In this episode of "20 Sales with Harry Stebbings," Rich Liu, CRO at Everlaw and a seasoned unicorn go-to-market executive, shares his insights on scaling sales in a tight market. Liu emphasizes the importance of adapting sales strategies, particularly the need for direct engagement with economic buyers and crafting a compelling, quantifiable value proposition. He discusses the challenges of pipeline generation, deal closures, and maintaining premium pricing through strategic discounting. Liu also advises on hiring practices, stressing the need to align expectations with company goals and the significance of understanding product-market fit before scaling sales teams. Additionally, the conversation touches on the effectiveness of various sales tactics, the role of product-led growth, and the critical nature of structured deal reviews.
"That early adopter, that product led sale, does not work in a tight market. I'm not spending any money. Default is no. The only time that I'm going to spend something is if someone convinces me this thing is not what you think it is. It actually is going to solve the most important thing that you're afraid of right now."
This quote highlights the need for a tailored approach in sales strategies during economic downturns, emphasizing the importance of addressing the client's most pressing concerns to secure a sale.
"First of all, there's a lot of luck involved. I think it's a lot easier to see things going back than looking forward."
The speaker reflects on the role of luck in his career path and the clarity hindsight provides, suggesting that career progression isn't always predictable or linear.
"One of the things I learned most about that company, and I know that sometimes it's derided, is move fast and break things, like the idea that you don't have to be perfect."
The quote captures the essence of Meta's philosophy, which prioritizes speed and innovation over perfection, and how it has influenced the speaker's approach to scaling businesses.
"The only time that I'm going to spend something is if someone convinces me, ooh, this thing is not what you think it is. It actually is going to solve the most important thing that you're afraid of right now."
This statement underscores the critical role of demonstrating clear and immediate value to clients, particularly in a market where spending is scrutinized and reduced.
"Right now I need to figure out what is the problem my product solves and for whom."
The speaker emphasizes the importance of reevaluating and clearly defining the problem a product solves, ensuring it aligns with current market demands and the priorities of decision-makers.
"Whether it's my support, my Cs.org, my AES, my sdRs, my partner people. I'm trying to figure out how do I actually measure the effectiveness and productivity of that bookings per head rep source dollars per marketing spend."
This quote reflects the current focus on measuring and optimizing the productivity of various go-to-market roles, highlighting the need for data-driven decision-making in sales and marketing investments.
"Let's actually set the tone of what good looks like within that. Let's make sure your CFO or CIO or whoever is going to ultimately say yes or no is bought into that as well."
The speaker discusses the need for a clear definition of ROI and aligning it with the expectations of key decision-makers, which is essential for successful renewals and customer retention.
"And so we almost have to redo the sale the right way with the value message, with the EB engagement, than when we hadn't done it in the front, which is tougher."
This quote highlights the challenge of re-engaging customers post-sale with a value-driven approach, particularly if the initial sale did not fully involve executive buy-in or a clear value proposition.
"Without tying clearly to value, quantifiable value and agreement of what that value is, that relationship is going to be at risk."
The quote emphasizes the necessity of establishing and agreeing upon quantifiable value in customer relationships to prevent potential risks to those relationships.
"If you're at that stage where you're still figuring out that question of what is the problem my product solves and for whom... I've got to be close enough to help make sure that whatever is happening and whatever learnings we're getting is translating back..."
The quote highlights the founder's responsibility to be intimately involved in the early stages of defining the product's purpose and ensuring that sales learnings are integrated back into product development.
"Dude, if you don't know the problem, who you sell to and how you sell it to them shouldn't be doing this fucking company because you'll have zero luck fundraising, by the way."
The quote bluntly states that without a clear understanding of the business problem, target customers, and sales approach, the founder will struggle to raise funds and build a team.
"Throw the title out the window for a moment. I think that first hire, when I'm looking to scale, I'm looking to scale me out as a founder."
This quote suggests that the initial sales hire should be someone who can replicate the founder's vision and sales approach, regardless of their job title.
"Oh my God, you do it too slow or you do it too fast."
The quote captures the delicate balance required when transitioning from founder-led sales to a team approach, noting that both moving too slowly and too quickly present risks.
"I'm a big fan of two at a time. Right? Again, this is the engineer me coming out the two at a time thing, right?"
The quote supports the idea of hiring two sales reps simultaneously to create a more effective and competitive sales environment.
"It's really hard to do both well, right. And it comes back to even how you design your product."
The quote discusses the inherent challenges in pursuing both PLG and enterprise sales strategies, emphasizing that the approach taken should align with product design and team capabilities.
"If I'm building a security company doing enterprise security, I should probably start at the top of the market and then go down."
This quote suggests that the starting sales strategy should align with the product's market and the founder's expertise, with enterprise security as an example where starting at the top might be preferable.
"People are the most important thing. That was what that company did better than anything else is figuring out not the product, not anything else, but hiring the best people and then figuring out how to utilize them."
The quote stresses the critical importance of hiring the right people for the company's success, more so than perfecting the product or other aspects of the business.
"ay, if you think about it, they're actually a pretty ineffective way to understand if someone's going to be good at something, right? Whoever interviews well gets a job, but that doesn't mean they're a great engineer and they're a great CSM or they're a great marketer."
The quote highlights the disconnect between interviewing skills and actual job performance, suggesting that traditional interviews are not a reliable indicator of future success in a role.
"Designing number one structured interview questions that vet for. Ooh, tell me how you had driven situation, action result, right? Tell me how you drove this type of interaction, what you did, what was the result, how did you do it?"
This quote emphasizes the importance of designing structured interview questions that probe into candidates' past experiences and actions to assess their suitability for the role.
"Everybody, every salesperson can tell you how they were the top. And then the questions that don't get asked are like, oh, what were the metrics that you were measured on? Okay, how did you do on that?"
The quote explains that to properly assess a candidate's track record, one must delve deeper into the context of their achievements, rather than taking their word at face value.
"Job changes, a lot of job changing. Huge red flag for me."
This quote identifies frequent job changes as a potential indicator of issues with a candidate's job performance or commitment.
"Having an exercise that really, and you don't have to be a big company to do this. What is something that they would actually do that mimics what they would need to do in the role?"
The quote recommends incorporating practical exercises into the interview process to get a realistic sense of how candidates would perform on the job.
"References and back channels. I know sometimes people do the back channel thing has mixed emotions out there, but I would say if we know someone who we trust that has worked with that person is obviously not going to blow them up that I trust in my network, I sure as hell want to figure out some signal."
The quote stresses the value of obtaining information from trusted sources to verify a candidate's past performance and suitability for the role.
"There are some good benchmarks out there for any role. AE, CSM, marketer, partnerships, person, ops, person, strategy person. So trust that all vcs, all the town folks and recruiter will give you that."
This quote advises founders to rely on established benchmarks for compensation packages rather than getting caught up in competitive offer inflation.
"If I'm running like an enterprise sale, I like to hold a high list and then figure out how I need to discount to still protect a premium and get the deal done."
The quote reflects a strategic approach to discounting in enterprise sales, where maintaining a premium while offering discounts is part of the negotiation process.
"Great deal review. Let's actually go through and use a framework, any framework. Med pick, you build your own right command of the message."
This quote emphasizes the importance of using a structured framework during deal reviews to systematically assess sales opportunities.
"90% stage, that's actually where the impact is driven."
This quote emphasizes the significance of the 90% stage in the sales process, where deal reviews can have the most impact on whether a deal will close successfully.
"Weekly at least."
This quote indicates the minimum frequency at which deal reviews are held, highlighting their importance in the sales process.
"Number one is you never had true buy in to start with."
This quote points out the primary reason deals fail to close, which is the absence of genuine commitment from the client from the beginning.
"They don't do PG, number one."
This quote highlights the importance of a sales rep's ability to generate their own leads as an early indicator of their potential success.
"I talk to a lot of early stage go to market leaders and early stage founders who will tell me the flip side of this same question, which is like, what's possible?"
This quote reflects on the common mistake of misalignment on expectations and the importance of having a realistic and shared vision of growth potential.
"Now is the time, more than ever, to go inspect what is real and what is not."
This quote advises sales leaders to critically examine their pipelines to ensure accurate forecasting, which is especially crucial in the current market environment.
"Doing that level of pain based discovery has not changed."
This quote underscores the enduring importance of discovering and addressing the core business issues of potential clients in the sales process.
"Having that perfectly crafted email... is not going to work right now."
This quote signifies a shift away from relying solely on well-crafted emails for sales engagement, advocating for a multi-faceted approach instead.
"The biggest mistake, I think, is hiring ahead of what you actually have conviction to do."
This quote cautions against premature expansion and emphasizes the importance of hiring sales leaders who are a good fit for the company's current objectives.
"Be quick in identifying and driving alignment with the CEO or founder or your boss."
This quote offers guidance to new sales leaders on the importance of promptly aligning with higher management to focus on the most critical goals.
"I would love to see more people consider it as a career coming out of any major with any background."
This quote expresses a desire to diversify the field of sales and challenge the preconceived notions of what a salesperson looks like.
"They built a freemium thing into the contract."
This quote illustrates the effectiveness of a freemium strategy within an enterprise-level sales contract, highlighting an innovative approach to sales during difficult times.