Hiring a VP of Sales in SAAS as a CEO | Part 1
EVERY SAAS COMPANY REACHES A POINT WHERE THEY HIT THE CEILING AND NEED HELP OVERCOMING THEIR UNIQUE SALES CHALLENGES. I WANT TO HELP.
Full article: How to hire a VP of Sales in SaaS | CEO Guide
Every SaaS company reaches a point where they hit the ceiling and need help overcoming their unique sales challenges.
You've got the business to at least $1m ARR or close to it.
The conditions seem right. You?accelerate pre-existing sales?and have a?growing sales team?closing deals. Your?sales strategies?and tools are perhaps less imaginative but effective. It's not just repeatable but repeating, so it's ready to scale.
You've appeared to do all the right things. Then suddenly, you do not see the results you need anymore – and you need leadership to step up.
Maybe you already have a VP of Sales, and they can't get you there. Perhaps you are finally ready for your first VP. Either way, it is your most challenging hire. Most expensive hire and possibly the worst hire you will ever make. A high failure rate is inevitable. I want to help you.
I am going to be honest with you. There are a million things that I can say on this topic, but the most important thing is that each business, including SaaS companies, is different, meaning someone with a creative approach at the helm who gets it is a must – or you're steering a sinking ship.
So, if you have specific questions about your VP of Sales, sales tactics, or sales function, reach out to my team and me. Otherwise, keep reading and see if I can help you.
SAAS VP OF SALES COMP PACKAGES
I hate starting here. When you start thinking about your?first VP Sales?and getting the right person, it is not about your sales comp, but it is often the first thing that stops CEOs and founders in their tracks- writing a job description with a comp package attached.
The unfortunate realities startups?face outside SaaS are not dissimilar to those faced by other businesses:
The woeful lack of competency and the severe talent shortage is ripe among the VP of Sales.
However, while business outside of SaaS struggles to come to terms with the reality that they need to recoil in fear from?potential hires?wanting anything less than a $150k base, the SaaS startup world is throwing crazy money at people they think will fix the problem.
And another sad fact is it's not that these people were hired and hit some obstacle along the way, but they were never going to be the person to fix it.
SaaS companies are throwing everything at?SaaS VPs?who can talk and not even have to walk. It's crazy.
But let's get real. You will have to pay them a base salary. They usually need some commitment when working the enterprise customer deals, plus over-rides on their team, bonuses tied to specific metrics, and equity.
All said and done; you are looking at a?$500k+ comp package?on a good VP Sales.
Is it an expensive hire for someone who won't sell most of your deals? Yes, but necessary – if you get the right one.
If you get the wrong one, it is your most expensive mistake.
Honestly, I have seen worse; this is just what someone at this level expects. And did I mention that this assumes you can lure a VP of Sales to leave?
There is a reason why the average tenure of a VP of Sales is falling daily. In today's competitive markets, people have no clue how to sell, close, or what it takes to be a true VP of Sales.
In short, most people are soft. You need to know where to find someone and how to ensure you don't choose the wrong person – stop focusing on what you're going to pay them and focus on getting the right one.
WHERE TO FIND A VP SALES FOR SAAS
This is easy to answer but is hard for any CEO or founder. It may take you six months to find and close a VP of Sales – perhaps longer.?
This is because you can't compromise, and they likely have a very comfortable role, perhaps not as a VP, but they are already valued somewhere.
So do everything to find them. Hound your network – Angel List, LinkedIn. Stalk your competitors. Pay recruiters.
A great VP of Sales is 100% accretive.
Jason Lemkin, SaaStr
Be relentless and suspicious.
Don't take advice at face value for such a crucial hire. While paying recruiters can be helpful, I'm skeptical of anyone claiming to have the perfect candidate.
It is not uncommon to meet 20+ candidates. Just know that the more you encounter, the more you learn what you want, especially if this is your first VP Sales hire.
One last thing:?Always court great candidates. Meet all of them. And drive to see them. You want to show these people that you want them and want to invest in them. Never forget that value is a great motivator – and like any sale, you need to inspire.
It may take up to six months to find and close a great one. You can't compromise. Otherwise, they will squander your precious lead generation, capital, and time.
So, do it. Do all of it. And start now.
VP SALES TYPES IN SAAS
There aren't three, six, or twenty-six types of VPs; there are two.
One ancient idea relative to the SaaS sales was three types of VP sales: The Scientist, The Engineer, and The Operations Managers.
The basic gist:??The Scientist experiments. The Engineer builds a repeatable sales process. The Operational Manager executes.
The current stage of your business also requires a specific type.
I have talked to many thought leaders in this space about the over-simplification of the VP of Sales. Most know that it is not that simple and that content is content.
So, here are my thoughts about: The Scientist, The Engineer, and The Operations Managers:
领英推荐
THE SCIENTIST
The scientist is a?Sales Ops Manager; if you hire this person, you will have a very regimented and efficient?sales process,?deal management, and?buyer journey.
It will be clean, documented, and logical. It will lack personality; no sex appeal to sell.
You will?hit quota?if it's set low enough. You will maintain a good business and only sell profitable deals. Your?sales organization?will be a good core group of salespeople with no HR issues.
This lead is always careful not to scale too quickly.
THE ENGINEER
The Engineer is serious about data. Constantly require customization and optimization to get 0.1% better.
But this person is so far in the weeds that they completely miss the forest from the trees – data-driven?VP Sales?equals poor planning.
You will have high?salespeople?turnover because their approach will be abrasive. They will constantly talk about?SPIN Selling?and?Challenger Sales Methodology.
They will get you to deal with?large organizations?and?enterprise customers, perhaps close one every year but will burn almost all the smaller (cash flow) deals.
This person will want you to constantly pay for new tech, loading up your tech stack because he NEEDS to keep track of everything.
If you ever say no to something, they will blame everything on 'lack of insight into the numbers.'
They will grow the team slowly until they hit the benchmarks for one quarter and then want to go on a hiring craze. Scale rapidly and then quickly lose control.
THE OPERATIONS MANAGER
Is a lazy idiot – do not hire them.
Look, there is no full-proof predictor of success in a VP of Sales role. You have to be willing to make the mistake of getting this wrong, but there are ways to avoid a complete catastrophe. I have never seen someone call this right on the first try – especially without my help.
SAAS VP OF SALES TRAITS
Solutions-focused & results-driven
The sales director is your buffer from everyone else in your organization who believes you're overly ambitious. It's an unwavering commitment and mentality –– "there's always a way."
Do not hire The Engineer that produces data and reports to explain away missed targets and projections.
Data is good, but you need to be results-driven, not data-driven – thus, your sales leader is solutions-focused.
Solution-focused means that your sales leader needs to be creative and strategic in their sales strategy and then implement the measures to execute.
Cultivating sales culture
Above all else, your sales leader systemically cultivates the sales culture. This is true of even the worst VP of Sales because culture is formed whether you are actively seeking to develop it or not.
In sales, culture is essentially the way things get done in your organization – and this needs to be based on accountability and transparency.
Accountability includes:
It is the sales leader's job to enforce that accountability and therefore uphold the culture of the entire sales team.
Suppose the sales leader is beholden to everyone accountable to standards. In that case, they must be capable of achieving those standards as well – this links to their selling capabilities which we will get to shortly.
Talent recruitment & development
A significant component of?sales culture?is the hiring and development of each salesperson to meet the specific needs of the sales organization.
Suppose a salesperson or sales rep feels they get limited value from the sales leader. In that case, they will not utilize the sales leader to their fullest potential because they won't feel confident in the leader's abilities and training.
When leaders aren't beholden to any particular rep, they can push the boundaries and make the sales representatives achieve more. This also creates the need to have crucial conversations while implementing the forcing functions that keep the team in line without constant hand-holding.
The leader must prioritize sales hiring to build and scale a team of the right people and retain highly accountable, professional salespeople while consistently weeding out unimproved low performers.
Sales talent
All sales leaders need to succeed as sales representatives in their past. Prior experience and previous roles are irrelevant.
I want hard proof that they can sell because, on paper, a VP of Sales with experience in a big company does not mean they can drive revenue upwards.
There are myriad factors for revenue growth: competitive market, marketing strategy, and founder skills, to name a few.
In SaaS, the leader knows:
You may be thinking:?but my VP of Sales shouldn't be closing deals with the rest of them; they need to be leading.
I agree that your VP of Sales is not pulling in all your deals. They are hiring, culture developing, and scaling your processes in an ideal world.
But your sales representatives need to aspire to a leader that can sell. Think about the power imbalance. If your top performer weren't your VP of Sales – you would have mutiny.
As a founder, I need to know that a VP of Sales can close a deal versus allowing solid sales teams to experience failure as a learning opportunity. Only?high-performing sales experience?provides you with this insight.
In part 2, I will go through in more detail the interview process, but to get started download Our Sales Leader Hiring Rubric.
The rubric systematically assesses your sales leader against measurable sales leader traits and expectations. Ensure your organization's growth today