How to REALLY Sell to a VP of Sales

"So buy it maybe?" 

Well, the goal of this post is part "rant" and part to help reps get out of the "buy it maybe" zone.

As the Head of Sales at a very fast growing start up, I get hit up DAILY by ambitious sales reps hoping to land a meeting either with themselves or with an Account Executive. Ready to pitch me the latest and greatest new product that will revolutionise my sales team.

Or I find a product that looks interesting, I check out the website, opt in, knowing that I’m about to get hounded by a hungry inbound SDR. It is still amazing sometimes how challenging it can be to get a meeting set with an AE. I can’t tell you how many times and SDR has missed a scheduled call, or an AE has rescheduled a meeting. But that's another story.

 But either way, eventually I hop on a join.me or something to get a demo of the program/software.

They all start the same way.

“I’d like to learn a little more about what you do, your team, and your goals." 

To which I explain the size of my team, what we sell, and what I’m trying to accomplish.

Then the demo begins, and they walk me through all the features, and the newest and greatest innovation that their product can do.

But they all seem to miss out on a MASSIVE piece of information. 

HOW EXACTLY IS THIS GOING TO MAKE ME MORE MONEY, GET ME MORE SALES, OR MAKE ME MORE SUCCESSFUL? 

Or another way to ask it 

What is the ROI that I’m going to see from your product?

 It has always boggled my mind how simple it is, but how few times anyone does it.

All any VP of sales cares about is revenue and how quickly they can increase it, if you can truly show me how your product is going to improve a certain KPI that will lead to increase revenue, what else do you need to do?

Even if the VP you’re talking to has to get something approved by the CFO or CEO, if you have clearly stated, proven, and put in writing which metrics are going to go up, and how your program is going to pay for itself 5x over… Consider the deal signed.

But nobody F’ing does this, and it blows my mind.

My team at SnackNation sells a product that does not have a pure monetary return for a company, great tasting healthy snacks. Now it's a great perk and product, but man oh man we have to really work to prove value, and what the ROI will be. But we do it, and we do it well. We have brought on 1,000s of customers over just the past 1.5 years, 75% through outbound selling. If you want a free sample box, just hit me up, I'll get one on the way for ya. 

But I have always envied the reps that are selling to sales leaders because it’s very black or white. Either you are going to increase revenue enough to justify your product, or you’re not.

Something that I don’t think many reps ever ask themselves is this…

What does a VP of Sales (or anyone you're pitching to) do after you pitch them? 

If you think I'm skipping down the hallways shouting out the greatness of your pitch, you're wrong. 

I run the numbers.

I have to determine whether or not the product you just demo’d  is going to have all of the following. 

1. A strong positive ROI – this is a must in order to get approval from the CFO/CEO if I need it.
2. Improve the sales team significantly – Will the team buy into it. Is this something that will truly improve the numbers I want.
3. Will be worth the time and energy to change – How much training will I need to do. How easy is this to implement. Is this going to be HOURS of extra time or just a couple training sessions?
4. Won’t make them look bad or stupid. – What are the odds this DOESN’T work? What happens if that does occur.

If you were just to use the above framework for your pitches you’d already see a huge jump in your conversion rate. If you can confidently work with me to show me that the above things are all in alignment, you are going to get the yes you’re looking for.

So let’s dive into how to actually sell to a VP of Sales.

1. Find out what the main KPI’s and Metrics that I track and want to improve.

This is far and away the first and most important step. You need to know what KPI’s (Key Performance Indicators) or metrics I track day to day, and month to month for my sales team.

For a few very important reasons.

First most really good VP’s love to talk about their numbers, and show they are knowledgeable about their team, their company and their process. This is a very easy rapport builder, and give the VP a chance to talk about their team a bit. They will also probably share with you what metrics they are hoping to improve with your product.

Second it will also let you know who YOU are talking to. If you ask a question like “So what are the key metrics you track for your team and are trying to improve” and all they say is “We just want more sales”, it should actually be a pretty big red flag that you may not be talking to the right person. Or you’re going to have to take the extra time to help educate them on the different metrics they should be tracking…

Lastly and most important, you need to be able to determine which of the key metrics they track and are trying to improve, can be positively influenced by your product.

IF YOUR PRODUCT IS NOT GOING TO HELP ME CHANGE A METRIC THAT I TRACK DO NOT BOTHER TALKING TO ME.

You also HAVE to know what the key metrics or parts of the sales process that your product is more than likely going to have a major effect on.

 This is key guys and gals. If you’re selling me a nice to have, it’s going to be very tough for you to convince me it’s worth it, and even harder to get me to get the approval from the people I might need it from.

Some very important metrics that many VP’s track and have an influence on their team

• Conversion Rate
• Avg Sale Size
• Opportunities Created per Month
• # of deals per month
• # of deals per rep
• Sales Cycle Length
• Rep Led Response Time
• Email Open, Click, and Response Rate
• The cost per everything – Lead, Opportunity, per Hire, etc
• Activity Metrics – Phone Calls, Emails, Talk Time

 We will talk about how to talk about these metrics a bit later.

1. Know what I sell and how much a customer is worth to me

 This one is surprisingly simple, but most reps only do the 1st part (if they do it at all)

You have to know what my company does, and what my team is responsible for. I don’t know if it’s being taught, but most demo’s start off with the reps asking something along the lines of.

“So tell me what you do there, your team make up, and your goals”

You should already know what I do here – That should be very simple.

You should know what products my team needs to sell – This is easy to find out on the website. OR if there are multiple products, that is a much better question. “What products is YOUR team responsible for? A, B, C, or all the above?” This show’s me you’ve done your research a bit, and I don’t need to explain everything.

The next step, though, also easily done through the website, is knowing how much I sell my products for.

Are they 1 time sales?

Are they recurring subscriptions? If so for how long?

What are the different prices that are listed?

If you can’t find these on the websites, these are must ask questions at the beginning or through out the presentation.

What you are trying to discover here is how much is a customer worth to me and the company. You’ll see why in just a little bit, but knowing this piece of information is crucial.

1 question that I have NEVER gotten, but should every single time is…

 What is the average LTV of one of your customers?

 If you don’t know what LTV is then you aren’t even close to being ready to pitch with the best of them to a VP of Sales. Know your customer's guys.

LTV stands for Life Time Value. 

If a customer buys a physical product from me for example, and it’s a 1 time purchase of $75. Then the LTV of that customer is $75.

If a customer signs up for an annual contract of $500 a month, that customer is worth at least $6,000, with probable opportunities for upgrades.

By asking the VP this question, you’re going to appear like much more of an expert, someone that I can truly level with, and is going to set up the next parts of your pitch and close perfectly.

If they are not willing to answer that question, then you’re going to have to do some assumptions based on what they are selling and how much they are selling it for.

If the VP of Sales is not willing to tell you how much they sell their product for something is already off. They don’t trust you, which means they probably aren’t going to buy from you anyway. 

The VP you’re talking too needs to know why you want to know that. So the easiest way to ask it is with a strong justifier. The set up can look something like this

“I know in order to make a confident purchase, you have to make sure you’re going to see a solid ROI on it right? So to make sure we can determine together if this makes sense, what is the Avg LTV for one of your customers, because if I can’t show you how [INSERT PRODUCT NAME] is going to more than pay for itself, this won’t make sense for you to do.”

Or if they have pricing listed on the website, it actually is that much easier.

“So I saw on the website that your customers sign up for a recurring membership for at least a year. So is the Avg LTV for your customer around $6,000? Or is it a bit higher/lower than that.

You’re starting to get the numbers you need to really close the deal strong. And also make getting approvals from the powers at be even easier.

1. Find the metrics that your product is going to increase the most.

This is where your demo starts to come together. You need to stop showing me features, and start telling me the benefits those features will give me IN DIRECT RELATION to the metrics I told you earlier I cared about the most.

If anyone on my sales team is reading this right now, they know what’s coming next.

IN ORDER FOR SOMETHING TO BE A BENEFIT, IT MUST PASS THE STFW TEST.

 What is the STFW test? Oh, well let me enlighten you real quick.

STFW stands for “So The Fuck What”

Most of my team actually has this on their monitors with a sticky note as a constant reminder.

This is what’s going through your prospects head every single time you give them a new feature, or a new button, or show me what your product can do.

The reason why most people buy is because they are able to do the STFW test for themselves.

 Regular Sales Rep – “This feature here will let you quickly and easily split test your email campaigns”

Me – Audible “Ok cool” In my head “Ok so if I’m able to split test faster I should be able to increase open rates and response rates faster over the next 3 months. If I can do that by 10% I should see an increase in sales by X%... Interesting” 

STOP MAKING ME THINK SO HARD!

Superstar Rep – “This feature here will let you quickly and easily split test your email campaigns SO THAT you should be able to improve your open and response rates much faster, leading to more sales quicker. How often do you split test right now? 

If I say “never, rarely, sometimes” – The follow up is pretty simple. “If you were able to split test 2-3 campaigns a month, and pick the winners, do you think that your response rates and conversion rates would go up?”

If I say “All the time” – “Ok great, if you were able to do the same tests, but significantly faster, could you find other places to apply your time to further help your team do X?

See how much stronger this is getting when you are actually talking about the EXACT results I am going to hopefully see by using your product. You’re starting to talk my language now, and I’m starting to picture how things will change with this product.

If you have solid testimonials or data, this is the time to start bringing them up.

• One of our clients saw a X% increase in X when they made the switch
• X went down by X%
• Save X amount of time every day which allows for X to get done more often.

Much much better.

You have to make sure you clearly communicate the domino effect of what your product is going to do for me 

Here are some examples

• Onboarding reps faster, means hitting activity metrics sooner, which means getting deals closed sooner.
• Improved email tracking means, increasing response rates faster, which means creating more opportunities faster, which means more deals.
• Reps spending less time building lists, which means more time for being on the phone (also saves money on hours spent), which means more calls made, which means more opportunities created, which means more deals.

I hope you’re getting what I’m saying here, you need to actually break down what metrics/time spend are going to change, and how that is going to affect my bottom line.

1. Show me how I’ll get at least 5x return on your product.

 This is where it all comes together.

You know what metrics I care about.

You know how much 1 customer is worth for me.

You know which metrics are going to go up because of your product.

Now it’s time to show ME how this is all going to work.

Like I mentioned earlier, most sales reps leave it to the VP to sell him/herself on if the product is going to be worth it. As superstar sales person, you’re going to do this with and for me.

Here’s what you and I need to know

• Which metrics we think will go up
• Why we think they will go up (or come down if that’s a good thing)
• What that will mean monetarily for me and the company

 Now before we continue…

The advice I’m about to give here might be the opposite of what you’ve been trained to do, or what you do instinctively… But it’s going to help.

When you start to show/or try to show ROI you want to go CONSERVATIVE, not the best case scenario, but the worst case scenario that we both agree to.

You have to remember, you’re the sales rep, you’re pitching to me. So when you say things like “This ONE customer I had, boosted sales 300%” I really don’t give a shit, because I’m 99% sure that’s not going to happen to me.

So if you try to show me the ROI using a 300% increase in something, it’s not going to work, because I won’t believe it, and therefore I won’t buy. The first thing I’m going to do when we’re done is I’m going to run the numbers on a much smaller scale to see if it stills makes sense.

 Here’s how it works.

You’re going to take the cost of your product- For this example let’s say it’s a $500 a month SaaS product with an annual agreement. Which means I’m looking at spending at least $6k with you.

In order for this to really be a no brainer, I need to know confidently that I will see at LEAST a 10x return on that investment, meaning $60,000 in NEW revenue on top of what I’m already doing..

This is where knowing the LTV for the VP’s sales team becomes so crucial.

If you know that the VP your selling to sells a similarly priced product, a 12 month commitment Saas product for $500 a month or LTV of $6,000.

All you need to show me is that I’ll get at least 10 new customers by using your product.

(LTV x 10)/(Cost of your Product) = >10

Example 

LTV = $6,000

Cost of Product $6,000

($6,000 x 10)/$6,000 = 10 – You’re in good shape here. 

($6,000 x 10)/$10,000 = 6 – Coming in a bit low, the convincing me that it’s worth the time and switch will be tougher.

Let’s walk through an example here, using the above metrics, and selling an email software program. 

Rep – “Ok so let’s see if this is going to make sense for you and your team. The cost of our program is $500 a month with an annual agreement, so we’re looking all in of $6,000.

At the end of the day, to just cover the cost of the program, we’d only need to see 1 additional customer, not including time spent. Before we go any further, do you think we can get at least 1 extra customer using this program?

VP - Yes – Continue

VP - No – You need to back up, you clearly did not pitch well enough with the STFW benefits to make sure I knew what I’d get out of it. Back up and find out what you missed. 

Rep – Ok, but we’re not here just to get 1 more customer, my goal is to help you 10x your ROI by using our program, so let’s see if we can do that.

Right now your reps are sending out 50 emails a day, with a response rate of 10%, which is leading to 20 Opportunities per month. Right? 

VP – Correct 

Rep – And your reps are converting on 25% of those opps right to close 4 deals a month correct?

VP – Yep, you’ve been paying attention. 

Rep – Well lets see if this makes sense, now I’ve had customers who once the started split testing saw 3x response rates from their emails after a few month of test, but lets be conservative here.

Let’s take a look at 1.5xing your response rate. 

So for 1000 emails sent right now you’re getting 10% response rate, so 100 responses which are leading to 20 opps. So a 20% conversion rate on those responses. 

If all that stays the same, but because you’re split testing with our software, we get you from a 10% to a 15% response rate. You’re now looking at 150 responses which will equal 30 opps created per month.

Is the math making sense so far?

VP – Yep so far it does.

Rep – Ok lets finish this up. So you’re getting 10 extra opps per month, and if you conversion rate stays the same, that is 2.5 extra deals closed per month. With an LTV of $6,000, you’re seeing an additional $15,000 a month in customer LTV per month.

Take that across just 6 months, that’s 15 extra customers, which is $90,000 in LTV, and you only had to pay $6,000 with us to get it. That is a 15x return on investment.

And that’s just for 1 rep! If two reps are using the program, we can double those numbers.

 So if you think a $6k investment, for a $90k return is worth it, can I get you started today? 

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Mind Blown!

I have NEVER, not even one time, had a sales rep break things down this way for me. Can you see how much easier the close becomes when you’re actually using numbers to do it.

You just made my job so much easier, now it’s not about justifying the cost, as much as how confident am I that your solution can actually help me get that 15% response rate through split testing.

Which if you’re product is good, and you’re given me all the STFW’s through out the demo, getting to that 15% response rate should be an absolute no brainer.

This is so much stronger, and such a better way to close.

Also can you see what this will do to the approval process? If all this information, or this break down is in a follow up proposal that they can show to the CFO or CEO, is it not a much stronger case for them to get the yes you’re looking for? 

I think we all know the answer is yes. 

If they say they have to get it approved, then you MUST include this calculation in your proposal to them. Provide a worst case, conservative case, and best case calculation.

So in the above example do a 12.5%, a 15% and a 20% response rate calculation, to show even worse case scenario they will more than convert their investment.

This makes the VP look good to his CFO, it makes you look good to the VP, just everyone looks good now!

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If you really want to sell to a VP, you need to know your numbers, you need to know their numbers, and you need to be able to back everything up with numbers.

Numbers don’t lie, sales people do. 

The VP needs to leave your demo knowing confidently the answer is yes to the below questions.

Remember - They have to determine whether or not the product you just demo’d to them is going to have...

1. A strong positive ROI – this is a must in order to get approval from the CFO/CEO if they need it.
2. Improve the sales team significantly – Will the team buy into it. Is this something that will truly improve the numbers I want.
3. Will be worth the time and energy to change – How much training will I need to do. How easy is this to implement. Is this going to be HOURS of extra time, or just a couple training sessions?
4. Won’t make them look bad or stupid. – What are the odds this DOESN’T work? What happens if that does occur.

As you can see from the above advice, every single one of these questions will not only be handled, but handled with numbers which is all a VP cares about.

Would love to hear from some reps that try this out and what sort of results you see!

Shoot me a message here on LinkedIN if you want to give it a shot with me, after hours, to get some feedback for yourself.

KD

(Excuse any typos, I am a speaker not a writer! But I'm sure the message still gets across)