20Sales: Why the Founder Should Not Be the One to Create the Sales Playbook, Why You Should Hire a Sales Leader Before Sales Reps & Why You Should Not Hire Sales Leaders From Big Companies with Matt Rosenberg, CRO @ Grammarly

24:42If you do the research on the company, you could understand a lot about what the boss cares about. What are the core strategic objectives for the business? What are their priorities? And a lot of this is very readily available. If it's a public company, it's all out there. You just read the filings. You'll give you a pretty clear roadmap into what the business is trying to achieve. Once you understand that and then you ask, what is that person's priorities? How does it map to what the business priorities are? Generally, you find some pretty good alignment. The next set of questions is, how is your success measured?

25:13Like, what do you care most about? And how do you know whether you're being successful or not? Next set of questions, what are you doing very well? We start with what's going well because people will open up and they'll talk about it. And then what could you improve? And if it's nothing, that's fine. What are things that are going so well. And why? They'll tell you that. And that's where you're really listening. If you were to fix those things that aren't going well, what impact would it have for you, your business, or how you're measured? That's the question that's always missed by salespeople.

25:42They're just so happy to hear something that they think they can sell against, that they move too fast. Slow it down and ask that payoff question, because if you truly understand what their value is of solving it, Then you'll have a business case, then you'll reduce discounting in the end, then you'll be able to build closed plans, and you'll actually be able to close that customer quickly. And then at the end of it, you're going to keep out with your her, how would you prioritize those issues? Because you need to know what they care most about, one, two, three, and then you have the map to winning the account.

26:12You understand how to win it. If you don't have the information, you don't understand their biggest pain points, what it means to solve them, you're probably going to be on a slow road road to a closed loss in the end. I love it. My one challenge, people aren't always open. And so they won't always reveal that in the most transparent way. How do you make sure that people are open and honest in revealing what's not going so well? What is actually their boss's priorities? How do you get the truth? Well, people will feel comfortable expressing themselves more openly if they believe that you are a trusted partner and have some insight to share.

26:51Right? Are you worthy of getting the truth? And that's just human nature. So if you're doing that research and advance the discovery call and you have a pretty good idea of what their strategic goals and priorities are, you know, start with some insight, bring it back to them. You know, in our experience, we found through talking to customer to potential customers like yours and people are struggling with the following issue. And we also find that with people struggling with that issue, they can solve it through whatever. Or does that resonate with you? And just get them talking. If that resonates with them, you're on the track to issue identification.

27:25And it gets them to open up because they feel, they don't feel alone, they don't feel isolated. Yeah, someone else says that problem too. Well, that's interesting. So do I. Oh, you do. To tell me more about that. And then I'll send you off and on your way. Those things called insight discovery openers is give them something that shows connection, understanding, empathy, and people do open up. I agree with you in terms of empathy and people opening up. I always think kind of vulnerability, breath vulnerability, I'm always quite open to sharing the challenges of my life. The hard thing is also just urgency.

27:55You said there about kind of good discovery can lead to actually good sales cycles. How do you create urgency in a sales process? Because it is freaking hard to move the ball down the field. It's really hard. I mean, like I said earlier on, like if you run really great discovery, you actually create urgency because great discovery points to a business outcome for solving the problem. If you understand the pain and it's quantified in a way where you know if you could solve it your prospect agrees there's this economic benefit that they will realize every unit of delay is equal to some value. So you could actually start to work with them to say let's agree we'll get this done by the end of the quarter as an example.

28:37If it doesn't hit by the end of the quarter and extends a month you know a month's worth of lost revenue, lost time, lost economic value unit equates to, and you start freeing it that way. That does create urgency if only if you understand what that unit is worth to them. If you dull, you're basically playing their game. There's no reason for them to try to jump over their procurement queue to get their deal done faster because you haven't created your agency and you haven't aligned on it. So to me, if you can create and understand that unit of benefit or economic measure, he creates a level of urgency already that wouldn't otherwise be there.

29:14Does that mean you can only create urgency if you sell a painkiller or not a vitamin? It's a lot harder when you're selling vitamins. You can do it and then it comes down to really understanding what their goals are and what achievement and whatever it is you're giving them helps them achieve as opposed to pain reduction. But again, the day it is going to be a lot harder, then it comes down to budget, it comes down to process, it becomes down to really understanding how they move the deal for and holding them accountable to a timeline that they set out early on. You don't have the economics behind you, but you have a timeline and a process in a rig -upon process, and that's hard because that slips all the time.

29:50You're a man to talk to so many. I get a lot of heads of sales calling me and they just say, Harry, every CFO is running budget today. Regardless of whether the cheap product officer, whoever in the company wants to buy the solution, the CFO is just not open for business, Not open for business. Why don't I know what I'm gonna do? What do I do? If you were asked that by a friend who's ahead of sales, he's just facing a brick wall because the CFO's not buying new products. What do you say to them? Yeah, well, I started a discovery process, frankly, and tried to understand what is it they're selling and what is it they're solving.

30:25Because here's what I found with CFO's. The CFO's start oftentimes from a place of I'm not buying because I'm controlling the budget. The reality of CFOs are they are very rational actors. In fact, they're some of the most rational actors within a business. They can be very objective. And if you have something that adds demonstrable value, then they will buy it. So I think it's a falsism to say, my CFO is going to block. What that says is you haven't done a good enough job of showing the value and you haven't made it a priority for the organization. It also says you haven't brought the CFO along in the process and that's a huge exposure point.

31:01One of the things I always tell my team is keep your eye in the CFO. You have to get this to their desk in front of them and understand what they care about. How do you bring in the CFO without making the other side feel a bit of a second -class? This is then, you know, Matt, it's great to get to know you, but can we bring in your CFO because I know who the real boss is? How do you get around that? Well, you don't say it like that because that's gonna get you in trouble. And we learned that there are front -lookers part of our process for you to be successful. We found that we collectively need to engage the CFO because the CFO at the end of the day is the person that's like, prove the process or not.

31:40Being very clear about your process upfront and giving them a roadmap to how the deals get impressed is exactly how you bring the CFO. And then sometimes say, look, we're not going to continue the less than until the CFO is engaged because we've seen all too often that these deals will fall apart if the CFO isn't involved. And I don't want to waste your time. I don't want to waste my time. It's a very hard position to take. I was called the power position. But if you know the CFO's going to be there and you don't take it, you're just going down a long path to lead to a very unfortunate outcome.

32:11Pull it for be clear, be transparent, bring the CFO in and you'll have a lot more success. But if you know it's out there and you avoid it, you're really not serving yourself, your investors, your founder, your business, you're not doing them any good. Discounting. Often, CFOs come in and say, hey, Matt, love it. But I'm adding a thousand seats to relatively big customer. I want some discounts. How do you advise heads of sales on discounting? When not to it? And lessons from your experience? Yeah. So let's start with the Utopian state and then we'll work down to the realistic state. Okay. The Utopian state is, well, I've done such a fantastic job doing discovery, uncovering pain, demoing perfectly against the pain point, quantifying value, putting up pricing that has a huge ROI, I don't need to discount.

32:59Now I'm going to hold firm. Sure, that's great. Let's call that the Ethiopian state. Let's say you run a perfect process. Some percentage of deals you just don't have to, right? The reality though is oftentimes even the company you're working for has a tradition and habit of discounting at the end of quarter. So you sort of set the market up for the discounting conversation. That's a hard one to overcome because everybody's waiting. You're under pressure. You have to hit your number and inevitably your face with, should I discount to close or not discount to close? That's a very personal decision for the sales management team and whether to do it or not.

33:34I have discounted in the past. This is true. There will be something that is so important to the business that I need to do it. And that's the reality of it. Like there are times when you will be forced down and discounting path. And you have to make the top calls. It may not like it, but at the end of the day, if you're gonna do it, just do it with principle, do it with guide posts, do it so it doesn't get out of control. Make sure the customer understands exactly why you're doing it, so it's defensible, and you try to ring it, right? Like, put a fence post around it. Otherwise, it does get out of control.

34:04It's a big problem. Out of control is like more than 50%, more than 10%. What's like, oh, if it goes above the ax, they're really asking for too much. Yeah, I mean, a discount is a concession, so you could start from a place of any discount you want to contain because you really shouldn't discount your product if you're solving customer issues and you're pricing it appropriately, right? You know, 10 to 15 % discount or more is a problem. Like I think 10 % discount is really where you want to be at all. And from there, you're looking at a slippery slope because 10 to 15 all of a sudden becomes 30, becomes 50 and then you're at a really bad spot.

34:41So you look at the root causes for why you're scanning in the first place. It's usually a process issue. It's usually a product issue or a pricing issue. In terms of process that you mentioned there, you said a brilliant thing to me early. You said let the data speak and guide your process. It was a bit of a cliffhanger, honestly Matt. I was wondering what he meant by that. Can you unpack that for me and how it leads to your thinking? Yeah, I mean, there's a lot of ways to use data. My job is to sell data to make everybody wildly successful. Like when I will tell my teams where they join me is like, my job is to get you set up for the next best job.

35:17So my job is to develop your talent and make you incredible at what you do. To be incredible, what you do, you have to understand the data of every single person in your organization. Because if you're understanding what that process is and where the gaps are in their process, the data will tell you that. It will tell you, for example, a sales rep is really struggling with discovery. They're losing at a much higher rate in the discovery motion that another rep, Boom, I'm in there, I'm helping them, I'm diagnosing the issue, I'm getting them out of that hole onto success. The average time to close, win rate, loss rate, average time to access, the data is telling you a million stories about your team.

35:56Your job then is to figure out how do I coach and develop talents so they can overcome those roadblocks to become wildly successful. Data will also tell you your sales process as a whole. Is it working? Is it not working? Where do we slow it out? Where can we speed up? What's happening? I'm pricing. and my discounting, my not discounting, and my upselling cross selling expanding. They will tell you all about it. Leave and tell you your sales motion. Where do I invest my time? For example, I'm a big believer in connecting dots on data to be able to prospect efficiently and effectively. An example at Compass, a company I was at prior to coming to Grammarly, all real estate data is public.

36:33So you could see every real estate agent when they did a transaction on the other side, who the other person was on the other side. I could understand the person on the other side who was a prospect. I could see into their data and understand their volume was their business increasing, was it decreasing. I could then ask my customer to enjoy working with this prospect and where they willing to make an introduction to that prospect. I could do that all the background with data. If the answer was yes, in Salesforce, those opportunities would be surfaced to my sales team. So they would know exactly who to go after.

37:09So these are all different varying degrees of how to use data. But at the end of the day, data, if you're a great zero or a great revenue leader, use it. It's your friend. It'll guide your team, your process and your individuals to success. Do you think prospecting is done well, Staten Mass? I love that in terms of how you break that down. I don't see that level of thought bluntly very often. No, it is not done well. If you just check my LinkedIn messages, it is done very, very poorly of a quick aside where it's done really well. So this will give all prospectors out their hope. I actually came to Grammarly in the most unusual of ways.

37:44I got a cold email from the CEO of Grammarly and the CEO of Grammarly reached out to me with a very precise message around his interest in talking to me because of a number of different reasons based on my background and it was a cold outreach. And I read the email and I was like wow that's a very interesting approach. I understand what they're looking for. I believe there's a good conversation to be had. I picked up the phone and here I am as serial grandma. But so I think that kind of prospecting is incredibly effective, but really understand your message, understand the person and the other end, do your homework at works?

38:21Where does it work is what's happening today? Policeration, AI, prospecting, proliferation of, I know you may have a problem with pipeline. Do I, how do you know it? A problem with pipeline. I'm insulted now. Don't tell me other problem. because I don't. You know, it's like all these things that go wrong today, people are just putting back at you. I love that in terms of the email from the CEO. I had no idea about that. So that is like fantastic. And what also, like what humility respectfully, I don't know many CEOs that will do that quite frankly, especially not at groundless scale. I loved it for so many reasons, not the least of which is the humility and the non -alpha nature of that leader to be able to be like, hey, I'm looking for assistance here.

39:02I think you're an interesting person to talk to. Let's have that conversation. I just loved it. You mentioned data and also kind of identifying upsell and expansion. Customer expansion is hot again. How do you view this? How do you think about this? And what do you think you see that others aren't mad? Yes. First of all, isn't it crazy that it wasn't task? Can you imagine a world where it wasn't the thing? Oh, it's so much easier to expand and retain a customer that go get new, but everybody, All the glory is on NetNew, which is fine, but anyway. Why do you think that was? Do you not think it was just because it was easier?

39:36There was so much people with new budgets and there was so much free money going around that actually just a NetNew customer was a win for the person, and show me the incentive, I'll show you the outcome. The incentive mechanism was set up to reward that. Yeah, I think that was a huge part of it. It was also how investors thought about the value of the business and was their product market fit and all those things sort of led to this emphasis just on that new when you have this unbelievable opportunity with your install base of customers who have already raised their hand. They said, I like the product.

40:07I want to use the product. And if you're not paying a lot of attention to how did all the opportunities to continue to expand it, you're missing the huge opportunity because it is all there in front of you. And by the way, those reference customers make your net new acquisition a lot easier. And by the way, helped you dramatically reduce discounting because when people hear the reference stories of all the benefit that they get from the solution, you essentially create the urgency around the solution, the need around the solution, the conviction it's the business case you've laid out, and therefore, their motivation to hold you to have your discount, it ends up dissipating.

40:43That's natural, that's human, right? You want the solution more, so you'll do more to get it. Matt, you see our... Grammily. Grammily was the ultimate PLG. It was the ultimate consumer product led, amazing while moment scaling into enterprise. Moving from a consumer grade product to an enterprise sales led product in many respects is really hard making that transition. What do founders not know about moving from consumer to enterprise that you just really think they should? Everything. I've done it twice. I was at Eventbrite. The event break was a $30 million product -blade growth company. I was brought to come in and build out enterprise motion on top of it.

41:24Grab really the same. Everything about enterprise versus product -lit is different. Language is different. Messaging is different. Positioning is different. Customers are different. Product is different. Pricing is different. It really is a very different business. The difference is, it has to be reconciled against the strengths of product -blade growth because they have to work together in their can't be cannibalization, their can't be conflict. But founders need to understand it's a very different business. It deserves different levels of staffing, different types of staffing, different capabilities from the marketing team, from the product team, from the security teams.

42:00And it's a very hard thing to do to build on top of the very successful motion. Because again, the data will guide your enterprise motion because you have a lot of data coming out of product -like growth. How do you use that data to build a brand new enterprise motion is going to be unique and different. How you position and market is going to be different than what you've done on the individual or consumer side. But it all again has to work together. And so it is a very complex but achievable thing. But it is hard and better. It's all different. Given the scale of just everything is different, how do you think about advising founders on wins the right time.

42:39You don't want to go to early, distract resources, distract team, but you also don't want to go to late, essentially let competitors then leave money on the table. How do you think about the right time? Yeah. There's a point where you really understand your product led motion where it is measured. It is calibrated. You know what dials to turn to be able to optimize, spend against acquisition. You understand how to optimize retention, your retention, a life cycle, no motion is going to the point where you feel like you have some control. When you feel like you have some control, you'll never feel great.

43:16When you feel like you have some, that's the time. I wouldn't encourage you to wait till it's perfected, but I would encourage you to wait till you feel like you control and visibility into the motion of the business, and then I start on the other side. Is there a way to test it without committing a huge amount of resources? Steve Y. Vanta said it, she liked to wait to dip your toe in the water, so to speak. If there are a way to do that, or do you have to fully commit full scale, we're going to be going on to price. The testing happens organically. Like the testing is already there. It's in the data.

43:47Because like so, for example, at Eventbrite, you started to see very large organizations adopting Eventbrite and deploying it in enterprise -like ways. At Grand Relay, you see the proliferation, I think, at Compass, my alma mater, 30 ,000 employees, there were 3 ,000 people using Grand Relay. It's there. It's in the enterprise. If I were to look at almost any enterprise, Grammarly's there and in a lot of product led motions It already sits in the enterprise people are bringing their applications to work more and more The signal's already there. It's already sort of being proof it out that it can be used in that environment Now should it always be used in that environment?

44:24No, is it optimized to the environment? No, but there's enough signal That you don't really have to tip your toe in because your toe is already in the water You just gotta see it and understand her for what it is. I find incentive mechanisms foundational but also really challenging when we look at a product like Grammady, incentives especially in comp structure. Where do they go? Because you've got a PLG motion in a lot of ways that can get it into the hands of the end user which gets it into the enterprise in the first place. Is the sales leader can really turn that from a customer into an enterprise customer?

44:56But then CS can also do a lot in terms of upside down expansion. How do you think about especially in this new world of PLG to enterprise in that transition? Where comp structures and incentive mechanisms should be placed? Yeah, it's a very hard one because cannibalization is the trickiest of all issues that you have to wrestle through. But remember, selling an enterprise license is very difficult and it's very different. And the product -led motion into an enterprise is very different than selling an enterprise agreement where the enterprise sanctions supports and budgets for your solution. That deserves compensation.

45:33Separately, just getting an enterprise license in an agreement and then expanding it across the whole business is difficult as well and that deserves compensation. The unique aspects of the same value chain start all the way through expanding to the whole enterprise, but each of those things are different in and of themselves, complex in and of themselves, and do require a degree of specialization that warrants that kind of compensation. Does that make sense? No, it totally does. Why don't we do a quick fire and we can rock and roll from that? That's not good. So what sales tactics have not changed over the last five years?

46:06Uh, well great discovery. Never changes. It's always important that would be number one. What sales tactics have died of death? Yeah, cold call. Who picks up their phone? Like literally. Who picks up their phone? What one piece of advice would you give a new sales leader today starting a new role? My piece of advice would be, and I do this for every role, I create a very detailed list of questions, the question rubric for individuals, every line of leadership within the business, every function within the business. Same set of 20 questions. I go and I ask the same questions over and over again to every person in the business that I can't because what happens is it speeds up your rate of learning.

46:45There's pattern recognition that ever is. you understand strengths and weaknesses. And I think spending that time, it's painful. Asking the same questions over and over again, but if you just map it out, you'll see the organization ways that you would take probably six to nine months to see, but you can do it within 30 days. Penaltimate one, what would you most like to change about the world of sales? I'd like to see more women in sales leadership roles. If you really want to find a great sales executive, hire a mom, hire a mom because they know how to multitask They know how to drive behavior, they listen, they empathy, all of these things.

47:23I think it's very hard for women, particularly younger mothers to be successful in this field because there is a level of alpha. There's a level of, you got to grind, you got to put the work in. If you want to find efficiency, find the mom. They will be the most efficient people on the planet or dad. I don't need to be discriminatory with moms versus dad, but find a parent, particularly a parent of young children. more stuff will get done in an eight hour block than you could imagine. That's what I like to see. Final one for you. What one company sells strategy have you most been impressed by recently?

47:55Yeah, I'm always impressed by companies that make markets, that sort of take something and make it into something that they then own. I think you'd have to look at GON. I'm just amazed at what GON's done. Now it's very common in my profession. Everybody records calls, everybody breaks down the calls, every sales leader leverages the application. So kudos to them for not only creating a technology but then creating the market the brand all of it I think they've done an exceptional job. Matt, this has been such a joy Thank you so much for being so flexible with my questions, and I've absolutely loved it Thank you.

48:28I am as well and it's it's an honor to be here. Thank you, Harry You know sometimes I can't believe podcasts are free and sometimes I just rate my own Matt was incredible That was such a good discussion if you want to see more from us Of course you can on YouTube by searching for 20BC, but before we leave you today, outreach is the only AI -powered sales execution platform that unlocks seller productivity to help sales teams efficiently create and close more pipeline. From prospecting, to deal management, to forecasting, their platform leverages automation and artificial intelligence to help revenue leaders increase efficiency and effectiveness of all go -to -market activities and personnel across the revenue cycle, An outreach is the only company to offer sales engagement, revenue intelligence and revenue operations functionalities in one unified platform.

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50:30As always, I so appreciate all your support. I so love doing this show. So let me know what you think on Twitter and Harry's Stebnings and we have an incredible episode with Guillermo Vassalon Friday.