Predictable Prospecting
Episode 63: Sales Organization Architecture - Tito Bohrt
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Episode Highlights:
- Introducing Tito Bohrt
- Defining the POD and the round robin factory models
- When to use each type of organization model
- Client success stories
- When is the best time to implement a new organizational structure?
- Account based selling, prospects, and the POD and farming models
- Being pleasantly persistent
Resources:
- “Sales Pods – Nice in Theory, Not so in Practice” blog post by Tito Bohrt
The tech stack Tito Bohrt uses when building early stage sales teams::
- CRM: Salesforce
- Lead Research: Linkedin Sales Navigator, ZoomInfo and Hunter.io
- Sales Automation: Outreach.io
- Phone system: Outreach.io + Jabra Headset
- Pipeline Management: GridBuddy
- E-Signatures: Rightsignature
Why does he use these products?
- Salesforce: Good to start with this from day 1. There’s no better CRM, and switching CRMs later can be costly
- Linkedin Sales Nav: The most up to date employees and titles to help you find Buyer Personas at your ICP
- ZoomInfo: The best source for direct lines, lots of accurate emails as well.
- Hunter.io: Good tech to help you guess emails if you don’t find them on ZoomInfo
- Outreach.io: Allows the tracking of all KPIs for SDRs and has the dialer integrated. This is a must have for SDR teams at every B2B company. Very superior to SalesLoft when it comes to analytics and customizations
- Jabra Headset: Likely the best sound quality, but also pricey. If on a budget, any USB headset (even those for gaming) will be good enough.
- GridBuddy: GridBuddy gives you an excel-like interface to make sales reps lives easier and allowing sales leaders to capture all the data they need for accurate forecasts and analyzing KPIs. This is another must have if you are a data-driven company (and you should be).
- Rightsignature: All the e-sig capabilities you need for an affordable price.
Want more from Tito Bohrt? Connect with him on Linkedin or send him an email: tito@altisales.com
Episode Transcript
Marylou: Hey everyone, it’s Marylou Tyler. This week, I have a friend of a friend. Mark from Outreach is a friend of mine, introduced me to Tito Bohrt who’s on the line with us today. Tito is the CEO of AltiSales and he’s also a jack of all trades, everything sales. Mark, my friend, really wanted me to talk to Tito because of this concept of the architecture of the sales organization, what I call the architecture. It’s this whole POD versus a factory or farming.Tito wrote this fabulous blog post about the architecture, the set-up. It’s changed the lives of so many people in sales and executives that I really wanted Tito to come on the show today to enlighten all of us on when to use what and how things work in terms of setting up the SDR role, the AE role, customer support, if there’s any technical liaisons. I was a sales engineer back in the day so I was part of the team. Really, we want to talk about when you should set these things up, how they should be set up and at what level? Because I’m always interested in the theories of accounts because I work more on enterprise of market and Tito works probably what, is it correct to say early stage Tito that you’re more involved in or do you take it all the way to the older companies too? Tito: I do all the way, actually. Marylou: Without further ado, welcome, Tito, to the podcast. Tito: Thank you. It’s such a pleasure to be here. Marylou: Tell us how this all got started. How you made your mark in the world? You were telling me a great story about Mark so why don’t you start there. Tito: That’s interesting. Mark contacted me after I wrote this blog post that you were talking about. Kind of talking about the differences between the POD structure, which has recently become super popular in regards to mapping your team and how it’s going to grow, your SDR to AE to CSM ratio. I wrote a very thorough argument for doing it the opposite way. Doing it like the round-robin/factory model where I still believe that you should scale proportionately. Your SDR, AE and CSM teams should definitely be growing in whichever proportion worked initially to maintain the deal flow but you still think you should cross end the leads. Any SDR combo for any AE can close deal and give it taking care of by any CSM. Marylou: For those of you who are listening, just in case you don’t understand these terms, the POD structure Tito explain what that is, the architecture of that. Tito: Right. The POD structure would mean not in sales, everybody has the sales of owner reps. Many times in the POD structure, they are also assigned just the territories. You might have a sales of owner rep who’s covering Florida. If he sets up a meeting for an account executive, it would be for the exact same account executive who has the exact same territory, they’re working like a unit. If that person closes, then the customer success manager will take over that same account. Those three people, in whatever proportion you structure that team is always working together. They’re like a unit of work and then you can scale those units. Marylou: Okay, versus the let’s call the factory model for this telephone call because I’m sure there’s some other term. Tell us about the round-robin factory model. How does that look? Tito: In the round-robin factory model, you wouldn’t necessarily use territories to assign the specific accounts to your team. In this complete round-robin, you can assign it in different ways. One of the things I proposed in a different blog post was actually do it alphabetically which makes it easier because if I go look at HP for example, I don’t necessarily know where the headquarters is. Then I go bump into intermedia like, “Where are they headquartered?” You don’t necessarily always know where the HQ is but if you do it in an alphabetical way, it’s very easy to know like, “I own all the accounts that start with A.” You could do a lead bounty and all that very quickly and easily and intuitively. However, the factory model, what it means is then any SDR will be booking meetings and then those will be spread out throughout all the account executives. As the account executives close those deals, those will be spread out across all the customer success managers. There are specific reasons that you’d want to do that. They have to do with understanding your key performance indicators and really understanding how your reps are performing across sales development, account executive, and customer success. As well as preventing your team from breaking down in case of somebody getting promoted or somebody leaving your company. It eliminates the fragility of the team. Those are two big reasons why you would not want to do a POD structure. Marylou: Okay, let’s devil’s advocate here. We’ve been ingrained from everything down to the lonely email to segment, segment, segment. The POD concept represents segmentation in a way. How does the factory model render when you have, let’s take the fictitious company who’s selling two or three products scenario, we call them buying scenarios which one particular buying scenario, maybe a project-based sale, where you go in there’s a defined project, the sale cycle is a little bit shorter. Same product but there’s a project in mind at the client at the prospect. The second scenario would be they’re doing some long-term planning. They eventually want to replace their legacy system with something new. Same product but their sale cycle is longer. We typically like to separate those in segment, those two specific SDRs because of the skill set. In the factory model how does that render? Do you just put everything in a big pot and the next number that comes up is what they call and work on? Tito: That’s interesting. I don’t like going to either extreme, when you’re saying the POD likes super segmenting. I’ll give you this example. Let’s say we have these two product lines. Let’s imagine you have a big sales team just for the purpose of understanding the concept. Let’s say you have 100 SDRs, 100 AEs and 100 CSMs that are working. Because you have two product lines, I wouldn’t have everybody call every product or both markets. I would separate my team into two different teams. I wouldn’t consider my sales team just one team. After you have two teams though, I wouldn’t say that, “I’m going to grab one SDR, one AE and one CSM and make them a unit. And that SDR, every meeting he books, he will be booking for the AE. Then, every meeting the AE closes will be going to that one CSM.” I’ll grab those 50, 50, 50 and say, “Any meeting you, 50 guys book in the SDR team could go to any of the 50 account executives.” That is what I am referring to the factory model. Yes, when you have a specific different products, I think you should still segment. When Aaron Ross and you talk all about the segmentation of roles: SDR, AE, CSM, I’m all in for that. I think those were fantastic ideas. Marylou: Okay. Really, this is sounding like the old call center models when we used to have predictive dialers in the call center. We had SDRs, the predictive dialer was the one who dictated where they were calling at the time. Geography wasn’t as important but we did segment it by product line. We also segmented it in some cases by sales cycle, only because the sales conversation that we needed to have to get to a codified opportunity may have been three to five calls versus one to two calls so we did segment out that way. That’s kind of like by product but it’s really by sales cycle and more complexity that was built into the product. Predictable revenue talks about that which a lot of people either tore out those pages and didn’t read it or I’m not really sure what happened but we were talking about this 315 process where that was a natural split for SDRs even to have people who qualified during the AWAF, the Are We A Fit Call which was a 15-minute qualification call. Then we had more seasoned SDRs handle the longer calls where they did one-hour call with the decision maker and then maybe a two-hour call with the stakeholders, more of the challenger type model that they talk about with the three to five stakeholders in each account. But I love the concept of what you’re talking about because it’s efficient. Tell us about how effective it has been in the clients that you’ve worked with, who had the POD concept and then moved over to the factory model. Tito: Yeah, happy to talk about. The interesting thing is when the POD structure started emerging, even companies like Aldridge where Mark’s at, they start doing a POD without any necessarily big thinking or reason behind why you should do POD. They’re all selling the same software, Aldridge. Then you might have had 10 SDRs, 10 AEs, 10 CSMs and there was a 1:1:1 structure where every deal was flowing through, and there was no real reason for that. That creates three problems. If you have one great SDR and he’s booking you more meetings than your worst SDR, which will always happen, then the AE who’s getting the meetings for your best SDR has a bigger pipeline. It’s not because anything he’s doing, it’s just because the SDR that supports him directly is doing a better job. Then, what will happen soon is, “Oh, that SDR is great. He wants a promotion. He finally gets it.” Now your entry level SDR goes and supports that small unit again. Then that small unit, because they have a new SDR who’s training might be now underperforming. Your AE who has gone to, initially he was over quota, 50% over quota now he has a new SDR. Now, he just puts his time and prospect himself and now he just missed quote. You’re like, “What happened?” What happened is you created a straight line of traffic of deals that is not allowing everybody to take everybody’s deals. The first thing is uneven SQL distribution. If you were to have all 10 of your SDRs book meetings for all 10 of your AEs, you can much better measure not only the quantity but also the quality of those deals. If one of your units, you have 10:10:10, let’s say this AE is getting 20% more demos than anybody else but he’s not closing them. You’re like, “Oh my God, my AE needs training. He’s getting 20% more demos but he’s not closing those demos.” Then, when you actually get into the nitty-gritty of what’s actually happened, and you go listen to the calls of the SDRs, you realize that this SDR might not have been qualifying the deals as much. He’s been trying to push people a little bit more than anybody else. Even though the AEs is getting 20% more demos and his close rate now looks lower, it’s not his fault. He might be your best AE but because he’s getting all the same deals from this only one SDR who’s pushing people a little bit more than everybody else, now his metrics look really bad. When you do the factory model, every AE is taking deals from every SDR and now the metrics for your close rate for every AE are actually representative of the skill the AE has to close those deals. It’s kind of like the bell curve. You are giving everybody a variation of data points left and right, up and down. Just like slicing a tiny part of how good the SDR was and sending him over that, “I’m just working off of that.” The first thing is kind of like the SQL distribution. Just understanding that if you don’t run a factory model, the key performance indicators that you are measuring, you’re contacted to booked percentage for your SDRs or your meetings performed to deals closed or your AEs might not be entirely representative of their skill. They are also representing what’s happened right before they took that or right after they hand it over to the next team. Marylou: Plus, like you said, you have a statistically relevant sample because of the fact that you’re using a round-robin methodology, means that you’re looking at a sampling that’s a larger size to begin with. Then, once you start analyzing that data set, you’re able to then drill down to the minute component, which in this case would be the SDR skill set, it could be the least issue. You would not necessarily see these things red flag if you have a smaller sample to work with. Because you’re not able to really look at the gap and the contrast, as well as if you do have everything set in one bucket that has a statistically relevant sampling number of records. It sounds just like the call center model back in the ‘90s that we used to use. It wasn’t called farming but it allowed us to take a universe of records and distribute them across a wider range of data points which allowed us to really find tune a lot more about that list itself, the complexity of the list, whether it was getting fatigued. We could also look at the skill sets of the people using the list. We could also from there, look at the geographies product lines, everything else that we needed to look at in order to, in our case, replenish the list because we were constantly working from a cold list and back in the day you couldn’t just go online and pull records down. You had to purchase lists and purchase phone numbers and you had to be a lot better at analyzing what was working and what wasn’t. Tito: Yeah, correct. I think the primary reason that so many companies have moved to the territory and/or POD structure has been because so many companies had field sales reps. We’ve seen this changing over the years. 10 to 15 years ago, you couldn’t sell $100,000 contract over the phone. Now, I’ve seen that happen multiple times. Six-figure deals being closed over go-to meeting and just e-sign it, send us back and we’re all done. Now, we require less people to actually be flying around and be on the field. It doesn’t necessarily make as much sense to have territories if everybody’s going to be doing inside sales. Marylou: Right, right. I’m sure the audience is sitting here thinking, “Okay, this is sounding really interesting. Where do I start?” Can you help us by giving us some characteristics of when it might be a good time to consider putting in a factory type model? Or are you going to tell us that you should do that from the beginning? Help me understand that. Tito: Yeah, I would do that from the beginning. The only scenario where you would not start this from day one is if you are really considering doing field sales and either selling maybe high six-figure deals or seven-figure deals and you are likely going to need people on the field. Other than that, even when you have one SDR and one AE, I would think that as soon as you higher your second pair of SDR and AE, I would have cross-book meetings. I could get slightly more hectic on the counter because one reason people advocate for the POD model is if the SDR only has one AE, he can quickly look at the counter, make it so much easier, there’s no scheduling conflicts. But at the same time, all the things that you lose by not doing the factory model of round-robin hurt you much more than the easiness of booking something on the calendar. Marylou: Okay. Let’s break it down then into theories of accounts. Mid market, which is usually inside upper mid market which is usually inside and some enterprise which is usually split inside and out, those are great opportunities for the factory model. If you have field sales reps where you’re handshaking with actual belly to belly sales reps or actually going to the client site, this may or may not work as well in that environment. Correct? Tito: Correct. I would still have my SDRs, if they’re all inside. I would still have them do all the whole territory. But then for the AEs, you could assign the AEs specifically to the territory they’re going to be covering. Sometimes the CSMs, it’s also a good idea to have covered territories. Because for some reason if there’s a conference or something’s going to happen soon and you want to fly somebody over there and meet with their corresponding clients in the area, that would make sense. The sales development side, I could still see everything running in a factory model. As long as the value proposition is the same for a mid market and enterprise company, there’s no reason to split them down and say, “Okay, we’re going to have a specific team for mid market and a specific team for enterprise.” The targeting and the messaging and the value prop is exactly the same. I would run the factory model just because the better KPIs, easier scalability. Marylou: Okay. Tell us about the new buzz word which is the old buzz word of strategic selling, it’s called account based selling. How is this or does it even matter? I’m hearing that it probably doesn’t but just to set people’s mind at ease who have embraced account based selling methodologies. Does the factory model apply and work in those types of environments? Tito: I think so. There are a lot of things being said about account based. I feel some confusion in the market. Some people are saying the account based just means reaching a wide variety of people of the other company. Other people say account based is actually just going beyond and then having your whole team go reach to their whole team. Again, I think the factory model would apply to both of those cases because even within your CRM if you set it up correctly, you should have some indication that your team and whatever company you’re trying to prospect into, has a specific connection or a way where we can get in there in a warmer way. I would still flag to those accounts and still ask my CEO, my president, my head of customer success or whoever has a connection with the other company to send them email and help my team get into that account. You can still have somewhat of like a small target accounts list that gets cycled through. One SDR for this month or six weeks you might say, “I want to try to get into Markesan and I want to grab the 12 people that I’m trying to prospect into for Markesan, want to put them into my cadens. I’m going to throw them into Outreach and then when I try that account but if I don’t book it, it’s not mine anymore. After six weeks, it’s open floor. Anybody who wants to take it, he can grab it and prospecting.” It’s so important to set up your CRM correctly and be able to make it easy for all your SDRs to understand when is the right time to go after which accounts and what has happened in the past. Marylou: Right. There’s a lot of angst over accounts and ownership. In the world I work, AEs are just really wanting to own a core number of accounts that they go after. They are essentially the owners of those accounts and drive the sales conversations. The SDR is typically in a support role of helping it get in the door. But it’s still prevalent where we see these core counts in the inner bulls eye owned by the AE. Then, there’s a tear out from that what we’re calling extended universe that is more of that round-robin style that we’re going to put it into a big pot. They’re statistically qualified using the predictable revenue model and the predictable prospecting model of the ideal account profile, the ideal prospect personas are put into this bucket for the extended universe and then that’s utilized in a round-robin fashion to try to generate first meeting or get responses back. But there is still some holdout from the AE side of wanting to have those core accounts. Tito: Just to reiterate here for the audience. The idea that I wrote about and I proposed in the factory model doesn’t necessarily mean that the AEs will now be thrown any deal, anytime. Because if you have an account executive who just worked at one of your target accounts and he’s like, “I want to own that.” I think they should still own that. However, I wouldn’t tie them to one SDR. I wouldn’t have them say, “Okay. AE Jonathan I want to be working with Cindy who’s my SDR and she’s the one who’s just going to be supporting me.” The only thing I’m trying to break is that idea of one SDR and one AE working together. If your AE has strong connections into one company and they want to take that account for two or three months and say, “I know a bunch of people. I want that to be my account.” I think you can still run named accounts. I like the idea of named accounts. I like the idea of specializing roles. What I do not like and the only thing I’m trying to advocate against is let’s not tie one SDR to one AE, let’s not tie one AE to one CSM or in any proportion. If anybody books Markesan and we have this one AE who used to work at Markesan for 20 years and he has a bunch of friends there, we should send it to that one AE. Then, the next one that they were supposed to take, let’s send it to somebody else because what we want to do eventually is just maximize the amount of revenue the company can make through leveraging every possible connection we have and every inside into every company while still maintaining our metrics healthy when it comes to the distribution of who’s doing what and what’s the reason we’re over or under performing in certain areas. Marylou: One last objection that I know people are thinking of and I’ve heard this from my clients is what about the prospects? If we have these different SDR people calling in, there isn’t the chance to develop any type of rapport with the SDR. Then the lead gets handed off to the AE and there’s a disconnect there. Is that a growing concern, issue in your mind or is it just we need to get better finessing the hand-off? Where do you sit there? Tito: I don’t think I’m too concerned about that if the hand-off is done correctly. I’ve seen a lot of companies have their hand-off completely broken. Everywhere I go I really advocate for people to actually rethink about their CRM a lot. This is one really big thing for me. I recommend everybody use GridBuddy which is a prog by AppBuddy, a company I’ve worked extensively with. It’s just fantastic. It gives every sales reps so much visibility over their pipeline. To give you some idea here, the way we build that team was every SDR would get assigned target accounts for the month or six weeks. They would get those three accounts. They’re the only ones prospecting to those accounts. You all are building that rapport. You’re not going to get one account being hit by four different SDRs. They only own that account for six weeks. After that, it’s not theirs anymore. This also makes it competitive. Otherwise, an SDR if they don’t book a meeting and somebody’s like, “No. Call me back in six months.” This is a very high value prospect for your company. They just set themselves a reminder in six months and then they call back in six months. Here they know that that’s not a thing. If somebody tells you, “Call me back in six months.” That’s not your account anymore, that’s going to be somebody else’s. You have to book in the next six weeks and you should try to get in through a different way or keep being persistent and always persistent in a nice way. Marylou: Yep, Karen used to call me pleasantly persistent. Tito: For those six weeks if they book and it’s complete, yes they are building the rapport with the whole account. There are so many cool things you can do. We try to get the SDRs to always be very creative. I’ve seen things work from the story from my persistence email that is very more popular nowadays than it was before like sending pictures of puppies or sending personalized videos. If you really know that they are good fit for your product and you are pleasantly persistent, you’ll build a rapport and you could do a great hand-off to your AE if you understand how the deal needs to flow. Marylou: These are all such great ideas. We’re introducing scarcity. I love that idea of the six weeks. It’s out of your hands that the opportunity appears more valuable. That’s Cialdini’s rule, one of the six principles persuasion of scarcity when something appears more valuable because it’s less available to you. I love that idea. How can people reach you if they really want to dive deep. You mentioned a couple of software apps, I’ll make sure that I put all the links to you and your companies on our show notes. What’s the best way, Tito, to get a hold of you? Tito: I’m very active on LinkedIn. If you send me an invite saying, “Heard you on the podcast, definitely will be glad to connect.” You can also send me an email at tito@altisales.com. Marylou: I will also, for you guys, put a link to that blog post that turned my friend Mark around. Mark does billions of records, he’s processing all the time. He’s Outreach, he’s got an app that’s allowing us to start a conversation to people we don’t know in a very systematic and effective way. He was so excited about me speaking with Tito today because of the concept. We should look at that. We shouldn’t just accept the POD or accept a particular structure. We should really look to start thinking outside the box here because it is all about revenue. It’s all about consistency and scalability. Great ideas, Tito. Thank you so much for your time today. I look forward to maybe having another conversation down the road to see how somebody’s things planned out. Tito: That was fantastic. Thank you for having me, Marylou. We’ll talk soon.