Salespeople are really strugglingOct 03, 2021
This is an emergency, leaders must take note
In a recent poll, 68% of over 1,000 respondents said, that when faced with an opportunity to do a deal with a customer they knew did not fit their ideal customer profile and would be a poisoned chalice for the company, that they’d do the deal anyway!
What does that say about tech salespeople today, what does it say about their incentives, what does it say about the leaders that develop these incentives, what does it say about today’s tech company culture, and what does this mean for buyers?
Here’s my 2 cents…
Tech salespeople today:
There’s a stark difference between product-led growth salespeople and enterprise salespeople. The poll did not ask people to state their category but my guess is the majority were in the PLG category.
In the enterprise due to the size and multi-layer impact of deals at this level, the due diligence is much deeper and involves multiple departments, so technically the opportunity for a salesperson to get a deal through that was doomed to struggle or fail from the outset is less likely - although not impossible, I’ve seen it happen, even on 7-figure contract sizes.
Salespeople, regardless of PLG or enterprise, are under incredible pressure today, as valuations and growth expectations in SaaS in a particular go through the roof. That translates to targets that are harder to hit, but it also translates to leads that stretch the boundaries of the ICP.
I’ve personally always been the salesperson and leader that’s had the strength of character to challenge my manager, CEO or investors to build a culture of under-promising and over-delivering at every step of the buyer journey. However as this poll shows, people that do this are the exception, not the norm, and that says as much about the leaders as it does the salesperson.
Incentives in sales:
It’s all about the money. Often 50% of earnings are tied to deals. And more often than not there is no qualitative metrics it’s just pure revenue. And if there are circumstances that make it harder for deals to get done, there’s no forum for the salesperson to have their case heard.
If salespeople fail, in many cases, they’ll get fired. These incentives leave salespeople with very little room to manoeuvre. It’s no wonder so many push the deal through - getting fired is a harsh consequence for many, especially those without any kind of financial or family safety net.
It begs the question about whether traditional incentives should be upended, and/or whether incentives should make up such a large part of a sales person’s earning capacity.
From the CEO down there are failings. Here are a few:
1. CEOs convince investors of future fast growth to get the valuation they desire, without knowing how to get that growth, but safe in the knowledge they know they can get the valuation.
2. The CEO goes back to the team and dictates the growth goals. What should be a stretch goal becomes a standard target. This is why you see the average performance to target across a sales team dropping to around 75%.
3. Sales leaders that get handed targets from the CEO, accept them, without challenge. This is a huge error that weak sales leaders need to be called out on.
4. Sales leaders let the targets roll downhill leaving no room for discussion. So when a lead or a deal turns out not to meet the ICP, salespeople don’t trust they’ll be heard. And that’s because the sales leader laid no grounds for themselves to be heard by the CEO, and the CEO laid no grounds for flex in the board expectations they set.
At every level, especially in PLG companies, often all aspects of sales leadership are operating sub-optimally. Part of my personal strategy for posting on LinkedIn is to expose this with practical and actionable advice for leaders. For those of you that have opinions on this, I’d encourage you to surface your solutions too.
Nothing about this is good for company culture. In case it needs me to spell out the vicious cycle here it is:
- Salesperson under pressure to do a bad deal, does bad deal
- Customer Success (CS) gets saddled with bad customers which reduce their efficiency (and happiness)
- CS’s ability to renew and upsell their client base is stymied by bad customers both taking up too much of their time, and churning
- Marketing gets a positive signal that their leads that stretched the definition of the ICP worked, and they double down on this action.
- Salesperson is under even more pressure to do bad deals... rinse and repeat.
This vicious cycle forces a deep divide across GTM teams. It’s typically sales that gets fired. If anyone should be fired (unlikely anyone should imo) technically it should be the CEO that gets fired for setting this wheel in motion right? But that’s obviously not going to happen!
What does this mean for buyers?
This is a horrible situation for buyers. You want to believe your tech partner has your back, but according to the poll rather they are passing the buck in 68% of the cases. So this is how you combat it:
1) Request to meet with Customer Success, BEFORE you sign the contract. They are the team that will support you ongoing, make sure the fit is good.
2) Listen to your spiny senses. If you feel like you are cutting corners you probably are. Do your due diligence properly. If it’s not crystal clear the product or the timing is right to purchase this product don’t.
3) Seek a 2nd or 3rd opinion. Involve people internally in your decision, and speak to a like-customer if possible. You’ll also likely know someone in your network that uses the tool, take 30 minutes out with them to get your burning questions out.
Salespeople are not off the hook here, but in my opinion, this poll was a clear cry for help. They do not set the rules and they do not set the culture, they operate within the confines of both the rules and the culture.
Leaders set the rules and the culture. If you’re a leader or investor, make no mistake, these acts are primarily on you.
You have the power and influence to affect these behaviours overnight. If you want to build a go-to-market flywheel, which sustains your businesses and investments over the long term, there’s a 70% chance you need to make changes.
This was a cry for help. Please listen. Please act.