From Growth at All Costs to Efficient Growth: Adapting Your Sales Strategy with Pete Kazanjy

Randy Wootton (00:04):

Hello, everybody. This is Randy Wootton, CEO of Maxio, and your host of SaaS Expert Voices, the podcast where we bring the experts to you. And today I’m so excited to have an expert in SaaS on the sales go-to-market side, Pete Kazanjy.

Pete Kazanjy (00:19):

Kazanjy.

Randy Wootton (00:22):

Kazanjy. Thank you. With a name like mine, I have extra sensitivity to pronouncing it correctly, but thank you for correcting that. Pete’s been around for a long time, the co-founder of Atrium for the last eight years, which we’ll talk about, a really cool company. And the insights that he’s been able to collect via Atrium and around go-to-market teams, specifically around sales, are extraordinary. He’s an author of a book, Founding Sales, which I’ve read, it’s awesome for folks, early-stage CEOs who may not be sellers themselves thinking about how they should be building go-to-market teams and hiring revenue leaders, which we’ll get into. It’s a great book. And he’s the creator, I don’t know if you have a title of it, but the new sales reality deck and that’s how we got connected. What are you calling that deck?

Pete Kazanjy (01:11):

I think the concept that I’m aligning on is what I’m calling the sales performance gap. And then the decking question is really just an aggregation of my research and my meditation on what is driving what I perceive and what many people perceive, many leaders perceive, as this pretty pervasive performance gap in go-to-market right now. So we can call it the sales performance gap, it’s a good working title.

Randy Wootton (01:45):

There you go. Great. And we’ll include it in the show notes. And the people that are must have right now, go to LinkedIn and find Pete because he has it posted there with a lot of comments, it’s a robust deck. And to your point, it roots in the sales performance gap or go-to-market performance gap, but what I loved about it was all the research that you did upfront in terms of what is the current reality, what have been the trends that have impacted go-to-market, why are we in the state that we’re in? Which we’ll lead off in a second. But Pete, I’m so excited to have you on. Did I miss anything in your bio that you wanted people to know more about?

Pete Kazanjy (02:23):

I don’t think so. I think maybe helping folks understand the synthesis of my background and my arc might be helpful for folks so they know where I’m coming from. Yeah, I run a software company that’s focused on sales performance management right now, but how I got there is a long and winding road. No, not necessarily. I have a background in product management and product marketing. I started my career at a company called VMware a long time ago in a galaxy far, far away. And I went from being a business generalist, kind of product manager, product marketer type person to when I started my first software company, TalentBin, which was a recruiting software company.

(03:04):

I was our first, as business generalist founder, but then a seller, and that’s where I figured out like, “Oh, actually software doesn’t sell itself, the founder has to be the initial seller.” First seller, first sales manager, first sales leader. We were acquired by Monster Worldwide in 2014, and then that’s when I went from being a manager and a leader of a 20-person sales organization to responsible for new product sales across a 400-person sales organization at Monster. And really started thinking about what drives and what blocks high performance sales organizations and process excellent sales organizations, and what have you.

(03:49):

Wrote a book, as you noted, on modern sales and go-to-market, called Founding Sales, and then also started the nation’s largest sales operations and sales leadership community, called Modern Sales Pros. So, all that led to the founding of Atrium that exists to help organizations better measure, manage and improve sales performance. And that’s really what I think about. And so we work with hundreds of customers right now, and one of the things that I’ve been thinking about over the last six, 12, 18 months is this broad under performance in go-to-market, and specifically in sales performance that seems to be preventing the industry and trying to understand what might be driving that.

(04:37):

And I have this presentation that I’ve been aggregating together that synthesizes some of that, mainly hypotheses, but they seem pretty valid, and it seems to resonate a lot with CEOs and boards and CROs, and so on and so forth. Maybe it doesn’t resonate as much with the individual contributors who might think that there’s other things going on, but for folks who have been around the block, it really kind of synthesizes things in a way that they say like, “Yeah, those are the disparate themes that I’ve been seeing.” And this kind of pulls us together, so I’m excited to talk about it with you.

Randy Wootton (05:12):

Well, let’s dig in then. So, when we talk about the current go-to-market perception versus the reality, I think there’s this starting point in terms of how do people process reality via assumptions and data. So you have a set of data, you layer some assumptions on it based on your experience. If you’ve been through the recession or been around for a while, you have a broader set of assumptions, and based on that you make a conclusion, you have a hypothesis. I think Stephen Covey calls it the ladder of inference. And so, what was our previous reality, and then what has changed?

Pete Kazanjy (05:46):

Well, there was, what was the immediate previous reality, and then the funny thing is then there’s the reality before that, trends like maybe we could just for times around it. So, there was a state of go-to-market and also a new product, new technology, go-to-market, that maybe say it’s through 2000 through 2010 or so, 2010, 2012, 2014-ish. And a lot of people who are ICs, individual contributors, whether SDRs or AEs or whatever, they were in grade school or high school or what have you during that period. And then, something kind of substantially shifted, in 2009, and 2010, there was the great financial crisis driven by the housing financial crisis.

(06:40):

And of course, then the Federal Reserve’s reaction to that was a substantial reduction in the interest rate, the Fed fund rate to zero. But not just that, also a metric ton of quantitative easing as well. So essentially just like the entire economy was flooded with liquidity, which made for a very expansionary and easy money kind of environment. And that precipitated, and grew over time through 2012, 2014, 2016, et cetera, 2018. Interest rates started perking back up again in 2018, and 2019. But then of course we had COVID.

(07:31):

And of course, as soon as COVID happened, the interest rates dropped to zero. The Fed dropped interest rates to zero again, plus a ton, a ton, a ton of stimulus that came into the market. And so, what happened there was, again, more really easy money being deployed, and of course, especially in 2020, 2021, and the first half of 2022, what that meant was tons and tons and tons of investment by the venture community into new technology. And so what that meant was all sorts of positive, or at least momentarily positive impacts when it came to go-to-market, so very, very receptive buyers who have pretty flush budgets.

Randy Wootton (08:17):

And are told to grow, grow, grow, so, it’s like they’re going to-

Pete Kazanjy (08:21):

And are told to grow, grow, grow, yeah.

Randy Wootton (08:22):

Mm-hmm.

Pete Kazanjy (08:23):

Yeah. So, receptive buyers, what’s that going to do? Well, that’s going to positively impact win rates. Receptive buyers, what is that going to do? That’s going to positively impact willingness to take first meetings and pipeline generation. Very receptive buyers, that’s going to make it such that you have SDRs who can fish with dynamite if you will. And then, of course, the positive win rates are going to create really like a tailwind for account executive quota attainment and net revenue retention, and so on and so forth.

(09:01):

And then, of course on the marketing side and the pipe gen side as well, that was the buy side, but then also on the sell side you got marketers who have big budgets that they can spend a lot of money on LinkedIn ads or Google Ads, or what have you. A lot of hiring, “Oh, one SDR to three account executives, how about one SDR to each account executive?” And so, what this did was you had these cascading effects that were fairly far-reaching. So that’s just that. But then there are second-order effects as well. You’ve got a bunch, like all this money is coming into the system, now you’ve got organizations that are hiring like crazy.

(09:43):

Okay, cool, well, if you have a ton of organizations that are hiring like crazy, that’s probably going to modify how you manage your sales team. So if you have SDRs who are being told by, SDRs who are six months into their role or 12 months into their role, and then you have other organizations who are desperate to hire account executives telling them, “Hey, you’re ready to go. We’re hiring SMB AEs right now.” Well, then you might prematurely promote those folks as well. The same is true with the whole ladder.

(10:13):

You also might be very hesitant to performance manage in any meaningful way, like, “Hey, you got to be on top of your pipeline hygiene. Your pipeline’s a mess.” “Hey, screw you Randy, I’m out of here, I’m going to go be an account exec, I’m going to go take this call with a recruiter over here from the latest company that raised $100 million from Tiger Global.” And so essentially what you have is just this cascade of money across the entire industry from the 2012, 2014, I mean it really started ramping up in 2012, and then kind of went crazy in 2021 and 2022. But now that’s really meaningfully shifted, the Fed funds rate is at 5% now, venture investment has fallen off a cliff.

Randy Wootton (11:03):

Yeah, I just saw another article… Oops, sorry, just another article on that from I think it was CARTO that put that together, and you just see the number of investments the VCs are done is way down, and still down quarter over quarter. The dollars invested are higher, which means the VCs are still investing, but they’re looking for great deals. And if you disaggregate that and look at where they’re investing, the preponderance is going to AI, so if you try to spread it around more broadly. So I do think what we’ve talked about is this idea of the growth at all cost era versus the efficient growth era. And I think the point that you’re in your deck and making more broadly in this opening narrative is, this is a cycle. And so we’re in a new cycle.

Pete Kazanjy (11:04):

Totally. Yeah.

Randy Wootton (11:47):

And in the new cycle, you got to change your assumptions. I think the thing in our pre-briefer I thought was really interesting was how you talked about how these assumptions play through the different folks involved in the ecosystem from investors, LPs, VCs to CEOs to managers to ICs. Can you talk a little bit about that? Because everybody kind of has a different sense for, they have their radars up and they’re ingesting new information and new data, and they’re making decisions on different timelines. So how is that playing out? Because we’re right in the middle of this shift.

Pete Kazanjy (12:23):

So one of the things that humans are particularly bad at is understanding kind of time offset, multi-step processes. And so that’s kind of what’s happening right now is you have this big ripple going through the market of cheap money. And so that cheap money started drying up as soon as the Fed funds rate started going up pretty substantially mid-2022, and what have you. And so immediately the LP class, so the people who invest in venture funds, they started reallocating. The GPs, the venture fund folks, they immediately were like, “Oh, okay, these LPs are not going to give us more money, we’re going to slow our deployment rate.”

(13:04):

And so through the board meetings, they started telling the founders that they work with, the executives that they work with, et cetera, et cetera, like, “Hey guys, there’s not going to be more money and your incremental fundraisers are going to be really hard.” And so then the question of course is, did that information cascade to the VPs and organizations, frontline managers, ICs, et cetera? So I think in general, usually these things take six months to permeate for each layer of the stack, if you will, and that’s actually if you have good information transparency available.

(13:38):

And I was talking to a gentleman who’s a VP of rev ops, they’re a 50 person or a 50 sales, or a 50 rep company, the other day. And he was lamenting the fact that the board and the C-suite and the VP level, they live in one reality, and that the ICs live in a very different reality, even though this information is being communicated like, “Hey guys, we need people to raise their levels of effort, we’re not going to be able…” Like, “Hey, remember how we riffed the SDR team and took it down by 50% or took it down by 70%? We need you to bring that level of effort back up again because having five customer-facing meetings a week is really not tenable.”

(14:21):

And then for whatever reason, those messages aren’t sticking. And the question would be like, why? And I think part of it is it takes a little bit of time for people to update their priors, like re-update. And then the question of course, so it just takes time, and that’s cool. But then there’s a second component to it too, which is what is the information environment that folks are in that they give them that would help them update their priors or alternatively not? And I think a big component there is social media is, not only does it exist in a consumer context or what have you, obviously Instagram and TikTok and what have you, but also it’s starting to permeate the professional realm as well.

(15:04):

So the folks over at LinkedIn have done a very good job of getting the content flywheel going on the LinkedIn feed. And so the thing that folks need to remember is that these algorithmic-driven feeds, so the way that content gets prioritized in these feeds is twofold. One, the people who are posting the information obviously have selection bias. You don’t post boring things. This is why everyone on Instagram is always on vacation. It’s not because everyone’s always on vacation, it’s because people only post their vacation photos. They don’t post a photo of them, like their keyboard while they’re doing work. So that’s the first thing, is there’s selection bias.

(15:47):

And then the second thing is, is that the content that is prioritized for consumption is going to be stuff that is heavily engaged with, so liked and lingered on and commented on, and so on and so forth. And so typically those things have a tendency to be things that people like, people enjoy. So good examples of this would be on LinkedIn, when you open LinkedIn, the thing that’s at the top of the feed or the first handful of things is somebody’s promotion or the fact that somebody’s hiring. Or someone on a diatribe about how their boss is a micromanager because they were all over them to make sure that their MEDDPICC fields were appropriately updated. And then there’s a bunch of people being like, “Yeah, you tell them, man. Fight the man.” And so the problem is, because those things are fun, it’s like, “Yeah!”

(16:51):

And so, the problem of course is that if you’re an SDR or a junior AE that’s in that information environment, and this is compounded by work from home scenarios where you don’t have individuals who are sitting amongst six other reps or what have you, and can’t see what that manager is doing with that rep over there and observe the active management or observe these norms. But instead, the information environment that you’re in is this, then it’s going to make it such that it’s harder to update your priors on those realities. And then of course you have grumpy old men and women like me, and other sales leaders who are like, “Hey guys…” A very basic, well-known thing in sales leadership is that customer-facing activity actually is very important and that you should pay attention to these sorts of things, and if deals don’t close themselves, they’re the result of account executives pushing things uphill.

(17:51):

And you see people come out of the woodwork and are like, “Well, what about the quality of activity?” And it’s like, “Oh, my God, guys, come on.” And so what ends up happening is you have people who are soaking in that information environment and they’re not reading and rereading John McMahon’s The Qualified Sales Leader. They’re not rereading Jason Jordan’s Cracking the Sales Management Code, or what have you. What they’re instead having is they’re being fed feel-good, what I like to call pleasing lies, as opposed to the things that are actually going to be important for them. And so that’s going to make it harder for those folks to update their priors, and it makes it such that leaders, it’s more incumbent on leaders to realize that your staff is soaking in this information environment and that you have to counter-program, effectively.

Randy Wootton (18:48):

Yeah, great. A couple of just takeaways for me I think was just how this new information gets processed through the system. And the one, I think you called this out, but just want to underscore, like LPs are telling VCs that they want return and they’re not going to invest more money. And then VCs telling their CEOs and the Portcos that we’re not going to, when you thought you were going to raise money after 18 months, you need to make that investment last 36 months. And that’s what I hear from my CEO colleagues around, “Oh, gosh, we’re not going to be able to have that T2D3 growth curve because the market has changed. Because of that we need to move from growth at all costs to efficient growth and maximize our efficiency.”

(19:33):

And so how do you structure an organization to deliver on that, and realistic, aggressive, but achievable goals 100%. And so then as CEO, you’re spending time, that takes a year because you wrote out an operating plan at the beginning of fiscal year ’24. And I was talking to someone, I think it was Ray Reich who has this great survey he does around every year he asks people, it’s a benchmark survey, what are their growth aspirations for the year? And everybody was at 30% at the beginning of fiscal year ’24. And now people are not hitting their target. But if you set up this organization with that level of expectation in terms of investment, and well, top line growth and investment associated with it, now you’re changing, because if you’re not hitting the top line you got to control the cost. And so I think to your point, we’ll get into this, how do you translate this new reality?

(20:19):

It’s how transparent are you able to be with your organization and say, “These were the assumptions,” or as you described priors, “That were informing our plan, though as we’ve moved forward we are finding out those assumptions aren’t correct. So we have to restate the assumptions, and those have implications. And those implications are these sets of things.” And I think that’s getting managers, and then ICs, to your point, I think the other thing you just were really hammering, which I think is great, is in this world of social media, you don’t have the New York Times reporting on what I would call fine, some people may say lean’s left, but broadly facts and truth. We live in these echo chambers, to your point of feel-good opinions. And so I think it’s incumbent upon all of us as leaders and managers and individuals, is to create a broad listening post, a broad set of listening posts where you’re ingesting information so you are defining reality, and not just having it influenced by the influencers that you’re following.

Pete Kazanjy (21:21):

And a good buddy of mine is a gentleman named Cory Bray. He and his co-founder, Hilman Sorey, are amazing sales authors. One of my favorite sales management books is called Five Secrets of the Sales Coach. It’s written as a narrative, it’s like very Patrick Lencioni, kind of like Five Dysfunctions of a Team, sort of situation. Well, they’ve written a bunch of others, like a book on sales development, a book on sales enablement. They have their sales methodology book, Triangle Selling, et cetera, et cetera. And these guys are voluminous content producers and excellent, excellent content. And I think the challenge though is that staff are not reading those necessarily. Maybe some are, but for the most part not. And I think that it’s… I’ll give an example.

(22:11):

At Atrium, we had a reading program, we had a list of a couple dozen books that were kind of whitelisted, and actually we would pay a SPIFF if people read them. And we had some high performers that would do so. And the SPIFF was not 50 bucks, it was 250 bucks, it essentially netted out that, it would land you at 50 bucks an hour, depending on how quickly you read, anywhere between 25 to 50 bucks an hour to read Cracking the Sales Management Code, or The Qualified Sales Leader or Five Secrets of the Sales Coach, or my book, or what have you. And it was kind of remarkable to see how some people would consume it, but broadly people were not taking us up on this offer, which was fairly remarkable.

(23:05):

And I think that this is something that we as leaders need to be mindful of, this is something that I’ve told again, Cory, because we kind of joke about the keyboard warriors on LinkedIn, account executives who had three account executive roles during the zero interest rate environment, now sharing all their learnings about that, which of course don’t even apply. And I think it’s an important thing to think about how you can potentially down sample some of this content. I think an old man shakes fist at cloud sort of situation, and I think about this as it relates to my seven-year-old, it would be much better if folks could actually read long form and synthesize that, but go to war with the army, you have sort of situation meeting people where they are in order to micro -chunk these things or what have you, I think is important.

(24:01):

But whatever it is, you have to set expectations and say like, “Hey, there’s a bunch of people on LinkedIn who would love to sell you magic beans about the fact that you actually don’t have to do, like you can use magic AI to do your job, as opposed to doing your cold calling.” Or people are telling you, “Hey, actually it’s okay if you don’t have 10 customer-facing meetings a week.” Whereas the reality is, actually you should have a pit in your stomach if you don’t have 10 customer-facing meetings a week, you should be scared. Like that’s weird. That should feel bad. And making sure as a leader that you popularize these things and do it on a consistent basis is really important, which I think is very different than in the last five years.

(24:49):

Previously providing feedback or correcting folks or guiding folks in the right direction would be like, “Oh, man,” viewed as potentially problematic, “I’m going to leave this organization, et cetera, et cetera.” There are two thirds fewer job postings right now than there were 18 months ago, which is the result of that liquidity leaving the market. So managers and leaders need to again, update their priors as it relates to their managerial approach. Because one, there was a gentleman who, he was the VP of revenue operations at one of our customers. He recently departed. And in 2023, the organization did a bunch of riffs to control their costs. And then the big thing was is that they did those riffs at the beginning of 2023, but they didn’t update their performance culture. So what you had was you had a compressed organization with the same level of effort as the larger one.

(25:47):

And so in 2024, his phrase for this was like, “We’re going to go from inspiring…” Inspiring achievement was kind of their prior, like they watch where it… And he’s like, “No, in 2024, we’re going to demand excellence. We’re going to take our performance management tempo from quarterly.” We’re like, “We look at performance on a quarterly basis.” “No, no, no, no, we’re going to bring it forward and we’re going to be looking at these things on a monthly basis. We’re going to be looking at leading indicators.” Which the staff are kind of like, “Wait a minute, I thought this was 2021.” Like, “The fish jump into the boat, and you’re my professional best friend, not my manager, or a manager is a professional best friend, et cetera.” And so that’s going to take an adjustment, but you have to do it, or else your company going to be dead.

Randy Wootton (26:39):

I think you’re right. And I do think this idea that you’re talking about that at the core people have been in sales a long time, is a process. It’s like a training program, and you get up every day and you do the activity. And unlike many functions, there is a direct correlation between the work you put in, revenue generating activities, and the output you get. And I think broadly the best AEs you find are the ones, guess what? They don’t work just from 8:00 to 5:00, they’re working on Sunday night to get ready for their Monday morning outbound calling.

(27:10):

And so to that point, just this idea of, well, what is the new playbook? We’ve been talking about it. You’ve got to set expectations, I think there’s a piece, the other part is, but you’re also providing support in investment and training and sales methodology. For example, at Maxio, we started with Sandler as a program, which I liked. I’ve used it in other companies, with Webtouch, inside sales motion. We did it for a year here. We invested in Winning By Design, and all in on that at our go-to-market kickoff.

(27:39):

And so the idea was to help people develop, I call it sharpening their spears, help them develop the skills so that they know what’s expected of them, be super clear about the expectations, the metrics are going to be measured, the forms of accountability, and then support them with the investment in the training, and then make your sales managers better at coaching. So help us understand from your perspective, what is the new playbook to be successful? And maybe we can break it down by the different rounds. So a seed company, a series A or a series B, if that makes sense. But structurally, what’s the big difference?

Pete Kazanjy (28:15):

I think the big kind of delta from two or three years ago really is just proactive sales management is important. And it’s funny, one of the things, you mentioned the word coaching in there, which coaching is important, but I think one of the things that I… Actually, I had this realization, I think it was six or nine months ago, that coaching is actually a subcategory of management. So as a manager, you have a number of jobs to be done, one of which is as an example, the easiest one hopefully, is encouragement, kind of being a cheerleader, “Hey, good job on XYZ.” Motivating people, et cetera, et cetera.

(29:02):

Another component of management is accountability and saying, “Hey, we have agreed, we’re going to set expectations that you’re going to have. This is what an ideal week looks like. This is what an ideal day looks like. These are the measures that are going to indicate whether or not you’re executing a set of ideal days, a set of ideal weeks, et cetera, et cetera. And then by the way, if you’re not, I’m not going to ignore that. I’m going to say, hey, this is not in alignment with this thing right here.” And that’s actually just pure accountability.

(29:39):

And then of course there is coaching, which is like, “Oh, okay, cool. You’re not doing your calling activity, Mr. SDR, I’m going to hold you accountable to that. Oh, why are you not doing that?” “Oh, I’m afraid.” “Oh, okay, wonderful. Now we’re going to coach you on that and we’re going to do role plays and so on and so forth, and I’m going to apply a coaching plan, et cetera, et cetera.” But I think in a lot of organizations historically have said like, “Hey, we want our managers to coach more.” It’s like, yeah, definitely, but you also just want your managers to actually freaking manage as well.

(30:15):

And I think that that’s something, like someone like you and someone to me, or to someone who was an SDR or an account executive in 2006 or 2010 or 2012, they’d be like, “Yeah.” But for someone who came online in 2020 or 2021 or 2022 or 2019 or whatever, they might say, “Wait a minute, I thought that my manager was the person who is my number one cheerleader.” And then also, if I’m not putting the calories in, well then they encourage me to do more calories or whatever versus saying like, “Hey, you’re not doing this thing and that’s not acceptable. We’re going to go ahead and fix this, and if you don’t fix this, you’re not going to be here.”

Randy Wootton (31:05):

Yeah, I think it’s that distinction-

Pete Kazanjy (31:07):

And that sentence scares the hell out of… You could just imagine junior managers just puckering at the concept of that sentence.

Randy Wootton (31:18):

Well, I think a couple of thoughts. One is that you’re drawing the distinction between attitude, effort, and results. And that a lot of times people are like, “Hey, I have a great attitude and I’m really trying hard.” But in sales in particular, if you’re not delivering the results and they’re super clear, and one of the things that you’re helping to do with your company is identify what are the consistent patterns across many companies and the expectations to help address the performance gap, which is what your deck is about and your book is about, is the leverage point is really in the managers.

(31:49):

And so having a deliberate training for management. So at Microsoft, they called it management excellence. And at every company I’ve been at I’ve had two programs that we’ve developed. One is for leaders, is to help leaders, VPs, and above primarily understand what their roles are as they transition to that M2 or M3 role and how they think about their level of altitude and what they’re being held accountable for. And then the next program is around management excellence, and how do you take those basic skills, because as you probably have some stories, especially in sales, your bestsellers are often not your best sales managers, because they do it all just innately, and they crush in their quota and then all of a sudden they become a manager and they’ve got a wide spectrum of capabilities.

(32:30):

And being able to have the empathy, the ability to do the coaching and hold people accountable, and do the diagnosis to be able to write the right prescription for the individual is a learned skill. Every manager has to do it in terms of setting expectations for the job, what are your activities for the week, and then providing feedback and brainstorming when there are problems or issues. But I think in sales, in particular, we often promote the bestseller because they want to advance in their career and they think management is the way to do it.

Pete Kazanjy (33:00):

Yeah. For sure. And I think the other thing that folks really, the zero interest rate policy kind of bullwhip has two negative impacts there where people need to re-base what management is in a nonpermissive financial environment. So one, you have people who maybe were account executives in 2014, 2016 and 2018, maybe they got promoted to frontline managers in the bubble. Well, they had to behave in certain ways because, “Look at this, all the fish are jumping in the boat. This is crazy. My whole team is crushing their number. This is amazing. And being the heavy isn’t all that terribly fun. And actually, I don’t have to be the heavy, but even if I did need to be the heavy, that’s okay, these other guys are bailing us out from a quota attainment standpoint.”

(34:02):

Or moreover, “Man, if I even try to be the heavy, these folks are going to try it and go somewhere else,” I’m like, “I need to retain this quota capacity.” And so that’s that, that’s that cohort. And then you have the IC cohort where maybe someone was an SDR in 2016 or 2018 and they became an account executive in 2020 or 2021 or 2022. And then they see, “Wait a minute, this is how management happens.” And I think what folks need to do is go back and look at things like read the Qualified Sales Leader and learn about how the PTC sales diaspora, which then shows up in places like MongoDB and AppDynamics, and so on and so forth, how sales management has been done historically.

(34:56):

And there are reasons why sales management is very regimented, because one, sales is hard, there’s far more solutions being sold than there is budget to buy it. And so what that means is account executives have to be high effort, because there are lots of other account executives, not just your competition for a specific use case, there’s competition for budget and there’s lots and lots of folks who are out there seeking that budget. And so being high-level of effort and rigor, and so that’s the first thing.

(35:30):

And then secondarily, rigorous with respect to deal execution, this is why MEDDPICC was originally designed or spiced by Winning By Design is, deals are amorphous things, there are lots of stakeholders in these organizations. And so if you can provide structure around it, then now these deals can be legible and inspectable, but they can’t be legible and inspectable if we don’t populate the information.

(35:55):

And so that’s why managers need to be rigorous about enforcing that because otherwise, we’re not going to know where these various deals are at. And so there’s a reason why these things were designed this way over the last 20 years. And yes, there was this momentary point in time where physics was suspended, if you will, but now they-

Randy Wootton (36:19):

Yeah. Reality is bad.

Pete Kazanjy (36:23):

Yeah, they’ve reasserted themselves in a very muscular fashion. Right.

Randy Wootton (36:26):

Yes. Indeed.

Pete Kazanjy (36:28):

And so just reacting to that is important.

Randy Wootton (36:31):

Awesome. And so I think great advice, and again, people should check out your sales performance gap deck, which has a lot of these trends you’ve been talking about, and what it is implied in terms of what AEs do today versus what they do yesterday, what the expectations are going forward for both AEs and managers, embracing this idea around performance management. And it’s not a new concept.

(36:56):

But as we sort of wrap this up, performance management leading into the speed round where we talk about favorite metric and why, favorite book and why, you’ve been underscoring a Qualified Sales Leader, but you had some other ones in our pre-brief that you wanted to share, and then favorite influencer, so who’s the person that’s helping to poke a hole in distorted reality? So the favorite metric, you’ve called it out a couple of times, but let’s go back to it. What is the thing you think is your favorite metric with the sales organization to be tracking and looking at on a regular basis?

Pete Kazanjy (37:28):

Yeah, I mean, you really can’t beat customer-facing meetings, because it’s the fundamental unit of information transfer. It’s a face-to-face, either on site or via Zoom, information transfer where you are doing discovery of what their state is in their organization. You’re positioning your solution against that. You’re meeting more people, you’re multi-threading, et cetera. You’re forming rapport, et cetera, et cetera. It’s customer contact. And then you can do all sorts of wonderful things with customer-facing meetings as well. You can count the number of first customer-facing meetings.

(38:08):

You might say, “Well, I want to see new opportunity in flow.” “Sure, okay, cool. We can track that.” But the reality is is first customer meetings with an account, it’s kind of like an opportunity. You can also look at things like second meetings, or the ratio between first meetings and second meetings. If people get a lot of first meetings but they don’t get a lot of second dates, that tells you something. But even if you just are more simplistic and just count the total numbers of customer-facing meetings, like is somebody putting in the level of effort? You can’t go wrong with that.

Randy Wootton (38:39):

Awesome. So just two questions on that. One is, do you have a general sense across the companies you’ve worked with in terms of what the high watermark is and number of customer meetings per week for, I don’t know, call it a Series C company, average ACV, I don’t know if there’s a big distinction, but maybe call it 20 to $30,000. What are you expecting from all the information you’re gathering in terms of high water?

Pete Kazanjy (39:04):

Yeah, I mean, the way to think about that is just do a bottoms up analysis. It’ll be different on a per organization basis, but there are bell curves for different average selling price sales commissions. Like do a bottoms up analysis of there’s 40 hours in a week, how long are these meetings? Are these 45-minute or 60-minute on-sites, or are these 30-minute Zooms. You’ve got a 15, if it’s an hour-long onsite, you’re probably going to be doing a half hour, an hour prep associated with it, and probably an hour after.

(39:40):

You’re probably also going to be doing travel time as well, et cetera, et cetera. If it’s an SMB organization where these are 30-minute meetings, where you can do 15 minutes of prep ahead of time, 15 minutes after. In an SMB organization, you probably would want to expect your reps to be doing in the 12 to 17 customer-facing meetings a week, which you might say like, “Whoa, 12 meetings, that’s a lot, or 15 meetings, that’s a lot.” It’s actually just three meetings a day. It’s not a lot, especially if it’s half hour, it’s like nothing.

(40:08):

And then from a mid-market organization, that’s where you’d want to say, “Okay, cool, target 10.” And then maybe two of those or three of those are first meetings. The higher the ASP, the larger the ratio is going to be between first meetings to second and third and fourth meetings because there are more stakeholders. And then if you’re in the enterprise, you got to accommodate travel time, et cetera, et cetera. But if you’re under five customers… You would hope it would be seven to 10. If you’re under five, that’s scary, because what is that seller doing all week long?

Randy Wootton (40:47):

That was one of the things we introduced. So I track all my time, what meetings I’m in, and I try to be super deliberate about what percent of time I’m spending with customers and partners, because other stuff can just suck up your life. And I think we did this exercise throughout the sales organization was have them track their time, and we had a bucket which was revenue generating activities, and just split it into two, how much time are you spending on revenue generating activities versus everything else?

(41:13):

And I think you get surprised by what that ratio is. I think to your point, you double click down on that and say, “Okay, of revenue-generating activities where you could be reviewing Zoom calls, you could be doing outbound cadence.” I think to your point, I love this idea, the fundamental unit of information transfer is at the end of the day it comes down to customer meetings. So of all the other activities, how do you drive that? Go ahead.

Pete Kazanjy (41:37):

No, that’s what I mean, it’s like it’s face-to-face. That’s what we do as sellers, is we’re eliciting information from them and we’re providing information from us in a very rich and rich synchronous back and forth, like low latency. You ask a question, and I can tell that you’re thinking about it a little bit wrong, so I reframe your thinking there versus semi versus asynchronous via email where we’re playing ping pong back and forth every 24 hours, or what have you. So customer-facing meetings is the high order bit.

Randy Wootton (42:18):

Awesome. Well, let’s drop, we’ve talked about The Qualified Sales Leader is a book. I want to get to the influencer that you’re following because of the earlier conversation we had in terms of trying to create a broader reality. Who do you find is writing good stuff on LinkedIn, or you’re watching their emails or you’re listening to their podcast, who really is making an impact on you?

Pete Kazanjy (42:41):

So there’s a woman who previously, named Ellen Rataj, R-A-T-A-J. And she just started consulting, but she previously… She was at HubSpot for a decade. HubSpot has a really phenomenal sales diaspora, a very strong Boston sales culture. So Boston for the most part, because PTC came out of Boston. Also we love our Massholes, very direct, high accountability, not going to beat around the bush, et cetera, et cetera. Great sales organizations come out of Boston for these various reasons, and HubSpot is one of those. So John McMahon from PTC was an advisor to Mark Roberge for the longest time at HubSpot. So Ellen was actually the person who founded and then scaled the sales management program academy at HubSpot.

Randy Wootton (43:42):

Interesting.

Pete Kazanjy (43:45):

And so she talks a lot about what makes for effective sales management and how you can… Because again, if you’re only as strong as your frontline managers, then the response to that would be like, “Well, we better breed and train very good frontline managers.” And so she was responsible for that. And so she’s a great LinkedIn follow there, because it’s like real talk too, she’s very candid. And a lot of the messages are not like hand wave-y feel-good, because it is very like PTC, HubSpot-y, very brass tacks.

Randy Wootton (44:23):

Awesome. I just followed her. So I look forward to reading her stuff. And to your point around Boston sales, the sales leader at Seismic, a guy named Ed Calnan, was Boston. And I think you’re absolutely spot on, there’s something special about the water they’re drinking in Boston that makes them frothing revenue dogs, as we described.

Pete Kazanjy (44:42):

I buy it.

Randy Wootton (44:42):

Great. Pete, it’s awesome to have you. Thank you for sharing your perspective. Again, I recommend everyone reading your book, and following you on LinkedIn, you’re saying, helping to frame the broader truth. Other than that, on LinkedIn, how else would you like people to connect with you if they wanted to find out more about Atrium or find out more about some of your thoughts on broad trends and sales management?

Pete Kazanjy (45:05):

Yeah. Well, I think in general, if you as a sales leader or a CEO or a board member are thinking about how you can raise the tempo of performance in your organization, a lot of that comes down to doing a better job around performance management. So measuring, managing, and improving, and driving that accountability is 100 percent what we focus on.

(45:28):

We mainly work with organizations that have 20 or 30-plus sellers, up to a thousand-plus sellers. But the good news is is accountability is the new black, and performance management is no longer kind of a scary phrase, it’s more like a required thing. So if that’s the case, you can check us out at Atrium, just Google Atrium sales or go to AtriumHQ.com. And then yes, I’m on LinkedIn, I’m very identifiable. I’m the only Peter Kazanjy on there.

Randy Wootton (46:01):

Well, thanks very much for your time, Pete, and appreciate all the wisdom you shared and look forward to continuing the conversation.

Pete Kazanjy (46:07):

Cool. Thank you very much, Randy.