20Sales: How Snowflake Built a Sales Machine | Why You Have to Hire a CRO Pre-Product | Why Most Sales Reps Do Not Perform | Why Hiring Panels are BS in Interviews | Why Remote Sales Reps Do Not Care About Their Development with Chad Peets
Aug 23, 2024
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Chad Peets, a renowned sales leader and recruiter with 25 years of experience, shares invaluable insights on building effective sales teams. He argues that SaaS companies need a Chief Revenue Officer before launching a product to ensure proper sales strategies. Chad exposes common pitfalls in hiring practices and explains why many sales reps underperform. He also stresses the importance of aligning sales and product marketing efforts and highlights how understanding personal motivations can enhance recruitment strategies.
Having a Chief Revenue Officer (CRO) pre-product is essential for creating a targeted sales playbook and ensuring market alignment.
Implementing a robust onboarding program for sales teams helps improve performance by ensuring deep understanding of products and processes.
Identifying sales talent goes beyond motivation; understanding cultural fit and decisiveness in hiring are critical for building effective teams.
Deep dives
The Role of Sales Leadership in Startup Success
In the early stages of a startup, having a Chief Revenue Officer (CRO) involved before the product launch is crucial. A CRO can effectively create a sales playbook by leveraging their expertise in sales, which is often beyond the scope of technical founders. They also facilitate vital customer discovery conversations during the product development phase, helping to ensure that the product will meet market needs. This approach helps avoid common pitfalls, such as building a product that no one wants to buy, and leads to a more informed and targeted sales strategy from the outset.
The Importance of Sales Training and Culture
Investing in a structured sales onboarding program is essential for long-term success. Companies should prioritize dedicated resources for training new sales hires, allowing them to fully understand the product and sales processes before being put on the front lines. Assembling a sales team based on shared messaging and a unified approach significantly boosts credibility and ensures consistency. Creating a strong company culture that emphasizes meritocracy and mutual support fosters an environment where sales professionals can thrive and focus on their development.
Understanding and Recruiting Top Sales Talent
Identifying and attracting the right sales talent is a significant challenge that many companies face. The speaker emphasizes that successful salespeople are often those who are willing to make sacrifices and are motivated by more than just money. Effective recruitment involves delving into a candidate's motivations and work history to discern whether they will fit the company's culture and performance expectations. Moreover, leaders must be decisive in their hiring process and avoid allowing personal bias to cloud their judgment, especially when assembling a high-performing sales team.
Collaboration Between Product and Sales Teams
The relationship between product development and sales teams is integral to a company's success. Sales leaders need to communicate customer insights and requirements back to product teams to ensure that the product roadmap aligns with market demands. If collaboration is lacking, it can lead to sales staff encountering obstacles that hinder their ability to effectively sell the product. A well-functioning product-sales relationship significantly impacts revenue projections, as product teams must understand what features are needed to support sales expansion.
Metrics for Success: Balancing Retention and Revenue Growth
Companies need to measure both gross revenue retention (GRR) and net revenue retention (NRR) to get a comprehensive view of their performance. GRR reflects how well a company retains customers and their satisfaction with the product, while NRR takes into account expansions within existing accounts. A drop in GRR often signals deeper problems within the product or service offering that need to be addressed proactively. A successful strategy involves addressing churn while simultaneously generating upsells and expansions to maximize revenue potential.
Chad Peets is one of the greatest sales leaders and recruiters of the last 25 years. From 2018 to 2023, Chad was a Managing Director at Sutter Hill Ventures. Chad has worked with the world's best CEOs and CROs to build world-class go-to-market organizations. Chad is currently a member of the Board of Directors for Lacework and Luminary Cloud and on the boards of Clumio and Sigma Computing. He previously served as a board member for Astronomer, Transposit, and others. He was an early-stage investor at Snowflake, Sigma, Observe, Lacework, and Clumio.
In Today's Discussion with Chad Peet's We Discuss:
1. You Need a CRO Pre-Product:
Why does Chad believe that SaaS companies need a CRO pre-product?
Should the founder not be the right person to create the sales playbook?
What should the founder look for in their first CRO hire?
Does any great CRO really want to go back to an early startup and do it again?
2. What Everyone Gets Wrong in Building Sales Teams:
Why are most sales reps not performing?
How long does it take for sales teams to ramp? How does this change with PLG and enterprise?
What are the benchmarks of good vs great for average sales reps?
How do founders and VCs most often hurt their sales teams and performance?
3. How to Build a Hiring Machine:
What are the single biggest mistakes people make when hiring sales reps and teams?
Are sales people money motivated? How to create comp plans that incentivise and align?
Why does Chad believe that any sales rep that does not want to be in the office, is not putting their career and development first?
Why is it harder than ever to recruit great sales leaders today?
4. Lessons from Scaling Sales at Snowflake:
What are the single biggest lessons of what worked from scaling Snowflake's sales team?
What did not work? What would he do differently with the team again?
What did Snowflake teach Chad about success and culture and how they interplay together?
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