Podcast Episode Summary: The Twenty Minute VC (20VC)

Episode Title:
20Sales: Rippling's CRO on Why Founders Should Not Create Sales Playbooks | Why Discounting is BS and How to Create Urgency in Deals | The Biggest Lessons on Pricing and How to Win the Pricing Game with Matt Plank

Release Date:
December 20, 2024

Host:
Harry Stebbings
Guest:
Matt Plank, Chief Revenue Officer (CRO) at Rippling

Introduction to the Episode

In this episode of 20Sales, part of The Twenty Minute VC (20VC) series, host Harry Stebbings is joined by Matt Plank, the Chief Revenue Officer at Rippling. Matt brings a wealth of experience from his previous role as Sales Director at Zenefits, where he scaled the company to $70 million in Annual Recurring Revenue (ARR). At Rippling, Matt has played a pivotal role in growing the company's ARR to hundreds of millions, establishing Rippling as a market leader.

Matt Plank's Journey in Sales

Timestamp [00:00 - 02:27]
Initially, Matt shares his longstanding passion for sales, dating back to selling wrapping paper in elementary school. His competitive nature drove him to pursue various commission-based sales roles throughout his career, including selling hot tubs, appliances, and Cutco knives during his college years. Matt emphasizes that while innate qualities can make someone a good salesperson, many sales skills can be learned and honed over time.

Matt Plank [00:00]:
"I've been in love with sales since I was selling wrapping paper in fifth grade."

The Role of Founders in Creating Sales Playbooks

Timestamp [53:06 - 54:48]
One of the central discussions revolves around whether founders should create sales playbooks. Matt advises against founders taking on this role, arguing that it's more effective to hire dedicated sales leaders early on. He believes founders often delay hiring sales professionals due to concerns about attracting talent without substantial traction. Matt underscores the importance of leveraging experienced sales leaders to develop repeatable and scalable sales processes.

Matt Plank [53:06]:
"Founders definitely should not create the Playbook... They feel like they can't hire a good salesperson potentially without a bunch of traction."

Understanding Win Rates in Sales

Timestamp [05:01 - 06:04]
Matt discusses the typically low win rates in sales, citing Rippling's rates of 15-20%. He attributes these low win rates primarily to customer indecision and the tendency of prospects to stick with existing solutions. Matt highlights that in competitive markets, win rates are inherently low because Rippling often competes directly by replacing other systems. Effective sales strategies involve building relationships with both won and lost prospects to foster future opportunities.

Matt Plank [05:11]:
"The number one reason why you lose a deal in most cases... is indecision."

The Importance of Discounting and Pricing Strategies

Timestamp [24:56 - 27:42]
Matt delves into the topic of discounting, labeling it as a "made-up thing" focused on the distinction between list price and net price. He advocates for a consistent and firm discount policy, allowing flexibility based on factors like company size, product bundles, and contract timelines. Matt warns against founders who set prices too low to achieve high win rates, suggesting that a lower win rate can actually indicate healthier pricing and broader market opportunities.

Matt Plank [24:56]:
"Discounting is a completely made up thing... the only thing that matters is net price."

Building an Effective Outbound Sales Function

Timestamp [08:46 - 12:13]
Addressing the misconception that outbound sales is obsolete, Matt argues that outbound remains a critical component for scaling businesses, especially when inbound methods alone are insufficient. He emphasizes the necessity of establishing a deep partnership between sales and marketing teams to drive effective outbound strategies. According to Matt, successful outbound sales require meticulous planning, clear segmentation, and dedicated resources to maintain a robust pipeline.

Matt Plank [10:29]:
"You have to have a very deep partnership with marketing where you don't care about, like, credit."

Multi-year Contracts and Creating Urgency in Deals

Timestamp [30:55 - 32:12]
Matt discusses the strategic use of multi-year contracts to instill a sense of urgency and secure longer-term commitments from clients. He advises incentivizing the sales team to prioritize multi-year deals through commission kickers, ensuring that these contracts contribute significantly to revenue goals without disproportionately inflating commission payouts.

Matt Plank [30:55]:
"Multi years is really important and we, we have multi year deals and we incentivize our sales team to sell multi year deals."

Managing and Scaling Sales Teams

Timestamp [43:06 - 65:05]
Matt shares insights into scaling sales teams effectively. He highlights the importance of hiring sales leaders who demonstrate a rapid growth trajectory and have a history of earning multiple promotions at high-growth companies. Matt cautions against relying solely on homegrown talent without introducing fresh expertise from outside, especially as a company scales. He also touches on the challenges of maintaining team morale during volatile times, advocating for a culture of ownership and accountability.

Matt Plank [56:16]:
"You want to hire for slope, right? You want to hire for how steep you think somebody is going to be able to grow and scale."

International Expansion Challenges

Timestamp [47:13 - 52:38]
Expanding into international markets presents unique challenges, according to Matt. He explains that maintaining efficiency in new markets is more complex due to varied local dynamics and the high cost of scaling. Matt notes that while outbound sales remain effective, the lack of a proven playbook for international regions necessitates careful experimentation and adaptation to local conditions.

Matt Plank [47:55]:
"When you enter a new market, everything is way more expensive... you don't have the same playbook."

Lessons Learned and Advice for New Sales Leaders

Timestamp [65:51 - 66:58]
Matt offers advice for new sales leaders, emphasizing the importance of working under CEOs who push for excellence and challenge their teams to achieve beyond comfort zones. He advocates for hiring sales leaders who are highly driven and have demonstrated the ability to adapt and grow rapidly within their roles.

Matt Plank [65:51]:
"You really should work for a CEO whose ambition and expectations make you deeply, deeply uncomfortable."

Final Thoughts and Quick Fire Round

In a swift conclusion, Matt reflects on the importance of operational strategies in scaling sales efforts, such as segmenting product lines to specialize sales approaches. He underscores the necessity of continuous adaptation and optimization to stay competitive in diverse market segments.

Notable Quotes with Timestamps

• Matt Plank [00:00]:
  "I've been in love with sales since I was selling wrapping paper in fifth grade."

• Matt Plank [05:11]:
  "The number one reason why you lose a deal in most cases... is indecision."

• Matt Plank [24:56]:
  "Discounting is a completely made up thing... the only thing that matters is net price."

• Matt Plank [30:55]:
  "Multi years is really important and we, we have multi year deals and we incentivize our sales team to sell multi year deals."

• Matt Plank [56:16]:
  "You want to hire for slope, right? You want to hire for how steep you think somebody is going to be able to grow and scale."

• Matt Plank [65:51]:
  "You really should work for a CEO whose ambition and expectations make you deeply, deeply uncomfortable."

Conclusions

Matt Plank's insights provide a comprehensive look into effective sales strategies within a high-growth technology company. Key takeaways include the importance of specialized sales playbooks developed by dedicated leaders, maintaining realistic win rates to ensure pricing health, the enduring value of outbound sales in scaling operations, and the nuanced challenges of international market expansion. For founders and sales leaders alike, Matt emphasizes the need to build strong partnerships across departments, adopt disciplined pricing strategies, and foster a culture of accountability and continuous improvement within sales teams.

This episode offers valuable lessons for startups and established companies aiming to refine their go-to-market strategies, emphasizing the critical role of experienced sales leadership in driving sustained growth and market leadership.