interview and some thoughts from it below, originally here on Lattice Engines’ very well done Sales and Marketing Hub.
I had the opportunity to recently catch up with Jason Lemkin, co-founder and CEO of EchoSign, which was acquired by Adobe in 2011. Jason is one of the foremost leading minds on SaaS companies. You can learn more on his blog, SaaStr.com. Read on to learn the best composition of skills for a VP of Sales, tips on how to scale or ramp a team and why the VP of Sales and the VP of Marketing should always act like the Mom and Dad of revenue.
Amanda: What 3 factors/skills must every VP of sales possess? Why?
Jason: There are different types of VP of Sales for different phases of B2B companies. But if we’re talking say broadly from $1m-$50 in ARR, there are three top skills. And directly selling his or herself isn’t one of top 3, interestingly.
- Ability to Recruit a Large and Successful Team. Because you’re going to need a team to sell. And recruiting great reps and making them successful is the #1 most important thing your VP Sales will do. And the great VP of Sales all know this. They all either have in their back pocket, and/or are constantly on the prowl for, the next 2-3 great reps because sales is a lead-driven but headcount-closed business. To hit their number, they know they need the heads. It becomes mathematically impossible without them.
- Hands-On Enough to Backfill His/Her Sales Team. Until you are relatively big, while the VP Sales won’t be able to take most deals personally, he or she will have to spend a ton of time helping his/her sales team close deals. Working and closing key deals with them. Spotting issues before they blow up and seeing opportunities ahead of the horizon. In general, the VP of Sales should be making sure his/her 3 reports, then 10 reports, then 30 direct and indirect reports — work as effectively and efficiently as they can.
- Sales Tactics. The VP Sales has to be the author and chief strategist on the sales tactics that will work for your space and product. How to compete. How to put together the best pitch scripts. Coordinating FUD and anti-FUD. Segmenting customers. Optimizing how best to work with Demand Gen and marketing. Getting feature gaps filled with Product and Engineering. In sum -> Learning and understanding how to maximize the revenue per lead.
A: You’ve stated that the VP of sales is one of the most common mis-hires SaaS companies can make. What are some red flags to look out for?
J: A few key flags:
- Only Ever Worked at a Start-Up. These guys maybe managed 3, then 5 or 8 folks. They may have ever done really well. But their bio is full of Start-Up to Start-Up to Start-Up. These guys are often very smart. The problem is, they don’t scale. For a variety of potential reasons (lack of skills, lack of interest, shiny penny syndrome). It doesn’t matter why. They don’t scale.
- His or Her Claimed Metrics Don’t Make Sense. “I grew sales 400%”. But the company only increased ARR 80% over that period. Huh? This is pretty common, in fact. These guys aren’t connected with success at their past company. You need a VP Sales you can trust. Even more than that, you need a VP Sales you can go into battle with every day. If the metrics make no sense, pass. You can’t rely on him or her.
- Too Much Name Dropping. A little name dropping is good. But when they talk about “Marc” and “Larry”, or too much about being on a first-name basis with too many CXOs and VPs … then this person is way too focused on position and selling up. You don’t need or want this. Telling you about the great customers he closed — wonderful. Telling you how a non-amusing story about “Marc”? Pass.
A: How should a sales leader break down his or her time?
J: Roughly, in the order noted above in Top 3 priories. Those Top 3 should be at least 50 percent of his or her time. Probably 15-20 percent on recruiting. 15-20 percent on backfilling the team. And 15-20 percent on putting together the tactics and strategies to enable his or her team to excel and drive up Revenue Per Lead.
40-50 percent for everything else … sales ops; cross-functional work; board meetings; plane trips to Big Customers; etc. etc.
A: What is your top advice to VPs of sales looking to shorten their teams’ ramp to productivity?
J: Actually I can’t help the great ones. They know better than me.
But what I can do is give some advice to CEOs and founders so they know what to look for. The #1 best piece of advice is make sure you have 1 or 2 reps that are completely killing it. They just know how to close. And make sure they are sitting dead center in the sales pit. That way, everyone can learn by example. And by osmosis. If no one is killing it … it’s highly demoralizing. No one will believe. If no one believes, if they can’t see and talk to at least one or two guys with big W-2s driving M6 convertibles … they won’t try hard enough. Because they won’t be sure it’s worth it.
Beyond that, in general on productivity in the early and middle days … make sure your VP Marketing and/or whoever is heading demand gen sits right in the middle of the sales pit. I.e., he or she is connected at the hip to sales. That will dramatically increase the lead qualification effectiveness and maximize lead quality. If Marketing doesn’t sit with sales, each can blame the other … sales says marketing gives them cr*p leads … marketing say sales is lazy and doesn’t follow up with their leads …
A: What can a VP of sales do to help foster sales and marketing alignment?
J: The great ones do this already. First, sit next to each other. See above. And meet at least twice a week, once formally. Even if you don’t think there’s anything to talk about.
Second, and this is controversial.. but be careful about creating 2 types of leads. Many companies have Marketing Qualified Leads and Sales Qualified Leads. They are times when this is a good idea, especially with solution sales and larger ACV deals. But I don’t like it at all for transactional and higher volume sales. I want consensus here between sales and marketing what a qualified lead is period. Otherwise, Sales and Marketing are working at two related, but different goals. They should ultimately have the same goal — MRR growth.
Third, your VP Sales should never, ever blame Marketing. At least not in public. LeBron shouldn’t blame D. Wade in public — same thing. If the VP Sales thinks the leads aren’t high quality, or aren’t there — talk about it behind close doors.
>> The VP of Sales and VP of Marketing need to be the Mom and Dad of Revenue. Don’t let anyone see Mom and Dad fight.
(Cross-posted @ saastr)