Sahil Mansuri is the founder and CEO of Bravado and today we discuss the state of B2B sales. We dig into the elements of how we manage and compensate sellers that are broken, like quota and commission plans. And we exchange ideas on how they could be fixed. Sahil is moving full speed ahead to challenge the status quo in sales. We need more voices like his. Don’t miss this conversation.
Andy Paul: Sahil. Welcome to the show.
Sahil Mansuri: Thanks man. Thanks for having me.
Andy Paul: It’s good to have you. Um, so you’re up in the midst of, uh, the apocalypse in the Bay Area.
Sahil Mansuri: That’s right.
Andy Paul: Permanent nighttime.
Sahil Mansuri: Yeah. We, uh, we recently painted the, uh, sky orange, you know, the Golden Gate Bridge has been such an icon for San Francisco that we decided to see if we could, you know, expand the reach and appeal of it throughout the entire city.
Andy Paul: Yeah. If people are listening to this, they understand what the hell are we talking about? We’re recording this at the time fires are blazing all around the Bay Area and the sky is sir, permanently dark for like that damn, total eclipse even the middle of the day.
Sahil Mansuri: For the first time I think we might get some believers in this whole climate change thing. Let me say, I hope so.
Andy Paul: Yeah, I think California will be the proving ground for the whole thing, unfortunately. So, so, uh, and you’ve, you’ve got, you’ve got so many things going on. You’ve got, your raising money for your company. You’ve got a new child on the way to.
Sahil Mansuri: That’s right. It’s uh, you know, not, not satisfied with the joys of raising a startup from the ground up, decided to take on human life at
Andy Paul: A human startup. Yes. Love it. Love it. Well, that is a wonderful adventure. So, and eventually they grow up and they become like my producer, my son. Who you just spoke to, so, um, hopefully that, that could be your case. The family business. All right, we’re gonna, we’re gonna, we’re gonna talk about sales. I know surprise sales podcast. We’re gonna talk about sales, but I wanted to have you on the show because yeah, to my mind, you’re one of the few people out there that are really thinking, I’ll say big thoughts about how sales needs to change and evolve as we move forward. And we’re going to talk about it in multiple dimensions and we’ll start with one of your favorite topics, which is I know quota. And you weave in compensation and free agency and all sorts of things into that conversation. But let’s just start with the concept of quota itself. Is it still valid?
Sahil Mansuri: Yeah, I think it’s important to start with what is the history of quota. Where did it come from? How does a company set one? And how does it end up in the hands of a sales rep in the first place? So at most organizations the way the quota is created is you’ll have a CEO who sits down with the CFO and their VCs or their board members and we’ll say, “Hey, how much revenue do we need to generate for this business next year?” And then they’ll say, okay, well last year we generated 3 million, next year we want to show at least 3X growth. So let’s say it’s $10 million. And they’ll say, okay, great! So we want to make 10 million. And so someone will write the number 10 million into a spreadsheet. And then they’ll say, if we need to get to 10 million, and right now we’re doing 3 million, how are we going to get there? And they’re going to say, well, we can’t get there right away. So we gotta ramp up. So maybe in Q1 we’ll do a million and a half. To Q2, we’ll do two and a half million. To Q3, we’ll do three and a half million and Q4 we’ll make up the rest. And so they’ll say, Oh yeah, that sounds like a really good ramp, fair plan for people. Then these numbers settled and they’ll break them out into monthly targets, whatnot. And then they’ll call in the VP of Sales. And they’ll say to the VP of Sales, Hey, guess what? You’re now responsible for hitting $10 million. The company has decided that next year we want to hit $10 million in revenue and you’re going to make a plan to get there. And the VP of Sales because, uh, of stockholme syndrome is going to say, okay, well, got to got, gotta make it happen. You know, like we’re going to, you know, do whatever it takes, you know, always be closing. Some other attributes of running through brick walls and so they’ll go out and they’ll make a plan around it and they’ll say, all right, well, right now I’ve got 10 sales reps, and each of them has a 300K quota. That’s how we got to 3 million last year. Maybe now, what I need to do is I need to get to 30 sales reps with a 300K quota, and that would get me to a 10 million. And then the company will say, well, we don’t have the money to hire 20 more sales reps. And I’ll say, okay, well, you know, how much money do we have? And I’m like, well, you know, maybe we can get five more reps. You’re like, okay, well, so I don’t know, 15 reps, 10 million. Yeah. Let’s see. Maybe I need to give each one a 50% bump in quota and then we can get there. And so all of this is just done in spreadsheet math. And what I’m describing, what I’m describing right now if you’re listening to this podcast and you’ve never been a CEO, you’ve never been a board member, you’ve never been an SVP of Sales or a CRO. You’re listening to this and you’re thinking, what the heck is this guy talking about? Like, this can’t possibly be how my quota was decided.
Andy Paul: I’ve been a party to this, yes. On the receiving end of this on multiple occasions.
Sahil Mansuri: That’s right. And then if you are a VP of Sales, SVP of sales, CRO, a CEO, a founder, or a board member, you’re listening to this and you’re saying, of course, well, that exactly, that’s exactly how it’s done. Like, how else would you do it? Like the company needs to set the strategy and the company needs to make these decisions like-
Andy Paul: How else would you do it? Right? No logic or analysis, but just this is how you do it.
Sahil Mansuri: Yeah. Well, right. And thenthere is a place for alogic and analysis to be clear, you know, we haven’t gotten to that part yet though. All we’ve gotten to so far Andy is setting the goal. Now we’re going to use logic and analysis because we’re going to say, okay, well, in order to make that happen, you know, we’re going to need to increase our lead volume by X and we’re going to increase our pricing by Y and our close rates by Z. And by doing that we’re going to be able to get from 300k per rep and 3 million a year to, you know, 600K per rep in 10 million. And so, you know, the, the entire system is fundamentally broken from the ground up. Quota is nothing more than a aspirational number that someone drew up in a spreadsheet. And unfortunately it has real world consequences. Uh, and the real world consequence is, uh, an incredible amount of stress on the life of a sales, professional, unfair, unrealistic expectations of the sales team. Grazing of, uh, pricing to levels that are unsupported by the demand of what customers are willing to pay. A shortening of sales cycles beyond reason. Pushing deals through the funnel discounting multi-year, you know, all of this sounds really germane to sales, but actually all of it is taking the exact wrong approach to the way we should be thinking about sales, which is that we should be putting our customers first. And I think that, and I think that’s like the core of what provato as a company stands for. What I, as an individual stand for is to say that the entire system of sales needs to be rebuilt from the ground up in order to put customers first. And if we’re going to do that, we’ve got to start by. Listening to our clients in the market for how quotas are set and how we think about achieving goals rather than trying to artificially draw numbers on a white board or a spreadsheet.
Andy Paul: Yes to all that. Um, yeah, sales is broken in so many ways and that break has been accelerated over the last 10-15 years. So we start with this idea of quotas. Quota ties into so much of what you were talking about and so much of sales, but you said, you know, let’s go back and think about quota, I mean, quotas really a labor concept, right? As we used to pay laborers, in some cases still do on piecework basis. And quota is basically this sort of very old fashioned system of we’re paying you a piecework. You do this thing and we’re going to pay you a certain amount for that. And there’s so much written in sales these days about how we improve performance and so on that people always want to tie it to quota. And it really has those two things are completely disconnected, performance and quota.
Sahil Mansuri: Yeah. I mean, I think about it this way. Imagine you went to your design team at a company and you said, Hey, look, um, we’re going to pay you, you know, $6 per pixel that you draw that we implement on our landing page, or we’re going to pay you 150 bucks per page that you designed. And let’s say that you actually convinced them to do it. Let’s ignore the ridiculousness of the example. And let’s just say you got people to do that. Do you think the quality per page would go up or would go down? If we were to say, Hey, we’re going to pay you per page. I think every single person would know the answer that is obvious. I mean, if you tell someone I’m going to pay you in volume, then I’m going to increase the volume in order to increase by payment, even at the end expensive quality. And that’s exactly what happens to the sales process. That’s what happens to our customers. That’s what happens to our. Uh, uh, you know, the relationships that we build is sales has become a volume game. It’s how many emails can you send? How many calls can you make? How much pipeline do you have in your forecast? Uh, how many deals have you closed? How many contracts have come in? How quickly have they come in?
Andy Paul: Well, it’s gotten worse than that though. So in sales right now, at least in practice, by let’s say SaasS companies and so on, which is increasing segment of sales is they’re just playing the odds. I mean, you take the logical extension of, of everything being a number is selling really stopped to some degree because we know that if we can just create enough activity, we have a certain percentage that will convert at each stage. We just need to put more into the top of the funnel to hit a certain target. And so we’re just playing the odds and it’s like, okay, what about actual selling?
Sahil Mansuri: Well, well, I mean, you know, don’t get carried away, Andy, right? Like-
Andy Paul: Don’t sound so old fashioned. You actually want to sell something. Your example about the pixels on pages- so there’s, you may be familiar with this there’s a, was an English economist back in the sixties and then Charles Goodhart. And he came up with this formula called Goodhart’s Law. And there’s been papers don on it to prove out this, but his law was, is that when a measure becomes a target it loses all value as a measure. And so you think about that in the context of quota and the reason that loses all value as a measure is because to the point you were just making about the pixels on a page and so on is you optimize your process to achieve the target. And so it loses value as a measure because you don’t really care about optimizing productivity. You care about hitting the target.
Sahil Mansuri: And I guess, you know, another really famous, uh, uh, you know, economists W Edwards Deming has a lovely quote on this as well, which is, If you give a manager a numerical target, he’ll make it, even if he has to destroy the company in the process.
Andy Paul: Yeah, well, he’s got another similar saying, which is that,every process is perfectly designed to get the results it gets. And I don’t think there’s ever a truer words ever spoken about about sales. Every process is perfectly designed to get the system. It gets.
Sahil Mansuri: And I guess where we need to go back to, so, okay. So I think we can spend a lot of time talking about all the reasons why quotas and commissions and the structure itself is fundamentally broken. But the, the immediate outcry that comes out is in one of two flavors. The first flavor is. The reason I got into sales in the first place was because I wanted to make a lot of money and sales gives me the potential to make a significant amount of money and I’m taking on the risk. Uh, yeah, I’m willing to barter the risk because the payment, the payout is worth. Um, and. Every company has its stories of the sales reps that, you know, hit 400% of quota and made 500 grand in a single paycheck back and, you know, flew to Mexico for the weekend and got a Rolex and a Ferrari and P club and this and that, you know, sales is, uh, always glamorized, but unfortunately, there’s this messy thing we have called a data and reality. Um, and so let’s talk about that for a second really quickly. Just, just, you know, it, it reminds me, I really liked what you said about it being an odds game, because in many ways, people don’t realize this, but sales is a lot like playing the lottery.
And you’re saying, Hey, I’m going to, I’m going to risk in order to try and get a big reward. And, you know, sometimes you, you play the lottery and you don’t win, but like, that’s why you keep playing because you keep playing next one in order to hit the big one. And a lot of sales reps see their role that way they see themselves as, you know, kind of getting ready to hit that really big deal. That really big paycheck. That’s going to make all the, you know, pain and sacrifice worth it. So let me give you some stats on this.
Um, in, uh, 2019. So this is last year, right? This is not 2020, you know, recession and economy and COVID and whatnot. 2019 economic boom, you know, stock prices higher than ever. Everyone’s employed, et cetera. 53% of sales reps missed their quota. So more than half of sales professionals missed their quota. Um, the average tenure for a sales professional is less than 12 months. So just exactly 11.4 months is the average tenure for an account executive and sales, the average tenure for a VP of sales- famously Selling Power had an article in 2010, June 2010. I just looked it up a couple of days ago. The tenure for a VP of Sales was pegged at 27 months back in 2010. So in 2010 average tenure of VP of Sales was 27 months and it was heralded. The front page of the article was there’s a crisis because the average tenure for a VP of sales has plummeted. Has plummeted. It used to be 48 months. Then it was 36 months. Now it’s 27 months, you know, heaven forbid it should ever break below 24 months. You wouldn’t even stay at a company for two years as an executive level member of the organization.
Andy Paul: You don’t even get through two full business cycles. Yeah.
Sahil Mansuri: 17 months, Andy. 17 months is the average tenure for a VP of Sales. So, okay. So, so, you know, 53% reps, aren’t making quota, they’re getting fired in less than a year and VPs of Sales are out in 18 months. And so what system is it that you’re so passionate about preserving? Because every time that I’ve ever sat in on a conversation, which, you know, because I both angel invest, my wife is a VC, right? I’m the CEO of a company that has a board and has raised $15 million in funding. And I’ve been a VP of Sales at four different times. Every time I’ve ever sat in on a conversation that has to do with sales compensation. I can assure you that any time rep makes a lot of money. Immediately, there’s a conversation of, okay, cool how do we make sure that that doesn’t happen again. Because, because you may think, Oh, the sales comp plan is incentivized for me to go and kill my number and so that I can make a ton of money, but let me promise you this. That is not what is happening at the executive level of your company. They are seeing it as great advertising and fancy spiffs and, and, and, and handouts cause they know that 50% of your colleagues are not even going to make their OTE their base. And so, because they’re not going to even make their OTE they can afford to pay out a little bit more on top and this like, you know, kill or be killed, uh, you know, zero sum game mentality that we have in sales is not a profession it’s mercenary work.
And I think that the sales profession is, is long overdue to have the same sort of institutionalized professionalism, as by the way, every other one of your colleagues at every other department has whether they’re in marketing or in HR or in product or design or engineering or wherever they work, finance. Every other department in your company is treated like a profession, but you, my friends in sales are treated like mercenaries and the entirety of our existence. And I think you and I share this mission, is dedicated to putting professionalism and respect back into sales. Instead of it being seen as this commoditized marketplace, which you insert a quarter and get a dollar out, otherwise you just throw the machine away and get another one.
Andy Paul: No, no. Yeah, absolutely. I was just getting further depressed, listening to you, but, um, is, is, you know, in your sort, as opposed to, if you were put on LinkedIn about. This whole issue is his fundamental issue. And I, I agree a hundred percent is that compensation for sellers is not tied to value created. So there’s a fundamental mismatch right there.
Sahil Mansuri: Yeah. I mean, look at it this way. Um, if you are a company. And so this is, and maybe this is the, you know, so again, a lot of problems, right? So what’s the solution look like? So let’s start with the very beginning. Somebody started your company likely wasn’t you, because most of the time in sales, uh, you know, sales is seen as an afterthought in the Silicon Valley. Uh,
Andy Paul: I’m the classic afterthought. Yeah, go ahead.
Sahil Mansuri: Yeah. Right. Um, but. You know, likely a couple engineers or, you know, an engineer and a product person came together and started your company. When they started that company they did so with the mission to solve a problem, that’s how every company starts. Just to be clear, you start, you start a company because you see a problem in the world and you say, I can build a product, a service, in order to fix that problem. And so you you had at its core problem solving. And so the first step is you invest a lot of money and energy into engineering and to design and to product in order to create a product, create a piece of software or hardware, often software in our, in our terms, a piece of software that can solve a problem that people face. So people have a problem. My software can solve that problem. Great. Let’s take an easy example. Let’s let’s pick one just for the sake of going through this. Let’s call it a commission tracking software, right? Every, every sales leader knows that tracking commission plans and comp plans is a nightmare and it’s hard to calculate. You have different variables. And so, you know, big Excel spreadsheets, and you’re always trying to figure out, do I have the right one? You know, so there’s a bunch of companies out there exactly is a big one. There’s a bunch of new ones now, Spiff, QuotaPath, uh, um, Concert, you know, I see them popping up, that are trying to take on this problem. And so, you know, all of these folks who started these companies thought, you know what comp plan calculation and comp is setting the right comp plan for our company is really, really difficult. And so I’m going to build a piece of software in order to solve it. And so they come out with the product and then the next thing they need to do is awareness. Right? You need an audience. So, you know, there’s a three step formula for any creator. Step one is to make art. Step two is to get an audience to see that art and step three is to get paid for making that art. That’s the three-step creator formula. Step one is you gotta make the art that’s making the software. Second step is to build the audience. You need to get the people who are responsible for making company the are calculating competence, notably VPs of sales, sales ops, sales finance, et cetera, to become aware of your solution. And that’s where marketing often comes in. And so you start to, you do some marketing, you make some landing pages, you run some paid ads, you do a bunch of things, partnerships and sponsorships and whatnot in order to get the word out about what your software does and how it solves this problem.
And then once you have an audience and you have people who are curious about your software, then the job is to turn those people into paying customers. And that’s where sales comes in. And so sales, his job is to take the people who are curious about your software and turn them into paying customers.
And here’s where the equation starts to break apart, because that actually makes a lot of sense. That’s very logical. What happens if you don’t have an audience? So what happens if you’ve made the art, but people don’t care, they don’t show up. You’ve got your big gallery, you know, opening day, you’re standing there and no one’s in no one’s in mind.
Well, what companies have realized no, no big deal. I’ll just hire sales. I’ll just, I’ll just hire a bunch of people to go run around town, handing out flyers, knocking on doors, you know, interrupting people on the street and saying, Hey, Hey, Hey, Hey, there’s a new art gallery over here. Well, it turns out that that is really freaking annoying.
It turns out that’s a really annoying intro pushy process. The entire formula was built so that you would have companies that would make the art. Then you’d have marketing that would drive demand and then you’d have sales that would convert that demand. And where everything is broken today in our world is that there are too many companies not solving real problems because you know, either the buyer doesn’t care about this problem or the buyer doesn’t, you know, have any interest in this specifically. And, and they don’t have a way to market their product. They don’t have a distribution strategy. They don’t have a user acquisition strategy. They don’t have a, uh, go to market strategy. And so they replaced that with cold outreach, with tons of emails and calls and, you know, LinkedIn messages and whatever bombarding their prospects with annoying intrusive messaging in order to corral them into a sales process. And to me, this is the fundamental breakdown in sales is that now all of a sudden you have these armies of 22 to 25 year olds who are being told the way to get into sales is to sit there in front of an Outreach or a SalesLoft or a Xant or whatever it might be, fire a hundred calls, send a thousand emails and blast canvas the market in order to try and drive demand. And all in the spirit of, we want to solve problems for customers. You know, like I think there’s just such a fundamental misalignment between the core ethos of why the company was built in the first place and the way that they treat the very people that they built their solution for.
Andy Paul: Yeah, I’m just taking it all in. Um, Yeah. So absolutely and there’s lots of knock on effects from that behavior. And it’s certainly been, uh, exacerbated by sort of the tidal wave of sales technology that sit on the market that, you know, we sort of lost the thread is, is, uh, I remember being told by my one of my parents growing up, I forgot which one was, they said, you know, just because you can do something doesn’t mean that you should. And just because we can do all these things with our sales technology, it doesn’t mean that we should. But that’s sort of the way they’re used. I can do this, therefore, Hey, let’s do it. Lets carpet bomb what’s going on out there.
Sahil Mansuri: Yeah. And, and I can understand the temptation, you know, because again, uh, the hard work, the real work would be to say, okay, Well, how do we organically create demand for our product? How do we help customers come to us, uh, and become aware of what it is that we’re doing? How do we build a product that’s good enough that people actually want to come to us and buy it, but nobody’s,
Andy Paul: The whole, this, this precedes you know, the last 10-20 years. This is, you know, the whole sort of, um, yeah, I call it the macho ethos of sales about prospecting, right? I mean, we’ve, we’ve got a whole, uh, sub-industry that’s grown up about. Prospecting, uh, when it’s, we all acknowledg we need to have prospects, but it’s become like this, uh, this test of manhood almost.
It seems like, uh, how committed you are to it.
Sahil Mansuri: That’s right. That’s right. And, and, and here’s the thing. If you look at, what, if you ask any sales leader, you know, who do you want out there? Prospecting accounts, who is it that you want out there drumming up new business, you’ll get answers like, um, you know, I want, I want someone who never takes no for an answer. Someone who’s got a lot of going has got a lot of grit, a lot of stamina, a lot of.
Andy Paul: An extrovert. A hunter.
Sahil Mansuri: A hunter. Oh man. Uh, let’s come back to Hunter. I’ve got a good concept on that for you, but yes, Hunter, and then you go to your buyers, you go to your customers and you say, what are they the attributes of the sales professionals that you would like to buy something from?
Andy Paul: You want to buy from a Hunter, right.
Sahil Mansuri: Yeah. You want to buy from someone who never takes no for an answer. Right? That’s, that’s what I’m looking for. Um, you know, and it turns out the qualities they list are things like someone who’s patient, someone who’s kind, someone who’s deeply technical and an expert in their industry.
Andy Paul: I’ve got a summary. It’s like curious open-minded problem solver.
Sahil Mansuri: I liked that. Curious open-minded problem solver.
Andy Paul: That’s what they want.
Sahil Mansuri: That’s really well-stated. And I think, you know, we have somehow lost the fact that the very people, people that were trying to hunt, so Hunter let’s come back to that really just cause it’s fun. So, you know sales has this endemic knowledge of terminology, lexicon, you know, hunters and farmers. And hunters, someone who traditionally is someone who’s out there, a new biz, right. New business drumming up and getting new clients and, um.
Let’s talk about what a Hunter does. Like what does someone do when they hunt? Like, I like an actual Hunter, not, not a sales Hunter. Uh, the way a Hunter operates is
Andy Paul: Take duck hunting for instance.
Sahil Mansuri: Sure. Let’s take duck hunting. So here’s what you do. You dress up, you dress up in and camouflage yourself to look like a tree or something, and then you emulate the noise of the animal to trick it into flying into the air and then you shoot and kill it and then you bring it home and you eat it
Andy Paul: Well, you must, you must, you must depart though. The critical part is that. You attract the ducks to come where you are. Because this is the irony is people think about hunters and going out. It’s like big game hunting shirt. Maybe you’re stalking though. You’re doing it in a caravan with a bunch of guards and so on. But you know, I, I, that’s why I used the analogy, duck hunting, you sit in a duck blind and you blow your duck calls and you wait for the ducks to come where you are. And increasingly deer hunting from Wisconsin state where a lot of, you know, deer hunting goes on in the upper Midwest and people do the same thing. They build, you know, deer stands, where again, they wait for the animals to come by them, which sounds a lot like inbound leads, FYI.
Sahil Mansuri: Right. And, and, and that’s kind of the point, right? Is that whether , first of all, I love what you’re saying around, you know, building ways for people to come to you. But I think the entire metaphor is, you know, contentious because it’s you versus the animal. It’s like you stalking your prey, it’s, you know, you defeating something. And, and I think that what’s different in sales is that. You’re trying to build partnerships and relationships. These people, aren’t some blend that you defeat in a negotiation, and then you victoriously get them to sign a contract in defeat,
Andy Paul: Well, that’s a whole other, that’s a whole other stereotype that drives me nuts is the closer. And you know, I’ve personally closed hundreds of millions of dollars worth of contracts over my career. I don’t think I was ever in the room when the customer made up their mind to buy from me.
Sahil Mansuri: That’s fair. I mean, you
Andy Paul: I mean in a business to business, I was selling large expensive. They decided at a board meeting. They didn’t decide when I was sitting there. Um, I mean, I could tell oftentimes in the meetings where the, the flip switched and I knew I was going to win, but I didn’t get the, they made the commitment. That decision in a board meeting.
Sahil Mansuri: And, and, and I think, and I think where it comes back down to, for me, Andy, is, is. We are, we glorify winning contracts, getting signatures, um, ringing the Gong and, and the bell as if the, the deal is done. You know, we always say, Oh, the deal’s done. When it, when the.
Andy Paul: Yeah. Deal’s just started.
Sahil Mansuri: When, when in reality, your company was born to solve the problem of the customer. And I think this is the thing that has been lost in sales is that our job as sales professionals is not to get someone to sign on it piece of paper it’s to solve the problem of the customer. And so what I would love to see is a sales compensation plan that rewards sales professionals for solving customer problems.
And let me give you a few examples. The first thing I think we should look at is product usage. If a sales professionals sells a product to a customer, they should be rewarded. If the customer actually uses and finds value in the product. The reason why I think this is so critical is because it creates a true win, win, win.
If the sales professional is able to get customers on board who find value in the product, they’re going to not only become evangelists for the company and for the product. They’re not only going to be happy compliance, which means a customer success and account management and the rest. So your teams are going to thank you. They not only are going to gleefully pay and renew without you sneaking in some evergreen renewal clause into your contract and trying to enforce it. And most importantly, what it’s going to do is it’s going to help the sales professional, understand that their job is not to just get anyone who has a pulse and signing authority to say yes. But to actually qualify the market and ensure that the right customers are coming on board. And so, you know, things, things like that. Okay.
Andy Paul: Shockng concept, that you should actually get qualified customers.
Sahil Mansuri: And, and, and, and, and one more, and one more thing quickly, which, which I think is, is important. I would love to see sales professionals get a bonus. If the customers that they bring on board renew, I find it shocking that new biz customers have a new best sales professionals have.
Yeah, I’ve, I’ve almost, I don’t think I’ve ever seen. I mean, I know it’s common in like the insurance industry and stuff where you manage a book of business, but in software sales, I don’t think I’ve ever seen a comp plan where the sales professional makes more money if the customer renews in 12 months or in 24 months, even though for the company, they are often not making much of a profit in the first year and all of their profit margin is made off of the LTV of the customer – lifetime value. And they’re expecting customers to stay on for three or four years. Why wouldn’t the company incentivize the sales person to bring them on clients who are more likely to renew, which in turn makes the company more profitable and ensures that the customers are happier that they bring onboard in the first place. Like it feels like the ecosystem just needs to be rebuilt from the ground up.
Andy Paul: Right. So if you’re gonna do that, though, that then starts working somewhat, not entirely, but somewhat against sort of this hyper specialization of roles that we’ve had. I mean, I took over the group in a company years ago, decades ago, where the salesperson and the account manager worked in tandem to develop an account.
You know, beyond the initial contract signing, you know, for an existing customer. And so it was a team effort. And, but what you’re saying, because we don’t see, oftentimes the sellers just handed off the deal to customer success. And I think what you’re advocating is that you need to keep sales involved either with customer success or in some other form to make sure the customer grows and renews.
Sahil Mansuri: Yeah. I mean, I, I don’t think I’m, I’m advocating a radical change here. I think it’s a pretty elementary change, which is the job of sales ends. Once the customer has. Seen success has, has seen value promised by the seller. So if the sales professional comes out and says, Hey, you know, if you implement our technology, you’re going to go from spending an hour and a half each month, calculating comp plan or calculating commissions to having it done automatically for you. Then great. As soon as the client is able to automatically calculate their commission plan, then your job is done. Then, then go off and sell it to the next customer. But don’t promise the customer that you’re going to be able to calculate commission plans automatically then sell the deal, hand it off to customer success. Customer success gets in and says, Oh yeah, you can do that. But only if you use this very specific comp plan, if you use that comp plan, then you’re still going to have to manually do a bunch of other stuff. And then the person’s really annoyed and pissed because they’re like, well, the rep didn’t tell me any of this and then customer success is trying to save the deal. And then it just becomes this contentious relationship, which I see happen in companies over and over and over and over again. And so it’s just to me, it’s like a, it’s such a simple concept. It’s like, whatever you promise in the sales process you deliver, once you’ve delivered it, then you can move on.
Andy Paul: Now some would say, well, one of the ways you address that though, is that you have customer success involved before the contract gets signed to vet that you can live up to your commitments.
Sahil Mansuri: Yeah. And to that, I’d say then we really don’t trust sales to be able to deliver the message well enough that they’re able to like, like, we need like a babysitter for the sales team through the CS team. Like I think that, you know, again,
Andy Paul: Well I know what you’re saying but, but yeah, I think in some cases that’s, that is the case. I mean, it’s something that’s more complex technically, perhaps that makes sense.
Sahil Mansuri: Yeah. I mean, this is where the rise of the sales engineer came from, right? I mean, sales engineers have become increasingly more prevalent in our, in our industries. As products have gotten more complex and more technical and sales professionals have become the quote unquote quarterback of the deal. You know, you hear this term a lot.
Andy Paul: Yeah, that’s that’s yeah, this is not new by the way mean, this was, I was, I was doing this to him back in the eighties, so yeah.
Sahil Mansuri: but, but I think, but I think what’s more, more common and these days than it used to be is the fact that, you know, sales is in this world of specialization. The sales professional is not expected to know how the product works technically they’re just expected to be able to like actually handle the sales process.
Whereas I think what’s changed from the eighties is that now everything’s available online. Right. What has changed is now information on G2 Crowd on a Capterra on a TrustRadius. Obviously Forrester, Gartner, Sirius Decisions have been around forever. Well, but now it just takes one quick Google search for you to start to get some pretty sophisticated level information on what a company does, how it works, how do their customers feel about it?
And so oftentimes, you know, the sales person is the line, last person who knows who’s, who’s involved in a purchasing process. You know, I’m sure you’ve seen these stats where, you know, when a, when a buyer says, Hey, I’m interested in buying something. You know, they ask their friends they do research online. They talk to their peers, they talk to reference customers. They talk to industry specialists. They talk to everyone besides the company, the sales rep. And so when, and so when the-
Andy Paul: By the way, I was just gonna say, it’s just, you know, this is this whole, that whole narrative is a source of great contention, right?
Sahil Mansuri: And I think that the, the obvious solution to that is that the person who is working for the company as the quote unquote sales rep needs to be able to do one of two things. I think there’s a more basic answer and then there’s, you know, where I think the industry is going as a whole. So I think the more basic answer is your sales professional needs to be as technically savvy as a sales engineer.
I think in 10 years, there is no chance that we’re going to have quote, unquote quarterbacks of deals like that. That if you are a deal quarterbacker you’re a dinosaur right now. Uh, particularly relevant given our apocalyptic state outside, but you’re a dinosaur like, like walking dead. Like you, the only future in sales is for those professionals who are able to actually roll up their sleeves and help a customer, understand value, get technical with their product, knows their industry inside out knows competitors and is able to actually be that trusted advisor, that consultant that the customer needs. If you’re not able to do that at your products. And you’re just like reading off a script and using your charm and sales skills and whatever, like you’re a dinosaur, those jobs will not exist in 10 years.
Andy Paul: Yeah. And I wonder how much they really exist today though. And that’s an interesting question because you know, this role of what used to be called an account manager was the person was, what you’re calling the quarterback, but this is the person that was the trusted advisor, right? They had the business acumen, they had the technical to some degree knowhow,, obviously they weren’t a sales engineer. They weren’t an engineer, but you couldn’t be thin, you had to have substance up and down the chain. What you’re talking aboutis a situation where this quarterback, you’re saying it’s just sort of flitting from deal to deal with very little value to add. And I think, yeah, I think that’s reflected in sort of the surveys you see from customers, you know, C level executives saying, I think it was a Gartner study at one point, something like 80% of C-suite executives say they find no value with their interactions from salespeople.
So how did we get into that position? Because that’s certainly, wasn’t, hasn’t always been the case.
Sahil Mansuri: You know, I’ve only been in sales for the last 12 years. So I can’t speak to anything before 2008. But since 2008, I have been in sales and at every company I’ve worked for the majority of the sales professionals that work there had no freaking idea what their product actually did, had no idea what the customer’s life really was like. And could not use their own product in order to achieve the very results that they were promising their customers to get. So, you know, I think it was a John Selig, like who’s this a sales comedian guy who said something really funny. He said, said something really funny. He was like, “you know, we spend all day selling products that we don’t know how to use to people whose jobs we don’t understand,” you know?
And it’s like, and, and that’s exactly what I have seen in my entire sales career is that we hire people right and we give them the bare minimum jargon and speak in order to sound like they kind of know what they’re talking about, throw them out there and just, you know, pressure, pressure, pressure in order to close deals.
Like the only reason why I stood out in the sales teams in which I sold that, and, you know, I think this is now somewhat on the public record, so I say this again with like more humility than, than, than pride, but I was, uh, I was the number one sales person at every single company I’ve ever worked at. And I was often one of the, if not the most junior member of the sales team, but the difference was that I came into sales through a very different lens than most of my peers did. You know, I spent years working on the Obama campaign and when I was in college and I ran field ops. And so I would spend my energy and time learning about all of the issues that voters cared about, knowing all of the facts around those issues. And then calling voters up and having conversations about voters telling me they wouldn’t vote for at the time, Senator Obama, um, because he was against abortion or because he was going to take away their guns or because he was a Muslim or, you know, there were all these like things that we would hear and I had to be so, so well versed in my facts that if I wasn’t able to like, you know, spar with the voter on the issue and educate the voter on what was real and what was not then I would never be able to change their minds. And, and, and so I walked into sales with the idea that I had to be much smarter than the person on the phone about what I was talking about. And that was the bare fundament terms of my job. But let me tell you something, Andy, I’m looking to buy a data analytics platform right now. I’m not going to call out any names because that’s not helping, but I’ve spoken to five vendors who sell data visualization, data analytics platform. All five of their sales reps know less about data analytics and data vis than I do. And I am not a data scientist or data analyst, but their sales reps are talking. And any time I ask a question, they immediately have to defer to the sales engineer who’s on the phone. Immediately it’s like, oh, well, Hey, uh, Hey, Hey, Hey Sally, can you take that one? Cause I, you know, I don’t really know about the, I’m not the expert on that, you know, and, and all the person’s doing is giving me this like super fluffy demo of their product inside of some sort of a sandbox environment where they’re kicking things around. And any time I ask a technique, even more slightly technical question, that’s off the script. They’re unable to answer it. Or if they do answer it, I know for a fact fact, because I’m listening to the answer that they’re half bullshitting and half hoping that they’re right.
Andy Paul: Yeah. So this is, this is a relatively recent development, by the way. I mean, I can tell you from the perspective of 43 years in complex B2B sales, it’s not been that way. Right? So is this because of you know, the, the specialized sales roles for AEs is because, you know, we put this enormous pressures, like for pipeline coverage ratios, which, you know, reps don’t have the opportunity to work in any deal deeply. So they basically just play the odds. I mean, and so if, if we’ve got it set up the way we do, there’s no incentive for someone to become deep.
Sahil Mansuri: Well, I think, I think we will have that incentive very quickly. Yeah. You know, because what I am seeing as the rising tide, the new wave of sales evaluation of sales purchasing, let me start here. And this is kind of the final point I want to leave you with cause I think, you know, you and I can spend all day on this topic, but I think I really want to end with this point. Um, there, there’s a reason why cold outbound continues to happen in our world. There’s a reason why I continue to send emails. There’s a reason why we continue to, you know, kind of do cold calling and cold messaging it’s because it works right. It does work. It doesn’t work nearly as well as we think. And it has many, many, many things deletrious side effects that, you know, companies have to pay the price for for years to come. Butit does unequivocally work. Period.
Now the fascinating question is why. Why does cold calling work? Why does cold emailing work? And I, in my understanding, you know, limited, this is just my opinion, but this is why, you know, you, you, you get, you get what you pay for, with your, with your podcast guests, I guess, um, which has a bunch of free, free hoopla, um,
Andy Paul: You’re being paid at scale.
Sahil Mansuri: Grom your lips to God’s ears. Um, and so, and so look. Uh, the reason why it works is because at the end of the day, buyers do have problems. They have real problems that they need to solve, and they don’t have an alternative way to find solutions. The only way to really understand if this product can truly help me or not is if I do the demo and if I sit through the painful discovery process and if I have to wait two and a half meetings to even get freaking pricing from this company, is because at the end of the day, calculating sales commission plan to continue with the analogy that we’ve been using to, to, to calculate sales commission plans is a pain in the ass.
And I would like to not have to do this. I would like to find a way to automate away of this problem. Now this technology may or may not do it, but it, you know, the, the potential benefit here is worth the price of admission and what we are building at Bravado. And by the way, we are by far not the only company that’s building, there are many other organizations that are building this. What we are building though is an alternative to the traditional sales process. What we are building is instead of talking to one of these companies and having them pitch you and tell you why their product’s great and then have to go and talk to three of their competitors and hear their pitch for why their product is great. And then, and, you know, kind of separate the chaff from reality and the bullshit from the whatever, and then make a decision. What if you could instead talk to someone who’s an expert in sales compensation software, who knows all of the players in the space and who can be your, call it, sales side, you know, buyer side salesperson. Yeah, that’s right. And, and by the way, this isn’t a new concept either. I mean, there’s, there’s you know, channel sales has existed in this format in many ways, uh, you know, Accenture and Boston consulting group and Bain, and do, do, do this as well, but that’s not the way the mid market buy software, the way the mid market buy software and SMBs buy software is they have to do it on their own.
And we’re building an alternative for that. And the reason why I’m so passionate to build that is because for the first time we’re putting customers first. Because where this whole conversation started and began, it was oriented around the fact that the job of sales is to put customers first. It’s to solve problems. It’s been so bastardized. And so, uh, you know, manipulate related and changed up that we can’t even recognize that for what it is. And I think the world that I’m so passionate about seeing is a world in which a buyer has an alternative and they can say, no, I’d rather work with someone I trust. I’d rather work with someone who’s an expert in the space. I’d rather work with someone who has my interest in heart, as opposed to having the interest of, uh, you know, the vendor and doing whatever they can to get a deal closed.
Andy Paul: So when are we going to see that?
Sahil Mansuri: Uh, stay tuned. I think, uh, you know, early, early October the first version comes out.
Andy Paul: All right. Well, put me on your list. I want to be the first to see it.
Sahil Mansuri: Yeah, I hope so my friend, I think, uh, you know, we, we we’re, we’re really excited to try and, uh, you know, shake up the traditional sales compensation structure, shake up the traditional sales model. Cause I really think that most sales professionals at their heart do want to do right by their clients. They’re just not set up in a system and an incentive structure that allows them to do so.
Andy Paul: Yeah. The incentive structure has them focused on the wrong activities. Absolutely. And we’ll have you come back and we’ll talk more about that because I think everything needs to be touched. You know, how we, how we hire, how we train, how we train managers, how we structure our management teams. We are completely off base as a performance based profession for how we do that today. And we fundamentally manage sales the same way we have for a hundred years. And to your point, it’s time to change.
Sahil Mansuri: Yeah, I appreciate what you do for the profession, Andy, and I appreciate your, uh, kind of, you know, ethos, your spirit and your drive to push our industry forward. Look, I love sales, right? I think that, you know, like I am so passionate about the profession. It is my heart and soul. I spent my entire career doing this and I have so much love for sales professionals and for the profession as a whole, that I’m willing to tear down the parts that don’t make sense that don’t work. And instead build a world that does.
Andy Paul: I’m there with you. Cause I don’t think there are many parts that do work right now. So. Yeah. I think a complete rethinking is in the cards and yeah, we’ll see it one way or another, but yeah, we’ll have it back on. We’ll talk more about it. Cause it’s, it’s really necessary and people need to get their eyes opened. So, um, Sahil, if people wanna find out more about bravado or get in touch with you, how can they do that?
Sahil Mansuri: Easiest way to get ahold of me. You can always find me on LinkedIn. Of course. Just look me up, Sahil Mansuri. I’m also on Bravado. Just go to Bravado.co, uh, and sign up there. Uh, you know, we have a direct chat platform. I’m always responding to members and communicating through a community there. Uh, but ultimately what I, what I really hope that, you know, Folks get from this, uh, from this podcast, uh, is the fact that you’re not crazy. You know, if you’re sitting around thinking, wow, sales is really hard. Wow. Like none of this doesn’t really make a lot of sense and like I wish things were a little bit different. You’re not alone. You’re not crazy. You look, Andy, I can’t tell you how many messages I get on LinkedIn every single day from folks. Thanks to hell I can’t publicly like, or comment on this post because I’m worried my boss is going to see. I’m worried that my company’s going to see. So what I want, but I want to just, you know what you’re saying makes so much sense. Like I’m here. Like I support it. Thank you for standing up for sales. And, and what I want to do is, is encourage those people to say you’re not crazy. You’re not crazy. You know, like we will build a better world for sales professionals and I’m excited to see us come together to do that.
Andy Paul: Perfect. All right, until next time.
Sahil Mansuri: Cool. Thank you very much.