Speaker 1: Welcome to the SBI podcast, offering CEOs, sales and marketing leaders ideas to make the number.
Greg A.: Good morning, good afternoon, good evening. This is Greg Alexander, CEO and co-founder of SBI, a sales and marketing consulting firm dedicated to helping you make your number. This is the weekly SBI podcast series and today I’m joined by a special guest, Doug Landis. Let me introduce Doug to the audience.
Doug is a vice president of sales productivity at Box, a provider of content collaboration software with 1,100 employees and annual revenue run rate of just under $250 million. Founded in 2005, the company’s based in Los Altos, California. Doug’s role is to help employees and partners close more business faster by ensuring everyone has the right tools, skills and knowledge. Doug has been increasing the productivity of sales people for 10 plus years, inside of some of the world’s most progressive companies at stops like Google and Salesforce.com. How about that for a resume?
A little side note: Doug is an Oregon duck having graduated from the university of Oregon. So Doug, let me ask you the most important question of the day. Is Marcus Mariota going to be a Hall of Famer?
Doug L.: That’s a great question. I like to think so and it’s partially do to the fact that he’s got a good head on his shoulders.
Greg A.: Yeah, he certainly seems like a modest, humble guy, given what he’s accomplished and what a run he had there at Oregon.
Doug L.: Yeah. Yeah, he was trained with the best of them and I think really, really well prepared to excel at the next level.
Greg A.: Yeah. Let’s jump into today’s topic. Sales coaching, let me ask come basic questions. Doug, first, do you believe in coaching sales reps?
Doug L.: Absolutely, without a doubt.
Greg A.: How come?
Doug L.: I think it’s a lot harder than it sounds. Kind of the first thing that pops up for me, when you say sales coaching, is the role of the frontline sales manager.
Greg A.: Correct.
Doug L.: I think, unfortunately, the role of the frontline sales manager far too often is just to help reps close deals but the real opportunity for a sales manager is to actually help a rep learn and grow. There’s no way a rep is going to go from lead development to inside sales to field sales unless they are given great coaching from a manager. Usually great reps have had a manager along the way that’s helped them develop and refine their skills more so than anybody else, and that’s really what’s helped to elevate or accelerate their performance.
Greg A.: If you think about that progression that you just laid out, which is very common inside the tech space, so LDR, lead development rep, inside sales rep, sales rep, is that the progression that you use at Box?
Doug L.: Yeah, we have a lead development team with a few levels and then we have an inside sales team with a few levels and then, of course, an outside sales team with additional levels. I say levels. It’s a focus of accounts based on employee count.
Greg A.: Okay, got it.
Doug L.: That’s the typical progression of a rep at Box, just like it was at Salesforce and the others.
Greg A.: As a rep that’s moving along that progression … so, if I’m a lead development rep, I probably have a supervisor and I’m receiving my coaching from that person. Then I become an inside sales rep. I have a supervisor. Getting coached by that person. Then I become a sales rep and at that point I’m receiving my coaching from a sales manager. Is that true?
Doug L.: No, we consider them all sales managers, whether you’re doing lead development or you’re actually closing a multimillion dollar deal. It’s everybody plays a part in the sales process and their all part of the sales engine that sales [inaudible 00:04:17] and we consider everyone a part of that. We don’t make the distinction as far as supervisors. Everyone’s a sales manager.
Course, there’s different levels of seniority of course.
Greg A.: Yeah, sure, so that person, as they move along the career there, from LDR to inside sales to sales rep, they’ll have one coach pulling them through that role or will they be coached by more than one person.
Doug L.: Oh, they will be coached by much more than one person. At every time they make a transition, they’ll have a new frontline sales manager and they may have the same vice president so there may be another sales director, sales vice president that oversees several of the segments as a rep moves along. They may have the same kind of executive leader but their frontline manager will change as they progress through the ranks.
Greg A.: Okay, got it. You said something earlier that I really want to talk about. I’m staring at my notes here and it’s almost as if you were reading my notes, which is we want sales reps to be coached and we believe that’s the job of the sales manager. I use that term sales manager loosely, but we have to teach the sales managers how to be affective coaches, which is different than helping people close a deal as the example you used. How do you do that? How do you teach sales managers to be affective coaches?
Doug L.: I think there’s a couple different approaches. The first is you got to lead by example so it starts with their manager. It starts with the leadership and the sales organization demonstrating what good coaching is, and demonstrating what good coaching is to everyone that they may engage with. Right? I don’t think good coaching is just a simple matter of the relationship between the rep and the manager. Good coaching happens between a manager and their manager, a manager and their vice president or their senior leader.
Managers become good coaches because they experience what it’s like to be coached, which means they experience what it’s like to have the questions asked. Great coaching is all about asking the right questions and letting the other person come to the table with the answer or sort out the answer. It can happen just by them learning by example or also by studying what great leadership is about, what makes for a great manager. How do actually develop other people? How do you get other people to do what you need them to do through the right guidance?
I think it’s also a little bit of trial and error, right. When you have a manager that just finds that all their doing is helping reps close deals and they’re not really building that long-term relationship and they’re just kind of cycling through people, it’s not very fulfilling for the manager nor is it very fulfilling for the reps. That [inaudible 00:07:32] of our time, as far as a certain manager’s skillset and, of course, their boss recognizes that and gives them opportunities to go learn more about how to become a better manager, how to become a better coach.
There are a series of workshops that you can also deliver to the organization that can help.
Greg A.: Yeah. When I look at your title here, vice president of sales productivity, to me, or the common definition of sales productivity, the output, is an increase in revenue per head. How do you connect coaching, which sometimes can be difficult to measure, to the goal of increasing revenue per head?
Doug L.: Yeah, that’s always going to be a bit of a grey area. Right? It’s hard to say specifically, “That conversation that you and I had where I was really helping you to come up with your strategy for handling the key objections that we knew we were going to face, going into this negotiation, that conversation that we had to get you ready for that, we can’t necessarily pinpoint to say, ‘Well, that helped us to reduce our sale cycle or that helped us to increase our win rate.’”
I think the important thing about productivity … and you’re absolutely right. Productivity really is a matter of dollars per head, right. The important thing underneath that is just understanding the core sales equation, right, which every rep needs to know and understand. I think this is where coaching can really help.
The core sales equation is number of opportunities times deal size times your win rate divided by your sales cycle. If we know in order to get to our number, our quota, I know I need to have a certain amount of [inaudible 00:09:09] I know I need to have my deals at a certain size. I know I need to maintain a certain win rate, and based on the dollar size, I have a sense of what our sales cycle is. That should give me some insight as far as how I’m progressing.
A manager can use those metrics to help coach a rep. For example, I look at Joe here and Joe is doing a great job. He’s on track getting his numbers. That’s great but how can we do better? Well, it looks like, “Joe, your sales cycle’s actually getting a little longer as we’ve progressed through the year. Let’s take a look at why that is.”
As it turns out, maybe Joe’s deal size has gone up dramatically, which is great, but if your deal size is going up but his sale cycle’s getting longer, what can we do to shrink that deal cycle back down to what it was while still maintaining that deal size? That’s a great conversation to have.
Greg A.: Yeah, that is.
Doug L.: By looking at the data, we can say, “What do you think about this? What do you notice? What’s going on?” When you have the data, and you can present it to your rep, you can easily get the answers from them, because they have the insight to backfill that data. It’s hard when you don’t have that data, when you’re kind of guessing. [Inaudible 00:10:24] like “Oh, where do you need some help?” That, unfortunately, is what a lot of my managers ask is, “How can I help you?”
Greg A.: What’s great about that, the sales equation and having the data, is it allows the sales manager to have a structured coaching session with a rep, because you can talk about things like, “Hey, I noticed your sales cycle length is getting longer. Why is that happening? What can we do about it? I noticed your deal size is shrinking? Why is that happening?” What we can do about it provides a lot of structure, which is great.
Doug L.: Yeah, and I think that’s such an important element to help drive coaching in a sales situation, is you got to give managers a little bit of structure for their conversations, right. That’s part of what I do, and my team, is we think about … we’re constantly looking at the sales equation and looking at the data. We’re also doing things like let’s put together the playbook for managing opportunities. What are the important milestones that a rep needs to do, quote/unquote “check the boxes” if you will, at each stage to ensure that they can validate that this deal should be moving forward to the next stage?
A forecast conversation is really all about protecting your ass, really. If you think about it, it’s like, “How do I validate that this is real, that it should be in commit?” Guess what, if I look at all the milestones that I’ve hit throughout this entire sales cycle, I’m on track. Therefore, I can feel confident that it can get done.
Greg A.: We’re going to get to playbooks here in a little bit. You’re getting a little ahead of me.
Doug L.: Sorry.
Greg A.: That’s okay. Do me a favor, will ya? Give that sales equation to the audience one more time.
Doug L.: Yeah, so I think one of the core elements to determining whether or not your organization can hit those productivity numbers that we all target is making sure we’re tracking the sales equation which is number of opportunities times your deal size times your win rate divided by your sales cycle. It’s important to know the baseline for each one of those for every sales segment.
Greg A.: Yep, because the numbers [crosstalk 00:12:27] are different by segment, yep.
Doug L.: Yeah, inside sales, you’re numbers are going to be a little different.
Greg A.: Yep, okay, so if I have those three variables in a multiplication formula divided by sales cycle length, that equals revenue per head?
Doug L.: That basically equals your output, right, which is then the revenue for that A.E. yes.
Greg A.: Okay, got it, all right.
I want to point the audience to a blog article. The title of the article is The Gold Standard of Sales Coaching and the reason why I’m bringing it up is because we’re talking to Doug Landis, who is the vice president of sales productivity at Box, about sales coaching. I recently just stumbled onto that, which is on the SalesBenchmarkIndex.com website. Just type that into the search bar and you can find it.
We just published our 3000th blog post if you can believe it. We publish every day and I was reflecting on the work that it takes to produce 3,000 blog posts and I was looking at analytics as to what blog posts have done well and which ones haven’t. That post, The Gold Standard of Sales Coaching, has been read over 20,000 times, which is pretty amazing so check that out.
Also, if you want to subscribe to the blog and you’re not subscribed to the blog, here is how to do that.
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Greg A.: Okay, welcome back, everybody. This is Greg Alexander, CEO and co-founder of SBI. This is the SBI weekly podcast show and today our guest is Doug Landis, the vice president of sales productivity at Box and we’re having a very rich conversation regarding sales productivity and sales coaching. Before the break, Doug gave us his sales equation, which I thought was fantastic, as a way to have a structured coaching conversation between manager and rep.
Let’s shift the gears a little bit here, Doug, and talk about when should coaching be performed. What are your thoughts?
Doug L.: Ooh, interesting question. When should it be performed? I guess I have an issue with that question because that supposes that there is a right time and a wrong time and I think the reality is it should happen all of the time. I think there’s an opportunity for coaching, not even just around deals or deal structure or how to win a deal, but coaching for how to behave in the office. How to dress, how to run a meeting, how to further develop your career, how to communicate upstream, how to manage up.
There’s so many coaching opportunities within an organization so I don’t believe there’s just a one-time, during our one-on-one deal review forecast meetings.
Greg A.: Mm-hmm (affirmative) okay, so you’re a believer that it’s just something that happens all the time. It shouldn’t be predetermined and said, “Okay, this hour we’re going to spend time on coaching?
Doug L.: No, I don’t. Yeah, because people may have some reservations about the whole notion of coaching. Maybe their experience previously was it was called coaching but it was more directing. I don’t believe that someone needs to sit down and call it coaching. I think it’s a behavior that every sales manager needs to embody, which is more around asking questions and getting the reps to come up with the answers, versus when we direct.
Now, there is a point in time when you do need to direct and you need to give very specific data to the individual but, for the most part, I think it should be asking a lot of questions [inaudible 00:16:28] coaching.
Greg A.: Yeah, okay. How much coaching is needed? Is there too much or too little?
Doug L.: I think great managers know some reps just need it at specific times. Some reps just need coaching around deal structuring. Some reps just need coaching on getting around gatekeepers and navigating complex sales situations and that’s it. They don’t need coaching on how to be in the office and how to close a [inaudible 00:16:59] book of business and how to build their territory plans or account plans. They don’t need coaching around any of those other areas because they’ve been at it for a while so their polished. Or they were trained really well in their last organization. I think it’s a matter of kind of doing an assessment by individual.
Greg A.: Yeah, okay. In the introduction I quoted something off of your LinkedIn profile, which was you described your job as helping employees and partners close more business faster by ensuring everyone has the right tools, skills, and knowledge which I loved that statement when I was preparing for our interview.
As it relates to tools and this topic of sales coaching, do you have a preferred coaching methodology? Is there something that you say, “Hey, we licensed this and it worked great,” or do you let it be more informal and organic?
Doug L.: A little bit of both. We do subscribe to the informal and organic. Of course, it’s all usually driven by the data of deals and deal flow but we also like to be pre-scripted like we were talking about before. Ensuring that in deal conversations … the coaching around deal conversations is really driven by milestones in the opportunity management, that the reps are actually checking off all the milestones that we … that everyone’s kind of covering themselves when they’re talking about deals, whether they sit in [inaudible 00:18:31] or commit or pipeline.
I think there’s more structure around the deal conversations and coaching around deal conversations. There’s definitely a lot less structure around coaching when it comes to other areas of the business.
Greg A.: Okay, and do you guys, as the leader of the sales productivity group, do you provide … you mentioned playbooks. Is there a sales manager playbook that says, “Here’s some workshops to attend to learn how to be a sales coach?”
Doug L.: Yeah, when we look at how do we accelerate performance of everyone in the sales organization so they can close more deals, that definitely does not just stop with the sales reps. For me, it’s all the way through the sales managers, all the overlays and even the post sales teams. That includes how to actually be a great coach, how to lead and manage in a high-paced sales environment.
Greg A.: Mm-hmm (affirmative) interesting. So many of the listeners here aren’t doing that. They invest heavily in training sales reps on a variety of different subjects to improve productivity but they don’t invest … in some cases not at all or in most cases just a little bit in comparison to what they invest in the sales reps. If you were to give me kind of a breakdown there, maybe as a percentage of time allocation, for every hour of training your team issues, how much is directed at the reps and how much is directed at the managers?
Doug L.: We say we’re like everybody else in that we think that our frontline reps actually need to know more than our managers, because they’re having different conversations. They’re having a lot more conversations and so what’s required of them is got to be different than a manager, right? A manager [inaudible 00:20:18] reps and I’m looking at their book of business and I’m trying to determine who are A players and B and C and where do I need to spend my time. Where do I need to spend more time?
If you think about that, one of the things we do is our managers go through all the same training with the same expectations as our reps. There’s no distinction because, if you’re the frontline manager, you need to be able to support your reps the same degree that your reps need to be able to deliver the message or understand the information to the same level as if they were giving it to the customer.
We don’t treat our managers any different and then, of course, we have separate training and development for our managers as well. From the percentage perspective, it’s hard because, again like I said, our managers [inaudible 00:21:06] reps in that regard and the expectation is that they do the same thing.
Greg A.: Yeah, okay, great. All right, we’re going to take a quick break and make the audience aware of the new SBI magazine, which is a quarterly print and digital magazine that is dedicated to helping you make the number. The reason why I’m bringing it up in the context of my time here with Doug is because, in this edition, we have an article that talks about the sales enablement strategy at Pegasystems, which is a enterprise software company. They’re trying to do the same thing, increase revenue per head and drive sales productivity up, so I thought the audience might find that article interesting.
If you’re not subscribed to the SBI Magazine, here’s how to do that.
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Greg A.: Okay, welcome back everybody. This is Greg Alexander, CEO of SBI. Today I’m talking to Doug Landis, the vice president of sales productivity at Box and we’re having a conversation about driving productivity of the sales team. We’ve been talking an awful lot about sales coaching, both at the rep and the manager level, at this point. We were discussing the investment split between the rep and the sales manager.
Doug let me ask you a question regarding expectations, in terms of A player, B player, C player, which is the terminology that you just used, and determining where to spend your time. There’s different points of view here. Some folks say ignore your C players. They’re going to be C players for ever. Investing in them is investing in a black hole so to speak. Spend a lot of time with your A players because they’re the ones who’re going to get your number. Then hang around with the B players with whatever time is left over, which I’m not sure that’s the best approach but that seems to be a common approach. Others say let’s move the middle, which came out of the Corporate Executive Board, 6% of the team is going to be a B and if you can move them to A(s) you can have a big impact.
Personally, what’s your philosophy? Where do you invest A, B and C?
Doug L.: I would agree with the latter. I would invest in the B(s) and the C(s) because your … and your A(s) are going to be A(s). Your A(s) are going to continue to perform. They’re going to continue to excel. If you think about it, how much more are you going to get out of your A and is that going to be enough coverage to cover for your B(s) to staying B(s)?
I think the reality is, unless there’s a massive gap between your A(s) and B(s) the reality is you’re going to get more overall from investing in your B(s), and even kind of the top-tier C(s), than if you invest in your A(s). It doesn’t necessarily mean you leave your A(s) alone but I believe that your A(s) already understand what they need to do and they know how to execute. They’re going to come to you when they need help, when they need coaching, when they need guidance.
You’re going to quickly identify with your A(s) areas where you know you need to spend some time with them, and that’s pretty much it. Like we were saying before, maybe they just need help strategically getting deals done internally, right. or working with legal and dealing with the red lines.
Okay, great. That’s what I know. When this rep’s trying to get a deal done, this is where I need to spend some time with him. All the others, my real goal is to take that number of B(s) and get them up to A(s).
Greg A.: Yep. Okay, let me present, just in the spirit of interesting conversation here, the opposing view on that. Give me your thoughts on this: a typical organization has a standard distribution. Call it 20% A(s), 60% B(s), 20% C(s), so the majority of that sweet spot is the B player category. If you invest there, in that B player category, yes, you’re applying your investment dollars against the majority of the population so even a small improvement there is going to have a measurable financial benefit.
However, the chances, the probability of B(s) becoming A(s) is pretty low. In all walks of life, the cream rises to the crop and there’s mediocrity in every form of life. Thinking that you can change that, to get mediocre people to perform like A players is a myth. Those that have this line of thinking, and I’m not saying I’m one of them, but those that do will say make the distinction between what you’re going to hire to and train to. Don’t invest in the B(s) just replace them with A(s). Hire in superstars. You can’t train somebody to be a superstar.
How do you react to that line of thought?
Doug L.: My first reaction is, well, you know what? Hiring is hard. Hiring a slew of A(s) is really hard so that line of thinking is great if you have an infinite pool of A(s). If you do, then great but I don’t think you really know that until you get them in. You do whatever you can to try and [inaudible 00:26:52] out but you don’t really know until you get them in.
I think that, kind of going back to hiring, you hire for people who are hungry. You can’t train hunger. You can’t train someone to have the right attitude. You either have it or you don’t. What I can do is I can train you around the technology. I can train you around the prospects. I can refine some of your skills.
The hiring profile, I think, is a really interesting point. The sad part, though, is if you just going to spend all your time with A(s), the single most important [inaudible 00:27:31] is culture. Everyone wants to be rewarded and be performing at a level that they’re getting their recognition and if you just focus on the top performers … they’re already getting all the rewards because they’re making all the money and they’re getting all the accolades because they’re closing all the deals. Then your leaving the rest of the organization behind, and so what kind of culture are you building?
Are you building a cutthroat culture where it says, “Okay, I need to do whatever it takes to become an A, because that’s the only way I can get anything.” I’ve been in cultures like that and it’s intense and it’s not healthy. Or do you spend your time and get really smart about what areas you need to focus on. Again, it’s not … i think one of the things that a lot of companies do is they take the peanut butter approach. “For all my B(s) and even my C(s) I’m just going to give them all the same thing,” and that might not be the right approach because you may have a chunk of B(s) who are … they just need help in one or two little areas and they can become B pluses. [Inaudible 00:28:37] the right attitude.
Greg A.: Yeah, I agree with you. Our firm’s philosophy is that the equation is 50% the talent level, so you have to hire for a certain competency, and 50% are the conditions you place that talent in. I’ve seen A players go from one company to the next and become C players overnight because the environment was toxic. Right, so you got to have both. You got to have the environment and the people.
All right, we’re going to take one more break and get to our third and final segment with Doug Landis. The reason for this break is that SBI has come out with a new television program, SBI TV which is a webcast. It airs monthly. It’s a 30 minute television program and this month we’re featuring Chris Perry, who is the president of Global Sales Services and Solutions at Broadridge. He discusses how to drive sales productivity up by investing in development programs. If you’re not familiar with the TV show and you want to find it, here’s how you can locate it.
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Greg A.: Okay, welcome back, everybody. We’re at our third and final segment here with Dough Landis, the vice president of sales productivity at Box. We’ve been having a conversation on sales coaching and its impact on revenue per head and the sales equation.
We’ve discussed many things. How to do it, who should be responsible for it, when it should be done. How much should take place? Should it be organic or inorganic? Should you hire to or train to? We’ve kind of run the gamut here.
Doug, let’s try to bring this home for the audience and wrap this up in some type of call to action so, if you’re somebody listening to this show, you can go do two or three things that might make your life a little better. If I could ask you to speak directly to the audience and give them, maybe, the two or three things that you would do immediately upon listening to this podcast, what would they be?
Doug L.: I’d say the first thing is know your numbers. Let’s go back to the sales equation and make sure you know your numbers and know where each one of your rests falls, in terms of the number of opportunities, the win rate … sorry, the number of opportunities, their average deal size, and their win rate, and their sales cycle. Know the numbers and then use that as some guidance for coaching. Those are the two most important things that you can do right out of the gate.
The third thing, I would say, is track and measure what you are focusing on. If one of the things you noticed [inaudible 00:31:56] take all your B players that they’re average deal size is a lot lower than what the A players’ are. Then focus on average deal size and track that over three to six months. See if your coaching is actually working. Fine tune and tweak the coaching. Tweak the conversations and give your managers some context around the conversation that they should be having.
Then the third thing I would say is spend some time with your managers and make sure that they understand how to have a real coaching conversation and not a closing conversation, because it’s different.
Greg A.: Great advice, really is. Okay, so let me try to put a bow on this and give the audience some more resources. If you’re interested in this topic of sales coaching, go to our site SalesBenchmarkIndex.com and in the search bar, just type in sales coaching and this will bring you to literally dozens of articles, tools, frameworks, methodologies, all about this subject.
You’ll notice that many of them are written by our subject matter expert on this subject. His name is Mike Drapeau. If you like what Mike has written and want to talk to him, he loves speaking to members of this community and, believe it or not, I’m going to give you his cell phone number so take your pins out. His mobile phone is 770-363-2045. Give him a call and he’d love to talk to you about this.
On behalf of Doug and myself, I want to thank the audience members for tuning in and listening to this. I hope you got something out of it. I sure did. I have written this sales equation down three times now.
Doug, on behalf of SBI and all of our podcast subscribers, I want to thank you personally for unselfishly sharing your knowledge with us. We’re all going to be better for it. Thanks a bunch for being on the show.
Doug L.: Absolutely. Thanks for having me. Good luck, everybody.
Greg A.: Okay, take care.
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