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“You Have to be Smart About the Needs of Your People”

How to Manage a Sales Function During a Downturn

A Q&A with David Aspinall, CEO of Auticon US

By Chris Hornby, Director, Technology Sector Practice, Sheffield Haworth

David Aspinall has been founding and running SaaS businesses successfully for years, following a long stint leading teams at AT&T and Sprint. He’s learned a lot along the way about managing sales teams and hitting targets during good times and bad.

Recently, David sat down with me to discuss the key lessons he’s learned about SaaS sales and how to apply them during periods of economic uncertainty.

When is the right time to stop focusing on customer lifetime value? How do you manage the psychology of sales teams when it becomes difficult to hit targets? Why is focusing on sales training often a waste of resources? David discusses all these and more in this interview.

Q: With deal decisions slowing and deal sizes decreasing, what do you think CEOs and investors should be working on with their revenue leaders?

A: We’re seeing a lot of decision inertia. In this situation, it’s important that investors work directly with their CEOs and their revenue leaders to look at the other side of the CAC (customer acquisition costs)/LTV (lifetime value) equation.

“At times like these, it’s wise to look at the overall cost of acquisition and understand exactly what your core market is.”

When we’re in high growth, we tend to look at how different revenue motions within the business affect lifetime value. But in times like these, it’s wise to look at the overall cost of acquisition and understand exactly what your core market is and then exactly how to penetrate that core market efficiently and effectively.

A SaaS sale is about striking that balance between effectiveness and efficiency, and at this time you have to look at the overall motion and inspect exactly what’s going on up to the point of sale.

Q: How do you get more granular with the teams when you need to take a deeper look? What kind of process do you go through to do that?

A: You have to be introspective and be able to zoom in and out. What that means is, there’s an assumption that you’ve got product-market fit. The organization wouldn’t be in the stage of funding that it is if it didn’t have product-market fit. Beyond that, you have to look at what the market is telling you and then adapt to that.

It might be time to reassess your ideal client profile. Look at recent wins and the firmographic and demographic factors of an organization that’s deciding to buy from you. Really reaffirm that you are targeting your ideal client profile rather than targeting superfluous businesses that just drag down those efficiency ratios and that you have a lower probability of closing.

“The buyer journey is not fixed. It’s like throwing spaghetti at the wall, especially when there’s a buying decision team.”

It’s a brave step, as the CEO has to be decisive and has to really inspect that ideal client profile to confirm that it’s exactly what the organization thinks it is. Beyond that, once there’s a level of confidence around the ideal client profile, you need to align the sales process with the buyer journey.

Those efficiency and effectiveness ratios really fall down on the cost of acquisition side when the buyer journey and the sales process don’t align. What do I mean by that? Well, a sales process is very linear. You have a funnel. Salespeople are trained to make advances within that funnel, to promote an opportunity from one stage to another. And there are fixed exit criteria within that funnel.

But the buyer journey is not fixed. The buyer could be having a bad day. The buyer could be having a great day. The buyer could have just come from a meeting that excited them or could have come from the dullest meeting they’ve ever had. The buyer journey is like throwing spaghetti at the wall, especially when there’s a buying decision team.

If the decision team isn’t at the same place at the same time, you’re going to lose. So you need to really understand what true exit criteria are on the sales process, to align with the buyer journey. And then also having the courage and the discipline that if an opportunity is not performing as it should in the sales stage that it’s logged, it can go backwards.

A lot of companies – I would say 99 out of 100 SaaS companies – see it as unacceptable to demote opportunities. That’s one of the real discipline points that disconnects the sales process from the buyer journey.

“CEOs and investors need to make sure that the revenue team is identifying the right sales personas.”

As CEOs and as investors, we need to make sure that the revenue team is identifying the right sales personas. That they know who buys. They know why they buy. They know the emotional drivers of that person, they know the pitch that works to them, and they know what not to say and what they fear in order to modify the value messaging of the platform that they’re selling to that individual.

Then you bring in the CFO, you bring in the MBAs, you bring in the guys that can really work the data. You look at the marketplace and you segment it against that ideal client profile (ICP), which was the first thing you did.

Once you’ve segmented according to your ICPs, you go after those top priorities first. Not the category four, category five guys that never actually buy from you.

Q: What’s the difference between buyer segmentation and account segmentation?

A: Account segmentation is the alignment of the ICP to the marketplace. It’s the mathematics of it. It’s hard and fast. These are your priority accounts. That’s account segmentation.

Buyer segmentation is which personas within those accounts are your buying decision team. Those personas can be dependent upon the SaaS platform we’re talking about. They can be HR leaders, CFOs, CEOs. They could be VPs of Engineering, could be an inline process owner within the business. It could even be the DEI Officer.

The reason it’s called segmentation is that industry by industry those personas change. You might have, for example, an accounting platform that you’re selling B2B to a manufacturing client. The personas that buy that could be different than if you’re selling it to a pro service platform. That’s especially true if you have an industry specific platform. But on general business platforms as well the different buyers and what drives those buyers changes by industry and you have to segment by industry.

Q: This sounds like something that’s better understood through quality training. But you don’t think sales training is always needed, do you? When should a company consider a sales training program, in your view?

A: The biggest mistake I see CEOs and revenue leaders make is to overemphasize sales training.

Doing sales training without the foundational blocks is foolish. It’s basically a waste of resources. To have effective sales training, the company, in addition to all the tactics we’ve discussed in this tricky market, has to be incredibly solid regarding its focus, targets, and core values.

If you are assembling people into a training venue, whether that be in person or remote, and the core values that connect those people are not known, lived, and followed, and the focus and the target of the company is not known, then again, it’s a waste of resources.

“The biggest mistake I see CEOs and revenue leaders make is to overemphasize sales training.”

Sales training comes in a more kind of grassroots level with the talent that you have within your revenue team. Referring specifically to front line managers, they have to stem the gap and you have to have the right frontline leadership to bridge to a point where sales training is going to be effective.

What you’re asking is individuals with pure talent and experience to keep the business and the pipeline flowing while you address these critical issues. And if you don’t address the critical issues that we’ve discussed before you do the training, you’ll find yourself in the next valuation looking at rear looking data and it driving a lower valuation than the investors should have got if this was done in the correct order.

Q: With deals slowing and deal sizes decreasing, how do you manage the emotional wellbeing of your sales talent? How do you retain top talent during times when numbers are down?

A: You have to be smart about the needs of your people. Oftentimes, there’s an over reliance on the idea that salespeople are coin operated. Yes, you have to have an effective compensation plan. But in times of retention, you must be completely transparent with the sales team.

You have to show that sales team you hired them because they are smart people who understand the industry and that you hired them against your core values. You have to say, “Look, this is what the market is showing us.” People will understand times are tough if that’s what the market is showing them.

“It’s a case of being incredibly transparent in what you’re seeing in the marketplace and trusting that you’ve hired people to your core values.”

Beyond that, there’s a continuum within the revenue world. This continuum is:

  • Are you making your targets? Yes/No.
  • Do you have a healthy pipeline? Yes/No.
  • Do you have the activity level? Yes/No.

In a situation where you may have an unhealthy pipeline due to macro factors, if you run that continuum as a flow chart and you don’t have a healthy funnel, you have to index on activity to fill the funnel for the next go around. Or you look to change the metrics within your current pipeline to allow for more activity to drive mid funnel.

It’s a case of being incredibly transparent about what you’re seeing in the marketplace, trusting that you’ve hired people to your core values, and that they’re smart enough to understand that, and then modifying the ratios and the metrics that you have within your funnel to account for the fact that the team is going to be doing different things.