Compensation and product pricing with Pete Kazanjy
March 26, 2019
Your go to market strategy comes in 3 stages; 1) People are paying for your product 2)You hire sales people and they are able to get people to buy your product 3) You start to scale and put systems in place while still selling your product.
A common failure that happens for early stage companies is a failure to start selling due to a lack of know how on sales. Another for the next stage would be scaling too quickly or scaling prematurely.
To scale your sales team, you should do so in incremental steps and make sure they are unit economic positive. This means that you should not go and hire 10 sales reps at once, hire one or two, get them to produce and be fully loaded, then hire another two.
To compensate your reps, you want them to be able to produce about 5 times the OTE of the sales rep. This means that if the sales rep is only able to produce 3x what they are costing, you need to look for ways to lower the sales reps costs (ie. moving to another city with lower salaries) or to increase the value and therefore the price of your product.
You can not just come up with an idea and start developing it. You need to start with market research. Ask the potential clients about the idea and how they feel about it.
A common problem founders typically make is to not do a go to market strategy.
It is very important to measure all aspects of the sales cycle. You may have a sales team that are conducting a lot of meetings but if you look at untouched opportunities or time between touches, the numbers can be very poor.
If you do not properly define a good ideal customer profile, you will start to onboard clients that will not find the value in your product and will churn. Not only will they churn but they will speak negatively of your company as they never found utility.
What is your favorite sales or leadership book? Cracking the sales management code by Jason Jordan
Do you have someone that you follow/read for sales/leadership ideas? Jeremey Donovan
Are you available 24/7? Do you have strict personal time boundaries? Always on, has an email SLA to have a 30 minute response time
What is your favorite tool used for sales? Sendoso.com
What one piece of advice do you have for all the founders/CEOs/VP Sales out there? Embrace go to market, don't be afraid of it.
Pete's LinkedIn: https://www.linkedin.com/in/kazanjy/
Pete's Company: https://www.atriumhq.com/
Adam’s LinkedIn: https://www.linkedin.com/in/springeradam/
Founding Sales (Book): https://docs.google.com/document/u/1/d/1ZHCSm5yUAGhdpDH9VFTPS271LZ-RgF3YHkvZQePxGnM/edit
Founder-led sales: https://docs.google.com/presentation/d/1pcSy-zV-776abGmZ8WJ7bGeXcHQAxscdypGdrUz28_c
Modern Sales group: https://docs.google.com/presentation/d/1Rou6eujVG0Q4bPValEO7311yC07hkp_UaZ3g4mRlpiY