Loading summary
Transcript60 lines
- [00:00]
A
What are some of those micro revop spots that move the needle?
- [00:04]
B
I tend to love the pricing and proposal one because it is where all the momentum that you create in a good sales pitch goes to die.
- [00:10]
A
I'm wondering how much you think emphasizing forecasting is asking the right questions.
- [00:15]
B
It's more like co constructing the framework that you can both use to talk about the forecast in a non threatening way. Let's agree on what the framework is and what the conversation is we're going to have about it ahead of time so it doesn't feel like that Police interrogation.
- [00:29]
A
You said that the discounting part was the most boring. I would say hold my beer. I think the most boring yet potentially most impactful would be taking whatever Your list of SKUs are that are available for sale. Yes, and killing some just murdering them. Build a Great relationship with Sales Improving
- [00:47]
B
a business is mostly about figuring out what the little secrets are that are holding you back. And if you guys don't trust each other, too many of those secrets are going to stay buried and they're going to keep holding the business back, hidden in the dark until something bad happens.
- [01:03]
A
Is this thing on Yesterday's Price is Not Today's Price. Welcome back to Run the Numbers. My name is CJ and today I invited my friend Paul Stanzic onto the podcast. So for those of you who haven't heard of Paul before, he's a frequent guest. He's an operating partner at private equity firm Parker Gale and what that means is he helps their portfolio companies be better at go to market. So he works with rev ops leaders, CROs, CMOs and he actually talks to a lot of CFOs like me from the Portco's and me and him were texting back and forth. Hey, what should we talk about here? Should we talk about annual planning? Should we talk about metrics? And said we what if we just did like a quick five spot hit list on how CFOs can build a better sales engine and it's amazing. Paul's electric, but he also just has a great way of thinking about partnerships. So the five things that we discuss in this episode are making the budget mean something, help emphasize forecasting, lend a hand with data analysis and metrics, get involved in a few key rev op spots and fifth, build a great relationship with sales. So enjoy this episode. I always love jamming out with Paul and if you sit at the intersection of finance, strategy and operations, this one is for you. The Prodigal Paul returns. Welcome back to the show. Paul Stanzik.
- [02:32]
B
Thanks man, it's always good to be anywhere. But being here is especially good.
- [02:37]
A
We're on the verge of the SNL smoking jackets. I sent you a backpack in the mail. I don't know if it's come yet. Maybe I wrote down the wrong address.
- [02:43]
B
Oh, man. I probably gotta go sort through the pile of boxes in my back entryway to my house because I'm sure it's there. Thank you in advance.
- [02:51]
A
I was excited to have you on because me and you were always texting back and forth about stuff that's at the intersection of finance and go to market. People have probably heard of you before if they listen to the show. But if you could just give a quick 30 seconds on what you do at Parkergale, because I think it kind of sets the context for what we'll talk about here.
- [03:07]
B
We buy B2B software companies from founders. It's all we invest in. We've been doing it for 10 years now. I've been here for closer to eight years. We've got a three person operations team. I help to lead that and I do everything related to go to market strategy and customer stuff. So depending on when you catch me, the answer changes on what I'm working on. But if you think about sales, marketing, customer success, ICP targeting, anything that touches an existing customer or a future customer, that's kind of my world and it's the weirdest job I've ever loved.
- [03:42]
A
Year of hello operator fame on Substack for all those who want to check it out. If you want the long form, Paul, you can get it here. But today's gonna be more. More of a quick hitter. We're gonna do a list. The topic is how CFOs can help build a better sales engine.
- [03:59]
B
Yeah, how do we start talking about this? Cause we were brainstorming podcast topics and we were looking for the connectivity between your world and my world. But where this came from is if you talk to CFOs or VPs of finance, they kind of get deputized either implicitly or explicitly as, hey, see if you can help me tighten up not just the finance organization, but this thing over here and this thing over there. Probably because they tend to be the most analytically gifted organisms on the executive team. And so when I talk to finance leaders, I get this question a lot, which is sales and marketing is kind of a black box to me, but I want to help. What can I do as a finance leader to help us improve what we're doing in sales? 1 to 2 points on a 10 point scale. It's not an obvious question, but there are some easy things that you can do. And as we started trading text on this, I think we both got excited about what the episode could be and now it's here.
- [04:53]
A
What I find really interesting about this is it's not just hey, how do you assign quota better, it's how you be an effective business partner to sales. And I find that the best CFOs that I know, at least, especially in a private equity back setting, are operationally minded and they're helping the CRO to figure out how to allocate resources. Because I think the best sales leaders actually have a lot in common with finance people. They think about their team as allocating dollars towards these heads in pursuit of of a risk adjusted return.
- [05:24]
B
It's a hard thing to evolve into. In some ways I think it's easier for finance leaders to grow up into that mindset because from the very beginning you're counting all the dollars and cents and you're kind of financially oriented. For sales leaders especially, I think it's something you have to flip a switch on like midway through your career because what do you get rewarded for and what do you get managed on when you're just coming up? Well, if you're an AE or a partners person or even a sales engineer, it's all about the next customer meeting or the next deal that you're going to close and you're not necessarily thinking about the inputs and the outputs economically for what goes into that. But at some point that changes and that's part of the reason that I think we get this question from finance leaders. It's I can tell my sales leader wants to come up to speed on thinking this way, but they've just done it a little bit less like how can I help them get there? It's a cool responsibility as a grown up finance leader to take on that mantle, but it's not always obvious how you can get it done. So we're going to talk about that today.
- [06:21]
A
I'll hit you with the first one here and maybe we can have a bit of a back and forth, but if you can unpack it, it's make the budget mean something.
- [06:28]
B
There are way too many companies out there that speed past the annual budgeting process and they don't use that as an opportunity to get the leadership team aligned around what they're trying to do. Like it's this very natural, very powerful reset where if you do it right like before, during and after, you're doing the Budget, you get to say, what is the business today and how is it going? What are the biggest challenges and opportunities in front of us? And if we're going to sign up our names to what we think the business can do, if we have a pretty good year next year, which is, by the way, what I think philosophically a good budget is. It's. It's what we think we can do and what we think we can beat. It's just a tremendous opportunity to bring together the rest of your team and say, hey, guys, all of us have a part in making this happen. We want to make sure that you understand your part, we want to make sure that you internalize your part, and we want to make sure that you get your head around all of the assumptions that go into the literal rows of the budget spreadsheet that we're building together so you can orient yourselves to that and so you can manage your team to that. So a good example that I like to coach my finance and sales leaders on is you should be doing a little bit of segmentation when you're building the top line of your budget. So we're talking about bookings, revenue, all the stuff that comes your way when you, when you book a customer. If you mash all that together in one bookings or revenue line, it makes it really difficult to tell which part of the organization is doing well and which isn't. And sometimes you can accomplish this with just one cut. So it's a really important decision to make. Like, okay, how are we going to split our products? How are we going to split our regions out? Is there a different way that we should cleave the business in two? Because if you reflect that in the budget and you build a plan for each of those parts of the business, three or six months later, it's going to be really easy to tell where your problem is and what you need to fix and what you need to adjust to hit that number later on. But too many companies out there, especially smaller companies less than, you know, 50 million of ARR, they treat the top line of the budget as a monolith. It's like, hey, it's all kind of part of one bucket. And then when it's not going well, you have to do a bunch of extra work to unpack it, to double click. And you can have that right there in your budget. And more importantly, you can have agreements on where are we trying to do kind of what we've been doing and where are we trying to inflect? So I think part of what makes the budget meaningful is that segmentation exercise and deciding how you're going to cleave the business in the parts. But that first feeds right into strategy, which is like we can do anything, but we can't do everything. So what part of the business are we going to try to improve this year and how do we make sure that's reflected in the plan that we're building together?
- [09:11]
A
And I think sometimes finance leaders and also with their sales counterparts get a little bit afraid of going down to the next level because in the back of the head they're like, we don't actually know with certainty what that was going to be. So I remember a scenario where we had a great U.S. business, let's say we were $30 million business at the time Europe was growing. So we had some data points. We were going to go into Asia. Like we had a person in Israel selling into Asia. That's how much we knew about it. But it's kind of daunting to to open the workbook and say we're going to put some assumptions around this, especially if someone's livelihood is going to be in some way linked to it. But I think having a great partnership there is saying we're doing this less to get it right, we're doing it more. So we have something to toggle to know whether the X times Y was was right or wrong.
- [09:57]
B
A lot of this should come down to a conversation when the bud almost ready to present to your investors or whoever. Okay guys, we just laid out a bunch of stuff. We just built a really complicated spreadsheet. Are we comfortable with the bet that we're making this year? Because this is about thinking in bets. It's about saying, how are we going to make the business better? What is the most effective and efficient way to do that? There's an element of uncertainty and risk in any long term planning exercise, right? But like here's the bet we're making, here's the operational things together that we're going to do to make that bet happen or to dramatically increase the probability that we're going to make it happen. And here's the resources we need either in terms of money or attention or both to go make it happen. I just think the further into the spreadsheet that you get, the easier it is to view this as an abstract exercise when in reality it's an agreement on what we think we can do. And it's a bet on the part of the business that you're trying to make better over the next 12 months.
- [10:55]
A
Hey, thanks for listening. We'll be right back after a word from our sponsors. I've seen a lot of FP&A tools and a laugh is one of the few that gave me that aha moment. Within minutes I remember watching their founder shout out to Albert, connect my netsuite data and build me a full P and L live in minutes. ALAF is now trusted by hundreds of leading companies. I've had the CFOs from Turo 8, Sleep, Zapier and more on the Pod and every one of them is a huge advocate. I also just published my second annual CFO Tech Stack Report and Aleph has been on the podium both years including a number one finish in the 50 to $100 million segment. This year, instead of being just another planning tool, they built a real enterprise grade data foundation for finance implemented at startup speed with AI native workflows woven into its DNA. All your systems erp, CRM, hris, ats, product usage and more powering one clean governed data layer that finance can actually trust. With AI moving as fast as it is, they're pushing even further mcp, custom AI chatbots, AI powered variance analysis and the list keeps growing. Try it with your own data@getaleft.com run that is G-E-T-A-L-E-P-H.com run tell them CJ sent you. So here's a pattern I keep running into when I talk to finance leaders at fast growing companies. You've outgrown the spreadsheets. You've probably outgrown your billing tools built in revrec. But you're not quite at the point where you can throw a 20 person team at the problem either. That's exactly the danger zone, right? Rev owns right? Rev is revenue recognition done right? It handles the messy stuff like high volume subscriptions, usage based contracts and mid contract upgrades. The things that break your ERP and the billing platform bolt ons. Here's the thing though. Your sales team isn't slowing down for you. They're closing ramp deals, usage commitments and mid quarter upgrades. And the longer you wait to fix the engine, the further behind you fall. So stop scrambling at month end and stitching together allocations across 3, 4, 5 spreadsheets to just have the numbers read. Well, that's it. That. That's the whole pitch. CFO's telling me it's like a glow up for the revenue books. If that sounds like where you are right now, right? Rev is worth the look. Head to rightrev.com cj that's right rev.com cj check em out. I got news for you. The ERP category is finally getting disrupted and if you haven't heard of Rylit yet, please pay attention. It's the AI native ERP built specifically to replace netsuite and it's already won over hundreds of finance teams. Their mission is to make these zero day close a reality and they're actually doing it. We're talking teams closing the books at 1:35pm on the first day of the month. Companies like Windsurf, Merkor and hundreds of others run their entire finance stack on Rylot. Revenue recognition, Close management, Multi entity Native structure, Stripe and Salesforce integrations Woo. Everything a scaling company needs. They've got 5.050 wow 5.0stars on G2. They're backed by A16Z and Sequoia. Heard of them and CPA LED implementations that get you live in 45 days. That is simply unheard of in the ERP space. If your books aren't running as fast as your business, check out Rillet. Book a demo@rillet.com CJ that is R I L L E T.com CJ that's me number two here. Help emphasize forecasting Think about your sales
- [14:13]
B
leader for a second. Think about their calendar. Think about what that looks like hour by hour, block by block. I occasionally stand in as as fractional sales executive inside my portfolio so I know what this feels like. It's chaotic. Like you are getting pulled into scheduled calls with customers that you know are happening, but then you're getting interrupted with questions from reps and from finance and from sales engineering trying to move the pipeline along. You're getting questions from your investors like it is a chaotic, interruptive experience to lead a sales team and then to be able to make the space to pull out and say amidst all that chaos, what do we think we're actually going to do for this month or this quarter? Like one that's an intellectually jarring experience because just to move the pipeline along and get people to talk to you is a totally different muscle than trying to do like analytically forward looking forecasting things. But you have to do it. And so I think part of your responsibility as a finance leader is to help make that happen. You and I both love our friend Dave Kellogg. He's got this phrase that goes help is defined in the mind of the recipient. This is really important for finance leaders to remember. It's your job is not to heap more accountability and more pressure on top of your Sales leader is to figure out like what would actually be helpful to them in getting all the parts of their job done and how do you deliver that help. And this is one of those where trying to come up with an accurate forecast and updating that forecast over time and building that muscle as an organization, you can be helpful to that person either by helping them create the space to do it, either by helping them with the last mile of analytical stuff that they need to get it done, or just by like making it a conversation that naturally happens on that leadership team. So any kind of forecasting in the organization and trying to come up with what are you actually going to do in the future. I think finance leaders, they don't need to take that over and to like put all that on their shoulders, but they do need to think about it as their responsibility to help make that happen. I don't know, I think you just got to look for the openings there. And a lot of sales leaders would say what would be helpful to them. Well, one, like help me build the tool or the framework that helps me think about how to forecast accurately. Maybe that's just breaking down the pipeline by stage or by close date or whatever it is, sometimes just creating the space to have the conversation, whatever it is, like you can help facilitate that. And I think too many finance leaders don't look for those openings and they kind of view that as like, oh, that's a sales thing. I'm not going to help with that.
- [16:49]
A
When you were giving the imagery of the salesperson's calendar with like 74 blocks and no time for lunch, it made me think that many salespeople are living life in the moment, right? They're going from deal to deal and they have the context that's needed to say, hey, I think this thing is going to go forward. I think it's going to be larger or smaller than we expected. But it is hard in any profession, like even in finance, if you're in the weeds for a while to take a step back and connect the dots. And I look at finance as the person who we are cursed because we know the numbers. You can step back and help connect the dots in a forward looking way. I'm wondering how much you think of this component here, Paul, in emphasizing forecasting is asking the right questions of the sales leaders to almost reframe what institutional knowledge they already know.
- [17:38]
B
I think it's less about asking the right questions and it's more like co constructing the framework that you can both use to talk about the forecast in a Non threatening way. So here's what this looks like when it doesn't work and when you actually degrade the relationship between finance and sales. There's a meeting on the calendar with the CEO present where you ask for the forecast and then the forecast changes and you put them under the police interrogation light and you say, what the hell happened? Explain the movement in the pipeline deal by deal. Is that going to get you to a causal answer for what happened and what you might expect? Like, maybe. But the connection that you have with that sales leader and the environment that you're creating in the room, it's not a psychologically safe environment.
- [18:23]
A
Right?
- [18:24]
B
Sales leaders look at the forecast. The good ones recognize that it's something they have to do. They also recognize that it's somewhat interruptive, somewhat annoying, because they want to close deals and go find customers. That's how they got into this line of work. But if you as the finance leader can sit down with them and whiteboard out and say, hey, let's talk about what it would look like to arrive at a pretty good forecast every week or every month. Like, literally, what would the inputs be? Where does the data come from? How are we going to handle edge cases with very large deals or deals that you might be able to pull in Bluebirds or run rate stuff or weird pricing changes or whatever it is just like literally diagramming that out and agreeing on what the framework is. One, it makes it a lot less scary. Two, you can create kind of a machine that can do some of this automatically for you, especially in the age of AI. And three, like, you've just acknowledged that this is a necessary but kind of scary component of the job for this person. I think that sends the signal that you're a good teammate. It's like, hey, I want to help you. I recognize this is something that might not be your fastball, but let's agree on what the framework is and what the conversation is we're going to have about it ahead of time so it doesn't feel like that. Police interrogation.
- [19:38]
A
Hey, thanks for listening. We'll be right back after a word from our sponsors. Scaling a tech company is thrilling. It's also really, really messy. Just ask anyone who's done it or anyone who's tried. Better yet, ask ey. They've seen startups at their best and in their most fragile moments. EY knows you don't start a company to burn cycles on, regulatory hoops, discounted cash flows, or the fine print of SEC form S.1. Although you probably do know I love myself a good S1 if you've listened to or read my stuff long enough, you can't ignore these things. That's how risk compounds kind of like negative interest. What you can do is work with EY from day one. They'll help you get it right early and often so you can stay in builder mode and keep the trains running on time. EY shape the future with confidence. Learn more at ey.com training tech startups that is ey.com tech startups one more thing about Spendhound Teams using Spendhound reduce software spend by up to 30%. Here's how that actually happens. First you get the data Real pricing benchmarks from over 1,000 companies across 10,000 SaaS and AI vendors. When a renewal comes up, you know what fair pricing is and what you should be pushing for. But knowing the number and getting the number are two different things. Spendhound also includes on demand procurement specialists who help with negotiation, strategy, contract review and renewal emails. You stop overpaying for the tools you need, you cut redundant tools before they renew and you negotiate from a position of strength now that you have both the market data and expert support behind you. Spendhound is built by the team behind Yipit Data. It's rated number one on G2 in SaaS spend management and did we mention it's free forever for SMB? When we say free we actually mean it. You can like keep all the savings. Plus it's only $10,000 per year for enterprise with $150,000 in savings guarantee. There's a reason we're growing more than 100% year over year. Do you want to stop overspending on SaaS and go to spendhound.com cj0risk guaranteed savings. That's spendhound.com cj Most finance teams aren't underperforming, they're actually under equipped. The problem isn't the people, it's what they're being asked to do. Because there are two kinds of finance work. The kind that moves the business forward and the kind that just keeps it from falling flat on its face. And too many finance teams are buried in the second kind and they call it a good week when they just get through it. Expense reports that take longer than the trips they cover spend policies living in PDFs that no one reads. A three day approval process for a $40 receipt. That's a lot of burritos, but not worth it. Month end close, it stretches into weeks. These aren't edge cases. They're the default state of finance at most growing companies. And the cost isn't just the time, it's what your best people aren't doing. While they're buried in the wrong work, you become what you spend on. And right now, too many finance teams are spending on maintenance instead of momentum. And that is why I use Brex Agentic Finance that captures receipts, automatically enforces policy before the spend happens, and closes your books in minutes rather than weeks. So your finance team stops spending on maintenance and starts spending on momentum. 35,000 companies like OpenAI, Coinbase, Anthropic and Doordash already run on Brex because high density talent deserves some high leverage systems. It's time to get Brex af. Can't believe they let me say that. Learn more@brex.com metrics that is brex.com metrics closely related to what we just discussed. I think it's a step deeper is lend a hand with data analysis and metrics.
- [23:13]
B
Yeah, I mean, especially in small companies, just look at the org chart, right? Like you got a sales leader, you got some reps, you might have sales engineers in my world of software, just to make sure you can tag team the demo effectively. And then if it's a 20 or $30 million business, you might have one rev ops person.
- [23:31]
A
Half a rev ops person.
- [23:32]
B
Yeah, you might, you might have, you know, is it the top half or the bottom half? I'm not, not really sure. But there's just not as much dedicated analytical muscle in most sales organizations for smaller businesses as there is on the finance side. A lot of great businesses out there were started with this idea of like, how can we use our excess capacity for good?
- [23:53]
A
Right.
- [23:54]
B
Like you can argue all you want about Uber and how they got to where they are, but like the insight behind Uber is there's a bunch of excess capacity in the transportation logistics world. Like, how do we harness that and make it available on demand? And I think CFOs can think about where the excess capacity is in their organization. Even though everyone's really busy, somebody probably has a couple hours somewhere. And just like you talked at the beginning of this episode about, you know, the inputs and the outputs and thinking about your return on capital, it's like, what can you get for that return on excess capacity for your really smart analytical people in the organization, I would argue one of the highest returns on that excess capacity is pointing those people towards the part of the organization that's going to help you get and keep customers and figure out how they can be helpful. And so whether it's forecasting or segmentation or going back to the CRM and figuring out where there's pipeline to reheat. It's a good thing to look for. And I also think you can pay your team a compliment and give them development opportunities that they might not have had if you hadn't thought this creatively of. You're doing a really good job with the budgeting, the FP and a the reporting package for our investors. Do you want to get involved operationally in other parts of the company that can help round out your skillset? Your really high performing people will say yes to that. And then it's about having a conversation with the sales leader to say where can this be most helpful to you without taking the responsibility away from them?
- [25:22]
A
Something that I find is key too is just walking the sales leader through which metrics are important and then going a step deeper to say why it's important to the greater P and L. So an example of this is I would drone on and on about net dollar retention in the quarterly meetings, right? And I remember like maybe two quarters in, I was meeting with the SVP of sales and he asked a question about the number and why it had moved up or down. And I paused and I was like, you know what, I'm going to walk him through all four of the levers that go into this. And we had like a 60 minute conversation about each of those. And I noticed the next time I brought it up at a meeting, his eyes lit up and he said something around one of those levers. So he had internalized what I had said and why it was important to the business. And he had linked it back to how we were hiring certain people and customer success versus system engineers and how it impacted the P and L. So we took this metric that he could cite like what the result was. This was my fault, not his. No one had taken the time to explain what went into that and then why it mattered for the rest of the org.
- [26:21]
B
We talked about make the budget mean something. I think it's make the metrics mean something too. Like why should we get excited when our net retention goes up? Or why should we get excited when Churn goes down or when our ASP or sales cycle moves in the right direction. Like what impact does that have on the P and L? Another way to frame it is like what impact is that going to have on an eventual exit? Every investor backed business out there is always thinking about exit readiness, but it's this really abstract pop quiz in most people's minds. Like Yeah, I know we're going to have to sell the business someday. I know the investor is going to ask us for a bunch of data, but when you can frame that in the right way of here's what's going to matter for the exit, here's how we can prove that we've made the business better and that there's more juice to squeeze in a hold period after that. That can reframe things and be a huge motivator, especially for for go to market teams that are really stuck in this. Like I got to make the quarter, I got to make rhythm. And again, as a finance leader who has the gift and the curse of access to all the numbers and the P and L and all that, and is often the CEO's right hand educating the rest of the leadership team, framing why it matters to the P and L and why it matters to an eventual sale for the business is a huge opportunity. Not just because you can deputize the rest of the leadership team to help you in that. It can be really motivating to think, hey, in two years we have to find a way to take NRR from 105 to 110. When you do that, what you discover is there's a lot of different ways that you can do it. And then the strategy becomes about picking a couple of those ways and putting your shoulder behind them.
- [28:01]
A
Next one here, get involved in a few key rev op spots. Maybe you could even make it real by naming what are some of those micro rev up spots that move the
- [28:10]
B
needle, Pricing proposals and quoting. There can be this pump the brakes moment in a deal when you've had a really good discovery call, when they love everything that they saw on the demo and then they ask you for a quote and then everything slows down. You gotta figure out okay, what are they actually buying and do we have that and how much does it cost. But it's a little more complicated because it has to integrate with this thing. All that should come out in good discovery. In too many businesses, I think the front end of the commercial process where you're just designing to get someone to kind of fall in love with you, is way more over engineered than the back end of the commercial process where you actually have to agree on commercial terms. And for a customer it can feel really bad that you have momentum to solving a problem and then all of a sudden it takes two weeks to get a quote and two more weeks to redline contracts and all of a sudden like all the momentum that you've built inside of Your organization is kind of dissipating. This is one of those places where I think it pays for sales leaders and finance leaders to team up. I will warn you, it's probably the most boring and least sexy the sales process. But if you're focused on compressing cycles and improving win rates, if you can make that more efficient and feel better for the customer and give your sales team more certainty for how to think about pricing and how to think about how they deliver a quote, the returns can be enormous. So I think the broader point here on get involved in a couple of revop spots is you should look for a couple of the bottlenecks in your sales factory and then go poke your nose in there and say, what can I do as the finance leader to either take on part of this problem myself so my sales and marketing team can keep selling, or to team up on something that's a little bit more of a complex problem and just de bottleneck that thing that's slowing down our new bookings and our revenue. And there's lots of different examples. I tend to love the pricing and proposal one because it is where all the momentum that you create in a good sales pitch goes to die.
- [30:11]
A
There is nothing worse than sprinting towards getting someone to verbally agree and then be like, can we get this guy a fucking quote? Like, can we send him something? And then the customer is like, you guys are not serious people.
- [30:21]
B
100% agree. And the cool thing that comes out of it, sales reps will not tell you how afraid they are to give customers straight talk about pricing. But when you do this work, when you actually, like, build a better pricing calculator or you get your CPQ shit in order for the first time, you can't do that without actually clarifying what you sell and what it costs and what that price depends on. And when you have that newfound clarity, you can give it to your sales team and give them a lot more confidence and allow them to sell on their front foot because they know what that algorithm looks like and they know what they can and can't say about pricing at each stage of the sales process. And that's like a very uncertain thing for too many sales teams out there. So the biggest benefit here is you get back to customers who still have momentum faster and you get to speed the sales process along. But the confidence that this can create for your actual frontline sellers is a is a huge second order benefit.
- [31:21]
A
You said that the discounting part was the most boring. I would say hold my beer. I think the Most boring, yet potentially most impactful would be taking whatever Your list of SKUs are that are available for sale.
- [31:34]
B
Yes.
- [31:35]
A
And killing some, just murdering them. The more you have, the more indecision on the, on the salesperson side. And then also that gets passed on to the customer who actually just wants to be told what they should be buying. Not like making my problem your problem.
- [31:49]
B
Well, I wrote something a while back called selling with certainty and it's all about this idea that the further into the sales process you get, the scarier it becomes for the customer. And if you sprinkle any doubt for them on top of that baseline level of uncertainty, it's like total pump the brakes moment. Wait a second. And you're kind of restarting from scratch. So one of the things that we're starting to do is literally pull quotes that are being sent to customers and just force ourselves to look at them and ask ourselves, how are we adding uncertainty to the sales process? Just with the formatting of this quote. So if you think about things like, hey, there's still a discount column in the quote, but there's no discount in it, which is allowing them to ask us a question about ask for a discount, or like, hey, it's a multi year deal, but we don't make it clear how much it costs each year, so they have to come back and ask us for that. Or we have a line for implementation services, but we don't spell out for that person what they get for implementation services or integration. But just looking at that with a really paranoid eye and saying, how are we making it more difficult or less certain for the buyer to transact with us? Proposal and quote formatting can be a huge one. The other thing people don't do, this is less of a finance thing, but you need to find ways to bring back the reason they got to the quote stage in the first place. When you deliver a quote or proposal, like they told you in the first couple of meetings, what they're dealing with today, what sucks about that and how you can help. And you have that either on a transcript or idea really in a piece of paper somewhere, why aren't you including that in the quote or proposal that you share with them? Because you're telling them what, what it costs. Are you telling them what they get for that, which is solving their problem. Like both of those things need to be delivered together. And again, more for the finance people's education and maybe for sales teams to steal. I'm actually encouraging my sales teams to show the quote and the mutual Action plan and go live plan on the same page at the same time when you present it to the customer. Because you want feedback on both. You don't just want feedback on what it costs. You want feedback on how you're going to make them successful when they go live. And I think too many teams are out there doing those two things in separate conversations. So yeah, it's not sexy. You and I are both passionate about it because de bottlenecking the second half of the sales process after you've gotten them excited, there's so much there to go get.
- [34:22]
A
So I got a text out of the blue from a friend who's still doing sales at a company I was at four years ago. So I was running FP&A at the time. I was not the CFO. But one of my tasks because I knew all the numbers, I knew all the funding stuff is I pen wrote the CFOs like letter to the customer. We were a hypergrowth company at the time. So it's not like they could see our financials and know we were going to be a going concern. We were trying to slug it out with like, hey, we want Citibank to buy or something. And they're sitting there like, is this company going to be around in a couple of years? So whenever there was an enterprise deal, Paul, we would take this letter and we put the CFO's face on it and it was explaining how basically our financial position, we have raised money from name drop, name drop, name drop, we have more than X amount in the bank, blah, blah, blah, just making them feel safe. And it was written in like first person. So it's like, hey, we're also human too. And we would attach that. But they've been using the same CFO letter to attach these enterprise deals and just updating some of the numbers for years and years. So that's a little bit of extra juice that you can sprinkle on top. But anything you can do to help the salesperson get to a quote that is signable and start the quote to cash process helps. Yeah.
- [35:30]
B
And people don't buy things in the enterprise world. Like how much did your stuff cost at that company? What was a typical ASP or quote that you were sending people?
- [35:38]
A
I mean, minimally 60k, but some of these are millions of dollars.
- [35:42]
B
Yeah. So six or seven figures, Nobody buys shit. That's six or seven figures. Unless they know it solves my problem. I know it's going to work for us and I know it's not going to make me look stupid.
- [35:54]
A
Yes, that last part. You say more about the last part. That's very important.
- [35:57]
B
Well, it depends on the company, right? Like if you're buying something from a startup and you're a CFO at a Fortune 100 customer, even if you know it solves your problem, and even if you know it's going to work with what you need, you're going to look really stupid if that business goes out of, goes out of business in a year. I think there's other examples that could be like, oh, it actually doesn't integrate with, with us, or it doesn't have multi country support or it doesn't like what's the thing that your customer is going to think about? Is this actually going to make me look stupid? And how do you include a piece of evidence when you are proposing to them what a business arrangement would look like that automatically attacks that potential point of friction? So again, this idea of like selling with certainty, this is mostly your sales and marketing leaders problem, but it's the whole company's problem if you guys are sending a bunch of proposals out and none of them are closing. Because if you're getting to that point, you are making a good first impression, you're giving them some evidence that you can solve their problem. But there's something happening in that second half of the sales process where they're saying, I don't know Bob, this one might not be for us and you need to be thinking about what that is from their perspective. It could be something as simple as the formatting of how you're laying out your price to them, but it could be something else more structurally about who you are, your age and stage of the business. And I think yours is a great example. Like yeah, we're a small company, but here's irrefutable evidence that we're going to be around that we're solid and you might have to worry about other stuff, but you don't have to worry about us not being here. Too many companies out there make that something that the customer has to take a leap of faith on. And at those price points, there's going to be a lot of customers who will not take that leap of faith.
- [37:37]
A
Fifth and final one, build a great relationship with sales.
- [37:40]
B
Yeah, none of this stuff happens unless you guys trust each other. If the sales leader thinks that you're only asking about the forecast because you want to get him fired and upgrade that role, like you're never going to have a real conversation about anything. So something I tell my teams all the time is you can't fix a secret. And improving a business is mostly about figuring out what the little secrets are that are holding you back and talking about them openly getting rid of them one by one. And if you guys don't trust each other as finance and sales, too many of those secrets are going to stay buried and they're going to keep holding the business back, hidden in the dark until something bad happens. And so again, I think this goes back to help is defined in the mind of the recipient. And if you're a really experienced finance leader, you might have a bunch of ideas on what a good sales function looks like and you might have a bunch of opinions and even feelings about why aren't we doing those things. You need to get curious about what that person is doing today, what they can't get to because their life is chaotic and busy, and how you can help. And if you adopt that mindset, which is frustrating because it takes longer and it requires you building connectivity with this person instead of just building a to do list of what you want them to do, what you're going to find is you start teaming up on stuff together and you start making real progress against the little things that are holding your business back that neither of you could have done by yourself. But all of that starts with building a high trust relationship with the person who's running your sales organization.
- [39:17]
A
I've talked to hundreds of CFOs at this point on the podcast and I think the biggest takeaway for me is the best ones actually have higher EQ than iq.
- [39:26]
B
I totally agree because like yeah, you can build a great budget and put together a great reporting pack, but ultimately making a business better is about talking openly and discovering what the challenges and opportunities are that would improve the business. And you can't see what all those are by yourself. You have to rely on your teammates and their five senses to notice what those things are and explain them to you. If you have that EQ and you do know how to build relationships with people and you are willing to invest in what it takes to build those relationships, why wouldn't you want to work that way, first of all? But two, you're going to see so much more stuff together and the options for what to do about those things are going to be so much more clear. And then when you commit to what you're going to do, you can team up on it because you trust each other. That I think is the biggest thing here is if you see a part of the business that needs work, your first instinct should not be to build the to do list for what we need to do to pull that out of flashing red and into the green. Your first instinct should be to ask yourself, who do I need to build a relationship with so I can really understand what's going on and so that I can team up on that problem with that person?
- [40:41]
A
I'll rehash them real quick for listeners. So the first one make the budget mean something. Second, help emphasize forecasting. Third, lend a hand with data analysis and metrics. Fourth, get involved in a few key rev op spots. And fifth, build a great relationship with sales. Anything you want to hit on in
- [41:01]
B
closing here, Paul, all of this starts with relationship, right? And the fun part of this is if you really commit to building a relationship with your commercial leaders as a finance person, good shit happens. Period. Whether you address those five things on the list or not. Because when you build a relationship, you get trust. When you have trust, you see way more clearly what's actually going on. Because people can talk openly about what's going on. And when you see what's going on, it's easier to fix stuff. And I think most finance people get into the role because they want to get analytical and they want to understand how the business works. But ultimately, like the people who really aspire to do more than just staying in your finance lane, you like fixing stuff. And I think you become a senior executive when you understand that anything that really improves a business is too big of a job for one person. Ultimately, this all comes down to building relationships and ganging up on the big problems together. And it all starts with the relationship building thing.
- [42:06]
A
Couldn't have said it better, Paul. It's always a pleasure to have you on my man.
- [42:09]
B
Thanks man. I appreciate it. It's always fun.
- [42:11]
A
Ear on the Numbers is a mostly media production yelling an intro by Fat Joe. Artwork by Meg d'. Alessandro show is executive produced by Ben Hillman. Nothing said on this podcast is intended to be business or investment advice. It's the sole opinion of me. A guy who feeds his dog way too much ice cream and has a history of net operating loss.
- [42:30]
B
Lol.
- [42:31]
A
If you like this podcast hit subscribe and give us five stars. It will take like two seconds and our algorithm overlords love it. Drink water, call your mom and have a great day.
- [42:39]
B
Peace.